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/raid1/www/Hosts/bankrupt/TCR_Public/070108.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 8, 2007, Vol. 11, No. 6 Headlines ACTIVE CORE: September 30 Balance Sheet Upside-Down by $5.4 Mil. AEOLUS PHARMACEUTICALS: Haskell & White Raises Going Concern Doubt ALLIS-CHALMERS: Intends to Offer $225 Million of Senior Notes AMBA INC: Case Summary & Six Largest Unsecured Creditors AMERICAN HOME: Moody's Rates Class B-1 Certificates at Ba2 ARROW ELECTRONICS: Acquires Agilysys KeyLink for $485 Mil. in Cash ARROW ELECTRONICS: Fitch Says Agilysys Buy Won't Affect Ratings ASARCO LLC: Creditors Support Exclusive Periods Extension ASARCO LLC: Wants Subpoena Issued to Roman Friedrich AVISTAR COMMS: Inks New $10 Million Revolving Credit Facility BATTERSON PARK: Fitch Holds Junk Rating on $16 Mil. Class B Notes BERWICK BLACK: Involuntary Chapter 11 Case Summary CALPINE CORP: Board Urges Unitholders to Reject Harbinger's Bid CALPINE CORP: Affiliate Inks Power Sales Agreement with PG&E CHARMING CASTLE: Sec. 341(a) Creditors Meeting Slated for Feb. 7 CHARMING CASTLE: Ch. 7 Trustee Taps W. Dennis Schilling as Counsel CITIGROUP MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 CLIENTLOGIC CORP: Moody's Lifts Corporate Family Rating to B2 COLLINS & AIKMAN: ASC Inc. License Pact Can be filed Under Seal COLLINS & AIKMAN: Has Until March 14 to Decide on Becker Leases COMPLETE RETREATS: Panel Counsel Wants $1.1MM Payment for Services CONSTELLATION BRANDS: Crown Imports Starts Operation as Scheduled CREST 2001-1: Moody's Lifts Rating on $30 Million Class C Notes DANA CORP: Wants $200MM Increase of DIP Loan to Enhance Liquidity DANA CORP: Exclusive Plan-Filing Period Extended Until September 3 DELTA AIR: PBGC Reach Agreement on Delta Pilots Pension Plan DORAL FINANCIAL: Third Quarter Loss Prompts S&P to Lower Ratings DOV PHARMACEUTICAL: Has Until January 16 to Repurchase Debentures DURA AUTO: Court Approves Upper Cumberland and Lawrenceburg Pacts DURA AUTOMOTIVE: Seeks Court Nod for Lease Rejection Procedures ECUITY INC: Has $12.9 Mil. Shareholders' Deficit at September 30 ELEPHANT TALK: September 30 Balance Sheet Upside Down by $129,639 EMPIRE RESORTS: Amends Option Agreement with Concord Associates EMPIRE RESORTS: Indian Affairs' Finding Show No Significant Impact FINAL ANALYSIS: Case Summary & Two Largest Unsecured Creditors FRIENDLY ICE: Sardar Biglari Rejects Offer of Two Board Seats FTS GROUP: Earns $69,551 of Net Income in Quarter Ended Sept. 30 GENERAL MOTORS: Asia Pacific Sales Up 17.9%; Market Share Up 6.4% GENERAL MOTORS: Reports 11.8% Market Share in China GOODYEAR TIRE: S&P Holds Rating on $46 Million Certificates at B- GUARDIAN TECHNOLOGIES: Mark Zorko Resigns from Board of Directors INCO LTD: Completes Amalgamation with Itabira Canada INTELSAT LTD: Subsidiary to Redeem $1 Billion Senior Notes INTERSTATE BAKERIES: Court OKs Settlement to Reconstitute Board IPIX CORP: Argusight Wants $2.2 Million Secret Offer Disallowed KL INDUSTRIES: Court Sets January 9 Cash Collateral Hearing KNIGHT PROTECTIVE: Case Summary & 20 Largest Unsecured Creditors LIFE SCIENCES: NYSE Arca Okays Listing Application MARCI-COURT: Case Summary & Five Largest Unsecured Creditors MESABA AVIATION: Inks Stock Purchase Agreement with Northwest METAMORPHIX INC: Sept. 30 Balance Sheet Upside-Down by $50.8 Mil. NESCO INDUSTRIES: Oct. 31 Balance Sheet Upside-Down by $11 Million NORTEL NETWORKS: Closes $320MM Cash Sale of Unit to Alcatel-Lucent NORTH AMERICAN TECH: KBA Group LLP Raises Going Concern Doubt NORTHWEST AIRLINES: Inks Agreement to Acquire Mesaba Aviation PHILLIPS-VAN HEUSEN: Completes Acquisition of Superba for $110MM PHOTRONICS INC: Extends Employment of Asia Ops Pres. Until Oct. 28 RADIO ONE: Sells WKAF-FM for $30 Million to Entercom RIO VISTA: Earns $4.6 Million in Quarter Ended September 30 RIO VISTA: Earns $4.7 Million Net Income in Quarter Ended Sept. 30 RONALD STONE: Case Summary & Seven Largest Unsecured Creditors ROO GROUP: Posts $3.7 Million Net Loss in Quarter Ended Sept. 30 SBARRO INC: MidOcean Partners Deal Cues S&P's Developing Watch SCIENTIFIC GAMES: Moody's Rates New $200 Million Loan at Ba1 SHIMBA HILLS: Case Summary & 20 Largest Unsecured Creditors SEA CONTAINERS: Wants Until June 12 to File Chapter 11 Plan SEA CONTAINERS: Wants Until May 13 to Decide on Leases SMARTIRE SYSTEMS: Oct. 31 Balance Sheet Upside-Down by $34.8 Mil. TANGO BRANDED: Case Summary & 20 Largest Unsecured Creditors TERWIN MORTGAGE: Moody's Rates Class B-5 Certificates at Ba1 TITAN GLOBAL: Completes New $22.6 Million Refunding with Greystone TITANIUM METALS: Sells Valtimet Stake to ValTubes for $75 Million WASHINGTON MUTUAL: Moody's Rates Class B-2 Certificates at Ba2 WEIGHT WATCHERS: Moody's Rates Proposed $1.2 Bil. Sr. Loan at Ba1 WOLDRICH HOLDINGS: Case Summary & Largest Unsecured Creditor XENONICS HOLDINGS: Eisner LLP Raises Going Concern Doubt XPEDIOR INC: Court Enters Final Decree Closing Chapter 11 Cases * Drinker Biddle and Gardner Carton Officially Merged * Former Assistant U.S. Attorney Douglas Fuchs Joins Gibson Dunn * BOND PRICING: For the week of January 1 - January 6, 2006 ********* ACTIVE CORE: September 30 Balance Sheet Upside-Down by $5.4 Mil. ---------------------------------------------------------------- Active Core Technologies Inc. reported a $7.5 million net loss on $572,043 of revenues for the quarter ended Sept. 30, 2006, compared with a $492,109 net loss on $2.7 million of revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $1.5 million in total assets and $6.9 million in total liabilities, resulting in a $5.4 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $848,327 in total current assets available to pay $6.3 million 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?1807 Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2006, Weinberg & Company, P.A., in Boca Raton, Florida, raised substantial doubt about ActiveCore Technologies' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the company's net loss, negative cash flow from operations, working capital deficiency, and accumulated deficit. About ActiveCore Technologies ActiveCore Technologies, Inc. (OTC BB: ATVE.OB) -- http://www.ActiveCore.com/-- fka IVP Technology Corporation operates a group of subsidiaries and divisions in the U.S. and Canada that offer a Smart Enterprise Suite of products and services. The company integrates, enables, and extends functions performed by current and legacy IT systems. Its products encompass web portals, enterprise middleware, mobile data access, data management and system migration applications. AEOLUS PHARMACEUTICALS: Haskell & White Raises Going Concern Doubt ------------------------------------------------------------------ Haskell & White LLP expressed substantial doubt about Aeolus Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and insufficiennt working capital to fund its operations throughout the next fiscal year. Aeolus reported a $5.7 million net loss on $92,000 of revenues for the year ended Sept. 30, 2006, compared with a $6.9 million net loss on $252,000 of revenues for the same period in 2005. The decrease in net loss is mainly due to lower reported research and development expenses of $3.5 million and lower reported general and administrative expenses of $2.2 million in fiscal 2006, compared with $4.5 million and $2.7 million, respectively in fiscal 2005. At Sept. 30, 2006, the company's balance sheet showed $3.6 million in total assets, $1.8 million in total liabilities, and $1.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1816 About Aeolus Aeolus Pharmaceuticals, Inc. (OTC BB: AOLS.OB) -- http://www.aeoluspharma.com/-- is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that has shown the ability to scavenge a broad range of reactive oxygen species, or free radicals. Because oxygen-derived free radicals are believed to have an important role in the pathogenesis of many diseases, Aeolus' catalytic antioxidants are believed to have a broad range of potential therapeutic uses. ALLIS-CHALMERS: Intends to Offer $225 Million of Senior Notes ------------------------------------------------------------- Allis-Chalmers Energy Inc. intends to offer, subject to market and other conditions, $225 million aggregate principal amount of its senior notes due 2017 in a private placement. The company plans to use the net proceeds of the offering to repay a portion of the debt outstanding under its $300 million bridge loan facility, which was incurred to finance its acquisition of substantially all the assets of Oil & Gas Rental Services, Inc. The notes will be offered to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, and outside the United States to persons other than U.S. persons, in reliance on Regulation S. The offer and sale of the notes will not be registered under the Securities Act of 1933, and the notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. Based in Houston, Texas, Allis-Chalmers Energy Inc. (AMEX: ALY) -- http://www.alchenergy.com/-- provides oilfield services and equipment to the oil and gas exploration and development companies primarily in Texas, Louisiana, New Mexico, Colorado, and Oklahoma; offshore in the United States Gulf of Mexico; and offshore and onshore in Mexico. The company offers directional drilling, compressed air drilling, casing and tubing, rental tools, and production services. * * * As reported in the Troubled Company Reporter on Sept. 27, 2006, Moody's Investors Service confirmed Allis-Chalmers Energy Inc.'s B3 Corporate Family Rating and B3 rating on the company's 9% Senior Unsecured Guaranteed Global Notes Due 2014. AMBA INC: Case Summary & Six Largest Unsecured Creditors -------------------------------------------------------- Debtor: AMBA Inc. 8101 Express Drive Marion, IL 62959 Bankruptcy Case No.: 07-40003 Type of Business: The Debtor operates a 35-room hotel. Chapter 11 Petition Date: January 2, 2007 Court: Southern District of Illinois (Benton) Judge: Kenneth J. Meyers Debtor's Counsel: Bradley P. Olson, Esq. Law Office of Brad Olson 144 S Division Carterville, IL 62918 Tel: (618) 985-5262 Fax: (618) 985-5962 Total Assets: $1,233,299 Total Debts: $887,626 Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banterra Bank Secured By Co-secured $40,000 800 North Carbon Cosigners Signers Marion, IL 62959 Residence Hospitality International Franchise fees $30,465 Inc. 1726 Montreal Circle Suite 110 Tucker, GA 38004 Brian Patel Pass due wages $19,500 8101 Express Marion, IL 62959 Jyodika Patel Management fees $2,550 203 Lingle Ave. Marion, IL 62959 The Lamar Companies Road sign $1,250 P.O. Box 96030 Baton Rouge, LA 70896 Maintenance USA 3 vacuum cleaners $310 P.O. Box 2317 Jacksonville, FL 32203 AMERICAN HOME: Moody's Rates Class B-1 Certificates at Ba2 ---------------------------------------------------------- Moody's Investors Service assigned an Aaa ratings to the senior certificates issued by American Home Mortgage Assets Trust 2006-6, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The certificates are backed by adjustable-rate, negative amortization, Alt-A mortgage loans originated by American Home Mortgage Investments Corp. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination and lender paid mortgage insurance provided by The Modified Pool Insurer. Moody's expects collateral losses to range from 0.9% to 1.1%. American Home Mortgage Servicing, Inc. will service the loans and Wells Fargo N.A. will act as master servicer. Moody's has assigned Wells Fargo N.A. its top servicer quality rating of SQ1 as a master servicer. These are the rating actions: * Issuer: American Home Mortgage Assets Trust 2006-6 * Mortgage-Backed Pass-Through Certificates, Series 2006-6 Class A1-A,Assigned Aaa Class A1-B,Assigned Aaa Class A1-C,Assigned Aaa Class A2-A,Assigned Aaa Class A2-B,Assigned Aaa Class R, Assigned Aaa Class X-P, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class B-1, Assigned Ba2 ARROW ELECTRONICS: Acquires Agilysys KeyLink for $485 Mil. in Cash ------------------------------------------------------------------ Arrow Electronics, Inc., disclosed on Jan. 2, 2007, that it has signed a definitive agreement pursuant to which Arrow will acquire substantially all of the assets and operations of the Agilysys KeyLink Systems Group, for $485 million in cash. Arrow will also enter into a long-term procurement agreement with the Agilysys Enterprise Solutions Group, Agilysys' value-added reseller business. "With this acquisition, we will become the leading distributor of enterprise products for both International Business Machines Corp. and Hewlett Packard Company, as well as the leading value-added distributor of storage and software," stated William E. Mitchell, chairman, president and chief executive officer of Arrow Electronics, Inc. "Keylink is a natural complement to our existing enterprise computing solutions business with its value- added approach and its resellers' focus on small and medium sized customers," added Mr. Mitchell. "Our partnership will create significant cross selling opportunities to further accelerate our growth in the global enterprise computing solutions distribution market. All field sales positions will remain intact to ensure that we will continue to provide our customers and suppliers with superior levels of service," stated M. Catherine Morris, president, Arrow Enterprise Computing Solutions. "We believe KeyLink will further benefit from Arrow's considerable global scale, vast customer base, strong financial resources and leadership in the technology distribution market," said Arthur Rhein, chairman, president and chief executive officer of Agilysys. "As a result of this transaction, both Agilysys and Keylink will be better positioned to achieve their full potential as Agilysys focuses solely on growing its information technology solutions business. We wish Arrow well as they continue to grow their business," added Mr. Rhein. "The acquisition is expected to be $.18 to $.22 accretive in the first twelve months and will further strengthen our industry leading return on invested capital, while generating an expected $30 million in operating cash flow annually," added Paul J. Reilly, senior vice president and chief financial officer of Arrow Electronics, Inc. The transaction, which will be funded with cash-on-hand plus borrowings under Arrow's existing committed liquidity facilities, is subject to customary closing conditions, including obtaining the necessary government approvals, and is expected to be completed within 90 days. Goldman, Sachs & Co. acted as financial advisor and Milbank, Tweed, Hadley & McCloy LLP acted as legal counsel to Arrow in connection with this transaction. About Agilysys KeyLink Based in Cleveland, Ohio, Agilysys KeyLink Systems Group is a distributor of enterprise servers, storage and software in the United States and Canada. Through approximately 500 employees, KeyLink provides complex solutions from industry leading manufacturers to more than 800 reseller partners. Pro forma sales for the 2006 calendar year are expected to be approximately $1.6 billion, which include revenues that will be associated with the procurement agreement. About Arrow Electronics Arrow Electronics (NYSE:ARW) -- http://www.arrow.com/-- is a provider of products, services and solutions to industrial and commercial users of electronic components and computer products. Headquartered in Melville, New York, Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. ARROW ELECTRONICS: Fitch Says Agilysys Buy Won't Affect Ratings --------------------------------------------------------------- Fitch Ratings expects that Arrow Electronics, Inc.'s proposed acquisition of Agilysys Keylink Systems Group for $485 million in cash will not affect the company's ratings or Positive Rating Outlook. However, Fitch believes further meaningful debt-financed acquisitions could result in a revision of Arrow's Rating Outlook to Stable or negative rating actions. Fitch currently rates Arrow as: -- Issuer Default Rating of 'BB+'; -- Senior unsecured notes of 'BB+'; -- Senior unsecured bank credit Facility of 'BB+'. Arrow recently disclosed that it has entered into a definitive agreement to acquire substantially all the assets of Keylink, a leading enterprise and computing solutions distributor, from Agilysys Inc. for $485 million in cash. Simultaneously, Arrow entered into a long-term procurement agreement with Agilysis' value-added reseller business. With approximately $1.6 billion of sales for calendar year 2006, pro forma for the Agilysis procurement agreement, Fitch believes the proposed acquisition will consolidate Arrow's already leading position in distributing enterprise computing solutions, and strengthen Arrow's exposure to Keylink's leading suppliers, International Business Machines and Hewlett Packard. In addition, Arrow expects Keylink to generate approximately 5.5%- 6% operating EBIT margins in 2007, including expectations for modest cost reductions, which would be accretive to Arrow's corporate-wide profitability, which Fitch estimates was at 4.7% for the latest 12 months ended Sept. 30, 2006. While recognizing these anticipated positives, this transaction, if consummated, would be Arrow's fifth acquisition over the past year and the first to be debt-financed. Including expectations for positive free cash flow for the fourth quarter ended Dec. 31, 2006 but with just $253 million of cash and cash equivalents as of Sept. 30, 2006, Fitch expects Arrow will fund the majority of the purchase price with either its $600 million senior unsecured revolving credit facility expiring June 2010 and/or $550 million accounts receivable securitization facility expiring February 2008, both of which were undrawn as of Sept. 30, 2006. Nonetheless, even assuming the transaction is fully funded with borrowings under these facilities, total debt adjusted for rent expense to operating EBITDAR will remain below 3x. Fitch believes that Arrow will continue to pursue acquisition opportunities, mainly in the more fragmented global enterprise computing market, which, depending on materiality, could pressure Fitch's Positive Rating Outlook in the future. ASARCO LLC: Creditors Support Exclusive Periods Extension --------------------------------------------------------- Glencore Ltd., Montana Resources Inc., Washington Corporations and the United States government, on behalf of certain environmental state agencies, support further extension of ASARCO LLC and its debtor-affiliates' Exclusive Periods. As reported in the Troubled Company Reporter on Dec. 15, 2006, the Debtors sought the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to further extend their exclusive period to file a plan of reorganization until May 11, 2007, and their exclusive period to solicit acceptances of that plan until July 11, 2007. Glencore, MRI and Washington Corp. contend that extension of the Exclusive Periods will give the Debtors time to complete a reorganization transaction that will enable them to realize on the value of their assets and businesses promptly. If the Debtors fail to do so, and copper prices continue to fall, the recovery of creditors will diminish substantially, Deirdre B. Ruckman, Esq., at Gardere Wynne Sewell, LLP, in Dallas, Texas, says. Glencore, MRI and Washington Corp. believe that during the exclusivity extension period, the Debtors will propose a plan of reorganization that provides for: -- the sale of their operating and other assets at a fair, market-driven value; -- the orderly continuation of their business operations; -- the continued employment of their union workforce; -- substantial returns to their creditors; -- addressing their environmental obligations and liabilities; and -- the establishment of a trust that satisfies their asbestos liabilities pursuant to Section 524(g) of the Bankruptcy Code. Ms. Ruckman tells the Court that Glencore, MRI and Washington Corp. are forming a joint venture to conduct due diligence and make an offer to purchase substantially all of the Debtors' assets, and assume certain environmental clean-up obligations. The Government Agencies contend that further extension of the Exclusive Periods will give them and the Debtors more time for a negotiation process, which they hope would resolve environmental issues so that the outcome of the negotiations would be included in a plan of reorganization framework. A status conference for the parties to report on the status of the environmental negotiation has been set for Feb. 16, 2007, David L. Dain, Esq., in Washington, D.C., representing the Government Agencies, relates. The Government Agencies hope that the Debtors will provide a specific schedule as to when they will provide necessary information to interested third parties for due diligence. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants Subpoena Issued to Roman Friedrich ---------------------------------------------------- ASARCO LLC asks the U.S. Bankruptcy Court for the Southern District of Texas to issue a subpoena directing Roman Friedrich to appear in Dallas, Texas, on Jan. 15, 2007, for deposition and to produce documents relevant to the June 2005 sale of its interest in Minto Explorations, Ltd. ASARCO LLC's statute of limitations to bring an action under Sections 544, 545, 547, 548, or 553 of the Bankruptcy Code will expire on Aug. 9, 2007. Before the statute of limitations expires, ASARCO must investigate all of its potential causes of action and decide, with respect to each potential claim, whether to: -- expend estate resources to actively prosecute the cause of action before Aug. 9, 2007; -- preserve the cause of action for further analysis and post- confirmation litigation; or -- abandon the cause of action. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas relates that ASARCO's investigation has identified, among other things, the Minto sale, an undeveloped mine in the Yukon. Mr. Price says that although ASARCO has invested more than $6,900,000 in developing Minto, it sold its interest in Minto for less than $2,100,000 just two months before the Petition Date. ASARCO's investigation reveals that at the time of the sale, the Minto Project contained 336,000,000 pounds of copper, 140,460 ounces of gold and 2,200,000 ounces of silver. In addition, annual production was expected to average 23,000,000 pounds of copper, 8,800 ounces of gold, and 123,800 ounces of silver for the 11-year life of the mine. To further advance its investigation into the questionable sale, Mr. Prince says ASARCO needs to depose and review documents in the possession of Mr. Friedrich, ASARCO's financial advisor in connection with the Minto sale. Mr. Prince asserts that Mr. Friedrich's deposition unquestionably is "likely to lead to the discovery of admissible evidence," and is therefore "necessary in the interest of justice." ASARCO also seeks to compel the deposition and production of documents by Mr. Friedrich on January 15, 2007, in connection with its pending adversary action against Mineral Park, Inc. Mr. Prince contends that by scheduling the two depositions consecutively, Mr. Friedrich will be required to make only one trip to the United States from Vancouver, Canada, where he resides, saving both time and money for all concerned parties. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AVISTAR COMMS: Inks New $10 Million Revolving Credit Facility ------------------------------------------------------------- Avistar Communications Corp., disclosed that on Dec. 23, 2006, it signed a $10 million dollar revolving credit facility with a major financial institution. This new facility provides for up to $10 million in debt financing to be used to fund business operations, and has an initial term through December 2007. The credit facility is subject to customary terms and conditions, including several reporting and non-financial covenants. "With this revolving credit facility in place, Avistar Communications Corporation has additional financial flexibility to take advantage of opportunities in the video collaboration marketplace in 2007," stated Robert J. Habig, Chief Financial Officer of Avistar. The credit facility is secured by the grant of a security interest in all of Avistar's assets, tangible and intangible. The facility is also supported by a personal collateralized guaranty from Gerald J. Burnett, Chairman and Chief Executive Officer of Avistar, increasing the accessibility of the line. Avistar Communications Corporation (NASDAQ: AVSR) -- http://www.avistar.com/-- develops, markets, and supports a video collaboration platform for the enterprise, all powered by the AvistarVOS(TM) software. Founded in 1993, Avistar is headquartered in Redwood Shores, California, with sales offices in New York and London. Collaboration Properties, Inc. (CPI), a wholly owned subsidiary of Avistar, holds a current portfolio of 71 patents for inventions in the primary areas of video and network technology. CPI pursues patents for presence-based interactions, desktop video, recorded and live media at the desktop, multimedia documents, data sharing, and a rich-service network video architecture that supports Avistar's product suite and customers. CPI offers licenses to its patent portfolio and Avistar's video-enabling technologies to companies in the video conferencing, rich-media services, public networking, and related industries. At Sept. 30, 2006, Avistar Communications' balance sheet showed a total stockholders' deficit of $7,303,000, compared to a deficit of $4,158,000 at Dec. 31, 2005. BATTERSON PARK: Fitch Holds Junk Rating on $16 Mil. Class B Notes ----------------------------------------------------------------- Fitch upgrades one class of notes issued by Batterson Park CBO I, Ltd. The rating action is effective immediately: -- $16,893,879 class A-5 notes upgraded to 'A+' from 'BB+'; -- $16,500,000 class B notes remain at 'C/DR3'. Batterson Park is a collateralized debt obligation that closed Nov. 17, 1998 and is managed by General Re/New England Asset Management. Batterson Park is composed of high yield bonds and high yield loans. As part of this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. The upgrade to the class A-5 notes is mainly due to an increase in credit enhancement. The continued failure of the overcollateralization test has been diverting all interest and principal proceeds to redeem the capital structure since July 2000. The class A-3 and A-4 notes paid-in-full in July 2006 making the A-5 notes the most senior tranche in the transaction. The A-5 notes have received approximately 66% of their original principal balance to date. The class B notes are remaining at 'C/DR3' because they continue to defer interest payments and are not expected to receive any payments until the class A-5 notes are paid-in-full. Credit enhancement to the class B notes has declined since the last review, as shown by a decrease in the OC test to 81.5%, according to the Dec. 20, 2006 trustee report, compared to 94.5% at the last review in September 2005. The class B notes are expected to recover amounts between 51% and 70%, which is the 'DR3' range. The ratings of the class A-5 and class B notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. BERWICK BLACK: Involuntary Chapter 11 Case Summary -------------------------------------------------- Alleged Debtors: Berwick Black Cattle Company 200 North Monroe Street Abingdon, IL 61410 -- and -- Mark Ray 1258 140th Street Cameron, IL 61423 Involuntary Petition Date: December 26, 2006 Case Number: 06-82166 Chapter: 11 Court: Central District of Illinois (Peoria) Judge: Thomas L. Perkins Petitioners' Counsel: Edward S. Weil, Esq. 180 North LaSalle, Suite 2700 Chicago, IL 60601 Tel: (312) 346-1300 -- and -- Paul A. Osborn, Esq. Ward, Murray, Pace & Johnson, P.C. 202 East 5th Street Sterling, IL 61081 Tel: (815) 625-8200 -- and -- Faegre & Benson 1900 15th St. Boulder, CO 80302 Tel: (303) 447-7774 -- and -- Ivan J. Reich, Esq. Becker & Poliakoff, P.A. Emerald Lake Corporate Park 3111 Stirling Road Fort Lauderdale, FL 33312 Tel: (954) 985-4135 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Joseph Bonar Loan $8,000,000 11028 Harbour Yacht Court Suite 102 Fort Myers, FL 33908 Larry Olson Loan $6,000,000 11210 Bellsville Pike Columbus, IN 47201 Robert Lucas Loan $300,000 204 West Main Street Delphi, IN 46923 Jeffrey Miller Loan $130,000 P.O. Box 997 Arvada, CO 80001 Gerald Lucas Loan $101,000 7525 East Gainey Ranch Road Scottsdale, AZ 85258 Gary Schreiner Loan $100,000 901 East 18th Street Rock Falls, IL 61071 CALPINE CORP: Board Urges Unitholders to Reject Harbinger's Bid --------------------------------------------------------------- The Board of Trustees of Calpine Commercial Trust, on behalf of Calpine Power Income Fund, has unanimously recommended that unitholders reject the unsolicited offer from Harbinger Capital Partners and not tender their units into the offer. The Board's recommendation, as well as a discussion of its reasons for rejecting the Harbinger offer, is contained in a Trustees' Circular filed on Jan. 4, 2007, with Canadian securities regulators. Unitholders are urged to read the Trustees' Circular in its entirety. Copies of the Circular are being mailed to the Fund's unitholders. In making its recommendation, the Board considered many factors including the written opinion of its financial advisor, BMO Capital Markets. This opinion states that the consideration offered by Harbinger is inadequate, from a financial point of view, to the Fund's unitholders other than Harbinger. The full text of the BMO Capital Markets opinion is included in the Trustees' Circular. "We believe Harbinger's offer is financially inadequate, opportunistic and fails to recognize the full value of the Fund," said Robert Hodgins, Chairman of the Board of Trustees. "We are advising unitholders to reject the Harbinger offer and not to tender their units. The Board has received strong interest from a number of third parties regarding potential alternative transactions that may offer superior value to unitholders. We are actively pursuing those discussions. We also believe recent developments in Calpine Corporation's insolvency proceedings, including an initiative by Calpine Corporation yesterday to enter into global settlement discussions with its U.S. and Canadian creditors, bode well for unitholders of the Fund." "We dispute Harbinger's self-serving and exaggerated claims regarding the risks and uncertainties facing the Fund as a result of Calpine Corporation's insolvency proceedings," said Mr. Hodgins. "The fact is that Calpine Power Income Fund owns high- quality, modern, geographically diversified and energy-efficient power generating assets that deliver stable cash flow and are underpinned by long-term contracts with financially strong counterparties. These assets have delivered significant value to unitholders over the past year. The trust units, over the year prior to the Harbinger bid, have increased in value by approximately 32% and regular monthly distributions have been maintained. The value is reflected in the strong interest we have received from potential acquirers in recent weeks." Reasons for the Recommendation The Board has carefully reviewed the Harbinger offer and believes that the offer fails to provide full value for the Fund and is an attempt by Harbinger to acquire the Fund without offering adequate consideration to its unitholders. The principal factors considered by the Board in concluding to recommend that unitholders reject the Harbinger offer and not tender their units include: * The Harbinger offer is inadequate, from a financial point of view, to the Fund's unitholders. * The Harbinger offer does not reflect the quality of the Fund's assets, cash flows, long-term contracts and contractual counterparties, or the value of the priority that the Fund's Trust Units have over Calpine Corporation's subordinated interest in certain of the Fund's assets. * The Harbinger offer does not reflect the substantial value of the unresolved claims the Fund and its subsidiaries have against Calpine Corporation. * Superior proposals delivering greater value to unitholders may emerge. * The Harbinger offer is opportunistic, in that it is timed to attempt to take advantage of unique information and knowledge acquired by Harbinger as a result of its role in the insolvency and reorganization proceedings relating to Calpine Corporation. * The Harbinger offer overstates the risks and uncertainties relating to the Fund from Calpine Corporation's insolvency and reorganization proceedings. * The Harbinger offer is not a "permitted bid" under the Fund's Unitholder Rights Plan. * The timing of the Harbinger offer is prejudicial in that it is open for only 35 days, including the eight days between Christmas and the New Year holiday, when it was a challenge to efficiently conduct a process that would best serve the interests of unitholders. * The Harbinger offer is highly conditional and not a firm offer. Exploration of Strategic Alternatives Although the Board was not considering a sale of Calpine Power Income Fund prior to receiving Harbinger's bid, it feels compelled, in light of the inadequate Harbinger offer, to explore other strategic alternatives, including obtaining competing bids, that may provide greater unitholder value. Accordingly, the Board and BMO Capital Markets are actively soliciting competing bids that may provide greater unitholder value. The Fund has established a data room for the purposes of providing confidential information to third parties. Several third parties have entered into confidentiality agreements with the Fund in order to access such confidential information. The Board cautions unitholders that tendering into the Harbinger offer before the Board and its advisor have had an opportunity to obtain competing bids may preclude the possibility of financially superior competing offers emerging. Unitholder Rights Plan The Fund has called a meeting of unitholders to approve the adoption and continuation of the unitholder rights plan dated Aug. 12, 2006. The meeting is scheduled for Feb. 9, 2007. The Board of Trustees has determined that the Separation Time under the rights plan shall be deferred until Jan. 24, 2007 or a later date as may be determined by the Trustees. Unitholders who have questions or who may have already tendered their units to the Harbinger offer and wish to withdraw them, may do so by contacting Georgeson, the information agent retained by the Board of Trustees, at Canada or the United States toll-free: 1-866-568-7438. About Calpine Power Income Fund Calpine Power Income Fund (Toronto Stock Exchange: CF.UN) -- http://www.calpinepif.com/-- is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, the Fund owns a participating loan interest in a power plant in Ontario and has made a loan to Calpine Canada Power Ltd. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta. The Fund has 61,742,288 Trust Units outstanding. About Calpine Corp Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CALPINE CORP: Affiliate Inks Power Sales Agreement with PG&E ------------------------------------------------------------ Calpine Corporation's majority-owned subsidiary Russell City Energy Company, LLC, has entered into a ten-year tolling agreement with Pacific Gas and Electric Company calling for the delivery of the full output of the 600-megawatt Russell City Energy Center, a natural gas-fired plant to be built in Hayward, California. Calpine, which recently sold a 35% equity interest in the plant to GE Energy Financial Services, owns the remaining 65% interest in RCEC and will operate and maintain the facility as part of its California power portfolio. Construction of the power plant is expected to begin by the spring of 2008, with energy deliveries scheduled to begin in June 2010 in time to help meet peak electricity summer demand for PG&E customers throughout the San Francisco Bay Area. Under the terms of the tolling agreement, PG&E will supply natural gas to fuel the plant and RCEC will guarantee plant availability and the efficiency at which the plant generates electricity and will receive energy and fixed-capacity payments. "Our agreement with PG&E further demonstrates how Calpine, its partners and competitive power markets are helping utilities across the country diversify their power portfolios, improve reliability and better manage risk and lower costs for their customers," stated Calpine Chief Executive Officer Robert P. May. "PG&E is a valued customer and we look forward to helping meet their growing energy needs in a dependable and environmentally responsible manner." Comparable to the majority of Calpine's energy centers, the Russell City Energy Center will use a combined-cycle design that will enable it to generate electricity up to 40% more efficiently than traditional gas-fired facilities. The project also will incorporate best available emissions control technology resulting in up to 90% fewer emissions compared to older-technology power plants. Calpine, one of California's largest power providers, currently operates 41 power plants in the state, which combined are capable of generating more than 5,250 megawatts of electricity. This is equivalent to almost 10% of peak California power demand and is enough electricity to power more than five million Californian households. Calpine also is the state's largest renewable energy provider. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. The Debtors' exclusive period to submit a chapter 11 reorganization plan expires on June 20, 2007. The Debtors' exclusive period to solicit acceptance of that expires on Aug. 20, 2007. CHARMING CASTLE: Sec. 341(a) Creditors Meeting Slated for Feb. 7 ---------------------------------------------------------------- The U.S. Bankruptcy Administrator for the Northern District of Alabama will convene a meeting of Charming Castle LLC's creditors on Feb. 7, 2007, at 9:00 a.m. in Tuscaloosa, Alabama. This is the first meeting of creditors in the Debtor's Chapter 7 case. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Hackleburg, Alabama, Charming Castle LLC, dba Indies House -- http://www.indieshouse.net/-- manufactures mobile homes. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. N.D. Ala. Case No. 06-71420). Robert L. Shields, III, Esq., at the Shields Law Firm represents the Debtor. Derek F Meek, Esq., and Jennifer Brooke Kimble, Esq., at Burr & Forman LLP represent the Official Committee of Unsecured Creditors. On Dec. 11, 2006, the Court converted the Debtor's case into chapter 7. Robert A. Morgan serves as trustee and is represented by William Dennis Schilling in Birmingham, Alabama. When the Debtor filed for protection from its creditors, it listed estimated assets of less than $50,000 but estimated debts between $10 million and $50 million. The Debtor's exclusive period to file a chapter 11 plan expires on Feb. 2, 2007. CHARMING CASTLE: Ch. 7 Trustee Taps W. Dennis Schilling as Counsel ------------------------------------------------------------------ Robert A. Morgan, the trustee overseeing the liquidation of Charming Castle LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Alabama to employ the law firm of William Dennis Schilling as his attorney, nunc pro tunc to Dec. 12, 2006. The Trustee expects the firm to represent or assist him in carrying out his duties. William Dennis' professionals charge these rates for their services: Position Hourly Rate -------- ----------- Attorneys $350 Paralegals $90 To the best of the Trustee's knowledge, the law firm of William Dennis Schilling and its professionals are "disinterested persons" as the term is defined in Sec. 101(14) of the Bankruptcy Code. The firm of William Dennis Schilling can be reached at: P. O. Box 55147 Birmingham, AL 35255-5147 Headquartered in Hackleburg, Alabama, Charming Castle LLC, dba Indies House -- http://www.indieshouse.net/-- manufactures mobile homes. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. N.D. Ala. Case No. 06-71420). Robert L. Shields, III, Esq., at the Shields Law Firm represents the Debtor. Derek F Meek, Esq., and Jennifer Brooke Kimble, Esq., at Burr & Forman LLP represent the Official Committee of Unsecured Creditors. On Dec. 11, 2006, the Court converted the Debtor's case into chapter 7. Robert A. Morgan serves as trustee and is represented by William Dennis Schilling in Birmingham, Alabama. When the Debtor filed for protection from its creditors, it listed estimated assets of less than $50,000 but estimated debts between $10 million and $50 million. The Debtor's exclusive period to file a chapter 11 plan expires on Feb. 2, 2007. CITIGROUP MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Citigroup Mortgage Loan Trust 2006-HE3, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by New Century Mortgage Corporation, LIME Financial Services, Ltd., Quick Loan Funding, Inc, and other mortgage lenders, adjustable-rate and fixed-rate, subprime residential mortgage loans acquired by Citigroup Global Markets Realty Corp. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, excess spread, overcollateralization, and primary mortgage insurance. The ratings also benefit from an interest- rate cap agreement provided by Swiss Re Financial Products Corporation. After taking into consideration the benefit from the primary mortgage insurance, Moody's expects collateral losses to range from 5.3% to 5.8%. Wells Fargo Bank, N.A., JPMorgan Chase Bank, National Association, Ocwen Loan Servicing, LLC, and Countrywide Home Loans Servicing LP will service the mortgage loans. Moody's has assigned both Wells Fargo and JPMorgan its servicer quality rating of SQ1 as primary servicers of subprime residential mortgage loans. Moody's has assigned Ocwen its servicer quality rating of SQ2- as a primary servicer of subprime residential mortgage loans. These are the rating actions: * Citigroup Mortgage Loan Trust 2006-HE3 * Asset-Backed Pass-Through Certificates, Series 2006-HE3 Class A-1, Assigned Aaa Class A-2A, Assigned Aaa Class A-2B, Assigned Aaa Class A-2C, Assigned Aaa Class A-2D, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class M-10,Assigned Ba1 The Class A-1 and Class M-10 Certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. CLIENTLOGIC CORP: Moody's Lifts Corporate Family Rating to B2 ------------------------------------------------------------- Moody's Investors Service upgraded ClientLogic Corporation's corporate family rating to B2 from B3. The rating outlook is stable. Concurrently, Moody's has assigned a B2 rating to ClientLogic's $675 million first lien term loan and $85 million undrawn first lien revolving credit facility. Proceeds of the current offering will be applied towards the financing of ClientLogic's proposed merger with SITEL Corporation for approximately $440 million in total implied enterprise value of which approximately $327 million represents the equity purchase price. The transaction is expected to close at the end of January 2007. This concludes a review for possible upgrade initiated in December 2006 after the company's disclosure of its revised plan to merge with SITEL Corporation and SITEL's recent return to filing timely financial statements with the SEC. The upgrade reflects the increased scale that ClientLogic will have once combined with SITEL as well as the favorable outlook of the call center outsourcing industry. The B2 corporate family rating reflects the substantial risks associated with a merger of this size, modest free cash flow, sizeable financial leverage as measured by free cash flow to debt, and moderate client concentration. Mitigating these risks is the company's position as the second largest provider within the highly competitive call center outsourcing industry and projected cost savings and synergies expected with the merger. Ratings: -- Corporate family rating at B2; -- Probability of default rating B3; -- $85 million first lien revolving credit facility at B2, LGD3, 35%; and, -- $675 million first lien term loan B2, LGD3, 35%. Headquartered in Nashville, Tennessee, ClientLogic Corporation provides outsourced call center services worldwide. COLLINS & AIKMAN: ASC Inc. License Pact Can be filed Under Seal --------------------------------------------------------------- The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan authorized Collins & Aikman Corp. and its debtor-affiliates to file under seal a settlement and license agreement between Dura Convertible Systems Inc. and ASC Incorporated resolving litigation between them. Dura Convertible is Collins & Aikman's debtor-affiliate. As reported in the Troubled Company Reporter on Dec. 20, 2006, ASC commenced on March 30, 2006, Adversary Proceeding No. 06-04507 in the Bankruptcy Court against Dura. The ASC Complaint alleged four counts of patent infringement relating to convertible tops produced by Dura for the Dodge Viper and Ford Mustang. Specifically, the ASC Complaint alleged infringement of: (a) US Reissue Patent No. RE38,546; (b) US Design Patent No. D442,541; (c) US Design Patent No. D464,605 and (d) US Patent No. 5,785,375. Dura filed its answer to the ASC Complaint on June 21, 2006, and asserted counterclaims seeking declaratory judgments of non- infringement and invalidity of the ASC Patents. The Bankruptcy Court held an initial scheduling conference on Aug. 14, 2006. The triable issues of (a) liability and (b) damages were bifurcated and the Court entered an order setting a trial date of Jan. 9, 2007, on the issue of liability. The parties have each served discovery requests on the issues of liability and damages. To alleviate the potential costs to the Debtors' estates, Dura requested that the discovery process be bifurcated as well, however, this request was denied. Dura produced hundreds of thousands of documents and responded to ASC's written discovery. On the verge of spending exorbitant sums to conduct discovery, the Parties agreed to a stay of discovery as they pursue a settlement. Dura and ASC have engaged in significant negotiations to resolve the ASC Lawsuit. Dura and ASC have agreed to resolve the ASC Lawsuit pursuant to the terms and conditions in the Settlement. The Settlement provided, among other things, that Dura will have a license to the ASC Patents for the Ford Mustang and Dodge Viper convertible roof assemblies. The Settlement also allows for the assignment of the license for the ASC Patents to a potential purchaser. The Debtors also agree to pay for a royalty fee, which is far less than the royalty fee that would likely be determined in the event that ASC were to prevail in the ASC Lawsuit. The Ford Mustang and Dodge Viper convertible roof systems can continue to be manufactured and sold at a profit by Dura after paying the royalty fee to ASC. Outside of the bankruptcy process, the information contained in the Settlement generally is held to be confidential because, otherwise, Dura and ASC believe would be competitively disadvantaged in the operation of their businesses by the disclosure of the information. The ASC licenses the ASC Patents for use by Dura in the production and sale of convertible roof systems for the Ford Mustang and Dodge Viper. If the competitors of Dura or ASC knew the terms of the Settlement, it could provide them with a competitive advantage in their dealings with ASC or Dura, as the case may be. Further, if Dura's customers were aware of the terms of the Settlement, it could provide them with a competitive advantage in negotiating agreements with Dura. 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: Has Until March 14 to Decide on Becker Leases --------------------------------------------------------------- The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan extends the time period within which Collins & Aikman Corp. and its debtor-affiliates must assume, assume and assign or reject unexpired leases of non-residential real property with Becker Properties LLC and Anchor Court LLC through and including March 14, 2007. As reported in the Troubled Company Reporter on Dec. 5, 2006, the Leases are: -- 6600 East Fifteen Mile Road, Sterling Heights, Michigan; -- 1601 Clark Road, Havre de Grace, Maryland; and -- 47785 West Anchor Court, Plymouth, Michigan. The Debtors will be unable to determine whether to assume or reject the Leases until they have selected the highest and best offer for the contemplated sale of all or part of their businesses. Without the extension, the Debtors will be at risk of assuming the Leases that the selected purchaser might deem unnecessary or impractical, or rejecting the Leases that the purchaser might deem essential to the operations of the Debtors' businesses. Thus, it would make no economic or practical sense to compel the Debtors to assume or reject the Leases at this time. In addition, Becker and Anchor Court are not damaged by the Debtors' continued occupation of the properties covered by the Leases. As of Nov. 29, 2006, the Debtors are complying with their postpetition obligations related to the Leases on a timely basis. Moreover, maintenance of the Leases is essential to the Debtors' continued operations without further complicating the Debtors' ability to confirm a plan in their Chapter 11 cases. The Debtors reserve their right to seek further extensions of the Lease Decision Period. 