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/raid1/www/Hosts/bankrupt/TCR_Public/070118.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 18, 2007, Vol. 11, No. 15 Headlines ABI CORP: Case Summary & 120 Largest Unsecured Creditors ADELPHIA COMMS: Ct. Temporarily Extends Stay of Confirmation Order ALLIED PROPERTIES: Trustee Hires Gainer Donnelly as Accountant ALLIS-CHALMERS: Moody's Rates $225 Million Senior Notes at B3 ALPHA NATURAL: Buys 77.5% Stake in Lime-Manufacturing Venture AIRLIE CLO: Moody's Rates $19 Mil. Class D Secured Notes at Ba2 ALERIS INTERNATIONAL: TPG Completes $3.3 Billion Acquisition ALION SCIENCE: S&P Junks Rating on Proposed $200 Mil. Senior Notes BACCHUS 2006-1: Moody's Rates $12MM Cl. E Deferrable Notes at Ba2 BROOKLYN HOSPITAL: Court Extends Plan Filing Period to March 27 BROOKLYN HOSPITAL: Hires Newmark & Co. as Real Estate Broker CABLEVISION SYSTEMS: Rejects Dolans' $8.9 Billion Buyout Offer CABLEVISION SYSTEMS: Extends Offer of 6-3/4% Sr. Notes to Feb. 20 CALDECOTT CDO: Moody's Rates $8.5 Million Class F Notes at Ba1 CASCADES INC: DBRS Changes Trend on BB (High) Rated Senior Debt CASCADES INC: Norampac Deal Cues S&P to Hold BB Rated Corp. Credit CE GENERATION: Fitch Lifts Rating on $400 Million Bonds to BB+ CENTRAL FREIGHT: Posts $10.4 Mil. Net Loss in Third Quarter 2006 CIFC FUNDING: Moody's Rates $25 Million Class B-2L Notes at Ba2 CINRAM INTERNATIONAL: Board Appoints J. Bruce Terry as Trustee CLADDAGH PUBS: Case Summary & 20 Largest Unsecured Creditors CLEAN HARBORS: Wants Court Approval on Heller Draper as Counsel COPPER RIVER: Moody's Rates $23 Mil. Class E Secured Notes at Ba2 DAIMLERCHRYSLER: Chrysler Certified Pre-Owned Vehicles Sales Up 8% DAIMLERCHRYSLER: Truck Group Reports Record Sales in 2006 DELPHI CORP: Kyocera Wants Stay Lifted to Exercise Setoff Rights DELPHI CORP: Mercedes-Benz Supports Extension of Exclusive Periods DVI MEDICAL: Fitch Takes Actions on Various Loans eROOMSYSTEM TECHNOLOGIES: Earns $28,905 in 2006 Third Quarter 2006 EAGLE BROADBAND: Posts $3.5MM Net Loss for 1st Qtr. Ended Nov. 30 FAIRPOINT COMMS: Verizon Deal Cues Moody's to Hold B1 Corp. Rating FIRST FRANKLIN: Fitch Downgrades Class M-9 Certificates to BB- FIRST HORIZON: Fitch Upgrades Class B5 Loan Rating to B+ from B GENERAL MOTORS: Says Too Early to Provide Details on Proton Deal HEADWATERS INC: Launches Proposed $125 Million Loan Offering I2TELECOM INT'L: Repaid Outstanding Loans to Cornell Capital INDYMAC NIM: Moody's Puts Ba1 Rating on Series 2006-LL Notes INTELSAT LTD: Fitch Junks Rating on $600 Million Senior Notes INTERPOOL CAPITAL: Investors' Offer Cues Moody's Ratings Review INTERPOOL INC: Buyout Offer Prompts S&P's Negative CreditWatch INTERSTATE BAKERIES: Wants to Extend Exclusivity Period to June 2 INTERSTATE BAKERIES: Posts $26.3 Million Net Loss in 2nd Quarter INTERSTATE BAKERIES: SEC Files Complaint Against Ex-IBC Officer IRVINE SENSORS: All Credit Facility Defaults Cured or Waived JEAN DUPLESSIS: Case Summary & 19 Largest Unsecured Creditors KARA HOMES: Court Approves $2.6 Mil. Loan Payment to Bear Stearns MAAX CORP: Poor Performance Cues S&P to Junk Corp. Credit Rating MAAX HOLDINGS: Strained Liquidity Prompts S&P to Junk Ratings MAIN STREET: Trustees Taps Freeman & Partners as Accountants MASTEC INC: Moody's Rates Proposed $150 Million Senior Notes at B1 MASTEC INC: S&P Puts B+ Rating on $150 Mil. Senior Unsecured Notes MAYCO PLASTICS: Asks Court to Fix Administrative Claims Bar Date MAYCO PLASTICS: Liquidation Plan Gets Court's Preliminary Approval MILLS CORP: Farallon Offers to Purchase $499 Million of Shares MILLS CORP: Gazit-Globe Offers $1.1B Revised Recapitalization Plan MILLS CORP: Inks $1.35 Billion Agreement with Brookfield Asset MIRANT CORP: Selling 6 U.S. Gas Plants for $1.4 Bil. to LS Power NORAMPAC INC: S&P Cuts Rating on $250 Mil. 6.75% Sr. Notes to BB- OMEGA HEALTHCARE: Board Increases Dividend on Series D Stock PAETEC COMMS: Moody's Affirms Corporate Family Rating at B2 PAETEC HOLDING: S&P Junks Rating on $175 Mil. Senior Secured Loan PENINSULA GAMING: Sells $22 Million Senior Secured Notes PILGRIM'S PRIDE: Moody's Cuts Senior Unsecured Credit Rating to B1 PITTSBURGH BREWING: Has Until Feb. 6 to File Amended Plan REFCO INC: Court Denies Michael McNeil's Stay Request REFCO INC: Court Directs Grant Thornton to Produce Documents ROBINSON CONSTRUCTION: Case Summary & 56 Largest Unsec. Creditors ROUNDY'S SUPERMARKETS: Moody's Holds Corporate Family Rating at B2 SABRINA TURMAN: Case Summary & 14 Largest Unsecured Creditors SANMINA-SCI: 10-K Filing Prompts Moody's to Affirm Low-B Ratings SAPPHIRE VALLEY: Moody's Rates $18 Million Class E Notes at Ba2 SIX FLAGS: Park Sale Not to Affect Fitch's B- Issuer Dflt. Rating SMART ONLINE: Amends Registration Rights Pact and Settles Penalty SMART ONLINE: Atlas Capital Increases Loan Credit to $2.5 Million SMART ONLINE INC: Posts $1.9 Million Net Loss in 3rd Quarter 2006 SNOQUALMIE ENTERTAINMENT: Moody's Rates $200 Mil. Sr. Notes at B3 SOLUTIA INC: Asks Court to Increase Total OCP Payment to $15 Mil. SOLUTIA INC: Committee Wants to Intervene in Calpine Arbitration SOLUTIA INC: Equity Committee Hires Two Experts for Pharmacia Case SOUTH COAST: Moody's Cuts Rating on $32 Mil. Class B Notes to Ba1 SPECTRUM BRANDS: To Cut 100 Jobs Pursuant to Reorganization SPECTRUM BRANDS: Receives Notice of Default from Noteholders TENFOLD CORP: Raises $1.3 Million from Sale of Convertible Stock U.S. ENERGY: Can Access New Funding Under Countryside Agreement U.S. ENERGY: Expects Acceleration of Chapter 11 Plan Confirmation UNITED COMPONENTS: Earns $2.1 Million in Quarter Ended Sept. 30 USI HOLDINGS: Fitch Places $210MM Secured Term Loan Rating at BB- VITRO SA: To Offer $750 Million Notes to Institutional Buyers VOLT INFORMATION: Closes $70 Mil. Credit Facility for Volt Delta WOODWIND & BRASSWIND: Creditors' Meeting on Open-Ended Schedule * Carl Marks Advisory Group Names Richard Heller as Partner * Jeff Marwil and Mark Thomas Join Winston & Strawn LLP * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABI CORP: Case Summary & 120 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Abi Corporation Ind. M. Julia 420 Calle A San Juan, PR 00920 Bankruptcy Case No.: 07-00119 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Geraldine, Inc. 07-00122 Jackies, Inc. 07-00123 Ranger, Inc. 07-00124 Contessa De Las Americas, Inc. 07-00125 Infinito, Inc. 07-00126 Humacao 5 & 10 07-00127 Fashion Bazaar 07-00128 Juncos 5&10 07-00129 Almacenes Linda, Inc. 07-00130 Type of Business: Saul Kleiman Katz is the president of the Debtors. Chapter 11 Petition Date: January 12, 2007 Court: District of Puerto Rico (Old San Juan) Judge: Sara E. De Jesus Kellogg Debtors' Counsel: Charles Alfred Cuprill, Esq. Law Offices of Charles A. Cuprill, P.S.C. 356 Calle Fortaleza, 2nd Floor San Juan, PR 00901 Tel: (787) 977-0515 Estimated Assets Estimated Debts ---------------- --------------- Abi Corporation $500,000 to $500,000 to $1 Million $1 Million Geraldine, Inc. $1 Million to $1 Million to $10 Million $10 Million Jackies, Inc. $1 Million to $1 Million to $10 Million $10 Million Ranger, Inc. Less than Less than $10,000 $10,000 Contessa De Las Less than Less than Americas, Inc. $10,000 $10,000 Infinito, Inc. $10 Million to $10 Million to $50 Million $50 Million Humacao 5 & 10 $100,000 to $100,000 to $1 Million $1 Million Fashion Bazaar $1 Million to $1 Million to $10 Million $10 Million Juncos 5 & 10 $500,000 to $500,000 to $1 Million $1 Million Almacenes Linda, Inc. $10 Million to $10 Million to $50 Million $50 Million A. Abi Corporation's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saul Kleiman Lease $22,500 Ind. Mario Julia 420 Calle A San Juan, PR 00920 BV Properties Lease $14,000 Yauco Plaza I Shopping Center, Suite 137 Yauco, PR 00698 John Irrizary Lease $12,000 P.O. Box 307 Lajas, PR 00667 Neftali Rivera Lease $2,600 Nimar Almodovar Pache Salaries $1,200 Mareille Gonzalez Raspal Salaries $1,086 Yathira Santini Rivera Salaries $960 Ana V. Rodriguez Verna Salaries $900 Elizabeth Rosado Ayala Salaries $840 Limarya Roman Garriga Salaries $721 Carlos J. Perez Nieves Salaries $613 Rosa A. Ortiz Vargas Salaries $600 Agustin Berdecia Melend Salaries $566 Joel Cosme Santiago Salaries $480 Carmen A. Rodriguez Torres Salaries $463 Anacell Diaz Melendez Salaries $412 Miguel A. Vazquez Rosado Salaries $360 Zuleika Reyes Jimenez Salaries $360 Jose A. Rosado Ramos Salaries $206 Tania Ramos Pacheco Salaries $51 B. Geraldine, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Plaza Carolina Lease $38,778 225 West Washington Street Indianapolis, IN 46204 DDR Rio Hondo LLC SE $26,978 P.O. Box 360771 San Juan, PR 00936-0771 Plaza Carolina Mall, L.P. Lease $25,348 225 West Washington Street Indianapolis, IN 46204 Empresas Puertorrique�as Lease $23,838 Vornado Montehiedra Acquisition $23,449 PR Barceloneta LLC Lease $22,623 Caguas Centrum L.P. Lease $19,671 DDR Palma Real LLC SE Lease $18,211 North Deck, Ltd. Lease $16,132 North Deck Ltd. Lease $15,421 PDCM Assoc. Lease $11,291 Regency Park Associates SE Lease $10,347 Plaza Guayama SE Lease $8,189 Joan Vega Ramos Salaries $1,200 Eva Martinez Figueroa Salaries $1,137 Wilkan D. Gomez Torres Salaries $1,125 Maura Rolon Medina Salaries $910 Glorivee Rivera Feliciano Salaries $910 Sheila Y. Rivera Nu�ez Salaries $900 Maria V. Nasser Joya Salaries $796 C. Jackies, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ FRG Sociedad Especial Lease $22,477 Yauco Plaza I Shopping Center, Suite 137 Yauco, PR 00698 BV Properties Lease $21,900 Yauco Plaza I Shopping Center, Suite 137 Yauco, PR 00698 Commercial Properties Development Lease $21,005 Los Jardines Shipping Center Marg. 130, Suite 300 Guaynabo, PR 00969-3470 PDCM Assoc. Lease $20,735 Archon Financial Lease $19,189 Comm. Enterprises Caguas Lease $16,699 North Deck Ltd. Lease $12,000 Tamara Corporation Lease $10,000 Aida I Franco Quesada Salaries $1,581 Lisette Gallardo Pacheco Salaries $1,548 Sandra Hernandez Alier Salaries $1,137 Miriam J. Correa Rivera Salaries $875 Sandra I. Martinez Masso Salaries $858 Raquel Cruz Castro Salaries $840 Lourdes Cintron Salaries $824 Karen M. Rivera Rosado Salaries $780 Wignelia Rosado Ortiz Salaries $770 Luz M. Ortiz Rivera Salaries $731 Luis O. Gonzalez Diaz Salaries $682 Doralis M. Garcia Martinez Salaries $675 D. Ranger, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Simon Plaza Carolina, LP-SP Lease $48,411 225 West Washington Street Indianapolis, IN 46204 E. Contessa De Las Americas, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Simon Plaza Carolina, LP-SP Lease $48,411 225 West Washington Street Indianapolis, IN 46204 F. Infinito, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Plaza Del Caribe, S.E. $82,681 P.O. Box 363268 San Juan, PR 00936-3268 Ron Simkin Belz Enterprises $54,348 P.O. Box 3661 Memphis, TN 38173-0661 DDR Del Sol LLC S.E. $52,462 P.O. Box 360771 San Juan, PR 00936-0771 Thor Gallery At Centre $44,732 Caparra Center Associates, S.E. $44,386 Caguas Centrum L.P. $44,007 DDR Norte LLC S.E. $40,905 DDR Atlantico LLC S.E. $38,725 DDR Se�orial LLC S.E. $38,591 Luan Investment S.E. $35,024 North Deck Ltd. $34,805 Vornado $34,216 Caparra Center Associates, S.E. $31,451 DDR Rio Hondo LLC S.E. $30,251 Plaza Las Americas $28,529 Kim Sam PR $27,025 DDR Isabela LLC S.E. $26,846 DDR Cayey LLC S.E. $26,113 MJS Caguas Ltd. $24,202 DDR Oeste LLC S.E. $24,050 G. Humacao 5 & 10 and Juncos 5's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Benhar $18,000 Ind. Mario Julia, Suite 420 Calle A San Juan, PR 00920 Rosa M. Viera Garcia $813 P.O. Box 941, Solar Suite 312 Las Parcelas Bartolo Rio Grande, PR 00745 Moll Almestica, Zulma $675 Bellisima H-292 Loiza Valley Canovanas, PR 00721 Luz I. Malave Muniz $412 Maria L. Morales Montoyo $330 Ebel L. Allende Fuentes $257 Olga I. Robles Figueroa $103 Maribel Gonzalez Vega $55 Denirka Diaz Lopez $51 H. Fashion Bazaar's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Doris Ayala Rios $1,256 HC 01, P.O. Box 8183 Sector Capitan P. 244-A Toa Baja, PR 00949 Jennifer Ramirez Rivera $960 Las Cuevas Carr. 117- Km 3.7 Int. Lajas, PR 00667 Jessica Burgos Davila $910 Calle M. Cacho, Suite 170 Bo. Barahona Morovis, PR 00687 Iris Y. Figueroa Colon $880 Careline Maldonaldo Gonzalez $440 Johanna Soto Rivea $300 Idaliz G. Lopez Zamot $206 Liz R. Negron Garcia $114 Marilyn Maldonado Muniz $103 Laura E. Cabrera Tavarez $60 Mirnelys Rosa Rivera $51 Edith Valcarcel Colla $51 Jaydee L. Pagan Pallens $51 Sylkalianett Rivera Reyes $51 Tania Galindez Barrio $51 Tatiana Flores Urbina $51 Julio a. Rodriguez Cast $51 Doralice Cortes Cardona $51 I. Almacenes Linda, Inc.'s 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular #0999 $4,000,000 P.O. Box 362708 San Juan, PR 00936-2708 Citibank $2,800,000 P.O. Box 70301 San Juan, PR 00936-8301 Banco Santander $2,733,039 Carr. Nu. 2 Esq. Carr. 167 Bayamon, PR 00959 Banco Bilbao Vizcaya $2,150,000 P.O. Box 364745 San Juan, PR 00936-4745 Banco Popular #1999 $2,000,000 P.O. Box 362708 San Juan, PR 00936-2708 Banco Popular #9007 $1,778,504 P.O. Box 362708 San Juan, PR 00936-2708 Banco Popular #9008 $1,161,960 P.O. Box 362708 San Juan, PR 00936-2708 Banco Popular #9001 $1,122,417 P.O. Box 362708 San Juan, PR 00936-2708 Banco Popular #3999 $1,000,000 P.O. Box 362708 San Juan, PR 00936-2708 Fierres Inc. $372,276 P.O. Box 13296 San Juan, PR 00908-3296 Gypsy House $305,110 P.O. Box 4024234 Pta. Las Marias Shopping Center Santurce, PR 00913 ADELPHIA COMMS: Ct. Temporarily Extends Stay of Confirmation Order ------------------------------------------------------------------ The U.S. District Court for the Southern District of New York on Tuesday temporarily extended the 10-day stay of the order confirming the Adelphia Plan of Reorganization to a day early next week in order to give the District Court adequate time to adjudicate a pending motion for a stay of the Confirmation Order pending appeal. The Confirmation Order confirming the First Modified Fifth Amended Joint Chapter 11 Plan for Adelphia Communications Corporation and Certain of its Affiliated Debtors, dated as of Jan. 3, 2007, as Confirmed was entered by the Court on Jan. 5, 2007. The occurrence of the Effective Date of the Adelphia Plan of Reorganization is subject to conditions, many of which are outside the control of Adelphia, including that the Effective Date occur by Jan. 19, 2007. The Outside Date may be extended by the Settlement Parties. There can be no assurance as to whether the Settlement Parties will extend the Outside Date, or whether or when the Effective Date will occur. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. As reported in the Troubled Company Reporter on Jan. 9, 2007, the Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York has entered an order confirming the first modified fifth amended joint Chapter 11 plan of reorganization of Adelphia Communications Corporation and Certain Affiliated Debtors. ALLIED PROPERTIES: Trustee Hires Gainer Donnelly as Accountant -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas authorized Randy W. Williams, the Chapter 7 Trustee appointed in Allied Properties LLC's bankruptcy case, to employ Miles D. Harper III and the firm of Gainer, Donnelly & Desroches, LLP as his accountants. Gainer Donnelly is expected to perform accounting services in connection with the preparation of Internal Revenue Service returns. Mr. Williams discloses that Mr. Harper will be paid $185 per hour. Out-of-pocket expenses will be charged to the Debtor. Mr. Williams assures the Court that Gainer Donnelly does not hold or represent any interest adverse to the Debtors' estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Houston, Texas, Allied Properties LLC is a real estate developer. The company filed for chapter 11 protection on August 1, 2006 (Bankr. S.D. Tex. Case No. 06-33754). Leonard H. Simon, Esq., at Pendergaft & Simon, LLP, represented the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. In its schedules of assets and liabilities, the Debtor listed $24,000,072 in assets and $16,424,907 in debts. The Honorable Marvin Isgur converted the Debtor's bankruptcy case into a Chapter 7 liquidation proceeding on Oct. 13, 2006. Randy W. Williams was appointed as the Debtor's Chapter 7 Trustee. He is represented by Thompson Knight LLP. ALLIS-CHALMERS: Moody's Rates $225 Million Senior Notes at B3 ------------------------------------------------------------- Moody's Investors Service placed Allis-Chalmers Energy, Inc.'s ratings on review for possible upgrade. At the same time, Moody's assigned a B3, LGD4, 53% rating to the proposed $225 million senior unsecured notes to be issued by ALY. Proceeds from the notes will be used to refinance a portion of the $300 million senior unsecured bridge loan the company used to finance the cash portion of its acquisition of Oil & Gas Rental Services Inc. The OGR acquisition, which closed on Dec. 18, 2006, was for $291 million in cash and 3.2 million shares of ALY's common stock. ALY anticipates issuing 4.5 million shares of common stock to refinance the remainder of the $300 million bridge loan. The review for possible upgrade reflects: -- the company's strong financial performance, particularly, its acquired companies having success in meeting forecasted expectations; and, -- its increased scale and diversification, both by product line and geographically, which has been primarily achieved through acquisitions. The ratings will likely be upgraded to B2 if: -- ALY successfully completes its planned equity offering and de-leveraging, which will provide a degree of financial cushion supportive of a higher rating in light of the expectation that management will continue to be acquisitive and the potential for a cyclical slowdown over the near to medium term; -- Moody's sector outlook at the time remains adequate; and, -- a review of the company's year-end 2006 audited financial statements raises no unanticipated issues. Historically robust industry fundamentals and ALY's success thus far in integrating its acquisitions have resulted in the company generating strong financial results commensurate with forecasts. ALY generated pro-forma EBITDA of $158 million over the last twelve months ending Sept. 30, 2006, with EBITDA margins of approximately 34%, which compares favorably to its higher rated peers and represents substantial growth versus pro-forma EBITDA levels of $38 million for the prior year period. Management's growth strategy has expanded the company's product and service capabilities, enhanced its market positions in several of its product lines, increased its geographic diversification, and provided for greater economies of scale. The OGR acquisition, in particular, strengthens ALY's market position in the domestic rental tools markets, further diversifies its revenues into the Gulf of Mexico, both on the shelf and deepwater, and provides the company with organic growth opportunities. Given the risks associated with ALY's aggressive acquisition strategy and the possibility that the company could be facing a sector softening during the course of 2007 and into 2008, Moody's believes that a material degree of common equity funding is required before a higher rating can be achieved. Moody's expects that ALY will remain acquisitive, which could result in increased leverage levels. While management has stated that it intends to issue equity to fund a meaningful portion of material acquisitions, equity market access may not be as supportive during weaker points in the cycle. The B3 rating on the unsecured notes reflects an LGD4 loss given default assessment as secured debt represents only a moderate amount of the company's total capital structure. The unsecured notes are contractually subordinated to the company's $25 million secured bank credit facility, under which all domestic assets are pledged. The notes are guaranteed by ALY's current and future domestic subsidiaries but not its Argentine-based drilling subsidiary DLS Drilling Logistics and Services Corporation; however, debt at DLS is expected to remain modest. The indenture limits debt at foreign subsidiaries to 15% of tangible assets. Pro-forma for the new notes, ALY will have