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: Panel Counsel Wants $1.1MM Payment for Services ------------------------------------------------------------------ Bingham McCutchen LLP seeks payment of $1,110,499 for professional services it rendered on behalf of the Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Complete Retreats LLC and its debtor-affiliates for the period Aug. 3, 2006, through Oct. 31, 2006. Bingham McCutchen further seeks reimbursement of $23,546 for actual and necessary expenses it incurred during the Application Period. William F. Govier, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut, relates that attorneys at Bingham expended 2,271 hours on the Debtors' cases during the Application Period, while law clerks and legal assistants expended 509.9 hours. The services performed by Bingham during the Application Period include: -- preparing for meetings and communicating with Committee members, other unsecured creditors, and the U.S. Trustee regarding the bankruptcy cases' status and other matters as needed; -- preparing and reviewing retention applications and monthly statements for the Committee's professionals; -- reviewing and analyzing proposed interim DIP financing and holding discussions with the proposed interim DIP lenders; -- analyzing the Debtors' ongoing financial and operating performance, merger and acquisition program, and various possible plan and restructuring scenarios; -- reviewing the Debtors' proposed lease rejections and property disposition motions; -- evaluating prepetition lien status and reviewing mortgages, security agreements and related documents for approximately 70 properties; -- reviewing proofs of claim from time to time as filed; and -- reviewing and summarizing pleadings and electronic docketing notices for distribution to the Committee. 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). CONSTELLATION BRANDS: Crown Imports Starts Operation as Scheduled ----------------------------------------------------------------- Constellation Brands and Grupo Modelo, S. A. de C. V.'s owned beer importation and marketing joint venture, Crown Imports LLC, reported that it is operational as scheduled. The joint venture will import to the United States the Corona Extra, Corona Light, Negra Modelo, Modelo Especial and Pacifico brands owned by Grupo Modelo, in addition to Tsingtao from China and St. Pauli Girl from Germany. Crown Imports disclosed that its operation marks the first time since the 1978 introduction of Grupo Modelo brands into the U.S. that they have been imported and marketed by a single entity. About Crown Imports Headquartered in Chicago, Ill. Crown Imports LLC -- http://www.crownimportsllc.com/-- is a beer importation and marketing joint venture owned by Constellation Brands and Grupo Modelo, S. A. de C. V. Bill Hackett, former president of Constellation's Barton Beers, will lead the company. The company will have a board of directors half from Grupo Modelo and half from Constellation Brands. About Grupo Modelo Founded in 1925, Grupo Modelo (MX: GMODELOC) produces and markets beer in Mexico, with 62.8% of the total (domestic and export) market share, as of Dec. 31, 2005. The company has seven brewing plants in Mexico, with a total annual installed capacity of 60 million hectoliters. Grupo Modelo currently brews and distributes 12 brands; Corona Extra, the number one Mexican beer in the world, Corona Light, Modelo Especial, Victoria, Pacifico, Negra Modelo among others. The company exports five brands with a presence in more than 150 countries, and it is the exclusive importer of Anheuser-Busch products in Mexico. About Constellation Brands Based in Fairport, New York, Constellation Brands, Inc. (NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- produces and markets beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well-known brands in Constellation's portfolio include: Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Nobilo, Kim Crawford, Alice White, Ruffino, Kumala, Robert Mondavi Private Selection, Rex Goliath, Toasted Head, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Inniskillin, Jackson-Triggs, Simi, Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet, Mr. Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi- Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl, Tsingtao. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006 Moody's Investors Service's affirmed its Ba2 Corporate Family Rating for Constellation Brands Inc., and downgraded its Ba3 probability-of-default rating to B1. The rating agency also assigned its LGD6 loss-given-default ratings on the Company's $250 million 8.125% Senior Subordinated Notes due Jan. 15, 2012, suggesting noteholders will experience a 95% loss in the event of a default. CREST 2001-1: Moody's Lifts Rating on $30 Million Class C Notes --------------------------------------------------------------- Moody's Investors Service upgraded the ratings on the notes issued by Crest 2001-1, Ltd, a collateralized debt obligation lender: * The $30,000,000 Class B-1 Fixed Second Priority Fixed Rate Term Notes, Due 2034 -- Prior Rating: A3 -- Current Rating: Aa2 * The $35,000,000 Class B-2 Floating Second Priority Fixed Rate Term Notes, Due 2034 -- Prior Rating: A3 -- Current Rating: Aa2 * The $30,000,000 Class C Third Priority Fixed Rate Term Notes, Due 2034 -- Prior Rating: Ba2 -- Current Rating: Baa3 Moody's noted that the rating action reflects the improvement of the credit quality of the transaction's underlying collateral. The transaction, which closed in 2001, has shown improvement in both the Class B Par Value Test and the Class C Par Value Test, resulting from an ongoing delevering of the Class A Notes, as well as an improvement in the Moody's Weighted Average Rating Factor. DANA CORP: Wants $200MM Increase of DIP Loan to Enhance Liquidity ----------------------------------------------------------------- In March 2006, the Honorable Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York authorized Dana Corp. and its debtor-affiliates to borrow under a $1,450,000,000 senior secured credit facility agreement with Citicorp North America Inc., as administrative agent, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., and Banc of America Securities LLC, as joint lead arrangers and bookrunners, and a syndicate of lenders and other financial institutions. The DIP Loan Agreement comprised of: -- a $700,000,000 term loan facility, and -- a $750,000,000 revolving credit facility. Under the DIP Loan Agreement, Dana Corporation, as borrower, and each of the other Debtors, as guarantors, are jointly and severally liable for all obligations and, as collateral, have granted security interests in substantially all of their assets, including a pledge of 66% of the equity interests of each of their material direct or indirect foreign subsidiary. The DIP Loan Agreement also contains covenants that are customarily found in similar DIP credit facilities, as well as two financial covenants specific to the Debtors' operations that require maintenance at all times of: -- availability under the revolving credit facility of at least $100,000,000; and -- certain minimum amounts of consolidated earnings before interest, taxes, depreciation, amortization, restructuring and reorganization costs for various periods from the Petition Date through February 2008. As of Nov. 30, 2006, the Debtors' unrestricted cash totaled about $164,500,000 and the amount available for revolving credit advances was approximately $332,000,000, Richard H. Engman, Esq., at Jones Day, in New York, relates. The Debtors, however, expect their overall liquidity to continue to decline in the next months and ultimately become insufficient to sustain their ongoing operations unless the Court permits them to amend their DIP Loan Agreement and they are successful in realizing significant amounts of cash from both the proceeds of asset sales and from the repatriation of cash held by their non-Debtor foreign affiliates. To avoid potential liquidity issues, the Debtors seek the Court's authority to amend their DIP Loan Agreement to provide for: (1) An increase of the term loan commitments by $200,000,000 to enhance their near-term liquidity and to mitigate timing and execution risks associated with asset sales and other cash repatriation activities that are in process and that they have previously disclosed; (2) An increase of 0.25% to the rate at which interest accrues on amounts borrowed under the term facility; (3) A reduction of certain minimum global EBITDAR covenant levels and a $25,000,000 increase to the annual amount of cash restructuring charges that are includable in the calculation of EBITDAR: Month Period Ended Covenant EBITDAR ----- ------------ ---------------- January 2007 11 months $200,000,000 February 2007 12 months $200,000,000 March 2007 12 months $175,000,000 April 2007 12 months $175,000,000 May 2007 12 months $170,000,000 June 2007 12 months $170,000,000 July 2007 12 months $185,000,000 August 2007 12 months $200,000,000 September 2007 12 months $200,000,000 October 2007 12 months $230,000,000 November 2007 12 months $250,000,000 December 2007 12 months $250,000,000 January 2008 12 months $250,000,000 February 2008 12 months $250,000,000 March 2008 12 months $250,000,000 (4) An implementation of corporate restructuring of their European non-Debtor subsidiaries that will facilitate the establishment of a European credit facility, improve treasury and cash management operations and facilitate the tax efficient repatriation of cash from Europe; and (5) Modification to allow the Debtors to receive and retain proceeds from the sale of their Trailer Axle Business without triggering a mandatory prepayment to the Lenders of the amount of proceeds received. A full-text copy of the proposed DIP Loan Amendment is available for free at http://ResearchArchives.com/t/s?1817 The Debtors also seek the Court's authority to restructure their European business operations. The European Restructuring contemplates non-debtor Dana Automotive Aftermarket, Inc., a United States subsidiary of Dana Corp., to form Dana European Holdings Luxembourg SARL, a Luxembourg company. Under the European Restructuring, three sets of transactions will be undertaken: 1. Luxco will purchase all of the assets of non-debtor Dana International Holdings Inc., with voting fixed rate preferred stock of DAA. Subsequently, Dana International would convert to a limited liability company under Delaware law and would transfer DAA shares to Dana Corp. 2. Luxco will acquire the shares of subsidiaries in Dana SAS (France), Spicer Nordiska Kardan AB (Sweden) and Dana Belgium NV from Dana Corp. in exchange for Luxco shares and notes. Luxco will acquire 99% interest of subsidiaries in Dana SAS. 3. Dana Corp. will contribute the shares of subsidiaries in Dana Italia SpA, Dana Europe SA (Switzerland) and Dana Europe Holdings BV (Netherlands) to DAA. DAA will contribute these shares to Luxco. After the initial transfers, Luxco will transfer the European subsidiaries to newly formed holding companies in Luxembourg and Switzerland. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DANA CORP: Exclusive Plan-Filing Period Extended Until September 3 ------------------------------------------------------------------ The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York extended Dana Corp. and its debtor-affiliates' exclusive periods: -- to propose a plan of reorganization through and including Sept. 3, 2007; and -- to solicit acceptances of that plan through and including Nov. 2, 2007. The Official Committee of Unsecured Creditors did not object to the Debtors' request to extend their exclusive periods although it noted that the extension is unusually long. The Creditors Committee said it has taken comfort in the fact that the Debtors have prepared and submitted to the Committee a list of numerous milestones they intend to meet to timely emerge from Chapter 11 in the third quarter of 2007. The Creditors Committee noted, however, that the Debtors' ability to meet certain internally generated deadlines is not necessarily dispositive of their ability to confirm a Chapter 11 plan that maximizes creditor recoveries. The Creditors Committee said that if it determines, for any reason, that cause exists to terminate exclusivity, it reserves its right to bring a motion to terminate exclusivity. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non- Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: PBGC Reach Agreement on Delta Pilots Pension Plan ------------------------------------------------------------ Delta Air Lines confirmed, on Jan. 5, 2007, that the Pension Benefit Guaranty Corporation, the federal agency charged with insuring the nation's pension plans under ERISA, has become the trustee of the Delta Pilots Retirement Plan. In December 2006, the company reached a settlement agreement with the PBGC and that the agreement had the full support of its Official Committee of Unsecured Creditors. The agreement later received approval by the U.S. Bankruptcy Court, which had previously determined that Delta could not reorganize or emerge from Chapter 11 unless the Pilot Plan was terminated. With the PBGC's agreement that the Pilot Plan meets all legal criteria for distress termination, the agency has become the Plan's trustee, with Sept. 2, 2006 established as the termination date for the Plan. In settlement of its claims against Delta and its affiliates, the PBGC will be allowed a prepetition unsecured claim against Delta of $2.2 billion, and the debtors' proposed plan of reorganization will provide for the distribution to the PBGC of $225 million in senior unsecured notes. "Delta appreciates the PBGC's recognition that the company satisfactorily met all of the statutory criteria for a distress termination of the Delta Pilots Retirement Plan and that the agency is now the Plan's trustee," said Edward H. Bastian, Delta's chief financial officer. "This represents an important and necessary milestone in Delta's restructuring and we are pleased we were able to work constructively with all parties involved to satisfactorily resolve what is an extremely important and complex issue." As previously reported, retired Delta pilots will receive in excess of $800 million in allowed claims in respect of their lost non-qualified pension benefits. Delta's active pilots are covered by a defined contribution pension plan previously negotiated with the Air Line Pilots Association, the union representing Delta's more than 6,000 active pilots. Delta reconfirmed that it will preserve the Delta Retirement Plan, which covers ground employees and flight attendants. The ability to preserve this plan was made possible by the alternative funding provisions included in the pension reform legislation passed by Congress last August. Headquartered in Atlanta, Georgia, Delta Air Lines, Inc., (Other OTC:DALRQ) -- http://www.delta.com/-- is the world's second- largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DORAL FINANCIAL: Third Quarter Loss Prompts S&P to Lower Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term ratings on Doral Financial Corp., including the counterparty credit rating, to 'B' from 'B+'. The outlook remains negative. The ratings actions comes after a disappointing third quarter that resulted in a $28.7 million loss, even with a positive lower-of- cost-or-market valuation adjustment on loans held for sale. "The operating loss was driven by the continued narrowing of the net interest margin, higher credit provisions, and trading losses on derivatives," explained Standard & Poor's credit analyst Michael Driscoll. "This marks the second consecutive quarter of substantial losses, and with a $30 million loss on the sale of securities resulting from a balance sheet restructuring in the fourth quarter, another significant loss in the fourth quarter is likely." Furthermore, mortgage originations continue to slow and totaled only $329.1 million, a 76% decline from a year earlier, indicating the sluggishness of the Puerto Rico housing markets and continued struggle for Doral's once dominant mortgage franchise. These results will make it more difficult for Doral to successfully refinance the $625 million in debt coming due in July 2007. In addition to the operating losses, Doral's various lawsuits are problematic in terms of the successful refinancing of the pending debt maturity. In addition to high legal expenses, the uncertain liability Doral faces from legal settlements complicates its initiatives to raise capital. Any material settlement or decision could further weaken Doral's already strained liquidity position. Lastly, governance issues resurfaced when Doral's nonexecutive chairman resigned last Friday citing concerns over how the company was being run, the release of a press release with wording he did not deem appropriate, and the failure to pursue a strategic buyer more aggressively. Specifically, the nonexecutive chairman disagreed with the wording that significant dilution could occur. While Standard & Poor's views the resignation as disconcerting, the disclosure seems appropriate under the circumstances. Standard & Poor's believes corporate governance concerns remain a weakness for this credit. Despite all of the negative news surrounding Doral over the past year and half, the mortgage brand itself remains strong. Doral has over 500,000 customers, but customers use only slightly more than one product each. Clearly, there are significant cross-selling opportunities, something management is intent on pursuing. However, Doral lacks the convenience and product set of other players in the market, who will not cede market share willingly, so Standard & Poor's expects progress to be difficult, expensive, and slow. DOV PHARMACEUTICAL: Has Until January 16 to Repurchase Debentures ----------------------------------------------------------------- DOV Pharmaceutical, Inc. received, through Jan. 2, 2006, tenders in the aggregate principal amount of $67.8 million, representing approximately 96.9% of the $70 million in aggregate principal amount of outstanding 2.5% convertible subordinated debentures due 2025. The offer to repurchase the debentures expired at 5:00 p.m. on Jan. 2, 2006, New York City time. The company does not presently have the capital necessary to repurchase the debentures that have been tendered and all of the debentures will be returned to the holders and remain outstanding. The failure to pay for the debentures tendered will constitute an event of default under the indenture governing the debentures. The company disclosed that it was obligated to make the offer to repurchase following the delisting of its common stock from The NASDAQ Global Market. The company has entered into a non-binding letter of intent with certain members of the ad hoc committee holding approximately 66.7% of the debentures regarding a consensual restructuring of its obligations under the debentures. The bondholders have agreed not to take any actions or exercise any remedies against the company, until Jan. 16, 2007, relative to its failure to repurchase the debentures, unless DOV commences any bankruptcy or similar proceeding or a proceeding is commenced against DOV. The company's proposed restructuring is expected to be in the form of an offer to exchange the outstanding debentures for a combination of cash of $212.50 per $1,000 principal amount of debentures (approximately $14.9 million in the aggregate) and shares of convertible preferred stock representing approximately 80% of DOV's outstanding equity after the offer. The preferred stock would be convertible into shares of common stock and would automatically convert at specified points in time, following stockholder approval and filing of an amendment to DOV's charter increasing the number of shares of authorized common stock. The preferred stock will entitle holders to initially appoint a majority of DOV's Board of Directors. Holders of DOV's outstanding common stock would receive warrants to purchase additional shares of common stock constituting approximately 20% of the outstanding equity of DOV after the exchange offer. The company further disclosed that if it is unable to restructure its obligations under the debentures or raise sufficient funds to repay the debentures, it may be forced to file for bankruptcy. Somerset, New Jersey-based DOV Pharmaceutical Inc. (PS: DOVP.PK) -- http://www.dovpharm.com/-- is a biopharmaceutical company focused on the discovery, acquisition, and development of novel drug candidates for central nervous system disorders. The company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. At Sept. 30, 2006, the Company's balance sheet showed $54.528 million in total assets and $105.504 million in total liabilities, resulting in a $50.975 million stockholders' deficit. The Company had a $19.301 million deficit at Dec. 31, 2005. DURA AUTO: Court Approves Upper Cumberland and Lawrenceburg Pacts ----------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware granted DURA Automotive Systems, Inc. and its debtor affiliates' agreements with Upper Cumberland Electric Membership Corporation and Lawrenceburg Utility Systems. The Debtors entered into separate Court-approved agreements with Upper Cumberland and Lawrenceburg. Pursuant to the Adequate Protection Agreement, the Debtors will make monthly payments to the utility providers beginning on the first business day of December 2006, and continuing on the first business day of each subsequent month with each monthly payment until the outstanding amount is paid in full: Minimum Outstanding Utility Provider Monthly Payment Amounts ---------------- --------------- ----------- Upper Cumberland $5,307 $15,918 Lawrenceburg Utility 35,677 214,525 Upper Cumberland and Lawrenceburg Utility agree that the terms of the Agreement provide adequate assurance of payment in accordance with Section 366(c) of the Bankruptcy Code. The Court also approved the Debtors' stipulation with Quest Energy, LLC, resolving Quest's objection to the Debtors' motion. Court papers did not indicate the terms of the Stipulation. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Seeks Court Nod for Lease Rejection Procedures --------------------------------------------------------------- DURA Automotive Systems, Inc. and its debtor affiliates, pursuant to Sections 365 and 554 of the Bankruptcy Code, seek the approval of the U.S. Bankruptcy Court for the District of Delaware for an expedited procedure for rejecting executory contracts and unexpired leases of personal and non-residential real property. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that the Debtors are in the process of consolidating their operations, which may require exiting non- core and unprofitable locations, returning unnecessary equipment, and terminating burdensome contracts in order to minimize costs and strengthen the businesses. In connection therewith, the Debtors anticipate that, in a very short time, they will seek to reject a number of real property leases, personal property leases, and executory contracts. Absent expedited procedures for managing this process, the Debtors will inevitably suffer delays and resulting administrative costs, which could be significant, Mr. Collins avers. The Debtors request that these procedures be approved in connection with the rejection of any executory contract, lease, sublease, or interest in the lease or sublease during the course of their bankruptcy proceedings: a. The Debtors will file a notice to reject any executory contract, lease or sublease, or interest in the lease or sublease, pursuant to Section 365 and will serve the Notice, as well as the deadlines and procedures for filing objections to the Notice, via overnight delivery service upon: (i) the United States Trustee; (ii) counsel to the agent to the Debtors' prepetition secured lenders; (iii) counsel to the agent to the Debtors' postpetition secured lenders; (iv) counsel to the Official Committee of Unsecured Creditors; (v) the contract counter-party or landlord(s) affected by the Notice, and (vi) any other parties-in-interest to the executory contract or lease, including subtenants, if any, sought to be rejected by the Debtors. If the Notice is issued by the Debtors prior to the effective date of a plan of reorganization, the affected executory contract, lease, sublease or interest in the lease or sublease will be deemed to be subject to a motion to reject for all purposes. b. The Notice will set forth this information, to the best of the Debtors' knowledge, as applicable: (i) the street address of the real property underlying the lease or sublease, the interest in the personal property lease or sublease or the type of executory contract which the Debtors seek to reject; (ii) the Debtors' monthly payment obligation, if any, under the contract, lease or sublease or interest in the lease or sublease; (iii) the remaining term of the contract, lease or sublease or interest in the lease or sublease; (iv) the name and address of the contract counterparty, landlord or subtenant; (v) a general description of the terms of the executory contract or lease; and (vi) a disclosure describing the procedures for fling objections, if any. c. Should a party-in-interest object to the proposed rejection by the Debtors of an executory contract, lease or sublease, or interest in the lease or sublease, the party must file and serve a written objection so that the objection is filed with the Court and is actually received by these parties no later than 10 days after the date the Debtors serve the Notice: (i) counsel to the Debtors: Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago, Illinois 60601, Attn: Ryan Blaine Bennett, Esq., and Richards, Layton & Finger, One Rodney Square, 920 N, King Street, Wilmington, Delaware 19801, Attention: Daniel J. DeFranceschi, Esq.; (ii) counsel to the Creditors Committee; and (iii) the Office of the United State Trustee. d. Absent an objection, the rejection of the executory contract, lease or sublease, or interest in the lease or sublease, will become effective 10 days from the date the Notice was served on the Service Parties without further notice, hearing or order of the Court; provided, however, that with respect to leases or subleases for non- residential real property, the rejection will become effective on the later of: (x) the Rejection Date or (y) the date the Debtors unequivocally relinquished control of the premises to the affected landlord by turning over keys or "key codes" to the affected landlord. e. If a timely objection is filed that cannot be resolved, the Court will schedule a hearing to consider the objection only with respect to the rejection of any executory contract, lease or sublease, or interest in the lease or sublease, as to which an objection is properly filed and served. If the Court upholds the objection and determines the effective date of rejection of the executory contract, lease or sublease, or interest in the lease or sublease, that date will be the rejection date. If the objection is overruled or withdrawn or the Court does not determine the date of rejection, the rejection date of the lease, sublease or interest will be deemed to have occurred on the Rejection Date or NRP Lease Rejection Date, as applicable. f. If the Debtors have deposited funds with a lessor or contract counterparty as a security deposit or other arrangement, the lessor or contract counterparty may not set-off for otherwise use the deposit without the prior authority of the Court. g. With respect to any personal property of the Debtors located at any of the premises subject to any Notice, the Debtors will remove the property prior to the expiration of the period within which a party must file and serve a written objection. If they determine that the value of the property at a particular location has a de minimis value or cost of removing the property exceeds the value of the property, the Debtors will generally describe the property in the Notice and, absent a timely objection, the property will be deemed abandoned pursuant to Section 554, as is, where is, effective as of the date of the rejection of the underlying unexpired lease. The Debtors further request that counterparties to executory contracts, leases or subleases, or interests in the leases and subleases that are rejected pursuant to the Rejection Procedures be required to file a proof of claim relating to the rejection of the executory contract, lease or sublease, or interest in the lease or sublease, if any, by the later of: (a) the claims bar date established in the Chapter 11 cases, if any; and (b) 30 days after the Rejection Date. The Debtors believe that the Rejection Procedures provide a fair and efficient manner for rejecting contracts, leases, subleases, and interests in leases and subleases. Mr. Collins asserts that the Rejection Procedures will enable the Debtors to minimize their unnecessary postpetition obligations while also providing parties-in-interest with adequate notice of lease and contract rejections and an opportunity to object to the rejection within a definitive time period. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ECUITY INC: Has $12.9 Mil. Shareholders' Deficit at September 30 ---------------------------------------------------------------- Ecuity Inc.'s balance sheet at Sept. 30, 2006, showed total assets of $1,306,810 and total liabilities of $14,301,572 resulting in a total shareholders' deficit of $12,994,762. The company's September 30 balance sheet also showed strained liquidity with $210,361 in total current assets available to pay $12,216,686 in total current liabilities. For the three months ended Sept. 30, 2006, the company reported a $49,120 net loss on $492,228 of revenues, compared to the company's $736,689 net loss on $669,306 of revenues for the three months ended Sept. 30, 2005. The company's working capital deficit decreased to $12,006,325 at Sept. 30, 2006, from a deficit of $12,455,168 as of Jun. 30, 2006, primarily as a result of the $766,469 gain on the change in fair value of the derivative instruments liabilities. In the 3-month period, cash decreased by $12,250, net accounts receivable decreased by $22,949, accounts payable increased by $80,652, and deposits on advance billings to customers decreased by $12,660. In the 3-month period ended Sept. 30, 2006, the company incurred an operating loss of $371,208 compared to an operating loss of $597,109 for the same period in 2005. The company's revenue from long distance and Internet service decreased to $359,924 in the current 3-month period compared to $549,029 in the same period in 2005 due to the loss of customers and related revenue, as well as legacy Internet dial-up customers moving to cable and DSL service providers. The lower revenues were offset by lower costs paid to carriers, resulting in an increase in gross profit percentage to 45.66% in the current 3- month period compared to 40.50% for the same period in 2005. The decreased operating loss in the 3-months ended Sept. 30, 2006, compared to the operating loss in the 3-months ended Sept. 30, 2005, resulted primarily from reduced operating expenditures for salaries, rent, and advertising in the current year. In addition, no expense for issued stock for services was incurred in 2006 compared to $56,599 for the same 3-month period in 2005. Total interest expense was $586,938 for the three months ended Sept. 30, 2006, compared to $208,446 for the three months ended Sept. 30, 2005, primarily due to $141,678 of additional interest charges related to the derivative instruments liabilities on the Digitaria demand notes and $276,038 of interest expense from accretion of the Cornell debentures. The company recognized a net gain of $908,276 in the 3-month period ended Sept. 30, 2006, related to the change in the fair value of the Digitaria and Cornell derivative instruments. Revenues from the Fox asset purchase are recognized by the company's wholly owned subsidiary, Ecuity Advanced Communications, Inc. EAC's business is primarily related to VoIP telephone voice and data services as well as traditional "legacy" long distance, dial tone, dial up and broadband Internet data services, and web hosting. All of the company's sales revenues from billed services flow through accounts receivable. Based in Seattle, Washington, Ecuity Inc. -- http://www.ecuity.net -- operates as a facilities-based telecommunication carrier serving primarily the small office and home office market, as well as fiber to the premises and broadband residential markets in the United States. The company also provides legacy telecommunication services and voice over Internet protocol services. ELEPHANT TALK: September 30 Balance Sheet Upside Down by $129,639 ----------------------------------------------------------------- As of Sept. 30, 2006, Elephant Talk Communications Inc. had $129,639 in total stockholders' deficit resulting from total assets of $13,756,390 and total liabilities of $12,795,376. Additionally, at September 30, the company reported negative working capital with $4,242,492 in total current assets and $9,295,376 in total current liabilities. The company's balance sheet at Jun. 30, 2006, showed total assets of $15,299,215, total liabilities of $12,248,517, and total stockholders' equity of $1,835,699. For the three months ended Sept. 30, 2006, the company's net loss increased to $3,148,396 compared to a $224,474 net loss for the same period in 2005. Revenues for the current period increased to $898,406 from $42,780 for the three months ended Sept. 30, 2005. Loans Payable Elephant Talk has executed a credit facility with a bank in Hong Kong since Jun. 29, 2004, under which the company has borrowed funds from the bank under three installment loans and a term loan arrangements. The company is in default of making loan payments on all the loans and as a result, the entire loan balances outstanding at Sept. 30, 2006, are immediately due and payable to the bank. Furthermore, the company is obligated to pay a default interest rate at the rate of 4.5% per annum in addition to the prescribed interest rate of the installment loans and term loan. The company has recorded $43,905 and $34,733 in interest expense and default interest expense on loans payable as of Sept. 30, 2006 and 2005. Based in Tsuen Wan, Hong Kong, Elephant Talk Communications offers primarily wholesale international long-distance between North America and Asia through its Hong Kong-based operating subsidiary, Elephant Talk Limited. The facilities-based carrier uses both circuit switched and Internet protocol (IP) based technology and operates switching facilities in China, Hong Kong, Singapore, and the United States. Elephant Talk also offers both prepaid and postpaid calling cards and other value-added services. EMPIRE RESORTS: Amends Option Agreement with Concord Associates --------------------------------------------------------------- Empire Resorts, Inc. and Concord Associates Limited Partnership agreed to an amendment to their option agreement, pursuant to which, Concord Associates has exercised options for 2.5 million shares of the company's stock for an aggregate cash consideration of $18.75 million to be paid by Jan. 31, 2007. In addition, Concord Associates will retain the right to exercise options for an additional 1 million shares of the company's stock until Dec. 27, 2007. The exercise of the options represents a modification to the letter agreement, dated Dec. 30, 2005, related to the termination of the plans by the company to acquire the Concord and Grossinger's resorts in Sullivan County, New York. "We want to thank Concord Associates for working with us to modify the terms of the Options Agreement," David P. Hanlon, president and chief executive officer, said. "With this amended options agreement, we are receiving a significant cash infusion on favorable terms relative to alternative financing options and reducing the total number of fully diluted shares outstanding. These funds will be used to support our growth opportunities including the ongoing approvals and development planning related to the St. Regis Mohawk Casino at Monticello Raceway as well as the development of other gaming management opportunities outside of New York State." A full text-copy of Amendment No. 3 to Option Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?1814 About Concord Associates Concord Associates, LP is a joint venture of Cappelli Enterprises and Reckson Strategic Venture Partners and is headed by Louis R. Cappelli About Empire Resorts Headquartered in Monticello, NY, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Mighty M Gaming facility features over 1,500 video gaming machines and amenities including a 350- seat buffet and live entertainment. Empire is also working to develop a $500 million "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. The company's consolidated balance sheet at Sept. 30, 2006 showed $60.8 million of total assets and $85.8 million of total liabilities, resulting in $25 million of stockholders' deficit. EMPIRE RESORTS: Indian Affairs' Finding Show No Significant Impact ------------------------------------------------------------------ Empire Resorts, Inc. disclosed that the Bureau of Indian Affairs has informed its partners, the St. Regis Mohawk Tribe, that the Final Environmental Assessment has been deemed sufficient and no Environmental Impact Study will be required. As reported in the Troubled Company Reporter on Sept. 15, 2006, Empire Resorts, Inc., and its partners, the St. Regis Mohawk Tribe, received a Notice of Availability from the Bureau of Indian Affairs regarding the draft Environmental Assessment. The draft Environmental Assessment is required to take the land into trust for the proposed St. Regis Mohawk Casino at Monticello Raceway. The BIA has issued a Finding of No Significant Impact related to the proposed federal action approving the Tribe's request to take 29.3 acres into trust for the purpose of building a Class III gaming facility, in accordance with the Indian Gaming Regulatory Act of 1988. The proposed St. Regis Mohawk Casino is to be located at Monticello Raceway, just 90 miles north of New York City. In a transmittal letter to the St. Regis Mohawk Tribe, Associate Deputy Secretary of the Interior James Cason indicated that the Department of the Interior anticipates continued political scrutiny of the ability of Tribes, such as the St. Regis Mohawk Tribe, to acquire land into trust for gaming purposes away from their aboriginal reservations and indicated that the Department itself was considering the implementation of regulatory changes that might broaden the scope of review of the applications. David P. Hanlon, president and chief executive officer, stated, "Our enhanced Environmental Assessment has been meticulously reviewed and approved over an extended period of time and we are pleased that now the process can move forward. Importantly, it is clear from the Department of Interior's transmittal letter that due to the evolving nature of off-reservation gaming in the United States, New York State and local officials should work together to immediately secure this unique economic development opportunity before the federal legislative or regulatory landscape inexorable changes -- leaving Pennsylvania, Connecticut and Atlantic City the really big winners." Headquartered in Monticello, NY, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Mighty M Gaming facility features over 1,500 video gaming machines and amenities including a 350- seat buffet and live entertainment. Empire is also working to develop a $500 million "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. The company's consolidated balance sheet at Sept. 30, 2006 showed $60.8 million of total assets and $85.8 million of total liabilities, resulting in $25 million of stockholders' deficit. FINAL ANALYSIS: Case Summary & Two Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Final Analysis Communication Services, Inc. 9701 East Philadelphia Court Lanham, MD 20706 Bankruptcy Case No.: 06-18520 Type of Business: The Debtor had sued General Dynamics Corporation, its largest unsecured creditor, and General Dynamics Information Services, Inc., alleging a breach of certain contracts between the parties. The jury in the case awarded the Debtor $116,030,000 in damages against General Dynamics, and awarded $8 million to General Dynamics with respect to counterclaims asserted against the Debtor. However, the U.S. District Court for the District of Maryland entered a judgment reducing the Debtor's award to $19,870,000. Both the Debtor and General Dynamics are currently appealing the District Court's judgment. Nader Modanlo, owner of New York Satellite Industries, LLC which holds a majority interest in Final Analysis, filed for chapter 11 protection on July 22, 2005 (Bankr. D. Md. Case No. 05-26549). Chapter 11 Petition Date: December 29, 2006 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: J. Daniel Vorsteg, Esq. Paul M. Nussbaum, Esq. Martin T. Fletcher, Esq. Whiteford, Taylor & Preston, LLP 7 St. Paul Street Baltimore, MD 21202 Tel: (410) 347-8700 Fax: (410) 625-7510 Estimated Assets: More than $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ General Dynamics Corporation $8,000,000 c/o Lisa L. Listrom Jenner & Block LLP One IBM Plaza Chicago, IL 60611 The Law Funder, LLC $3,646,500 295 Madison Avenue, 29th Floor New York, NY 10017 FRIENDLY ICE: Sardar Biglari Rejects Offer of Two Board Seats ------------------------------------------------------------- Friendly Ice Cream Corporation reported that Sardar Biglari rejected its offer of two seats on the company's board of directors for Mr. Biglari and his colleague, Phillip Cooley. As reported in the Troubled Company Reporter on Dec. 11, 2006, the company intended to increase the size of its board of directors from five to seven members and its Board also decided to offer one of the additional board seats to a designee of the group of shareholders led by Sardar Biglari, providing the group with representation approximately proportional to its ownership in the company. The company's Board determined that the offer is in the best interests of the shareholders, as it will avoid a potentially contentious and expensive proxy fight. The company's offer contained only one condition - that they agree not to solicit any proxies for additional board seats or other matters not recommended by the Board. The Board's offer was intended to respond favorably to a significant shareholder's request for a voice on the Board, while avoiding the unnecessary expense and distraction of a proxy contest. In rejecting the company's offer, Mr. Biglari increased his demands to include the submission of a proposal to Friendly's shareholders to remove the company's three classes of directors. In a letter to shareholders dated January 2, 2007, Donald N. Smith, chairman of the Board, stated, "(t)he results of WSC suggest that it would not be in the best interests of our shareholders to allow Mr. Biglari to control the Friendly's Board. After Mr. Biglari took control of WSC, rather than reinvesting in the restaurant business of WSC, Mr. Biglari used WSC's surplus cash, its bank credit facilities and a brokerage margin account to purchase Friendly's stock. It appears that Mr. Biglari is leveraging the credit of WSC and his hedge fund to purchase our stock." Mr. Smith added, "Under Mr. Biglari's leadership, WSC's operating cash has dwindled, year to year earnings from operations have declined, franchised restaurants continue to be closed, and its stock price has declined significantly. While he continues to offer criticisms of our company, he hasn't offered any plan, vision or strategy for increasing Friendly's shareholder value. If Mr. Biglari gains control of your Board, he could change the company's financial agreements to allow him to invest Friendly's cash in other companies, like he has done at WSC. We believe that Mr. Biglari wants to gain control of the Board in order to redirect corporate assets for purposes other than the continued growth of Friendly's. The Friendly's Board will take all actions necessary to prevent this from happening. Friendly's is a restaurant company not a hedge fund or investment company." With principal executive office at Wilbraham, Mass., Friendly Ice Cream Corporation (AMEX: FRN) -- http://www.friendlys.com/-- is a vertically integrated restaurant company serving signature sandwiches, entrees and ice cream desserts in a friendly, family environment in 525 company and franchised restaurants throughout the Northeast. The company also manufactures ice cream, which is distributed through more than 4,500 supermarkets and other retail locations. With a 70- year operating history, Friendly's enjoys strong brand recognition and is currently remodeling its restaurants and introducing new products to grow its customer base. * * * As reported in the Troubled Company Reporter on Nov. 9, 2006, Moody's Investors Service confirmed Friendly Ice Cream Corp.'s B3 Corporate Family Rating. FTS GROUP: Earns $69,551 of Net Income in Quarter Ended Sept. 30 ---------------------------------------------------------------- FTS Group Inc. reported $69,551 of net income on $1.6 million of revenues for the quarter ended Sept. 30, 2006, compared with a $179,345 net loss on $283,505 of revenues for the same period in 2005. The increase in consolidated sales is related to the inclusion of results of See World Satellites not included in the prior quarter results as well as the increase in sales at FTS Wireless. At Sept. 30, 2006, the company's balance sheet showed $6.6 million in total assets, $4.7 million in total liabilities, and $1.9 million in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $765,096 in total current assets available to pay $3.4 million 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?1809 About FTS Group FTS Group, Inc. (OTCBB: FLIP) -- http://www.ftsgroup.com/-- develops and acquires businesses primarily in the wireless industry. Through FTS Wireless Inc., a wholly-owned subsidiary, acquires and develops a chain of retail wireless locations in the Gulf Coast market of Florida. As of Mar. 1, 2006, the company operates nine retail wireless locations in Florida. Going Concern Doubt Withum Smith & Brown, P.C., in Princeton, New Jersey, raised substantial doubt about FTS Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses and working capital deficits. GENERAL MOTORS: Asia Pacific Sales Up 17.9%; Market Share Up 6.4% ----------------------------------------------------------------- General Motors Corp. said its sales and market share in Asia Pacific both reached new highs in 2006. GM sold 1,254,615 vehicles in Asia Pacific, which was an increase of 17.9% over 2005. It marked the second consecutive year that regional sales topped 1 million units. This took GM's market share in Asia Pacific to an estimated 6.4%, from 5.8% at the end of the previous year. "Our operations in China and Korea continued to drive GM's vehicle sales in the world's fastest-growing region," Nick Reilly, GM Group vice president and president of GM Asia Pacific, said. "We benefited from a positive reception for many of our new offerings, including the VE Commodore in Australia, the Buick LaCrosse and Chevrolet Lova in China, the GM Daewoo Winstorm and Tosca in Korea, and the Chevrolet Aveo in India and Thailand." Rising Sales In China, GM and its Shanghai GM and SAIC-GM-Wuling joint ventures sold 876,747 vehicles, which represented an increase of 31.8% over 2005. Shanghai GM sales rose 27% on a year-on-year basis to 413,367 units. SAIC-GM-Wuling, GM's mini-vehicle joint venture, registered sales growth of 36.5% to 460,155 vehicles. China remained GM's second-largest global market in 2006, following the United States. GM Daewoo sales likewise remained strong in 2006. Its sales in Korea rose 19.2% on an annual basis to 128,332 units. The Tosca sedan and Winstorm SUV accounted for more than 36% of domestic sales. Exports of complete vehicles and knockdown kits from Korea jumped 33.1% to 1,397,487 units. This was a GM record. Despite a drop in sales to 146,502 units in 2006, GM Holden remained Australia's number two seller of vehicles. GM Holden received a boost from the launch of the award-winning VE Commodore, Australia's single largest vehicle program. Thailand continued to lead the way for GM's growth in ASEAN. Sales of GM's lineup of Chevrolet products totaled 29,727 units. For ASEAN as a whole, GM sales topped 38,000 vehicles in a market that was down overall. In India, GM rolled out an unprecedented three new Chevrolet vehicles (the Aveo, SRV and Aveo U-VA) in 2006. Consumers responded, with GM's sales in India rising 15.4% year on year to 34,552 units. New Investment in 2006 GM continued the expansion of its operations in Asia Pacific in 2006. In May, GM Daewoo began regular production at its diesel engine plant in Gunsan, Korea. The diesel engine that it produces is powering both the Winstorm and Tosca for sale in Korea and around the globe. GM Daewoo also began operation of a new KD packing business at Korea's Incheon Port that can pack and export 570,000 knockdown kits annually for assembly at GM facilities worldwide. In India, GM announced it would build a new vehicle manufacturing plant in the state of Maharashtra that will more than double GM's local production capacity when it opens in 2008. The foundation stone was laid for the facility and construction officially began on November 21. To keep up with short-term demand, GM's manufacturing facility in Gujarat, India, opened a new paint shop and increased its annual manufacturing capacity to 85,000 units. The GM Thailand Manufacturing Center in Rayong also opened a new paint shop, while GM Holden completed an upgrade of the Holden Vehicle Operations (HVO) plant in Elizabeth, South Australia. In addition, GM signed an agreement to form a new joint venture with DRB-HICOM for the distribution of Chevrolet products in Malaysia. New Products and Facilities in 2007 GM plans to continue to expand its vehicle lineup and facilities in Asia Pacific in 2007. Among the new and upgraded vehicles that are scheduled to reach consumers this year are a Chevrolet mini- car in India, the Cadillac SLS in China, and a diesel version of the GM Daewoo Lacetti and a new state-of-the-art six-speed automatic transmission in Korea. GM Daewoo will complete its new automotive test track in Incheon, Korea, by mid-year. Related R&D facilities will follow over the next two to three years. In China, SAIC-GM-Wuling is on schedule to open a new engine plant in Liuzhou, Guangxi, in 2007. "We are pleased with our growth over the past few years in Asia Pacific," said Reilly. "By expanding our manufacturing, engineering and design capability, we are better able to meet the vastly different needs of our customers across Asia Pacific. This is enabling