zero drawings under its $25 million secured bank credit facility, $480 million in senior notes, $8 million of bank debt at DLS, and approximately $6 million of existing private debt. Moody's placed these ratings of ALY on review for possible upgrade: -- B3 Corporate Family Rating; -- B3 Probability of Default Rating; -- B3, LGD4, 53%, changed from 54% rated $255 million senior unsecured notes due 2014; and, -- B3, LGD4, 53% rated $225 million senior unsecured notes due 2017. The company's SGL-2 speculative grade liquidity rating was not affected by the rating actions. Allis-Chalmers Energy, Inc. is headquartered in Houston, Texas. ALPHA NATURAL: Buys 77.5% Stake in Lime-Manufacturing Venture ------------------------------------------------------------- Alpha Natural Resources, Inc. has acquired a 77.5% interest in Gallatin Materials LLC, a lime-manufacturing venture near Cincinnati, Ohio. Based in Verona, Kentucky, Gallatin plans to construct two rotary pre-heater limekilns that will produce more than 500,000 tons of high calcium lime per year. The first coal-fired kiln is expected to begin operating in late 2007, with approximately 260,000 tons of lime production planned for the following year, while the second kiln would come on line in 2009. The lime will be sold to coal-burning utilities as a scrubbing agent for removing sulfur dioxide from flue gas, helping them meet increasingly stringent air quality standards under the federal Clean Air Act. Lime will also be sold to steel producers for use as flux in electric arc and basic oxygen furnaces. Other markets include municipal water treatment and construction site soil stabilization. Customer commitments have been obtained for approximately three- fourths of planned lime production from the first kiln through 2012. "This is a great opportunity for Alpha to extend the material supply services we provide to our traditional base of utility and steel customers, beyond coal," said Michael Quillen, Alpha's chairman and CEO. "The project economics are very attractive while the risk to Alpha is limited. It's a good way to get our feet wet in a highly complementary business." For its 77.5% interest in Gallatin, Alpha has agreed to contribute $10.3 million to the venture and a $3.8 million shareholder loan for the first phase of the $55 million construction project, either from cash on hand or its revolving credit facility. For the project's second phase, Alpha has agreed to contribute up to $5 million in 2008 in the form of a shareholder loan. The company also has agreed to furnish a $2.6 million letter of credit to be drawn on only in the event of cost overruns. Additionally, Gallatin has secured a $20.6 million non-recourse project financing commitment for the first phase of the project from Nedbank Capital, a division of Nedbank Limited. After accounting for minority interest, the project is expected to be accretive to Alpha's earnings in 2008, when the first kiln is fully operational, and is expected to contribute significantly to net income and EBITDA when both kilns are fully operational in 2010. The limekilns will be adjacent to an underground limestone mine operated by Sterling Ventures LLC. Sterling has undertaken an investment to develop chemical stone to supply the kilns and has entered into a 30-year supply relationship with Gallatin. Alpha has two of three seats on Gallatin's board of directors and has agreed to provide accounting and other services under a management services agreement. Day-to-day operations will be run by a team with considerable expertise in the lime industry, led by CEO John Tangney, who has more than 25 years of mining and minerals experience. Palladian Holdings LLC, Alpha's newly created subsidiary, holds the equity interest in Gallatin as well as other potential non- coal assets acquired in the future. About Alpha Natural Resources Headquartered in Abingdon, Virginia, Alpha Natural Resources, LLC, (NYSE: ANR) -- http://www.alphanr.com/-- is engaged in the mining and marketing of steam and metallurgical coal. The company also supplies Appalachian coal to electric utilities and steel producers. Alpha and its subsidiaries currently operate mining complexes in four states, consisting of 66 mines feeding 11 coal preparation and blending plants. The company and its subsidiaries employ more than 3,500 people. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors, the rating agency confirmed its B1 Corporate Family Rating for Alpha Natural Resources LLC. AIRLIE CLO: Moody's Rates $19 Mil. Class D Secured Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Airlie CLO 2006-II Ltd.: -- Aaa to $320,500,000 Class A-1 Senior Secured Floating Rate Notes, due Dec. 20, 2020; -- Aa2 to $24,750,000 Class A-2 Senior Secured Floating Rate Notes, due Dec. 20, 2020; -- A2 to $25,000,000 Class B Senior Secured Deferrable Floating Rate Notes, due Dec. 20, 2020; -- Baa2 to $20,250,000 Class C Senior Secured Deferrable Floating Rate Notes, due Dec. 20, 2020; -- Ba2 to $19,000,000 Class D Secured Deferrable Floating Rate Notes, due Dec. 20, 2020; and -- Baa2 to $3,400,000 Composite Notes, due Dec. 20, 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The Moody's rating of the Composite Notes addresses only the ultimate receipt of the "Rated Balance". Moody's also analyzed the risk of diminishment of cashflows from the underlying collateral portfolio -- which consists primarily of speculative-grade senior secured loans - due to defaults, the characteristics of these assets, and the safety of the transaction's structure. Airlie CDO Capital Management, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. ALERIS INTERNATIONAL: TPG Completes $3.3 Billion Acquisition ------------------------------------------------------------ Affiliates of Texas Pacific Group completed the acquisition of Aleris International Inc. As reported in the Troubled Company Reporter on Aug. 9, 2006, Aleris entered into a definitive merger agreement, under which Texas Pacific Group will acquire all of the outstanding stock of Aleris International for approximately $1.7 billion plus the assumption of or repayment of approximately $1.6 billion of debt. The company's stockholders will receive $52.50 in cash for each share of Aleris common stock. Steve Demetriou, chairman and chief executive officer, said, "We are very pleased to complete this transaction with TPG which has created significant value for shareholders while positioning Aleris with a partner committed to our continued growth as a private company." The company's common stock will cease trading on the New York Stock Exchange and will be delisted. As soon as practicable, a paying agent appointed by TPG will send information to all company stockholders of record, explaining how they can surrender company stock in exchange for $52.50 per share in cash without interest. Stockholders of record should await this information before surrendering their shares. Stockholders who hold shares through a bank or broker will not have to take any action to have their shares converted into cash because the conversions will be handled by the bank or broker. About TPG Texas Pacific Group -- http://www.tpg.com-- is a private investment partnership, which currently has more than $30 billion of assets under management. With offices in San Francisco, London, Hong Kong, Fort Worth and other locations globally, TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, joint ventures and restructurings. About Aleris International Headquartered in Beachwood, Ohio, Aleris International, Inc. (NYSE: ARS) -- http://www.aleris.com/-- manufactures rolled aluminum products and is a global leader in aluminum recycling and the production of specification alloys. The company also manufactures value-added zinc products that include zinc oxide, zinc dust and zinc metal. The Company operates 42 production facilities in the United States, Brazil, Germany, Mexico and Wales, and employs approximately 4,200 employees. * * * As reported in the Troubled Company Reporter on Dec. 21, 2006, Standard & Poor's Ratings Services affirmed its 'B+' loan and '2' recovery ratings on the senior secured first-lien term loan of Aleris International Inc., after the report that the company increased the term loan by $125 million. With the add-on, the total amount of the facility is now $1.23 billion. ALION SCIENCE: S&P Junks Rating on Proposed $200 Mil. Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'CCC+' rating to McLean, Virginia-based Alion Science and Technology Corp.'s proposed $200 million senior unsecured notes due 2014. Existing ratings on the company, including the 'B' corporate credit rating, were affirmed. The rating outlook is stable. Proceeds from the proposed senior unsecured notes will be used to refinance Alion's $170 million bridge loan and to repay a portion of the senior secured term loan. Standard & Poor's ratings affirmation reflects the fact that this transaction is strictly a refinancing, and does not meaningfully impact Alion's financial profile. Operating lease-adjusted total debt to EBITDA remains in the mid-to-high 7x area following recent aggressive acquisition activity. "The 'B' rating reflects Alion's second-tier position in the highly competitive and consolidating government IT services market, an acquisitive growth strategy, and high debt leverage," said Standard & Poor's credit analyst Ben Bubeck. "A predictable revenue stream based upon a strong backlog and the expectation that the government IT services sector will continue to grow over the intermediate term are partial offsets to these factors." Alion is an R&D, engineering, and information technology company that provides services and communications solutions primarily to the federal government. After the proposed debt financing, Alion will have approximately $630 million in total operating lease-adjusted debt, including redeemable common stock warrants. BACCHUS 2006-1: Moody's Rates $12MM Cl. E Deferrable Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes and Combination Securities issued by Bacchus 2006-1 Ltd.: -- Aaa to $252,750,000 Class A Senior Secured Floating Rate Notes due 2019; -- Aaa to $3,500,000 Class X Senior Secured Notes due 2011; -- Aa2 to $18,000,000 Class B Second Priority Floating Rate Notes due 2019; -- A2 to $28,000,000 Class C Third Priority Deferrable Floating Rate Notes due 2019; -- Baa2 to $12,750,000 Class D Fourth Priority Deferrable Floating Rate Notes due 2019; -- Ba2 to $12,000,000 Class E Fifth Priority Deferrable Floating Rate Notes due 2019; -- Baa3 to $15,250,000 Class I Combination Notes due 2019; and -- Baa3 to $15,000,000 Class II Combination Notes due 2019. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The rating on the Class I Combination Notes addresses the ultimate receipt of interest at a rate of 0.30% and the initial principal balance and is based on the expected loss posed to holders of the Class I Combination Notes relative to the promise of receiving the present value of such interest amount and the initial principal balance. The rating on the Class II Combination Notes addresses solely the ultimate receipt of the initial principal amount of the Class II Combination Notes and is based on the expected loss posed to holders of such notes relative to the premise of receiving the present value of such payment. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. IKB Capital Corporation will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. BROOKLYN HOSPITAL: Court Extends Plan Filing Period to March 27 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York extended until March 27, 2007, the period within which The Brooklyn Hospital Center and Caledonian Health Center Inc. can exclusively file a chapter 11 plan of reorganization. The Court also extended the Debtors' exclusive period to solicit acceptances of that plan to May 23, 2007. The Debtors inform the Court that they have made substantial progress towards stabilizing their operations and developing a strategy to emerge from bankruptcy. In addition, the Debtors made discussions with the Committee in connection with their plan of reorganization. According to the Debtors, they have taken steps to start implementing ways of their exit strategy, which includes the selection of appraiser to value certain of their real estate assets and to commence talks with certain potential lenders relating to exit financing. The extension, the Debtors say, will allow them to resolve complex issues and provide them more time to negotiate, develop, and consummate a consensual plan of reorganization. Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org/-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. Glenn B. Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. Mark Dominick Alvarez at Alvarez & Marsal, LLC, serves as the Committee's financial advisor. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. BROOKLYN HOSPITAL: Hires Newmark & Co. as Real Estate Broker ------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York gave The Brooklyn Hospital Center and Caledonian Health Center Inc. permission to employ Newmark & Company Real Estate Inc. dba Newmark Knight Frask, as its real estate broker, nunc pro tunc to Dec. 12, 2006. The firm is expected to: a) develop offers or inquiries regarding the property; and b) canvas, solicit, advertise, and otherwise employ its services to bring about the sale of the property. The Debtor will pay the firm a 2% commission of the purchase price of the property. The Debtor will also reimburse the firm for any cost that it incurs relating with advertising the property for sale. To the best of the Debtor's knowledge, the firm does not hold any interest adverse to the Debtor and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org/-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. Glenn B. Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. Mark Dominick Alvarez at Alvarez & Marsal, LLC, serves as the Committee's financial advisor. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. CABLEVISION SYSTEMS: Rejects Dolans' $8.9 Billion Buyout Offer -------------------------------------------------------------- Cablevision Systems Corporation's Board of Special Committee has rejected Dolan family's $8.9 billion buyout bid saying the offer is "inadequate," Peter Grant of The Wall Street Journal reports. In a letter sent to the Dolans, the committee said that Cablevision has a "leading presence in some of the country's most attractive markets." The panel also noted that the company is well positioned to address the competitive challenges that exist and to capitalize on and benefit from its position in the marketplace. In a previous report, WSJ relates that the company received an offer of $30 per share from the Dolans, an 11% increase over their 27% bid in October. The Dolan family raised its bid from $1 billion to $8.9 billion saying it was "the best and final offer," WSJ said. As reported in the Troubled Company Reporter on Oct. 13, 2006, Dolan Family Group is offering to acquire, at $27 per share, all outstanding shares of the company's common stock. Charles and James Dolan believed their offer is fair to and in the best interests of the company and its public stockholders and that the public stockholders will find their offer attractive because: * The offer price represents a premium of 17% over the average closing price of the Company's Class A common stock for the past ten trading days, which follows substantial price appreciation in recent months. * The offer price represents an 11.3% premium to the 52-week high closing price for the Company's Class A common stock. * The offer price is 14.9% higher than the 2005 proposal, as valued by the Dolan Family Group at the time and when adjusted for the $10 per share special dividend paid in April 2006. * The all cash nature of the consideration provides value certainty. Based in Bethpage, New York, Cablevision Systems Corporation is a domestic cable multiple system operator serving more than 3 million subscribers in and around the metropolitan New York area. Its wholly owned subsidiary, Rainbow National Services LLC, headquartered in Jericho, New York, supplies television programming to cable television and direct broadcast service providers throughout the United States. * * * As reported in the Troubled Company Reporter on Oct 11, 2006, Moody's Investors Service placed all ratings for Cablevision Systems Corporation, CSC Holdings Inc., a wholly owned subsidiary of CVC, and Rainbow National Services LLC on review for downgrade following the Dolan family's announcement of a proposal to acquire Cablevision. The ratings on Cablevision Systems Corporation that are under review are: Corporate Family Rating, Placed on Review for Possible Downgrade, currently at B1; Probability of Default Rating, Placed on Review for Possible Downgrade, currently at B1; and Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently at B3, LGD6, 93%. CABLEVISION SYSTEMS: Extends Offer of 6-3/4% Sr. Notes to Feb. 20 ----------------------------------------------------------------- CSC Holdings Inc., a subsidiary of Cablevision Systems Corporation, will extend until Feb. 20, 2007, at 5:00 P.M., New York City time, its offer to exchange up to $500 million aggregate principal amount of its 6-3/4% Senior Notes due 2012, which were initially issued and sold in a private placement in April 2004, for an equal aggregate amount of its registered 6-3/4% Series B Senior Notes due 2012. Before this extension, the exchange offer was scheduled to expire at 5:00 P.M., New York City time, on Jan. 16, 2007. As of 5:00 P.M., New York City time, on Jan. 12, 2007, $406,956,000 of the old notes had been tendered for exchange. Except for the extension of the expiration date, all of the other terms of the exchange offer remain as set forth in the exchange offer prospectus dated July 18, 2006. Any holder of the old notes who would like to obtain copies of the exchange offer prospectus and related documents, or who has questions regarding the exchange offer, should contact CSC Holdings Inc.'s exchange agent, The Bank of New York, at (212) 815-3750. About CSC Holdings Inc. CSC Holdings Inc. (NYSE: CVC) -- http://www.cablevision.com/-- is a subsidiary of Cablevision Systems Corporation, one of the nation's leading entertainment and telecommunications companies. Cablevision's cable television operations serve more than 3 million households in the New York metropolitan area. The company's advanced telecommunications offerings include its iO: Interactive Optimum digital television, Optimum Online high-speed Internet, Optimum Voice digital voice-over-cable, and its Optimum Lightpath integrated business communications services. About Cablevision Systems Corp. Headquartered in Bethpage, New York, Cablevision Systems Corporation is a domestic cable multiple system operator serving more than 3 million subscribers in and around the metropolitan New York area. Its wholly owned subsidiary, Rainbow National Services LLC, headquartered in Jericho, New York, supplies television programming to cable television and direct broadcast service providers throughout the United States. * * * As reported in the Troubled Company Reporter on Oct 11, 2006 Moody's Investors Service placed all ratings for Cablevision Systems Corporation, CSC Holdings, Inc., a wholly owned subsidiary of CVC, and Rainbow National Services LLC on review for downgrade following the Dolan family's announcement of a proposal to acquire Cablevision. The ratings on Cablevision Systems Corporation that are under review are: Corporate Family Rating, Placed on Review for Possible Downgrade, currently at B1; Probability of Default Rating, Placed on Review for Possible Downgrade, currently at B1; and Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently at B3, LGD6, 93%. CALDECOTT CDO: Moody's Rates $8.5 Million Class F Notes at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Caldecott CDO 1, Ltd.: -- Aaa to $200,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2048; -- Aaa to $125,000,00 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2048; -- Aaa to $65,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2048; -- Aa2 to $40,500,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2048; -- A2 to $16,500,000 Class C Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048; -- Baa2 to $18,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048; -- Baa3 to $10,500,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048; and, -- Ba1 to $8,500,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2048. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities, CDO Obligations and other Asset-Backed Securities and Related Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Seneca Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CASCADES INC: DBRS Changes Trend on BB (High) Rated Senior Debt --------------------------------------------------------------- Dominion Bond Rating Service released a report that supports the recent downgrade of Cascades Inc.'s Senior Unsecured Debt rating to BB (high) from BBB (low) on Dec. 15, 2006. The trend was changed to Stable from Negative. The rating action followed a full review of Cascades' acquisition of the outstanding 50% interest in Norampac Inc., which was reported on Dec. 5, 2006. Cascades' credit metrics were considered aggressive for an investment grade rating prior to the acquisition and have further weakened with the increase in debt. In addition, challenging industry conditions, including high input costs, relatively soft demand and relative strength in the Canadian dollar, are expected to persist. As a result, Cascades credit profile is no longer considered compatible for an investment grade rating. On a pro forma basis, debt-to-capital increases to 59% and cash flow-to-debt modestly declines to 0.13, which includes 50% of Norampac's outstanding debt and $310 million in debt financing. The impact on Cascades' financial profile is relatively modest, particularly given the Company's decision to increase the equity-funded share of the $560 million transaction to $250 million. However, an improvement in Cascades credit metrics to levels considered more appropriate for an investment grade rating is unlikely over the near term. The acquisition of the remaining 50% equity interest in Norampac has strengthened Cascades' business profile. Positive attributes of the transaction include an increased presence in the packaging sector, which has historically generated relatively stable earnings at Norampac, and a more balanced mix of revenue. The Company will now have access to Norampac's cash flow, which will help to reduce the Company's debt load. In addition, packaging industry capacity curtailments have been implemented and are expected to support price increases. Cascades is expected to generate modest earnings growth over the near to medium term, despite industry challenges, which largely underpins the Stable trend. CASCADES INC: Norampac Deal Cues S&P to Hold BB Rated Corp. Credit ------------------------------------------------------------------ Standard & Poor's Ratings Services removed the ratings on Cascades Inc. and Norampac Inc. from CreditWatch with negative implications, where they were placed Dec. 6, 2006. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit rating on Kingsey Falls, Quebec-based Cascades after reviewing the effects of the company's acquisition of the remaining 50% of Norampac that it did not previously own. The outlook is stable. Standard & Poor's also assigned its 'BB+' secured debt rating to Cascades' new CDN$650 million revolving credit facility and CDN$100 million term loan, with a recovery rating of '1', indicating an expectation of 100% recovery of principal in a default scenario. In addition, the rating on Norampac's US$250 million 6.75% senior notes due 2013 was lowered to 'BB-' from 'BB+', as the obligations now rank alongside Cascades' unsecured obligations, which are also affirmed at 'BB-'. Finally, the corporate credit rating on Norampac was withdrawn after the company was amalgamated into Cascades. "The ratings on Cascades reflect the company's weak, but improving, earnings; aggressive debt leverage; and exposure to cyclical forest product pricing," said Standard & Poor's credit analyst Donald Marleau. These weaknesses are offset by the company's good diversity of revenue streams and more stable earnings than most of its forest products peers. "The acquisition of Norampac improves the company's business risk profile by giving it full access to Norampac's fairly stable stream of operating income, rather than the less predictable residual equity distributions it has received in recent years," Mr. Marleau added. Cascades issued CDN$250 million of equity to fund the CDN$560 million acquisition, thereby increasing its debt leverage only modestly. Despite persistently high energy costs and the strength of the Canadian dollar, Cascades improved its credit measures in the past year in contrast with many of its competitors. The company benefits from good product diversity among various packaging businesses and tissue, with operations in Canada, the U.S., and, to a lesser extent, Europe. The financial performance of both Cascades and Norampac has improved in recent quarters, as the companies have taken several measures to reduce costs and close unprofitable assets. Overall, Cascades' consolidated revenues are more stable than most of its forest products peers, owing to steady demand growth and higher degrees of concentration in the paper packaging and tissue segments, which combine to contribute to less volatile commodity prices. The stable outlook reflects the expectation that Cascades' credit profile will continue to improve modestly in the near term, as commodity pricing and margin pressure from energy costs and a higher Canadian dollar subside. Nevertheless, the company's credit metrics remain weak, and the ratings or outlook could be pressured in the absence of a sustained improvement in profitability and debt reduction in 2007. CE GENERATION: Fitch Lifts Rating on $400 Million Bonds to BB+ -------------------------------------------------------------- Fitch Ratings has upgraded to 'BB+' from 'BB' the rating of CE Generation LLC's $400 million secured bonds due 2018 as a result of the extension of the fixed-price period for short-run-avoided- cost with Southern California Edison, the purchaser of a significant portion of CE Generation's output. The extension of the fixed-price period through 2012 greatly stabilizes cash flows during the period. CE Generation is a portfolio of ownership interests in ten geothermal and three natural gas fired generation facilities. The ten geothermal facilities are separately encumbered with project- level debt, as is one natural gas fired facility. The two remaining facilities are unencumbered at the project level. CE Generation also receives fees for providing operating services to the Saranac facility. The project-level debt is structurally senior to the CE Generation debt. SRAC is a regulatory energy price typically indexed to the prevailing natural gas price. On May 30, 2006, Salton Sea and SCE agreed to extend the SRAC fixed-price period through April 30, 2012; the California Public Utilities Commission granted full approval on October 19, 2006. Beginning May 1, 2007, Salton Sea will receive 6.15 cents per kilowatt-hour, escalating 1% annually. The new agreements will result in approximately $86 million of incremental revenue over the five year period compared to the current 5.37 cents earned per kilowatt-hour. Prior to 2012, Fitch views CE Generation's credit profile as stronger than typical for the rating category. During this period, CE Generation is expected to receive significant cash flow from both Saranac and Salton Sea; distributions from Saranac alone are adequate to cover CE Generation's debt service. Fitch believes it is unlikely that distributions from Saranac will be trapped, as debt service coverage ratios at the project are significantly above the distribution threshold. Similarly, Fitch believes that the fixed SRAC period largely mitigates a cash trap at Salton Sea. Consolidated DSCRs are expected to average 1.7x between 2007 and 2012. The primary credit constraint is market exposure via SRAC pricing following the end of the fixed-price period in 2012. Fitch expects distributions from Saranac to fall away as it begins merchant operations, and that Salton Sea will eventually constitute the vast majority of CE Generation's cash flow. While Fitch projects DSCRs could average approximately 4.7x at Salton Sea and 2x at CE Generation on a consolidated basis after 2012, sensitivity analysis demonstrates a vulnerability to low SRAC prices. Under Fitch's low natural gas price assumptions, DSCRs could fall to less than 1.4x at CE Generation on a consolidated basis. Annual debt service of Salton Sea decreases from roughly $42 million prior to 2010 to less than $25 million after 2012. Similarly, annual consolidated debt service of CE Generation and Salton Sea decreases from approximately $81 million prior to 2010 to less than $60 million after 2011. This pattern of decreasing debt service contributes significantly to the pattern of rising DSCRS; Salton Sea's projected cashflows are relatively consistent from year to year after 2009. CENTRAL FREIGHT: Posts $10.4 Mil. Net Loss in Third Quarter 2006 ---------------------------------------------------------------- Central Freight Lines Inc. reported a $10.4 million net loss on $82.7 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $13.4 million net loss on $94.34 million of revenues for the third quarter ended Oct. 1, 2005. The net loss of $13.4 million in the fiscal 2005 quarter included a $4.3 million non-cash impairment charge and a related $1.7 million income tax benefit to write off all goodwill associated with prior acquisitions. The increase in net loss, excluding the non-cash impairment charge and related tax benefit, resulted primarily from a 12.3% decline in operating revenues offset by a 15.7% decrease in operating costs. Approximately $3 million of the total revenue decrease was due to reduced business from Dell, a former customer. Total tonnage decreased 50.8 thousand tons, or 11.1%, from 456.2 