us to increase our presence in this highly important region for General Motors." General Motors began doing business in Asia Pacific in 1915 when it introduced Buick and Cadillac products to Japanese consumers. Today, GM has automotive facilities and sales operations in more than 15 countries. Its regional headquarters is in Shanghai, China. GM's broad product portfolio in Asia Pacific encompasses the Buick, Cadillac, Chevrolet, GM Daewoo, Holden, HUMMER, Opel, Saab and Wuling brands. GM's business interests in Asia Pacific go beyond cars and trucks. They include GMAC, ACDelco and Allison Transmission. About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 327,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed $1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. GENERAL MOTORS: Reports 11.8% Market Share in China --------------------------------------------------- General Motors Corp. sets new marks for sales and market share in mainland China in 2006. Buoyed by record demand for all six brands offered by GM and its joint ventures, the automaker and its domestic operations sold 876,747 vehicles in mainland China, which was about 208,000 units more than in 2005. This represented growth of 31.8% from 2005 and was ahead of estimated industry growth of around 24%. It took GM's market share in mainland China to an estimated 11.8%. SAIC-GM-Wuling led the way, with sales of its family of mini- vehicles rising 36.5% on an annual basis to 460,155 vehicles. Sales of products from Shanghai GM rose 26.8% on a year-on-year basis to 412,791 units. "Vehicle sales continued to outpace most projections as a result of unprecedented consumer demand for passenger cars," GM China Group President and Managing Director Kevin Wale said. "While demand was particularly strong in the small car segment, nearly all passenger car segments experienced growth. "GM took advantage by introducing a series of new products under all six of our brands sold locally, in the process expanding what was already the broadest vehicle lineup in the marketplace," Mr. Wale added. Since 2002, when SAIC-GM-Wuling was formed, sales of GM and its joint ventures have grown an average of 34.9% annually and GM's market share has risen by 4.3 percentage points. GM's local product lineup has grown as well, to about 30 different models. In 2006, sales of GM's flagship brand in China, Buick, increased 24.9% on an annual basis to 304,230 units. Buick benefited from new vehicles such as the LaCrosse premium sedan, which registered sales of 52,021 units in its first year on the market. In addition, established products such as the Excelle, Buick's best- selling model, and the GL8, China's first family of executive wagons, enjoyed continued strong sales. GM's most popular global brand and its most affordable passenger car brand in China also performed well. Chevrolet sales topped 100,000 units for a second consecutive year, rising 36.8% on an annual basis to 145,392 vehicles. The brand's best-selling model in China in 2006 was the Spark mini-car built and marketed by SAIC-GM-Wuling, which sold 40,015 units. It was followed by the Lova small car from Shanghai GM, which sold 36,893 units in just its first year on the market. Cadillac, GM's luxury nameplate, experienced growing demand for its four products, the CTS premium sedan, SRX medium luxury utility vehicle, XLR luxury roadster and new Escalade luxury SUV. Cadillac began taking orders for the new SLS luxury sedan, which was designed especially for China and will go into production at Shanghai GM in the first quarter of 2007. The Wuling brand of mini-commercial vehicles and minivans enjoyed sales growth of 35.4% in 2006 to 420140 vehicles. The brand benefited from the ongoing popularity of the Sunshine minivan, which accounted for 69.6% of total sales, and the unveiling of two new products: the PSN crew cab pickup and Hong Tu minivan. "In response to what we expect to be continued double-digit market growth, GM and our joint ventures will invest an average of $1 billion per year in our domestic operations through 2010," according to Mr. Wale. "In 2007, we plan to roll out about 10 new and upgraded products," he added. "Like the Buick LaCrosse, Cadillac SLS and Chevrolet Lova, many of our new offerings are being engineered for the local market by the Pan Asia Technical Automotive Center. Our aim is to stay ahead in this critical market for General Motors by offering local consumers the products and services that they want when they want them." About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 327,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed $1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. GOODYEAR TIRE: S&P Holds Rating on $46 Million Certificates at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' ratings on the class A-1 and A-2 certificates from the $46 million Corporate Backed Trust Certificates Goodyear Tire & Rubber Note-Backed Series 2001-34 Trust. Concurrently, the ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 24, 2006. Corporate Backed Trust Certificates Goodyear Tire & Rubber Note- Backed Series 2001-34 Trust is a swap-independent synthetic transaction that is weak-linked to the underlying securities, Goodyear Tire & Rubber Co.'s 7% notes due March 15, 2028. GUARDIAN TECHNOLOGIES: Mark Zorko Resigns from Board of Directors ----------------------------------------------------------------- Mark A. Zorko resigned, effective Dec. 21, 2006, as a director of Guardian Technologies International, Inc., where he has served as a director since November 2005. Since 2000, Mr. Zorko, has been a CFO Partner at Tatum CFO Partners, LLP, a professional services firm where he has held financial leadership positions with public and private client companies. From 1996 to 1999, Mr. Zorko was chief financial officer and chief information officer for Network Services Co., a privately held distribution company. His prior experience includes vice president, chief financial officer and secretary of Comptronix Corporation, a publicly held electronic systems manufacturing company, corporate controller for Zenith Data Systems Corporation, a privately held computer manufacturing and retail electronics company, and finance manager positions with Honeywell, Inc. Mr. Zorko was a senior staff consultant with Arthur Andersen & Co. He served in the Marine Corps from 1970 to 1973. Mr. Zorko is a board advisor to Medspeed, Inc., a privately held medical transportation logistics company. Mr. Zorko earned a BS degree in Accounting from Ohio State University, an MBA from the University of Minnesota, and completed the FEIs chief financial officer program at Harvard University. He is a certified public accountant and a member of the National Association of Corporate Directors. Headquartered in Herndon, Virginia, Guardian Technologies Int'l Inc. (OTCBB: GDTI) -- http://www.guardiantechintl.com/-- is a technology company that designs and develops sophisticated imaging informatics solutions for the aviation/homeland security and healthcare markets. Going Concern Doubt Goodman & Company, L.L.P., in Norfolk, Virginia, raised substantial doubt about Guardian Technologies International, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's significant operating losses since inception and need for additional financing. INCO LTD: Completes Amalgamation with Itabira Canada ---------------------------------------------------- CVRD Inco Limited fka Inco Limited completed the amalgamation of Inco Limited and Itabira Canada Inc., a wholly owned subsidiary of Companhia Vale do Rio Doce, to continue as "CVRD Inco Limited". As a result of the amalgamation, CVRD now owns 100% of the common shares of CVRD Inco. Under the amalgamation, which was effective on Jan. 4, 2007, holders of Inco Limited common shares (other than dissenting shareholders and affiliates of CVRD) received, for each such share held by them, one Class A redeemable preferred share of CVRD Inco. The Class A redeemable preferred shares were then redeemed for CDN$86 per share in cash, the same price paid under CVRD's successful take-over bid for Inco Limited in October 2006. Inco Limited's common shares were delisted from the Toronto Stock Exchange at the close of trading today and will no longer be traded on any stock exchange. CVRD Inco has applied to cease to be a reporting issuer under Canadian securities laws and has suspended its reporting obligations under United States securities laws. Former holders of Inco Limited common shares can obtain more information regarding how to obtain the cash payable to them in connection with the redemption of their shares in the meeting materials relating to the special meeting of shareholders held on Jan. 3, 2007. These meeting materials are available on the Inco Limited website at http://www.inco.com/ Former Inco Limited registered shareholders with any questions or requests for assistance in surrendering their certificates may contact Computershare Investor Services Inc. by telephone toll free in North America at 1-866-612-8058 or overseas at 1-514-982- 7555. Stockholders' Approval As previously reported in the Troubled Company Reporter, at a special meeting held on Jan. 3, 2007, in Toronto, Canada, shareholders of Inco Limited overwhelmingly approved the amalgamation of Inco with Itabira Canada. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- nka CVRD Inco Limited produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INTELSAT LTD: Subsidiary to Redeem $1 Billion Senior Notes ---------------------------------------------------------- Intelsat Subsidiary Holding Co. Ltd., an Intelsat Ltd. subsidiary, intends to redeem all of its outstanding $1 billion Floating Rate Senior Notes due 2012. Intelsat Subsidiary has issued a notice of redemption pursuant to the indenture for the Notes stating that it intends to redeem all of the Notes on Feb. 2, 2007 at a redemption price equal to 101% of the principal amount of the Notes plus accrued and unpaid interest thereon to the Redemption Date. The redemption of the Notes is conditioned upon Intelsat Subsidiary Holding Company, Ltd. receiving sufficient funds on the Redemption Date from a term loan borrowing by its parent Intelsat (Bermuda), Ltd. The term loan borrowing is expected to be made pursuant to a new unsecured credit agreement that Intelsat (Bermuda), Ltd. intends to enter into to fund the Redemption Payment, which borrowing will be guaranteed by Intelsat Subsidiary Holding Company, Ltd. and the same subsidiaries of Intelsat Subsidiary Holding Company, Ltd. that guarantee the Notes. About Intelsat Ltd Intelsat, Ltd. -- http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high- quality connections, global reach and reliability. At Sept. 30, 2006, the company's balance sheet showed $12.4 billion in total assets and $12.9 billion in total liabilities, resulting in a $494.6 million stockholders' deficit. INTERSTATE BAKERIES: Court OKs Settlement to Reconstitute Board --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri issued an order on Jan. 5, 2007, approving a settlement that will result in changes in the membership of the Board of Directors of Interstate Bakeries Corporation. The settlement among the company and its various constituency groups implements the Board changes and also resolves certain related issues. "With the settlement approved by the Court, the company and its various constituency groups can continue to work together productively and focus all of their energy on IBC's restructuring efforts," said Tony Alvarez II, chief executive officer of IBC. As a result of the Court decision, David Pauker and Terry R. Peets will immediately join the reconstituted seven-member Board, which now also consists of Robert Calhoun, an IBC board member since 1991; Michael Anderson, a member of the Board since 1998; William Mistretta and David Weinstein, who were both named to the Board in August 2006. In addition, a new chief executive officer, who will replace Mr. Alvarez, who is currently acting as interim CEO, when hired, will join the Board as its seventh member. David Pauker is an experienced restructuring advisor and turnaround manager with 20 years' experience advising financially distressed companies or their creditors in a broad array of industries. Mr. Pauker served most recently as the chief restructuring officer of Refco, Inc. the largest bankruptcy filed during 2005. A managing director of Goldin Associates, L.L.C., he has led many of Goldin's restructuring advisory assignments and acted as chief restructuring officer or interim CEO or COO for numerous underperforming or distressed companies. Mr. Pauker's food industry experience includes a role as CEO during the bankruptcy of Vlasic Foods International, a major food company selling products under the Swanson, Hungry Man, Vlasic and Open Pit brands. He has advised numerous other food companies or their creditors, as well. Terry Peets is a senior executive with 30 years' experience in broad areas of food retailing. His responsibilities have included direct management of distribution/logistics; management information systems, manufacturing, retail and non-retail procurement; sales and marketing and store operations. He currently serves as chairman of World Kitchens, Inc., a manufacturer and marketer of consumer kitchen products, and was chairman of Bruno's Supermarkets prior to its acquisition by Ahold USA. Mr. Peets is currently a member of the Board of directors of Pinnacle Foods Group, Inc., Ruiz Foods Inc. and Winn-Dixie Stores, Inc. He also serves as vice chairman of the City of Hope National Cancer Center and the Beckman Research Institute. Departing from the Board are Frank E. Horton, G. Kenneth Baum, Ronald L. Thompson, Leo Benatar and Richard L. Metrick. "I speak for the IBC family in acknowledging and thanking the departing members for their leadership, insight and dedicated service to the IBC Board," Mr. Alvarez said. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. IPIX CORP: Argusight Wants $2.2 Million Secret Offer Disallowed --------------------------------------------------------------- Argusight Inc. objected to the request of Donald King, the appointed Chapter 7 trustee of IPIX Corporation, to sell the Debtor's patent portfolio to an anonymous bidder, Andrew Eder writes for Knoxville News Sentinel. Argusight had been a previous bidder offering $100,000 for the Debtor's interest in a high-resolution surveillance gigapixel camera, according to the source. Mr. King reportedly asked the U.S. Bankruptcy Court for the Eastern District of Virginia to withdraw Argusight's deal in favor of an anonymous $2.2 million bid for the entire Ipix patent portfolio, which includes the Debtor's immersive still photography and video surveillance technologies. The anonymous bid should be disallowed because of an unidentified buyer, Argusight said. "This kind of lack of disclosure, and secrecy, cannot instill public confidence in the bankruptcy system," according to documents filed with the Court. Knoxville Business relates that Brian Kenney, Esq., at Miles & Stockbridge, argued that Argusight's offer should be considered the stalking horse bid and the gigapixel portion of the anonymous bid should be capped at $128,000, possibly setting the stage for a counteroffer from Argusight. Mr. Kenney also commented that the Trustee is attempting to renege on bidding procedures that were approved earlier. However, the Trustee's request to sell to the anonymous bidder, says that the motion won't contain procedures for overbidding, the court papers disclosed. Headquartered in Reston, Virginia, IPIX Corporation (NASDAQ: IPIX) -- http://www.ipix.com/-- provides immersive imaging products for government and commercial applications. The company's immersive, 360-degree imaging technology has been used to create high- resolution digital still photography and video products for surveillance, visual documentation and forensic analysis. The Company filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code on July 31, 2006 (Bankr. E.D. Va. Case No. 06-10856. As a result of the filing, IPIX terminated all business activities after concluding it didn't have sufficient funding to remain solvent and was unsuccessful in securing the additional funding crucial for continued operation. KL INDUSTRIES: Court Sets January 9 Cash Collateral Hearing ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois in Chicago will convene a hearing on Jan. 9, 2007, at 10:30 a.m., to consider KL Industries Inc.'s motion to use the cash collateral securing repayment of its obligation to Mr. Gerald Capizzi. The hearing will be held at Courtroom 742, No. 219 South Dearborn in Chicago, Illinois. Mr. Capizzi is the Debtor's 80% owner and director. He holds $2.3 million in prepetition loan against the Debtor and has guaranteed the Debtor's $1.75 million loan obligations to La Salle Bank NA. La Salle Credit Facility La Salle Bank is a prepetition secured credit lender whom the Debtor pledged substantially all of its assets. La Salle also provided the Debtor postpetition credit facility pursuant to the Court's final order authorizing the Debtor to obtain debtor-in-possession financing from La Salle. The Debtor's ability to borrow under the La Salle DIP Facility will terminate upon the closing of a Court-approved $4.5 million sale of substantially all of the Debtor's assets to JD Norman Metal Technologies Inc. To the extent the sale proceeds are not sufficient to satisfy La Salle's claims in full, La Salle has the right to call Mr. Capizzi's guarantee. Mr. Capizzi may thereafter be personally liable for any shortfall and will be subrogated to La Salle's first-priority, properly perfected security interest in the Debtor's assets. As adequate protection for Mr. Capizzi's interest in the cash collateral, the Debtor proposes to grant Mr. Capizi a super- priority claim against the Debtor. The Debtor will use the cash collateral fund through a cash flow forecast extending through January 2007 as incorporated in the Debtor's DIP Financing Agreement with La Salle. The Debtor tells the Court that without the use of the cash collateral to pay for postpetition, post-closing wind-down expenses, including utilities, vendor claims and professional fees, such expenses are not likely to be paid. About KL Industries Based in Addison, Illinois, KL Industries Inc. manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. Daniel J. McGuire, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. CM&D Capital Advisors LLC is the Debtor's financial Advisor. In its schedules of assets and liabilities, the Debtor listed $10,462,451 in total assets and $11,898,913 in total liabilities. KNIGHT PROTECTIVE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Knight Protective Service, Inc. 8507 Edgeworth Drive Capitol Heights, MD 20743 Bankruptcy Case No.: 06-18409 Type of Business: The Debtor provides contract security officers to commercial organizations and the federal government, strives to exceed client expectations through excellent customer service, quality assurance measures, and continuous employee training and support programs. See http://www.knightprotectiveservice.com/ Chapter 11 Petition Date: December 22, 2006 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Martin T. Fletcher, Esq. Stephen B. Gerald, Esq. Susan Jaffe Roberts, Esq. Whiteford, Taylor & Preston LLP Seven Saint Paul St., #1400 Baltimore, MD 21202 Tel: (410) 347-8737 Fax: (410) 223-3737 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GM Card Trade Debt $28,352 P.O. Box 88000 Baltimore, MD 21288 National Union AIGRM Trade Debt $24,891 Special Bus. P.O. Box 35657 Newark, NJ 07193 Secure State $19,826 23340 Miles Rd., Unit C Bedford Heights, OH 44128 Alpine Trading Company Trade Debt $13,447 43-58 11th Street Long Island City, NY 11101 The Hartford Trade Debt $11,969 P.O. Box 2907 Hartford, CT 06104 QI Exchange Trade Debt $11,206 P.O. Box 472687 Charlotte, NC 28247 Prime EAP $11,083 4230 Cabin Creek Road Hurlock, MD 21643 ITPE Pension Fund $7,439 6851 Jericho Pike Suite 255 Syosset, NY 11791 Sprint $7,328 P.O. Box 4181 Carol Stream, IL 60197 ADP Trade Debt $5,491 11411 Red Run Blvd. Owings Mills, MD 21117 Security Workers Benefit $4,779 Fund 6650 Belair Road Baltimore, MD 21206 Deltek $4,306 P.O. Box 79581 Baltimore, MD 79581 The Gun Shop Trade Debt $4,180 60D Main Street Vincentown, NJ 08088 Assuant Employee Benefits Trade Debt $4,180 P.O. Box 806644-1 Kansas City, MO 64180 IKON Office Solutions Trade Debt $3,784 Mid-Atlantic District P.O. Box 827468 Philadelphia, PA 19182 Federal Express Corporation Trade Debt $3,749 P.O. Box 1140 Dept. A Memphis, TN 38101 Prime Rate Premium Finance $3,356 2141 Enterprise Drive Florence, SC 29501 Prime Rate Premium Finance Trade Debt $3,356 P.O. Box 100507 Florence, SC 29501 Lion Apparel $3,053 P.O. Box 710836 Cincinnati, OH 45271 Citgo Petroleum Corp. Trade Debt $3,038 P O Box 659590 San Antonio, TX 78265 LIFE SCIENCES: NYSE Arca Okays Listing Application -------------------------------------------------- Life Sciences Research, Inc., disclosed that the New York Stock Exchange Arca has approved its listing application. Trading is expected to begin under the new ticker symbol "LSR". In connection with the company's listing and trading on NYSE Arca, LSR and NYSE Group, Inc. have entered into a settlement agreement and release under which LSR will release the NYSE from all claims relating to the September 2005 postponement by the NYSE of LSR's trading on the NYSE. About NYSE Arca NYSE Arca, the first U.S. open all-electronic stock exchange, provides customers with fast electronic execution and open, direct and anonymous market access. About Life Sciences Research With principal office at East Millstone, New Jersey, Life Sciences Research Inc. (Other OTC: LSRI) -- http://www.lsrinc.net/-- is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries. LSR operates research facilities in the United States (the Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and Eye, England). As reported in the Troubled Company Reporter on Nov. 30, 2006, Life Sciences Research Inc.'s balance sheet at Sept. 30, 2006, showed total assets of $204.8 million and total liabilities of $230.1 million, resulting in a total stockholders' deficit of $25.3 million. At Dec. 31, 2005, the Company's total stockholders' deficit stood at $14.5 million. MARCI-COURT: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Marci-Court Investment, LLC 324 Scotland Road South Orange, NJ 07079 Bankruptcy Case No.: 06-22760 Chapter 11 Petition Date: December 19, 2006 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Linwood A. Jones, Esq. 55 Washington Street, Suite 603 East Orange, NJ 07017 Tel: (973) 676-7439 Total Assets: $3,200,000 Total Debts: $2,482,055 Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Northern Funding LLC Bank Loan $756,944 517 Route One, Suite 1002 Iselin, NJ 08830 $525,223 $208,553 Bayview Loan Servicing Bank Loan $98,000 P.O. Box 3042 Milwaukee, WI 53201-3042 East Orange Tax Collector Tax $60,000 Maplewood Tax Collector Tax $40,000 Irvington Tax Collector Tax $22,000 MESABA AVIATION: Inks Stock Purchase Agreement with Northwest ------------------------------------------------------------- Northwest Airlines Corp. has struck a definitive stock purchase agreement to acquire Mesaba Aviation, Inc., the (Minnesota-St. Paul) Star Tribune reports. Northwest spokesman William Mellon said the company intends to file a plan of reorganization on January 16, 2007, incorporating the deal, the Star Tribune says. Northwest also wants Mesaba to file a Chapter 11 plan by January 15. As part of the transaction, Mesaba will receive $10 million cash and a $145 million general unsecured claim in Northwest's bankruptcy estate, the Star Tribune relates. "There are no significant open issues requiring further negotiation," Northwest said in a statement, according to Bloomberg News. Northwest deems the Mesaba Claim to be a fair and adequate consideration for the value being transferred to the company. Riley Investment Management LLC, one of MAIR Holdings' shareholders, believes that Northwest's offer is grossly inadequate. Riley states in a press release that the total value of the Mesaba estate exceeds $300,000,000. The amount accounts for Mesaba's original claim amount plus the $100,000,000 value of Mesaba's SAAB Business. Northwest said that the acquisition would secure Mesaba's future by locking flight operations and positioning Mesaba for growth, Star Tribune relates. Northwest will contract with Mesaba to keep flying 49 Saab turboprops if the sale is finalized, Northwest Senior Vice President of Finance David Davis stated in his letter to Mesaba's creditors. Mesaba's Official Committee of Unsecured Creditors favors the deal. MAIR Holdings, Inc., which owns Mesaba, has not expressed support for the transaction, Mr. Mellon told the Star Tribune. Riley says it intends to pursue all avenues to ensure that the sale is not consummated. Riley notes that contrary to what has been stated in the press, Mesaba Airlines has not agreed to any terms of the Northwest deal. "We believe this would require board approval at Mesaba as well as board approval at MAIR, neither of which has occurred," Riley states in a press release. Riley emphasizes that MAIR Holdings shareholders are not opposed to Northwest acquiring Mesaba. MAIR Holdings shareholders believe Mesaba's claim is higher than $145,000,000. Riley alleges that Northwest destroyed value for MAIR Holdings shareholders, Mesaba and its employees. "We believe that not only is Northwest Airlines not offering fair value for Mesaba, it also pursued a strategy of destroying value in order to purchase Mesaba's at a huge discount to its fair value. At best, Northwest and its executives ignored clear conflict of interest issues and at worst, fraud occurred," Riley states in its press release. Northwest owns 28% of MAIR Holdings, and a Northwest director also sat on MAIR Holding's board. Mesaba currently has the exclusive right to file a Chapter 11 plan until February 12, 2007. Mesaba's Creditors Committee has asked Judge Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to approve its request to file a Chapter 11 plan on behalf of Mesaba to meet Northwest's Jan. 15 deadline. Riley plans to object to the Mesaba Creditors Committee's request. Riley states in its press release that it would offer a competing Chapter 11 plan if Mesaba's exclusivity period is terminated. MAIR Holdings' other large shareholders support Riley's actions. Judge Kishel has yet to rule on the request of Mesaba's Creditors Committee. According to the Star Tribune, Northwest's board of directors will meet on January 10, 2007, to vote on the deal. The deal is subject to approval by both the Mesaba Bankruptcy Court and the U.S. Bankruptcy Court for the Southern District of New York. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. METAMORPHIX INC: Sept. 30 Balance Sheet Upside-Down by $50.8 Mil. ----------------------------------------------------------------- Metamorphix Inc. filed its third quarter financial statements for the three months ended Sept. 30, 2006, reporting a $5,000,446 net loss on $765,019 of revenues, compared with $5,766,887 net loss on $600,407 revenues in the comparable period of 2005. The increase in revenues is primarily due to the introduction of various new product lines. The decrease in net loss is mainly due to the increase in revenues accompanied by decreases in research and development expenses, and in general and administrative expenses, partly offset by the increase in interest expense and accretion of debt discount. At Sept. 30, 2006, the Company's balance sheet showed $11,734,249 in total assets and $62,607,022 in total liabilities resulting in $50,872,773 stockholders' deficit. The company's September 30 balance sheet also showed strained liquidity with $1,596,594 in total current assets available to pay $26,772,035 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?180e Going Concern Doubt As reported in the Troubled Company Reporter on Oct 6, 2006, Deloitte & Touche LLP, expressed substantial doubt about MetaMorphix, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring losses and negative cash flows from operations, working capital deficiency and significant accumulated deficit at Dec. 31, 2005. About MetaMorphix Headquartered in Beltsville, Maryland, MetaMorphix, Inc. -- http://www.metamorphixinc.com/-- is developing a pipeline of innovative products addressing all major livestock sectors including cattle, swine, poultry and aquaculture, as well as developing products that enhance the health of companion animals. NESCO INDUSTRIES: Oct. 31 Balance Sheet Upside-Down by $11 Million ------------------------------------------------------------------ Nesco Industries Inc. reported a $906,000 net loss on revenues of $504,000 for the quarter ended Oct. 31, 2006, compared with a $1.5 million net loss on revenues of $247,000 for the same period in 2005. Revenues in the quarter ended Oct. 31, 2006, consisted of approximately $224,000 of sales of Hydrogel Design Systems products and approximately $245,000 of Foam Manufacturing Inc. products. No FMI products were sold in the 2005 quarter. The decrease in HDS sales of approximately $23,000 resulted from sales to one significant customer in the quarter ended Oct. 31, 2005, which did not recur in the quarter ended Oct. 31, 2006. The decrease in net loss is primarily attributable to the decrease in other expense from $1.1 million in the 2005 quarter to $307,000 in the current quarter. This resulted from a $702,000 debt discount and $126,000 amortization of financing costs in the 2005 quarter without a corresponding charge in the current quarter in 2006. At Oct. 31, 2006, the company's balance sheet showed $1.5 million in total assets and $12.4 million, resulting in an $11 million total stockholders' deficit. The company's balance sheet at Oct. 31, 2006, also showed strained liquidity with $425,000 in total current assets available to pay $12.2 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2006, are available for free at http://researcharchives.com/t/s?1813 About Nesco Industries Headquartered in New York, Nesco Industries Inc. (OTCBB: NESK) manufactures, markets, sells and distributes aqueous polymer-based radiation ionized gels used in various medical and cosmetic consumer products. NORTEL NETWORKS: Closes $320MM Cash Sale of Unit to Alcatel-Lucent ------------------------------------------------------------------ Nortel Networks Corp. closed the sale of assets and liabilities related to its UMTS access business to Alcatel-Lucent. The sale closed on Dec. 31, 2006. The transaction is for $320 million in cash less significant deductions and transaction related costs. The closing of the sale follows the signing of the definitive agreement on Dec. 4, 2006, and the signing of the non-binding Memorandum of Understanding between the companies on Sept. 1, 2006. As part of the agreement, approximately 1,700 of Nortel's UMTS access employees have transferred to Alcatel-Lucent. Regulatory approvals have been met. With the completion of this sale, Alcatel-Lucent acquired the UMTS access product portfolio, associated patents and tangible assets as well as customer contracts from Nortel. About Nortel Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on Oct. 5, 2006, Moody's Investors Service upgraded its B3 Corporate Family Rating for Nortel Networks Corp. to B2. NORTH AMERICAN TECH: KBA Group LLP Raises Going Concern Doubt ------------------------------------------------------------- KBA Group LLP, in Dallas, Texas, expressed substantial doubt about the North American Technologies Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the nine-month period ended Oct. 1, 2006. The auditing firm pointed to the company's recurring losses from operations and use of significant cash flows in operating activities. North American Technologies Group Inc. reported a $15.5 million net loss on $10.6 million of sales for the nine-month period ended Oct. 1, 2006, compared with a $10.1 million loss on $5 million of sales for the same period ended Sept. 30, 2005. The increase in net sales was due to the increased production of crossties at the Marshall facility and to a higher sales price per crosstie in 2006. The increase in net loss is mainly due to the increase in cost of goods sold from $10.1 million in 2005 to $15 million in 2006, the increase in selling, general and administrative expenses, and the increase in interest expense. The increase in cost of goods sold is due to the higher cost of producing crossties, reflecting the small scale and labor- intensive nature of this activity, inefficiencies of production and increase in costs primarily at the Marshall facility, plus a write-down of $742,243 related to certain finished goods and raw material inventory and an increase in warranty expense of $1.3 million substantially related to product replacements. Selling, general and administrative expenses increased by $3.1 million to $5.5 million in 2006. This increase was primarily due to $393,075 in wages and salaries related to additional executive and operating employees, $1.6 million in compensation expense related to grant of employee options and restricted stock, an increase of $374,066 in repair and maintenance expenses, $64,062 in relocation expenses of the Houston facility, incremental expense of $296,832 related to travel expenses and taxes, and $253,400 in marketing expenses. The increase in interest expense of $1.7 million is primarily attributable to an increase of $1.3 million in debt discount and beneficial conversion amortization related to the debentures, $375,753 in beneficial interest related to issuance of common stock for interest and additional interest expense related to an increase in debt. At Oct. 1, 2006, the company's balance sheet showed $20.3 million in total assets and $32 million in total liabilities, resulting in s $11.8 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the nine-month period ended Oct. 1, 2006, are available for free at http://researcharchives.com/t/s?178e Change in Fiscal Year-End On Jan. 1, 2006, the company elected to use a 52/53 week accounting period for its fiscal periods that will end on the Sunday closest to the end of each calendar quarter. The company also changed its fiscal year-end from December 31 to the Sunday closest to the end of the third calendar quarter. About North American North American Technologies Group, Inc., (OTCBB: NATK) -- http://www.natk.com/-- through its TieTek subsidiary manufactures and sells composite railroad crosstie known as TieTek(TM) made from recycled composite materials that is a direct substitute for wood crossties, but with a longer life and with several environmental advantages. NORTHWEST AIRLINES: Inks Agreement to Acquire Mesaba Aviation ------------------------------------------------------------- Northwest Airlines Corp. has struck a definitive stock purchase agreement to acquire Mesaba Aviation, Inc., the (Minnesota-St. Paul) Star Tribune reports. Northwest spokesman William Mellon said the company intends to file a plan of reorganization on January 16, 2007, incorporating the deal, the Star Tribune says. Northwest also wants Mesaba to file a Chapter 11 plan by January 15. As part of the transaction, Mesaba will receive $10 million cash and a $145 million general unsecured claim in Northwest's bankruptcy estate, the Star Tribune relates. "There are no significant open issues requiring further negotiation," Northwest said in a statement, according to Bloomberg News. Northwest deems the Mesaba Claim to be a fair and adequate consideration for the value being transferred to the company. Riley Investment Management LLC, one of MAIR Holdings' shareholders, believes that Northwest's offer is grossly inadequate. Riley states in a press release that the total value of the Mesaba estate exceeds $300,000,000. The amount accounts for Mesaba's original claim amount plus the $100,000,000 value of Mesaba's SAAB Business. Northwest said that the acquisition would secure Mesaba's future by locking flight operations and positioning Mesaba for growth, Star Tribune relates. Northwest will contract with Mesaba to keep flying 49 Saab turboprops if the sale is finalized, Northwest Senior Vice President of Finance David Davis stated in his letter to Mesaba's creditors. Mesaba's Official Committee of Unsecured Creditors favors the deal. MAIR Holdings, Inc., which owns Mesaba, has not expressed support for the transaction, Mr. Mellon told the Star Tribune. Riley says it intends to pursue all avenues to ensure that the sale is not consummated. Riley notes that contrary to what has been stated in the press, Mesaba Airlines has not agreed to any terms of the Northwest deal. "We believe this would require board approval at Mesaba as well as board approval at MAIR, neither of which has occurred," Riley states in a press release. Riley emphasizes that MAIR Holdings shareholders are not opposed to Northwest acquiring Mesaba. MAIR Holdings shareholders believe Mesaba's claim is higher than $145,000,000. Riley alleges that Northwest destroyed value for MAIR Holdings shareholders, Mesaba and its employees. "We believe that not only is Northwest Airlines not offering fair value for Mesaba, it also pursued a strategy of destroying value in order to purchase Mesaba's at a huge discount to its fair value. At best, Northwest and its executives ignored clear conflict of interest issues and at worst, fraud occurred," Riley states in its press release. Northwest owns 28% of MAIR Holdings, and a Northwest director also sat on MAIR Holding's board. Mesaba currently has the exclusive right to file a Chapter 11 plan until February 12, 2007. Mesaba's Creditors Committee has asked Judge Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to approve its request to file a Chapter 11 plan on behalf of Mesaba to meet Northwest's Jan. 15 deadline. Riley plans to object to the Mesaba Creditors Committee's request. Riley states in its press release that it would offer a competing Chapter 11 plan if Mesaba's exclusivity period is terminated. MAIR Holdings' other large shareholders support Riley's actions. Judge Kishel has yet to rule on the request of Mesaba's Creditors Committee. According to the Star Tribune, Northwest's board of directors will meet on January 10, 2007, to vote on the deal. The deal is subject to approval by both the Mesaba Bankruptcy Court and the U.S. Bankruptcy Court for the Southern District of New York. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. PHILLIPS-VAN HEUSEN: Completes Acquisition of Superba for $110MM ---------------------------------------------------------------- Phillips-Van Heusen Corporation has completed the acquisition of substantially all of the assets of privately-held Superba, Inc. As reported in the Troubled Company Reporter on Oct. 16, 2006 the company entered into a definitive agreement to acquire substantially all of the assets of Superba for $110 million, subject to adjustment, plus an earn-out over a three-year period based on the earnings of the acquired business for each of the first three years after the closing, with a maximum value of $70 million. Superba, Inc., manufactures and distributes neckwear in the United States and Canada. The acquired business, which includes neckwear licenses for designer and brand names, such as Arrow, DKNY, Tommy Hilfiger, Nautica, Perry Ellis, Ted Baker, Ike Behar, Michael Kors, JOE Joseph Abboud, Original Penguin, Jones New York and Hart Schaffner Marx, will be operated through the newly formed PVH Neckwear Group. The company disclosed that it has also entered into an agreement with Mallory & Church LLC pursuant to which PVH and Mallory have agreed to the early termination of the neckwear licenses that Mallory holds for the company's IZOD and Calvin Klein brands. The PVH Neckwear Group will assume control of the Calvin Klein and IZOD neckwear businesses and the neckwear offerings will continue to be distributed through better department stores and specialty stores. The arrangement is expected to become effective in early February. Commenting on the transactions, Emanuel Chirico, chief executive officer, stated "We are excited with the opportunity the Superba acquisition presents. Neckwear is, obviously, complementary to our heritage business in dress shirts and Superba has followed the same multiple brand, multiple channel, and multiple price point strategy that we have followed. We believe that the synergy created by coupling the leading neckwear and dress shirt businesses will provide us with additional opportunity to grow both businesses." Mr. Chirico added, "We are also pleased that we have been able to provide for the early return of the Calvin Klein and IZOD neckwear businesses. This will provide us with an immediate opportunity to expand our newly acquired neckwear business and enhance the growth we expect to see from it." Phillips-Van Heusen Corporation (NYSE:PVH) -- http://www.pvh.com/ -- owns and markets the Calvin Klein brand worldwide. It is a shirt company that markets a variety of goods under its own brands: Van Heusen, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps, and Donald J. Trump Signature. * * * As reported in the Troubled Company Reporter on Dec. 14, 2006 Moody's Investors Service upgraded Phillips Van Heusen Corporation's corporate family rating to Ba2 from Ba3. The company's senior secured notes were upgraded to Baa3 from Ba1 and the company's senior unsecured notes were upgraded to Ba3 from B1. The company's probability of default rating was also upgraded to Ba2 from Ba3. PHOTRONICS INC: Extends Employment of Asia Ops Pres. Until Oct. 28 ------------------------------------------------------------------ Photronics, Inc. and Soo Hong Jeong extended for one additional year the employment agreement of Soo Hong Jeong, chief operating officer, president - Asia operations, until Oct. 28, 2007. The Employment Agreement was originally entered into between Photronics and Mr. Jeong on August 24, 2001, and was subsequently amended on March 18, 2004, November 28, 2005 and June 9, 2006. Photronics, Inc. -- http://www.photronics.com/-- is a worldwide manufacturer of photomasks. Photomasks are high precision quartz plates that contain microscopic images of electronic circuits. A key element in the manufacture of semiconductors and flat panel displays, photomasks are used to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits, a variety of flat panel displays and, to a lesser extent, other types of electrical and optical components. They are produced in accordance with product designs provided by customers at strategically located manufacturing facilities in Asia, Europe, and North America. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Moody's Investors Service affirmed its B1 corporate family rating on Photronics, Inc. Additionally, Moody's revised its probability-of-default rating on the company's $190 million 4.75% convertible subordinated notes due 2006 to B2 from B3 and assigned a LGD5 loss-given-default rating on the loan. Moody's also upgraded to B2 from B3 its probability-of-default rating on the company's $150 million 2.25% convertible subordinated notes due 2008 and assigned a LGD5 loss-given-default rating on the loan. RADIO ONE: Sells WKAF-FM for $30 Million to Entercom ---------------------------------------------------- Radio One Inc. completed the sale of the assets of radio station WKAF-FM for approximately $30 million to Entercom Communications Corp., in the Boston, Massachusetts. The Company acquired WKAF-FM in October 1999 for approximately $10 million and will utilize its existing NOLs to shelter most, if not all, taxes associated with the capital gain that has been generated by the sale. On Dec. 29, 2006, the Company used most of the net proceeds generated from the sale to reduce borrowings under its bank credit facility. "This sale represents a very good start to our asset disposition process" Commenting on this transaction, Radio One's Chief Executive Officer and President, Alfred C. Liggins, III, stated. "While Boston is a wonderful radio market, it was not of great strategic importance to us. We have used the capital generated from this sale to reduce our leverage and we continue to look to rationalize our asset base." Headquartered in Lanham, Md., Radio One, Inc., (NASDAQ: ROIAK and ROIA) is a radio broadcaster that owns and operates 70 radio stations located in 22 urban markets in the U.S. * * * As reported in the Troubled Company Reporter on Dec 26, 2006, Moody's Investors Service affirmed Radio One, Inc.'s Ba3 corporate family rating, Ba1 secured revolver, Ba1 secured term loan, and B1 6-3/8% senior suborindated notes. Moody's also changed the outlook to stable from positive after a period of prolonged weakness at the company's Los Angeles radio station. RIO VISTA: Earns $4.6 Million in Quarter Ended September 30 ----------------------------------------------------------- Rio Vista Energy Partners LP filed its third quarter financial statements for the three months ended Sept. 30, 2006, reporting a $4,697,000 net income on $191,000 of revenues, compared with $1,074,000 net loss with no revenues in the comparable period of 2005. At Sept. 30, 2006, the company's balance sheet showed $18,364,000 in total assets and $2,123,000 in total liabilities resulting in $16,241,000 stockholders' equity. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?180d Going Concern Doubt As reported on the Troubled Company Reporter on May 5, 2006, Burton Mccumber & Cortez, L.L.P., in Brownsville, Texas, raised substantial doubt about the ability of Rio Vista Energy Partners L.P. to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. About Rio Vista Headquartered in Houston, Texas, Rio Vista Energy Partners L.P. buys, transports and sells liquefied petroleum gas. Rio Vista owns and operates terminal facilities in Brownsville, Texas and in Matamoros, Tamaulipas, Mexico and approximately 23 miles of pipelines, which connect the Brownsville Terminal Facility to the Matamoros Terminal Facility. The primary market for Rio Vista's LPG is the northeastern region of Mexico, which includes the states of Coahuila, Nuevo Leon and Tamaulipas. RIO VISTA: Earns $4.7 Million Net Income in Quarter Ended Sept. 30 ------------------------------------------------------------------ Rio Vista Energy Partners LP reported $4.7 million of net income on $191,000 of revenues for the quarter ended Sept. 30, 2006, compared with a $1.1 million net loss on zero revenues for the same period in 2005. There were no revenues during the three months ended Sept. 30, 2005, since the LPG transportation business did not commence until August 22, 2006. The reversal from a net loss in the 2005 quarter to a net income in the 2006 quarter is mainly due to a $5.2 million net gain on sale of LPG assets in the current quarter compared to none in the 2005 period. This is related to the August 2006 sale and assignment to TransMontaigne of certain LPG assets. At Sept. 30, 2006, the company's balance sheet showed $18.4 million in total assets, $2.1 million in total liabilities, and $16.2 million in total partners' capital. 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?1815 Going Concern Doubt As reported on the Troubled Company Reporter on May 5, 2006, Burton Mccumber & Cortez, L.L.P., in Brownsville, Texas, raised substantial doubt about the ability of Rio Vista Energy Partners L.P. to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. According to Burton Mccumber, Rio Vista's ability to continue as a going concern is dependent on Penn Octane Corporation's ability to continue as a going concern, and continued sales to P.M.I. Trading Limited at acceptable volumes and margins to provide sufficient cash flow to pay: (a) Rio Vista's expenses, (b) the TransMontaigne Note, and (c) guarantees of Penn Octane's obligations assuming Penn Octane's inability to pay those obligations. Penn Octane Corporation is an affiliate of the company and its supplier of liquefied petroleum gas under a long-term supply agreement. P.M.I. Trading Limited is Rio Vista's primary customer for LPG. PMI, a subsidiary of Petroleos Mexicanos -- the state- owned Mexican oil company -- is the exclusive importer of LPG in Mexico. PEMEX distributes the LPG purchased from PMI into the northeastern region of Mexico. About Rio Vista Headquartered in Houston, Texas, Rio Vista Energy Partners L.P. (NasdaqGM: RVEP) -- http://www.riovistaenergy.com/-- buys, transports and sells liquefied petroleum gas. Rio Vista owns and operates terminal facilities in Brownsville, Texas and in Matamoros, Tamaulipas, Mexico and approximately 23 miles of pipelines, which connect the Brownsville Terminal Facility to the Matamoros Terminal Facility. The primary market for Rio Vista's LPG is the northeastern region of Mexico, which includes the states of Coahuila, Nuevo Leon and Tamaulipas. RONALD STONE: Case Summary & Seven Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Ronald B. Stone 9511 Dabney Carr Drive Louisville, KY 40299 Bankruptcy Case No.: 06-33601 Chapter 11 Petition Date: December 22, 2006 Court: Western District of Kentucky (Louisville) Judge: Joan A. Lloyd Debtor's Counsel: William Stephen Reisz, Esq. Foley Bryant & Holloway 500 W. Jefferson St., Suite 2450 Louisville, KY 40202 Tel: (502) 569-7550 Fax: (502) 561-0025 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ RW, Ltd., Co. $1,152,022 c/o Jonathon N. Amlung 616 South Fifth St. Louisville, KY 40202 Advanta Bank Corp. $19,566 P.O. Box 8088 Philadelphia, PA 19101 AAA Financial Services $10,639 P.O. Box 15288 Wilmington, DE 19886 Citi Cards $10,286 P.O. Box 183063 Columbus, OH 43218 Chase $10,281 P.O. Box 94017 Palatine, IL 60094 Citibank Mastercard $8,877 P.O. Box 8013 South Haokenback, NJ 07605 American Express $5,458 P.O. Box 360002 Ft. Lauderdale, FL 33336 ROO GROUP: Posts $3.7 Million Net Loss in Quarter Ended Sept. 30 ---------------------------------------------------------------- Roo Group Inc. reported a $3.7 million net loss on $2.2 million of revenues for the quarter ended Sept. 30, 2006, compared with a $2.5 million net loss on $1.6 million of revenues for the same period in 2005. The increase in net loss is primarily due to the increase in operating expenses, sales and marketing, and general and administrative expenses. The increase in sales and marketing expenses were primarily due to an increase in sales and marketing personnel. The increase in general and administrative expenses was due to the increase in non-cash costs of $581,000 which consists of stock based compensation expense on stock options of $452,000 and valuation on warrants for consulting services of $129,000 plus $542,000 that is primarily due to an increase in salaries for administrative support related to the company's increased operations. At Sept. 30, 2006, the company's balance sheet showed $9.2 million in total assets, $4 million in total liabilities, $123,000 in minority interest, and $5.