thousand tons in the 2005 quarter to 405.4 thousand tons in the 2006 quarter. The average length of haul declined by 2.4% from 494 miles in the 2005 quarter to 482 miles in the third quarter of 2006. At Sept. 30, 2006, the company's balance sheet showed $143.9 million in total assets, $123.8 million in total liabilities, and $20.1 million in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $51.2 million in total current assets available to pay $72.5 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?1891 Investing and Financing Activities Net cash provided by investing activities was approximately $14.4 million and $7.7 million for the nine months ended Sept. 30, 2006, and Oct. 1, 2005, respectively. In the 2006 period, the company sold four terminals and revenue equipment and recorded proceeds of approximately $15.7 million. Net cash used in financing activities, for the nine months ended Sept. 30, 2006, was approximately $7.3 million primarily due to the pay off a mortgage on the Portland, Oregon terminal of $4.7 million. Net cash used in financing activities amounted to $4.1 million for the nine months ended Oct. 1, 2005. Merger with North American Truck Lines On Nov. 21, 2006, the stockholders of Central Freight Lines Inc. approved the merger of the company with North American Truck Lines LLC and Green Acquisition Company. Under the Merger Agreement, Green will merge with and into Central, with the company continuing as the surviving corporation. North American and Green are controlled by Jerry Moyes, the company's former chairman of the board, with Green being a wholly owned subsidiary of North American. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, McGladrey & Pullen LLP, in Dallas, Texas, raised substantial doubt about Central Freight Lines Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses from operations and negative working capital. * * * Based in Waco, Texas, Central Freight Lines, Inc. (Nasdaq: CENF) -- http://www.centralfreight.com/-- is a less than truckload carrier specializing in regional overnight and second day markets in the Midwest, Southwest, West Coast, and Pacific Northwest. Utilizing marketing alliances, Central also provides service to the Great Lakes, Southeast, Mexico and Canada. CIFC FUNDING: Moody's Rates $25 Million Class B-2L Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by CIFC Funding 2006-II, Ltd.: -- Aaa to the $65,000,000 Class A-1L Floating Rate Notes Due March 2021; -- Aaa to the $260,000,000 Class A-1LAt Floating Rate Notes Due March 2021; -- Aaa to the $100,000,000 Class A-1LAr Variable Funding Notes Due March 2021; -- Aa1 to the $40,000,000 Class A-1LB Floating Rate Notes Due March 2021; -- Aa2 to the $35,000,000 Class A-2L Floating Rate Notes Due March 2021; -- A2 to the $36,000,000 Class A-3L Floating Rate Notes Due March 2021; -- Baa2 to the $23,000,000 Class B-1L Floating Rate Notes Due March 2021; and, -- Ba2 to the $25,000,000 Class B-2L Floating Rate Notes Due March 2021. Moody's has also assigned the rating of Baa2 to the $20,000,000 Class I Combination Notes Due March 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. The rating assigned to the Combination Notes only addresses the ultimate return of the Rated Balance. Commercial Industrial Finance Corp. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CINRAM INTERNATIONAL: Board Appoints J. Bruce Terry as Trustee -------------------------------------------------------------- The Board of Trustees of Cinram International Income Fund appointed J. Bruce Terry as a trustee. "We are very pleased to welcome Mr. Terry to our Board," Henri A. Aboutboul, chairman of the Board of Trustees, said. "His broad- based strategic, financial, operating and business development experience as well as his intimate knowledge of the packaged goods industry will be a valuable asset to our Board." J. Bruce Terry is executive vice president and chief financial officer for Sobeys Inc., a Canadian grocery retailer and food distributor. Prior to joining Sobeys Inc. in January 2005, Mr. Terry held senior positions with domestic and international businesses including McCain Foods Limited, Shoppers Drug Mart, Tricaster Management Inc., Gulf Canada Corporation, Imperial Oil Limited and Marsh Canada. During his 24-year career, Mr. Terry has overseen the establishment and growth of domestic and international operations for treasury, accounting, corporate finance, taxation, risk management, legal, information systems and technology, internal audit, planning and strategy. Mr. Terry has an MBA from The University of British Columbia, an Honours BA in Economics from York University and is a member of the Sauder School of Business Advisory Board, the C.D. Howe Institute and the Marsh Canada Advisory Board. Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/ -- an indirect wholly owned subsidiary Cinram International Income Fund, provides pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram International Inc. manufactures and distributes pre- recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. * * * As reported in the Troubled Company Reporter on Nov. 16, 2006, Standard & Poor's Ratings Services revised its outlook on Cinram International Inc., a wholly owned indirect subsidiary of Cinram International Income Fund, to negative from stable. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit rating and its 'BB-' bank loan rating, with a recovery rating of '4', on Cinram. As reported in the Troubled Company Reporter on Aug. 3, 2006, Moody's Investors Service assigned a definitive B1 senior secured rating to the $825 million credit facility of Cinram International Inc. removing the provisional status from this rating. Cinram's Corporate Family Rating is B1 and the outlook is stable. In connection with Moody's implementation of its new Probability- of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its B1 Corporate Family Rating for Cinram International, as well as its B1 rating on the company's $675 million Senior Secured Term Loan. The debentures were assigned an LGD3 rating suggesting creditors will experience a 32% loss in the event of default. CLADDAGH PUBS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Claddagh Pubs, LLC 585 South Front Street Columbus, OH 43215 Bankruptcy Case No.: 07-30134 Debtor-affiliates filing separate chapter 11 petitions on January 10, 2007: Entity Case No. ------ -------- Claddagh Pubs of South Side Words, LLC 07-30114 Claddagh Pubs at the Precedent, LLC 07-30113 Claddagh Pubs of Plainfield, LLC 07-30118 Claddagh Pubs of Franklin Park, LLC 07-30115 Claddagh Pubs of College Park, LLC 07-30120 Claddagh Pubs of Algonquin, LLC 07-30119 Claddagh Pubs of Westlake, LLC 07-30117 Type of Business: The Debtor operates a number of Irish-themed pubs and restaurants. See http://www.claddaghirishpubs.com/ and http://www.thecladdaghpub.com/ Chapter 11 Petition Date: January 11, 2007 Court: Southern District of Ohio (Dayton) Judge: Lawrence S. Walter Debtors' Counsel: Richard D. Nelson, Esq. Cohen, Todd, Kite & Stanford, LLC 250 East Fifth Street, Suite 1200 Cincinnati, OH 45202-4139 Tel: (513) 333-5255 Fax: (513) 241-4490 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtors' Consolidated List of their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gordon Food Service Business Debt $2,119,654 Payment Processing Center Department CH 10490 Palatine, IL 60055-0490 Simmons & Simmons, LLC Business Debt $748,984 c/o Dave Simmons 2410 Gilbert Avenue Cincinnati, OH 45206 Wasserstrom Company Business Debt $149,300 477 South Front Street Columbus, OH 43215 Ulmer & Berne, LLP Business Debt $119,469 600 Vine Street, Suite 2800 Cincinnati, OH 45202-2409 Metropolis, LLC Business Debt $111,676 5252 East 82nd Street, Suite 300 Indianapolis, IN 46250 Queensgate Business Debt $100,035 Penn Center Management Corp. Business Debt $88,393 Cuyahoga County Treasurer Business Debt $79,804 Capella Investments Business Debt $75,228 DesignPlan, Inc. Business Debt $69,717 Algonquin Commons Business Debt $67,773 Midwest POS Solutions Business Debt $58,749 Deerfield Towne Center Business Debt $58,159 Holding Co. Westfield Franklin Park Business Debt $52,805 Rack Draft Services Business Debt $52,311 Greenway Center, LLC Business Debt $49,510 Hylant Group Business Debt $46,957 Fire & Electrical Services, Inc. Business Debt $45,253 Integrated Sign Business Debt $41,223 Kinzelmann, Kline, Gossman Business Debt $38,265 CLEAN HARBORS: Wants Court Approval on Heller Draper as Counsel --------------------------------------------------------------- Clean Harbors Plaquemine LLC asks the U.S. Bankruptcy Court for the Middle District of Louisiana for permission to employ Heller, Draper, Hayden, Patrick & Horn, L.L.C., as its bankruptcy counsel. Heller Draper will: a. advise the Debtor with respect to their rights, powers and duties as debtor and debtor-in-possession in the continued operation and management of its respective businesses and properties; b. prepare and pursue confirmation of a plan of reorganization and approval of a disclosure statement; c. prepare on behalf of the Debtor all necessary applications, motions, answers, proposed orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed; d. advise the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed by other parties herein; e. appear in Court to protect the interests of the Debtor; f. represent the Debtor in connection with obtaining postpetition financing, if any; g. advise the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; h. investigate the nature and validity of liens asserted against the property of the Debtor, and advise the Debtor concerning the enforceability of said liens; i. investigate and advise the Debtor concerning, and taking such action as may be necessary to collect, income and assets in accordance with applicable law, and the recovery of property for the benefit of the Debtor's estate; j. advise and assist the Debtor in connection with any potential property dispositions; k. advise the Debtor concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructuring, and recharacterizations; l. assist the Debtor in reviewing, estimating and resolving claims asserted against the Debtor's estate; m. commence and conduct litigation necessary and appropriate to assert rights held by the Debtor, protect assets of the Debtor's chapter 11 estate or otherwise further the goal of completing the Debtor's successful reorganization; and n. perform all other legal services for the Debtor which may be necessary and proper in this proceeding. William H. Patrick, Esq., a member of Heller Draper, tells the Court that attorneys at the firm bill between $225 to $350 per hour while paralegals bill between $60 to $95 per hour. Mr. Patrick discloses that the firm received a $150,000 retainer from the Debtor. Mr. Patrick assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Norwell, Massachusetts, Clean Harbors Plaquemine LLC operates a deep injection hazardous waste facility. The company is a subsidiary of Clean Harbors Inc. Clean Harbors Plaquemine filed for chapter 11 protection on Oct. 17, 2006 (Bankr. D. Mass. Case No. 06 13728). On. Dec. 21, 2006, the Massachusetts bankruptcy court ordered the case transferred. The Debtor's case was docketed on Jan. 9, 2007 (Bankr. M.D. La. Case No. 07-10019). The Debtor's schedules showed $2,717,549 in total assets and $129,505,369 in total debts. COPPER RIVER: Moody's Rates $23 Mil. Class E Secured Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Copper River CLO Ltd.: -- Aaa to $137,670,000 Class A-1A Senior Secured Floating Rate Notes Due 2021; -- Aaa to $180,000,000 Class A-1B Senior Secured Delay Settle Floating Rate Notes Due 2021; -- Aaa to $165,000,000 Class A-2A Senior Secured Floating Rate Notes Due 2021; -- Aa1 to $18,330,000 Class A-2B Senior Secured Floating Rate Notes Due 2021; -- Aa2 to $49,000,000 Class B Senior Secured Floating Rate Notes Due 2021; -- A2 to $47,600,000 Class C Secured Deferrable Floating Rate Notes Due 2021; -- Baa2 to $35,000,000 Class D Secured Deferrable Floating Rate Notes Due 2021; and -- Ba2 to $23,800,000 Class E Secured Deferrable Floating Rate Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Guggenheim Investment Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. DAIMLERCHRYSLER: Chrysler Certified Pre-Owned Vehicles Sales Up 8% ------------------------------------------------------------------ Securing its position as the fastest growing certified used vehicle brand since 2002, DaimlerChrysler AG's Chrysler Group reported that its Five Star dealers sold a new year-to-date sales record of 116,604 Certified Pre-Owned Vehicles in 2006, an 8% increase above 2005 sales. Chrysler Group continues to outpace the CPOV segment, which increased sales 2% for the year. Chrysler Group fourth quarter sales also rose 4% to 28,122 units, surpassing the fourth quarter sales record set in 2005. Compared against a record month of 10,441 units in December 2005, CPOV sales fell 10% to 9,350 units in December 2006, which was still the third best December in the company's CPOV brand's 5-year history. For the year, Chrysler brand sales were up 15% to 38,974 units. Jeep(R) brand sales rose 17% to 28,054 units and Dodge brand sales dipped 1% to 49,576 units. Top-selling volume vehicles in 2006 were the Jeep Grand Cherokee (15,790 units), the Dodge Caravan and Dodge Grand Caravan (13,367 units), and the Dodge Ram pickup truck (10,393 units). "Our Five Star dealers did an outstanding job of communicating the consumer benefits of our Chrysler, Jeep, and Dodge CPOV program and that was the reason for our record sales in 2006," DaimlerChrysler Motors Remarketing Director Peter Grady said. Chrysler Group offers one of the most comprehensive Certified Pre- owned Vehicle programs in the industry. For a vehicle to be certified under the Chrysler Group's used vehicle program, it must be a 2003 through 2007 model pre-owned vehicle with less than 65,000 miles and pass a stringent 125-point inspection. Chrysler Group's CPO vehicles are backed by an 8-year/80,000-mile powertrain limited warranty, a 3-month or 3,000-mile Maximum Care(TM) warranty, 24-hour, 365-day full roadside assistance and a $35 per day rental car allowance, in addition to a CARFAX Vehicle History Report(TM), and Buyback Guarantee. Marketed as "Brand Spankin' Used(TM)," Chrysler Group's CPO vehicles are sold only through Chrysler, Jeep, and Dodge dealerships, which have earned the automaker's Five Star Certification. Five Star Certification is a comprehensive validation of the dealership's facilities, operational processes, salesperson, and technician training accreditation as well as customer satisfaction survey ratings. Approximately 2,100 Chrysler Group dealerships in the U.S. are certified Five Star dealers. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER: Truck Group Reports Record Sales in 2006 --------------------------------------------------------- DaimlerChrysler AG's Truck Group sold more trucks last year than ever before. At 537,000 units, truck sales by the company were 1.4% higher than in 2005 (529,500 units). On the one hand, the DaimlerChrysler Truck Group could profit from a high market level in the Triad, mainly caused by pre-buy effects in response to new emissions limits in the U.S. and Japan. On the other hand, the Truck Group's five brands offering a full range of attractive models and innovative products such as the Blue-Tec diesel system contributed to this success. Sales development varied in the individual global markets. Truck Group sales increased in all of the triad markets, rising to 106,400 units in Western Europe (2005: 102,400), 187,800 units in the NAFTA region (2005: 183,000,) and 71,100 units in Japan (2005: 59,200). In South America, sales rose from 38,900 to 39,500 units. In the remaining regions of the world, sales decreased due to weaker markets to 132,200 units (2005: 146,100). Andreas Renschler, DaimlerChrysler Board of Management member responsible for the Truck Group & Buses, said: "The Truck Group offers customer-focused products on all continents. Throughout the world, these products are the technological leaders in their respective segments -- a fact that is also reflected in our sales success." Mr. Renschler continued: "As a result of cyclical and regulatory developments, we expect the markets in NAFTA and Japan to weaken significantly in 2007, while we anticipate that the demand in the European markets will contract only slightly. But because we are focused on our core business and provide our customers excellent products and services, we are well-equipped to handle this challenge. In addition, we expect the markets to recover in 2008 because new emissions regulations will probably lead to pre-buy effects." At 142,100 units, Trucks Europe/Latin America (Mercedes-Benz) sold 4.0% fewer vehicles than in the record year 2005 (148,000). On the other hand, sales were substantially above the previous year's level in the core markets of Western Europe, particularly in Germany. The main factor for this success continued to be the company's flagship truck, the Actros. Sales of this truck totaled 59,700 units, thus matching the high level posted in 2005 (59,500). Sales increases in Western and Eastern Europe were offset by declines in regions such as the Middle East as well as by a declining market in Brazil. The Mercedes-Benz trucks equipped with environmentally friendly Blue-Tec technology for meeting the Euro 4/5 emissions limits were particularly successful in the market, with more than 28,000 units sold in 2006. A total of nearly 40,000 of these trucks have been sold since Blue-Tec technology was introduced in early 2005. In the summer of 2006, Mercedes-Benz Trucks conducted an EU road show, during which it successfully presented its Safety Truck to the media and government officials in 12 major European cities. The Safety Truck is fitted with all available series-produced assistance and safety systems whose effectiveness has been demonstrated in a large-scale trial for the insurance industry. In addition, Mercedes-Benz rounded out its range of special vehicles by introducing the new Unimog U20 at Hanover commercial vehicle show in September 2006. Last year, Trucks NAFTA increased sales by 2.8% to 208,300 units (2005: 202,600). Trucks NAFTA sells trucks from the Freightliner, Sterling and Western Star brands, as well as Sprinter vans (bearing the Freightliner and Dodge nameplate) and buses from Thomas Built Buses. In the NAFTA region, Freightliner maintained its market leadership with Class 8 heavy-duty trucks and its number two position in the segment for Class 5-7 medium-duty trucks. The rapid development and market launch of the Sterling 360 in the NAFTA region was possible as a result of the close cooperation within the Truck Group. The Sterling 360 is a light truck based on the Mitsubishi Fuso Canter. In 2006, Freightliner also presented the prototype of a Business Class M2 medium-duty truck with hybrid drivetrain. The Truck Group plans to continue to promote the more widespread use of hybrid commercial vehicles in the North American market. Compared to the previous year, sales at Trucks Asia (encompassing the Mitsubishi Fuso brand) increased by 4.3%, rising from 178,900 units to 186,600. Now that the quality issues that predated DaimlerChrysler's share acquisition in Mitsubishi Fuso have largely been resolved, the company has been able to increase sales and market shares especially in its core Japanese market. "The hard work of the Fuso team and the consistent improvement in quality have enabled us to regain our customers' trust," Mr. Renschler said. In addition, pre-buy effects in response to the upcoming Japan 05 emissions limit had a positive effect as well. Although sales outside of Japan decreased, the decrease was the result of a decline in Fuso's largest export market, Indonesia. In most other export markets, Trucks Asia significantly increased sales. In July 2006, Mitsubishi Fuso introduced in Tokyo the pioneering Canter Eco Hybrid with superior environmental performance. The vehicle was first launched in the Japanese market. As well, the worldwide market launch of the new generation Canter