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1806 Going Concern Doubt As reported in the Troubled Company Reporter on May 29, 2006, Moore Stephens, P.C., in New York, raised substantial doubt about ROO Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses and negative cash flows from operations. ROO Group, Inc. (OTC BB: RGRP.OB) -- http://www.roo.com/-- is a global provider of digital media solutions and technology that enables the activation, marketing and distribution of digital media video content over the Internet and emerging broadcasting platforms such as set top boxes and wireless. ROO offers turnkey video solutions for businesses seeking to improve their web presence with video broadcasts or broadcast their own latest video clips. ROO helps business advertise their latest offering with interactive advertising solutions, 15-30 second video commercials with a linked call to action and played simultaneously with topical video content in a television style format over the Internet. SBARRO INC: MidOcean Partners Deal Cues S&P's Developing Watch -------------------------------------------------------------- Standard & Poor's Rating Services revised the CreditWatch listing on Sbarro Inc. to developing from negative. "The revision comes as the potential for a downgrade has decreased because the acquisition of the company by MidOcean Partners will not significantly change the capital structure," said Standard & Poor's credit analyst Diane Shand. "In addition, because the company has had positive operating performance for the past three years an upgrade is a possibility." The corporate credit rating is 'CCC+'. The Nov. 29, 2006, CreditWatch listing comes after the company's report that it had agreed to be acquired by private equity investors, MidOcean Partners, for an undisclosed sum. SCIENTIFIC GAMES: Moody's Rates New $200 Million Loan at Ba1 ------------------------------------------------------------ Moody's Investors Service assigned a Ba1, LGD2, 25% rating to Scientific Games Corporation's new $200 million Term Loan E, affirmed the company's Ba2 corporate family rating, affirmed the Ba3, LGD5, 80% rating on the $200 million senior subordinated notes, and revised to Ba1, LGD2, 25% from Baa3, LGD2, 21% the ratings on the existing $100 million Term Loan C, $150 million Term Loan D and $300 million revolver based upon the application of Moody's Loss Given Default methodology. The rating outlook is stable. The proceeds from the new term loan will be used to reduce borrowings under the revolving credit facility. Although there will be no increase in actual reported funded debt, the LGD methodology assumes 50% of baseline revolver availability will be drawn. Therefore, the rating change on the bank facilities was driven by a higher level of modeled outstanding senior relative to subordinate debt. The rating affirmation reflects Moody's expectation that debt to EBITDA will peak at about 3.5x, but will fall to around 3.25x by year-end 2007 due to anticipated earnings growth. Given that debt to EBITDA has risen, a share repurchase program has been initiated, and the company is integrating recently acquired companies, upward rating momentum is not anticipated. The rating outlook could be changed to negative or ratings downgraded if: the company's debt to EBITDA ratio were to rise above 3.5x in the context of a weaker operating environment or change in financial policy, or if the pace of acquisition activity rises before leverage is reduced. Moody's previous rating action occurred on Sept. 28, 2006 when Moody's changed the company's ratings under the LGD methodology. Scientific Games Corp. is a provider of services, systems and products to both the instant ticket lottery industry and pari- mutuel wagering industry. The company operates in three business segments: Printed Products, Lottery Systems, and Diversified Gaming; revenues for the last twelve months ended Sept. 30, 2006 were $868 million. SHIMBA HILLS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Shimba Hills Coffee Company, Inc. 601 F Street, NW Washington, DC, DC 20004 Bankruptcy Case No.: 07-00004 Type of Business: The Debtor supplies specialty whole bean coffees to the regional supermarkets. See http://www.shimbahillscoffee.com/ Chapter 11 Petition Date: January 3, 2007 Court: District of Columbia (Washington) Debtor's Counsel: Ronald M. Levin, Esq. Hall, Estill, Hardwick Gable, Golden 1120 20th Street, NW Suite 700, North Building Washington, DC 20036 Tel: (202) 973-1200 Fax: (202) 973-1212 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Buch Construction Co. Trade debt $546,000 10945 Johns Hopkins Road Laurel, MD 20723 WSC Marketing Trade debt $99,537 601 F Street, NW Washington, DC, DC 20004 Shalin Carter Trade debt $75,000 408 Franklin Street, NW Washington, DC, DC 20001 DC Arena Trade debt $33,406 Tal Roberts Trade debt $25,000 Brother Johnson Trade debt $25,000 Clear Channel Outdoor Trade debt $6,500 Ground Control Trade debt $5,000 Pack Plus Convertibles Trade debt $4,000 Dynamic Advertising Trade debt $2,000 Solutions Cafe Pronto Trade debt $1,919 Verizon Trade debt $1,800 Soups On Trade debt $1,800 Sysco Food Service of Trade debt $1,798 Baltimore Time Payment Trade debt $1,488 High Noon Trade debt $1,400 Jiffy Plumbing & Heating Trade debt $1,309 Quick Messenger Service Trade debt $1,100 Bread & Chocolate Trade debt $1,100 Revolution Tea Trade debt $704 SEA CONTAINERS: Wants Until June 12 to File Chapter 11 Plan ----------------------------------------------------------- Sea Containers, Ltd. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend their exclusive period to: (a) propose and file a plan of reorganization to and including June 12, 2007; and (b) solicit acceptances of that plan to and including August 11, 2007. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that since filing for bankruptcy, the Debtors have concentrated on stabilizing their business operations, managing a smooth transition to operating under Chapter 11 protection, and continuing to develop and implement their restructuring plan which will form the basis of a confirmable plan of reorganization. Specifically, the Debtors have: (1) filed several "first day" motions, which have been approved by the Court on an interim or final basis; (2) sought and obtained interim Court approval to make statutory payments to dismissed employees, which relief has minimized the disruption to their business operations associated with the commencement of the Chapter 11 cases; (3) filed a petition with the Bermuda Supreme Court to wind up Sea Containers Ltd., and sought the appointment of point provisional liquidators with limited powers, which appointment provides SCL with the additional protection statutory moratorium that ensures that no creditor or other party with standing could take action against SCL or its assets in Bermuda; (4) prepared and filed retention applications for various professionals to assist in their reorganization efforts. Among other professionals, the Court has approved the retention of Sidley Austin LLP, PricewaterhouseCoopers LLP, Collinson Grant Ltd., Towers Perrin, and Carter Ledyard & Milburn LLP; (5) filed an application to employ ordinary course professionals and a request to establish compensation procedures for professionals, which request was Court- approved on November 8, 2006; (6) devoted considerable time and resources addressing various business issues related to GE SeaCo SRL, as well as responding to the request of GE Capital Container SRL and GE Capital Container Two SRL for relief from the automatic stay to proceed with arbitration; and (7) continue to identify and implement significant business measures, including valuing and marketing various businesses and other assets for sale to maximize the value of the businesses and assets located across the group and the potential return to the Debtors' creditor constituencies. Mr. Brady tells the Court that the Debtors' sufficiently large and complex cases warrant an extension of their Exclusive Periods. As of June 30, 2006, SCL, on a consolidated basis with all its subsidiaries, had total assets having a net book value of $1,673,000,000, including assets of its former subsidiary Silja Oy Ab which has since been sold. According to Mr. Brady, the company's capital structure adds additional complexity because many of the Non-Debtor Subsidiaries have historically relied on SCL to provide financing for their various operational needs, including funding for the payment of Non-Debtor Subsidiaries' creditors, funding required to preserve the value of assets held by Non-Debtor Subsidiaries, and funding to maintain the business operations of the Non-Debtor Subsidiaries. The Debtors' Chapter 11 Cases have the additional complexity of dealing with foreign creditors, vendors and legal issues in a multitude of foreign jurisdictions, including the coordination with the JPLs and the proceedings in Bermuda, Mr. Brady adds. Mr. Brady assures the Court that the extension will not harm the Debtors' creditors or other parties-in-interest and will be used for a proper purpose that is to develop a feasible plan of reorganization, which is in the best interests of all of the Debtors' constituencies. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Wants Until May 13 to Decide on Leases ------------------------------------------------------ Sea Containers, Ltd. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend the original 120-day period to assume or reject real property leases through and including May 13, 2007, pursuant to Section 365(d)(4) of the Bankruptcy Code. According to Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, the Real Property Leases include: (1) lease of the 5th, 11th, 12th, 13th and 14th floors of Sea Containers House, 20 Upper Ground, in London SEl, United Kingdom, between Archlane Limited and Sea Containers Services Ltd., dated March 25, 1988, and expiring December 24, 2011; (2) lease of the second basement, first basement, ground 12th and 13th floors of Sea Containers House, 20 Upper Ground London SEl between Archlane Limited and Sea Containers Services dated March 25, 1988, and expiring December 24, 2011; and (3) lease of Arches 1-12 and 15 and 16 beneath Southwark Bridge, Southern Approach, Park Street, London SE 1, between The Mayor and Commonalty and Citizens of the City of London as Trustees of the Bridge House Estates and Sea Containers Services commencing August 20, 2003, and expiring December 25, 2011. The office spaces at Sea Containers House serve as Sea Containers Services' headquarters and of the direct and indirect U.K. subsidiaries of Sea Containers Ltd. Mr. Brady discloses that Sea Containers Services conducts substantially all of its business activities from the Premises. For the benefit of SCL, itself, and certain of the Non-Debtor Subsidiaries, Sea Containers Services' employees at the Premises, among other things: * manage financial and accounting services; * operate information technology systems; * provide administrative services; and * manage payroll and other human resource services. In addition, certain of the U.K. Subsidiaries and affiliated entities of the Debtors sublease office space at the Premises from Sea Containers Services. Mr. Brady informs Judge Carey that Sea Containers Services is not prepared to: (i) assume the Premises Leases and obligate the estate for the remaining five year terms under the Premises Leases; or (ii) reject the Leases before the expiration of the 120 days set forth in Section 365(d)(4) because Sea Containers Services' and the U.K. Subsidiaries' operations would be required to immediately relocate. Mr. Brady says an extension is warranted because: (a) Sea Containers Services is current on its obligations under the Premises Leases and intends to continue to fulfill their obligations under the Leases on a timely basis, unless the Leases are rejected; (b) as the headquarters of Sea Containers Services and the U.K. Subsidiaries, the Premises serve an important role in preserving the continuity of the Debtors' ongoing operations; (c) the Debtors' Chapter 11 Cases are large and complex, and it is important that they be afforded a reasonable opportunity to address the myriad of issues implicated by the ongoing restructuring efforts before they are forced to make a long term decision concerning the Premises; and (d) the Debtors and its creditor constituencies have not had sufficient time to formulate a plan of reorganization, which formulation will require the participation of multiple constituencies including several with rights which may emanate from foreign law. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SMARTIRE SYSTEMS: Oct. 31 Balance Sheet Upside-Down by $34.8 Mil. ----------------------------------------------------------------- SmarTire Systems Inc. reported a $5.3 million net loss on $851,779 of revenues for the first quarter ended Oct. 31, 2006, compared with an $18.2 million net loss on $592,866 of revenues for the same period in 2005. The decrease in net loss is mainly due to the $15.7 million decrease in interest and financing expense. Interest and finance charges for the three months ended Oct. 31, 2006 includes non-cash interest of $1.9 million compared to non-cash interest charges of $16.7 million for the three months ended Oct. 31, 2005. Of the $16.7 million non-cash interest charges, $16.3 million were for amortization of deferred financing fees. The company's balance sheet at Oct. 31, 2006, showed $6.1 million in total assets, $38.7 million in total liabilities, and 2.2 million in preferred shares subject to mandatory redemption, resulting in a stockholders' deficit of $34.8 million. At Oct. 31, 2006, the company's balance sheet also showed strained liquidity with $3.6 million in total current assets available to pay $4.7 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2006, are available for free at http://researcharchives.com/t/s?1810 About SmarTire Headquartered in Richmond, British Columbia, Canada, SmarTire Systems Inc. (OTC BB: SMTR.OB) -- http://smartire.com/--develops and markets technically advanced tire pressure monitoring systems for the transportation and automotive industries that monitor tire pressure and tire temperature. Its TPMSs are designed for improved vehicle safety, performance, reliability and fuel efficiency. The company has three wholly owned subsidiaries: SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited. TANGO BRANDED: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tango Branded Entertainment, LLC 20750 Civic Center Drive, Suite 300 Southfield, MI 48076 Bankruptcy Case No.: 06-59217 Chapter 11 Petition Date: December 26, 2006 Court: Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtor's Counsel: Gary H. Cunningham, Esq. Cox, Hodgman & Giarmarco, P.C. 101 West Big Beaver Road Tenth Floor Columbia Center Troy, MI 48084 Tel: (248) 457-7056 Fax: (248) 457-7001 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Richard J. Gagnon $1,147,900 20750 Civic Center Drive Suite 300 Southfield, MI 48076 Live Nation Worldwide, Inc. $148,208 Attention: Miranda Bradley 2000 West Loop South Suite 1300 Houston, TX 77027 Mark T. Johnson Employee Wages $100,200 200 West 54th Street Due New York, NY 10019 Mary K. Seipke Employee Wages $100,200 32501 Romsey Road, Suite 300 Due Franklin, MI 48025 David E. Logan Employee Wages $84,350 1 Fremont Road Due Sleepy Hollow, NY 10591 Mediascape, LLC $48,912 Attention: Diane Louinger 20750 Civic Center Drive Southfield, MI 48076 GTA, Inc. $40,736 Attention: Diane Louinger 20750 Civic Center Drive Suite 300 Southfield, MI 48076 Kriss Feuerstein & Katz LLP $25,837 360 Lexington Avenue Suite 1300 New York, NY 10017 TPG Planning & Design, LLC $21,547 Attention: J. Lim 360 Park Avenue South New York, NY 10010 AMA Consulting Engineers, PC $16,592 Attention: Ellen Borowski 250 West 39th Street 9th Floor New York, NY 10018 Andrea Gagnon Employee Wages $16,450 1965 N. Maud Avenue, Unit D Due Chicago, IL 60614 Mark T. Johnson $13,201 200 West 54th Street New York, NY 10019 Chadbourne & Park LLP $9,091 Attention: B. Barrera 30 Rockerfeller Plaza New York, NY 10012 Patricia Kay Cox $8,260 308 Dogwood Lane Ortonville, MI 48462 ALCOS Insurance $5,487 Attention: Daniel West 35735 Mound Road P.O. Box 8029 Sterling Heights, MI 48311 Roger L. Armstrong $4,858 2574 Aspen Springs Drive Park City, UT 84060 Shem, Milsom & Wilke, Inc. $4,162 Attention: B. Houghton 417 Fifth Avenue, 5th Floor New York, NY 10016 Gold Productions, Ltd. $4,152 Attention: Brian Gold 20750 Civic Center Drive Suite 120 Southfield, MI 48076 Mary Katherine Seipke $3,572 32501 Romsey Road Franklin, MI 48025 Reising, Ethington, Barnes, $2,691 Kissele, PC Attention: R. Collins P.O. Box 4390 Troy, MI 48099 TERWIN MORTGAGE: Moody's Rates Class B-5 Certificates at Ba1 ------------------------------------------------------------ Moody's Investors Service assigned an Aaa rating to the senior notes issued by Terwin Mortgage Trust 2006-12SL and ratings ranging from Aa2 to Ba1 to the subordinate notes in the deal. The securitization is backed by Ameriquest, Greenpoint Mortgage Funding Inc. and various other mortgage lender-originated home equity lines-of-credit and closed-end second lien residential mortgage loans acquired by Terwin Securitization LLC. The rating on the senior notes is based primarily on the note insurance policy provided by Financial Security Assurance, Inc., whose insurance financial strength is rated Aaa. The senior notes also benefit from protection against credit losses provided by subordination, excess spread, and overcollateralization. The ratings on the subordinate notes and the class G certificates are based primarily on the credit quality of the loans and the protection against credit losses provided by subordination, excess spread, and overcollateralization. The ratings also benefit from an interest-rate swap agreement provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 7.05% to 7.55%. Specialized Loan Servicing LLC and Greenpoint Mortgage Funding, Inc. will service the mortgage loans and LaSalle Bank Nation Association will act as master servicer. Moody's has assigned LaSalle its servicer quality rating of SQ3 as a master servicer of residential mortgage loans. These are the rating actions: * Terwin Mortgage Trust 2006-12SL * Asset-Backed Securities, Series 2006-12SL Class A-1, Assigned Aaa Class A-2, Assigned Aaa Class A-IO,Assigned Aaa Class M-1, Assigned Aa2 Class M-2, Assigned Aa3 Class M-3, Assigned A2 Class B-1, Assigned A3 Class B-2, Assigned Baa1 Class B-3, Assigned Baa2 Class B-4, Assigned Baa3 Class B-5, Assigned Ba1 Class G, Assigned Aaa The notes were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. TITAN GLOBAL: Completes New $22.6 Million Refunding with Greystone ------------------------------------------------------------------ Titan Global Holdings Inc. successfully completed a new $15 Million revolving credit facility and $7.6 million senior term loan with Greystone Business Credit II, LLC, and will save the company more than $3.6 million in annual cash flow and reduce outstanding stock by 1.25 million shares and reduce the fully diluted outstanding shares more than 3.5 million shares. "Last month Titan reported on the completion of its letter of intent with Greystone. As projected, we closed the financing prior to Dec. 31, 2006. Our new financing willsubstantially reduce our cumulative financing cost and monthly cash payments," said David Marks, Chairman of Titan Global Holdings. "Coupled with our record setting financial results for our last fiscal year, we believe that this refinancing will be a significant factor in our continued efforts to build shareholder value. Our shareholders can expect Titan to utilize these funds to exploit aggressive organic and strategic opportunities." The new Greystone financings were used to repay the existing credit facilities of each Titan Division, including a $5.6 million term loan for repayment of Oblio's loans with CapitalSource Finance, LLC, and a $2 million term loan for Titan's Electronics and Homeland Security Division's senior convertible loans due to Laurus Master Fund, Ltd., and provide for future working capital requirements. "We were pleased to work with Titan and its talented management team. Our financing will help Titan meet its growth objectives," stated Drew Neidorf, President of Greystone Business Credit II. "Greystone is equipped to design and implement creative and swift financing facilities for emerging growth companies such as Titan." "In addition, we look forward to working with Titan to design financing solutions for its synergistic acquisition candidates and future working capital needs," said Joel Flig, Executive Vice President of Greystone Business Credit II. Pursuant to an agreement Titan reached in September with Laurus, the refinancing led to the complete refinance of all sums owed Laurus. Therefore, Titan exercised its option right to purchase 1,250,000 Titan common shares held by Laurus and reduced the fully diluted outstanding shares by a net of 3,545,000. The Greystone Revolving Credit Facility has a term of three years and an interest rate of the Prime Rate of Citibank, N.A. plus 1.50%, and the Senior Term Loan has a term of three years and will be amortized over four years on a straight line basis with an interest rate of the Prime Rate of Citibank, N.A., plus 6%. "We intend to utilize the cash flow savings from this financing to exploit organic and strategic opportunities for the acceleration of business operations and revenue-growing activities in both divisions," stated Bryan Chance, President and Chief Executive Officer of Titan Global Holdings, Inc. "We are also working diligently to recover federal excise taxes and universal service fund fees paid which will accelerate the retirement of the Greystone senior loan and provide for future strategic and working capital needs as well." Recently Titan reported record financial results for the fiscal year ended Aug. 31, 2006, with the Company's divisions generating a total of $109 million in revenues, representing a 382 percent increase over the previous fiscal year. The Company also reported $7.9 million in earnings before interest, taxes, depreciation and amortization, versus an EBITDA loss of $2.1 million the previous year. Headquartered in Salt Lake City, Utah, Titan Global Holdings, Inc. (OTCBB: TTGL) -- http://www.titanglobalholdings.com/-- operates through three divisions: Oblio Telecom, Inc., Titan PCB East, Inc. and Titan PCB West, Inc. Oblio is engaged in the creation, marketing, and distribution of prepaid telephone products for the wire line and wireless markets and other related activities. Titan PCB is a printed circuit board manufacturer providing competitively priced time-sensitive, quality products to the commercial and military electronics markets. Titan PCB offers high layer count, fine line production of rigid, rigid-flex and flex PCBs. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 5, 2006, Wolf & Company, P.C., in Boston, Massachusetts, raised substantial doubt about Titan Global Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the fiscal year ended Aug. 31, 2005. The auditor pointed to the Company's significant operating losses, high debt levels, defaults on debt covenants, and negative working capital. TITANIUM METALS: Sells Valtimet Stake to ValTubes for $75 Million ----------------------------------------------------------------- Titanium Metals Corporation has completed the sale of its 43.7% interest in Valtimet SAS to ValTubes, SAS for $75 million in cash. Valtimet SAS is a manufacturing joint venture between Timet, ValTubes SAS, Sumitomo Metals Industry and Sumitomo Corp formed in 1997 for the manufacture of welded stainless steel and titanium tubing. The company had contributed its wholly owned titanium tubing facility to the Valtimet joint venture in 1997. The company will report a pre tax gain on the sale of its interest in Valtimet of approximately $39 million in its fourth quarter results. TIMET and Valtimet also entered into a new long-term agreement pursuant to which TIMET will supply up to 2,500 metric tons of titanium strip annually to Valtimet for use in the manufacture of welded titanium tubing. Steven L. Watson, vice chairman and chief executive officer, said, "This sale transaction allows us to monetize our minority non- controlling joint venture interest position in Valtimet at an attractive value and redeploy the proceeds into expansion of our productive capacity or other growth opportunities in our core and emerging business segments that we believe will provide the opportunity for an increased return on investment. The new supply agreement provides us the opportunity to continue to participate in the welded tubing market segment on attractive terms. After application of the proceeds of the sale to pay down our bank borrowings, we will have no net debt. We have a strong balance sheet and significant sources of capital and liquidity to allow us to capitalize on capacity expansion projects across all stages of our production process and invest in other growth opportunities as we continue to respond to the long-term positive outlook across major current and emerging markets." Headquartered in Dallas, Texas, Titanium Metals Corporation (NYSE: TIE) -- http://www.timet.com/-- is a worldwide producer of titanium metal products. * * * Moody's Investors Services placed a Caa1 issuer rating and B3 LT Corp Family Rating on Titanium Metals. WASHINGTON MUTUAL: Moody's Rates Class B-2 Certificates at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Washington Mutual Asset-Backed Certificates, WMABS Series 2006-HE5 Trust, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by People's Choice Home Loans Inc., First NLC Financial Services, LLC and other originators' originated adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization and excess spread. Moody's expects collateral losses to range from 5.75% to 6.25%. Washington Mutual Bank will service the loans. Moody's has assigned Washington Mutual Bank its servicer quality rating of SQ2 as a servicer of subprime mortgage loans. These are the rating actions: * Issuer: Washington Mutual Asset-Backed Certificates, WMABS Series 2006-HE5 Trust Class I-A, Assigned Aaa Class II-A-1, Assigned Aaa Class II-A-2, Assigned Aaa Class II-A-3, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class B-1, Assigned Ba1 Class B-2, Assigned Ba2 The Class B-1 and B-2 certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. WEIGHT WATCHERS: Moody's Rates Proposed $1.2 Bil. Sr. Loan at Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the proposed $1.2 billion senior secured term loan facility of Weight Watchers International, Inc. and affirmed existing credit ratings. The rating outlook remains stable. The proceeds from the $1.2 billion credit facility are expected to be used to fund share purchases, refinance the indebtedness of its subsidiary, WeightWatchers.com, and pay related fees and expenses. The existing $850 million credit facility is expected to remain outstanding at closing. On Dec. 18, 2006, Weight Watchers reported that it commenced a self-tender offer for up to 8.3 million shares of its common stock and also entered into an agreement with Artal Holdings Sp. z o.o., its majority shareholder. The agreement with Artal provides that Weight Watchers will purchase from Artal shares of its common stock so that Artal's percentage ownership in Weight Watchers after the tender offer will be substantially equal to its current level of approximately 55.2%. Prior to its recent report, Weight Watchers' credit metrics were strong for the Ba1 rating category, but reflected uncertainty related to the firm's target capital structure and expected financial policies. Although the reported transaction will result in pro forma leverage and cash flow metrics that are weak for the rating category, these metrics are expected to improve in 2007. Moody's expects profitability in 2007 to benefit from new business initiatives and expects the company to utilize internal cash generation to repay a portion of the transaction indebtedness. The Ba1 corporate family rating continues to reflect high levels of pretax income, impressive profit margins and solid geographic diversification. The ratings are constrained by reliance on a single brand and potential threats from new competitors and products. Moody's took these rating actions for Weight Watchers: -- Assigned $700 million add-on senior secured term loan A facility due 2013, Ba1, LGD3, 34%; -- Assigned $500 million add-on senior secured term loan B facility due 2014, Ba1, LGD3, 34%; -- Affirmed $500 million senior secured revolving credit facility due 2011, Ba1, LGD3, 34%; -- Affirmed $350 million senior secured term loan A facility due 2011, rated Ba1, to LGD3, 34%; -- Affirmed Corporate Family Rating, Ba1; and, -- Affirmed Probability of Default Rating, Ba2. Moody's affirmed the credit ratings of WeightWatchers.com and will withdraw such ratings upon the repayment of its rated debt with the proceeds from the add-on term loan facilities. The stable ratings outlook anticipates solid revenue and profitability growth in 2007 driven by recent franchise acquisitions, implementation of price increases in portions of North America and Europe, new marketing campaigns and wider roll- out of new monthly and seasonal membership plans. Free cash flow generation is expected to be primarily utilized for debt repayment. The company's willingness to substantially increase leverage in connection with its pending share purchase is inconsistent with an investment grade rating profile. Consequently, the ratings are unlikely to be upgraded in the intermediate term. However, over the long term, an upgrade is possible if the company: -- grows profitability or repays indebtedness such that EBIT coverage of interest and free cash flow to debt are sustained for a few years at over 4.5x and 12%, respectively; and, -- demonstrates a commitment to conservative financial policies. The ratings could be pressured by another large share repurchase in the near term or a failure to achieve anticipated improvements in credit metrics during the next year. Credit metrics could remain weak within the rating category if attendance levels or operating margins decline and term loan repayments are materially below Moody's expectations. A downgrade is possible if EBIT coverage of interest and free cash flow to debt are expected to be sustained at less than 2.5x and 8%, respectively. Headquartered in New York, New York, Weight Watchers is a leading global provider of weight management services, operating globally through a network of company owned and franchised operations. Revenues for the twelve months ended Sept. 30, 2006, were $1.2 billion. WOLDRICH HOLDINGS: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Woldrich Holdings, Inc. 17617 North 25th Avenue, #2 Phoenix, AZ 85023 Bankruptcy Case No.: 07-00009 Chapter 11 Petition Date: January 2, 2007 Court: District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: Scott H. Coombs, Esq. Coombs & Associates 4041 S. Mcclintock, #304 Tempe, AZ 85282 Tel: (480) 839-4828 Fax: (480) 897-1461 Estimated Assets: $0 to $10,000 Estimated Debts: $1 Million to $10 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ John & Constance Bigelow Corporate Debt $1,400,000 c/o Atty. Robert Bauer 7301 N. 16th Street Phoenix, AZ 85020 XENONICS HOLDINGS: Eisner LLP Raises Going Concern Doubt -------------------------------------------------------- Eisner LLP, in New York, raised substantial doubt about Xenonics Holdings Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended September 30, 2006. The auditor pointed to the company's incurred recurring losses and accumulated deficit. The company reported a $1,488,000 net loss on $4,833,000 of total revenues for the year ended Sept. 30, 2006, compared with $5,004,000 net loss on $4,434,000 revenues in the comparable period of 2005 At Sept. 30, 2006, the company's balance sheet showed $3,065,000 in total assets and $665,000 in total liabilities, resulting in a $2,400,000 stockholders' equity. A full-text copy of the company's 2006 Annual Report is available for free at http://ResearchArchives.com/t/s?180f Xenonics Holdings Inc. through its subsidiary, Xenonics Holdings Inc. -- http://www.xenonics.com/-- develops and produces illumination products for military, law enforcement, public safety, and commercial and private sector applications. XPEDIOR INC: Court Enters Final Decree Closing Chapter 11 Cases --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois entered a final decree closing the bankruptcy cases of Xpedior Incorporated and its debtor-affiliates. As reported in the Troubled Company Reporter on July 27, 2006, Sandra A. Reese, the liquidation trustee in Xpedior's bankruptcy cases, sought authority from the Court to enter a final decree closing the bankruptcy cases. On March 28, 2002, the Court confirmed the Debtors' Amended Consensual Joint Plan of Liquidation, which resulted in, among other things: a. the Debtors' estates being substantively consolidated; b. the creation of a liquidation trust, to which all the Debtors' assets were transferred; c. approval of a Trust Agreement, pursuant to which Sandra A. Reese was named Trustee of the Trust and granted authority to, among other things: -- hire professionals to assist with her duties under the Trust Agreement and the Plan; -- pursue all causes of action on behalf of the Debtors; -- compromise any and all claims asserted against the Debtors' assets; -- liquidate the Debtors' remaining assets; and -- make distributions to the Debtors' creditors in accordance with the Plan; d. the continuation of the Committee as the "Post- Confirmation Committee," which had the right to consult with the Trustee in accordance with the Trust Agreement and the Plan; and e. the appointment of Daniel F. Dooley as Special Litigation Trustee to investigate, prosecute and resolve, among other things, certain causes of action against Committee members and the Debtors' former officers and directors.3 The Trustee has liquidated all the Debtors' assets and the Trustee and the Special Litigation Trustee have resolved all motions, contested matters and adversary proceedings, including, without limitation, all claim objections, preference actions and causes of action against the Debtors' former officers and directors. In connection therewith, the Trustee and the Special Litigation Trustee accomplished these results: 1) secured claims were reduced from $2,455,489 to $9,677; 2) priority claims were reduced from $6,523,153 to $1,064,625; 3) general unsecured claims were reduced from $43,498,801 to $9,462,775; 4) several thousand possible avoidance actions were investigated and approximately 98 adversary proceedings under Sections 547 and 548 of the Bankruptcy Code were commenced, resulting in collections totaling $1,542,199; and 5) accounts receivable collections totaled $1,181,810. Also, the Liquidation Trustee and the Bankruptcy Professionals investigated and pursued various other matters which resulted in miscellaneous receipts and collections totaling $1,039,167 as of June 22, 2006 from several sources including, without limitation, distributions from the Debtors' many international subdivisions (almost all of which were undergoing various forms of liquidation proceedings), domestic and international tax refunds, distributions from other companies in bankruptcy and investment income. In addition, the Trustee and the Special Litigation Trustee settled these two substantial matters: (a) the Special Litigation Trustee settled a lawsuit against certain of the Debtors' former officers and directors which resulted in a collection of $575,000 in March and May of 2005; and (b) the Liquidation Trustee settled a class action suit, in which the Trust was the lead plaintiff, which resulted in a collection of $473,520 (net of attorneys' fees and expenses) in December of 2005. As a result, all secured and priority claims were paid in full and the Debtors' unsecured creditors received a 100% distribution on account of their claims. General unsecured creditors also recovered $2,513,244 in interest in accordance with Section 5.4 of the Plan. Thus, not only have all claims and all litigation been resolved, but the Trustee has also completed all distributions to creditors contemplated by the Plan. Accordingly, the Debtors' estates have been fully administered. As of June 22, 2006, the Trustee is still holding around $1,002,875 in the estate. However, the Plan does not provide to whom the Remaining Funds should be distributed and all equity interests in the Debtors have been terminated and waived. The Plan provided for the cancellation and extinguishment of all the common stock of the Debtors; thus, no common shareholder of any of the Debtors is entitled to receive any distribution from the Debtors' estates or further notices in these cases. In addition, although the Debtors' preferred shares were not outright cancelled under the Plan, distributions could only be made to a preferred shareholder after: (1) payment in full of all Allowed Secured Claims, all Allowed Administrative Claims, all Allowed Priority Claims, and all Allowed Unsecured Claims; and (2) the expiration of 120 days after the mailing of the final and last distribution to any Creditor. Xpedior's only preferred shareholder, PSINet Consulting Solutions Holdings, Inc., also expressly waived any and all claims against and interests in the Debtors. Nevertheless, the Trustee and her attorneys propose, after having consulted with the U.S. Trustee, that the Remaining Funds be donated to charity. Headquartered in Chicago, Illinois, Xpedior Incorporated (fka Metamor Consulting Solutions Inc.) designs, develops and provides innovative and comprehensive eBusiness solutions to Global 2000 companies and emerging internet businesses. The company and its debtor-affiliates filed for bankruptcy on April 20, 2001 (Bankr. N.D. Ill. Case No. 01-14424). Colleen E. McManus, Esq. at DLA Piper Rudnick Gray Cary US LLP, Matthew Gensburg, Esq., at Greenberg Taurig LLP, and Steven H Newman, Esq., at Esanu Katsky Kornis & Siger LLP represent the Debtors. * Drinker Biddle and Gardner Carton Officially Merged ----------------------------------------------------- The law firms of Drinker Biddle & Reath LLP and Gardner Carton & Douglas LLP are now officially merged. The new firm Drinker Biddle & Reath LLP, will be known as Drinker Biddle Gardner Carton in Chicago and Milwaukee during 2007. The combined firm includes more than 640 lawyers in 12 offices nationwide. "This combination provides our clients with a critical mass of top-notch lawyers across the country," Alfred W. Putnam Jr., chairman, said. "We now have major presences -- each with more than 100 professionals -- in the dynamic legal markets of Philadelphia, Chicago, New Jersey and Washington, D.C." "The integration of the two firms has been progressing since we announced the merger in November, and that process will continue during the year ahead," Andrew C. Kassner, executive partner, said. "There are many logistical details in a combination of this size that need to be handled, but one of the most important aspects of the combination -- the blending of the firms' cultures -- has been an overwhelming success, something we expected from the very beginning." As reported in the Troubled Company Reporter on Nov. 30, 2006, the Partners from each firm have voted to approve the merger, which would become official on Jan. 1, 2007. A copy of the Corporate Restructuring Brochure reflecting the combined GCD and Drinker Biddle practice groups is available for free at http://researcharchives.com/t/s?160a The new Drinker Biddle & Reath LLP, a full-service national law firm, has more than 640 lawyers practicing in Philadelphia; Chicago; Washington, D.C.; New York City; San Francisco; Los Angeles; Milwaukee; Wilmington, Del.; Florham Park, N.J.; Princeton, N.J.; Berwyn, Pa.; and, Albany, N.Y. * Former Assistant U.S. Attorney Douglas Fuchs Joins Gibson Dunn ---------------------------------------------------------------- Douglas M. Fuchs, Esq., will join Gibson, Dunn & Crutcher LLP's Los Angeles office as of counsel. Mr. Fuchs was previously an Assistant U.S. Attorney with the U.S. Attorney's Office in the Central District of California, where he served as Deputy Chief of the Major Frauds Section. He is recognized for the prosecution of former executives of Homestore.com. "Doug is a terrific lawyer who will be a strong addition to the firm," said Marjorie Lewis, Co-Partner in Charge of the Los Angeles office. "Our Business Crimes and Investigations practice is very busy, and we have recently added much needed capacity to the group. Doug's arrival comes on the heels of the arrival of former Los Angeles U.S. Attorney Debra Wong Yang and Maurice Suh, who is also a former federal prosecutor." "I am looking forward to returning to private practice," said Mr. Fuchs. "Gibson Dunn has one of the leading national litigation practices. I am delighted to join such a strong litigation team and to be working again with my former colleague Deb Yang." * Douglas M. Fuchs Prior to joining the firm, Mr. Fuchs was an Assistant U.S. Attorney for the Central District of California from 2000 to 2006, serving as Deputy Chief of the Major Frauds Section since 2005. While with the U.S. Attorney's Office, Mr. Fuchs personally handled all phases of the criminal prosecution of complex federal white collar fraud cases, including securities, accounting, bankruptcy, tax and money laundering and investor frauds. Fuchs handled the high-profile prosecution of 11 former Homestore.com executives in connection with a revenue inflation scheme, which culminated in a nearly three-month jury trial. The investigation was used as a model to formulate Justice Department policy relating to the prosecution of corporate fraud and corporations. Other representative matters include the prosecution of eight members of a telemarketing boiler-room operation for defrauding investors out of several million dollars and prosecution of numerous individuals for a variety of crimes. Before his tenure with the U.S. Attorney's Office, Mr. Fuchs practiced with Munger, Tolles & Olson and Davis Polk & Wardwell. He graduated cum laude from the University of Chicago Law School in 1992. About Gibson Dunn Gibson, Dunn & Crutcher LLP -- http://www.gibsondunn.com/-- is a leading international law firm. Consistently ranking among the world's top law firms in industry surveys and major publications, Gibson Dunn is distinctively positioned in today's global marketplace with 800 lawyers and 13 offices, including Los Angeles, New York, Washington, D.C., San Francisco, Palo Alto, London, Paris, Munich, Brussels, Orange County, Century City, Dallas and Denver. * BOND PRICING: For the week of January 1 - January 6, 2006 ----------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 0 Aetna Industries 11.875% 10/01/06 11 AHI-DFLT07/05 8.625% 10/01/07 70 Allegiance Tel. 11.750% 02/15/08 45 Allegiance Tel. 12.875% 05/15/08 46 Amer & Forgn Pwr 5.000% 03/01/30 69 Amer Color Graph 10.000% 06/15/10 71 Amer Tissue Inc 12.500% 07/15/06 1 Antigenics 5.250% 02/01/25 66 Anvil Knitwear 10.875% 03/15/07 71 Archibald Candy 10.000% 11/01/07 0 At Home Corp 0.525% 12/28/18 1 At Home Corp 4.750% 12/15/06 1 Atherogenics Inc 1.500% 02/01/12 74 Autocam Corp. 10.875% 06/15/14 29 Bank New England 8.750% 04/01/99 5 Bank New England 9.500% 02/15/96 17 Bank New England 9.875% 09/15/99 7 BBN Corp 6.000% 04/01/12 0 Burlington North 3.200% 01/01/45 58 Calpine Corp 4.000% 12/26/06 62 Calpine Corp 6.000% 09/30/14 68 Calpine Corp 7.750% 06/01/15 70 Cell Therapeutic 5.750% 06/15/08 69 Cell Therapeutic 5.750% 06/15/08 74 CHS Electronics 9.875% 04/15/05 2 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 3 Color Tile Inc 10.750% 12/15/01 0 Comcast Corp 2.000% 10/15/29 40 Conseco Inc 8.500% 10/15/02 0 Dal-Dflt09/05 9.000% 05/15/16 70 Dana Corp 5.850% 01/15/15 72 Dana Corp 7.000% 03/01/29 74 Dana Corp 7.000% 03/15/28 74 Dana Corp 10.125% 03/15/10 74 Decode Genetics 3.500% 04/15/11 74 Delco Remy Intl 9.375% 04/15/12 41 Delco Remy Intl 11.000% 05/01/09 42 Delta Air Lines 2.875% 02/18/24 64 Delta Air Lines 7.700% 12/15/05 65 Delta Air Lines 7.900% 12/15/09 67 Delta Air Lines 8.000% 06/03/23 65 Delta Air Lines 8.300% 12/15/29 67 Delta Air Lines 9.250% 03/15/22 66 Delta Air Lines 9.250% 12/27/07 67 Delta Air Lines 9.750% 05/15/21 64 Delta Air Lines 10.000% 08/15/08 67 Delta Air Lines 10.125% 05/15/10 64 Delta Air Lines 10.375% 02/01/11 64 Delta Air Lines 10.375% 12/15/22 65 Delta Mills Inc 9.625% 09/01/07 14 Deutsche Bank NY 8.500% 11/15/16 72 Dov Pharmaceutic 2.500% 01/15/25 45 Dura Operating 8.625% 04/15/12 34 Dura Operating 9.000% 05/01/09 5 E.Spire Comm Inc 13.750% 07/15/07 0 Eagle Food Center 11.000% 04/15/05 2 Encysive Pharmacy 2.500% 03/15/12 70 Exodus Comm Inc 10.750% 12/15/09 0 Exodus Comm Inc 11.250% 07/01/08 0 Exodus Comm Inc 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 1 Family Golf Ctrs 5.750% 10/15/04 0 Fedders North AM 9.875% 03/01/14 69 Federal-Mogul Co. 7.375% 01/15/06 75 Federal-Mogul Co. 7.500% 01/15/09 75 Federal-Mogul Co. 8.160% 03/06/03 64 Federal-Mogul Co. 8.250% 03/03/05 67 Federal-Mogul Co. 8.330% 11/15/01 68 Federal-Mogul Co. 8.370% 11/15/01 63 Federal-Mogul Co. 8.370% 11/15/01 68 Finova Group 7.500% 11/15/09 27 Ford Motor Co 6.625% 02/15/28 72 Ford Motor Co 7.125% 11/15/25 74 Ford Motor Co 7.400% 11/01/46 73 Ford Motor Co 7.700% 05/15/97 73 GB Property Fndg 11.000% 09/29/05 57 Golden Books Pub 10.750% 12/31/04 0 Gulf Mobile Ohio 5.000% 12/01/56 71 Gulf States Stl 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 31 Home Prod Intl 9.625% 05/15/08 57 Insight Health 9.875% 11/01/11 25 Insilco Hldg Co 14.000% 08/15/08 0 Iridium LLC/CAP 10.875% 07/15/05 28 Iridium LLC/CAP 11.250% 07/15/05 30 Iridium LLC/CAP 13.000% 07/15/05 28 Iridium LLC/CAP 14.000% 07/15/05 28 Isolagen Inc. 3.500% 11/01/24 75 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 30 Kaiser Aluminum 12.750% 02/01/03 11 Kellstrom Inds 5.750% 10/15/02 0 Key3Media Group 11.250% 06/15/11 0 Kmart Corp 8.990% 07/05/10 5 Kmart Corp 9.350% 01/02/20 12 Kmart Funding 9.440% 07/01/18 20 Lehman Bros Hldg 10.000% 10/30/13 75 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 66 Lifecare Holding 9.250% 08/15/13 65 Macsaver Financl 7.400% 02/15/02 0 Macsaver Financl 7.600% 08/01/07 5 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 56 MRS Fields 9.000% 03/15/11 68 MRS Fields 11.500% 03/15/11 75 Nail Steel Corp 8.375% 08/01/06 0 Nail Steel Corp 9.875% 03/01/09 0 New Orl Grt N RR 5.000% 07/01/32 71 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 NorthPoint Comm 12.875% 02/15/10 0 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 28 Northwst Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 70 Nutritional Src 10.125% 08/01/09 59 Oakwood Homes 7.875% 03/01/04 11 Oakwood Homes 8.125% 03/01/09 6 Oscient Pharm 3.500% 04/15/11 67 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 0 Outboard Marine 10.750% 06/01/08 6 Pac-West-Tender 13.500% 02/01/09 30 PCA LLC/PCA Fin 11.875% 08/01/09 19 Pegasus Satellite 12.375% 08/01/08 9 Pegasus Satellite 12.500% 08/01/07 9 Pegasus Satellite 13.500% 03/01/07 0 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 0 Piedmont Aviat 10.250% 01/15/49 8 Pixelworks Inc 1.750% 05/15/24 74 Pliant Corp 13.000% 07/15/10 45 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Primus Telecom 3.750% 09/15/10 36 Primus Telecom 8.000% 01/15/14 60 Primus Telecom 12.750% 10/15/09 68 PSINET Inc 10.000% 02/15/05 0 PSINET Inc 10.500% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 0 Railworks Corp 11.500% 04/15/09 1 Renco Metals Inc 11.500% 07/01/03 0 RJ Tower Corp. 12.000% 06/01/13 14 S3 Inc 5.750% 10/01/03 0 Scotia Pac Co 7.110% 01/20/14 73 Tom's Foods Inc 10.500% 11/01/04 9 Transtexas Gas 15.000% 03/15/05 0 Tribune Co 2.000% 05/15/29 69 United Air Lines 7.270% 01/30/13 56 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.210% 01/21/17 9 United Air Lines 9.300% 03/22/08 49 United Air Lines 9.350% 04/07/16 35 United Air Lines 9.560% 10/19/18 57 United Air Lines 9.760% 12/31/49 4 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.110% 02/19/49 48 United Air Lines 10.850% 02/19/15 47 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 7.500% 04/15/08 0 US Air Inc. 10.250% 01/15/49 1 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.300% 07/15/49 1 US Air Inc. 10.550% 01/15/49 0 US Air Inc. 10.750% 01/01/49 0 US Air Inc. 10.800% 01/01/49 10 US Air Inc. 10.900% 01/01/49 0 US Air Inc. 10.900% 01/01/49 0 USAutos Trust 2.212% 03/03/11 8 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insurance Group 8.750% 07/15/25 6 Werner Holdings 10.000% 11/15/07 7 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 5.000% 08/01/11 75 Wheeling-Pitt St 6.000% 08/01/10 75 Winstar Comm 14.000% 10/15/05 0 Winstar Comm Inc 12.500% 04/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 World Access Inc 13.250% 01/15/08 5 Xerox Corp 0.570% 04/21/18 42 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***