with regular diesel drive was also continued successfully throughout 2006. About DaimlerChrysler Headquartered Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DELPHI CORP: Kyocera Wants Stay Lifted to Exercise Setoff Rights ---------------------------------------------------------------- Kyocera Industrial Ceramics Corporation asks the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to modify the automatic stay in Delphi Corp. and its debtor-affiliates' chapter 11 cases so that it may apply its prepetition overpayment against its own prepetition claims for two heaters. Before the Debtors' bankruptcy filing, Kyocera sold various types of ceramic heaters to Delphi Automotive Systems LLC. The parties' contractual relationship was evidenced by various purchase orders that were in effect from time to time. Pursuant to the Purchase Orders, Kyocera agreed to supply the Debtors with 12-watt heaters with Part No. 25108420, and 18-watt heaters with Part No. 25165124. William Hawkins, Esq., at Loeb & Loeb LLP, in New York, relates that typically, the Debtor communicate its need for Heaters during upcoming periods by transmitting the relevant information into the i-Supply service, a third-party supply chain application that optimizes inventory and parts supply relationships. Kyocera Industrial would then access i-Supply and adjust its production to meet the Debtor's demand. The Debtors also prepare global forecasts compiled by Susann Halverson at their Warren, Ohio plant. The Halverson Forecasts are prepared at Kyocera's request. In early 2004, Kyocera noted a large discrepancy between the i- Supply Forecasts and the Halverson Forecasts. The Debtor advised Kyocera that the only forecast it should reference is i-Supply. Accordingly, at the Debtor's direction, Kyocera continued to rely on the i-Supply Forecasts and produced 18-Watt Heaters. However, in June 2004, the Debtor's requirements for the 18-Watt Heaters dropped dramatically -- from 12,000 units per week down to 2,000 units per week within a four-week period. Kyocera warned the Debtors of the problem, Mr. Hawkins relates. Still, the Debtor instructed Kyocera to ignore it. As a result of the failure of the i-Supply Forecasts, Kyocera now possesses an overstock inventory of 145,000 18-Watt Heaters, according to Mr. Hawkins. Based on the applicable costs of the 18-Watt Heaters and in its reliance on the i-Supply Forecasts, Kyocera asserts that it holds a $303,050 claim against the Debtor with respect to the overproduction of the 18-Watt Heaters. Kyocera has yet to receive payment for certain 12-Watt Heaters it delivered to the Debtor, Mr. Hawkins adds. On account of the 12- Watt Heaters, Kyocera asserts that it possesses a $85,800 claim against the Debtor. Mr. Hawkins relates that on April 27, 2004, the Debtor made a duplicate payment with respect to Invoice No. 3K3952200040211, for 18-Watt Heaters amounting to $46,600. In July 2006, Kyocera filed Claim No. 12530 for $311,830, which consists of: * the 18-Watt Heaters Claim for $303,050, plus * the 12-Watt Heaters Claim for $85,800, minus * the application of the $46,600 Prepetition Overpayment and a postpetition payment totaling $30,420. Mr. Hawkins argues that Kyocera has a valid right of setoff: -- Kyocera's claim arose prior to the Petition Date; -- Kyocera owes the Debtor a debt that arose prepetition; and -- Kyocera's debt to, and claim against, the Debtor are mutual obligations. Even if it did not have a setoff right, Kyocera has a right of recoupment with respect to the Prepetition Overpayment, Mr. Hawkins maintains. Equitable recoupment can be invoked when the situation involves a credit and a debt arising out of a transaction for the same goods and services, or arising out of the same contract. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Corporation Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DELPHI CORP: Mercedes-Benz Supports Extension of Exclusive Periods ------------------------------------------------------------------ Mercedes-Benz U.S. International Inc. asserts that Delphi Corp. and its debtor-affiliates' extension request is warranted because the Debtors have not been dragging in their reorganization process as they have recently negotiated a means for emerging from Chapter 11, have set a reasonable timetable for doing so, and have independent financial motivation for adhering to that timetable. Mercedes-Benz adds that union issues alone justify the additional time. Furthermore, Mercedes-Benz points out that loss of exclusivity: -- might force the Debtors to file a plan prematurely resulting in inefficient negotiations; and -- might result in competing plans, which could escalate the costs and time required to resolve the proceedings geometrically. As reported in the Troubled Company Reporter on Jan. 12, 207, the Debtors asked the Court to further extend their: (a) exclusive period to file a plan of reorganization through July 31, 2007; and (b) exclusive period to solicit acceptances of that plan through Sept. 30, 2007. Debtors' Response The Debtors point out that only Highland Capital Management LP opposed their extension request. The Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders have both agreed that extension of the Debtors' exclusive periods is necessary although the Creditors Committee believes that only a 60-day extension is appropriate. John Wm. Butler, Jr., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, asserts that as a would-be plan funder, Highland's motives are obviously to distract the Plan Investors' actions under the Framework Agreements so that it can obtain a right to file its own plan. The Debtors emphasize that they are not seeking further extension of their exclusivity periods to pressure creditors to accede to their demands. During the past six months, the Debtors and their professionals have consistently conferred with their constituencies on all major matters and have resulted in the framework discussions to find and implement a process to execute their Transformation Plan, Mr. Butler relates. The Debtors maintain that a six-month exclusivity extension is consistent with the timeframe contemplated by the Framework Agreements. Furthermore, the fact that the Debtors now need to reach an agreement with certain unions and General Motors only highlights how important it is that exclusivity be extended for an additional six months. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Corporation Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DVI MEDICAL: Fitch Takes Actions on Various Loans ------------------------------------------------- Fitch Ratings takes these actions on the long-term and Distressed Recovery ratings for the DVI transactions listed below: DVI Receivables X L.L.C., series 1999-2 -- Class A-4 remains at 'CC'/DR lowered to 'DR4' from 'DR3'; and, -- Classes B, C, D and E remain at 'C/DR6'. DVI Receivables XI L.L.C., series 2000-1 -- Class B notes lowered to 'C/DR6' from 'CC/DR5'; -- Class A-4 remains at 'CCC/DR1'; and, -- Classes C, D and E remain at 'C/DR6'. DVI Receivables XII L.L.C., series 2000-2 -- Class A-4 remains at 'CCC/DR1'; -- Class B remains at 'CC/DR4'; -- Classes C and D remain at 'CC/DR5'; and, -- Class E remains at 'C'/DR lowered to 'DR6' from 'DR5'. The ratings on these DVI transactions remain unchanged: DVI Receivables VIII L.L.C., series 1999-1 -- Class C remains at 'C/DR6'; -- Class D remains at 'C/DR6'; and, -- Class E remains at 'C/DR6'. DVI Receivables XIV L.L.C., series 2001-1 -- Class A-4 remains at 'CC/DR1'; -- Class B remains at 'CC/DR4'; -- Class C remains at 'CC/DR5'; -- Class D remains at 'CC/DR5'; and, -- Class E remains at 'C/DR5'. DVI Receivables XVI L.L.C., series 2001-2 -- Class A-3 remains at 'CC/DR2'; -- Class A-4 remains at 'CC/DR2'; -- Class B remains at 'C/DR6'; -- Class C remains at 'C/DR6'; -- Class D remains at 'C/DR6'; and, -- Class E remains at 'C/DR6'. DVI Receivables XVII L.L.C., series 2002-1 -- Class A-3a remains at 'CCC/DR3'; -- Class A-3b remains at 'CCC/DR3'; -- Class B remains at 'C/DR6'; -- Class C remains at 'C/DR6'; -- Class D remains at 'C/DR6'; and, -- Class E remains at 'C/DR6'. DVI Receivables XVIII L.L.C., series 2002-2 -- Class A-3a remains at 'CCC/DR1'; -- Class A-3b remains at 'CCC/DR1'; -- Class B remains at 'CC/DR4'; -- Class C remains at 'CC/DR6'; -- Class D remains at 'CC/DR6'; and, -- Class E remains at 'C/DR6'. DVI Receivables XIX L.L.C., series 2003-1 -- Class A-3a remains at 'CCC/DR2'; -- Class A-3b remains at 'CCC/DR2'; -- Class B remains at 'C/DR6'; -- Class C-1 remains at 'C/DR6'; -- Class C-2 remains at 'C/DR6'; -- Class D-1 remains at 'C/DR6'; -- Class D-2 remains at 'C/DR6'; -- Class E-1 remains at 'C/DR6'; and, -- Class E-2 remains at 'C/DR6'. Fitch's actions are based on continued loan performance deterioration as reflected in the servicer reports for the period ending Nov. 30, 2006. While the rate of defaults has slowed since distressed recovery ratings were assigned in April 2006, Fitch noted an increase in delinquencies and losses in recent months for several of the transactions. In addition, the amount of potential restructured contracts has decreased since Fitch's last rating actions in April 2006. Restructured contracts are contracts which have the greatest amount of potential proceeds and are added back to the collateral balance once the contract has been brought back to current status. Using assumptions consistent with historical DVI securitization performance, Fitch ran a series of cash flow runs for each transaction to determine the appropriate rating movements, if any. Fitch has had discussions with U.S. Bancorp Portfolio Services which replaced DVI, Inc. as servicer for each of the securitizations under the terms of each transaction's Contribution and Servicing Agreements in February 2004. Since taking over servicing duties, USBPS has been successful in working out and realizing recoveries on previously defaulted contracts. Fitch will continue to closely monitor performance of the transactions, will have regular contact with USBPS, and may raise, lower or withdraw ratings as appropriate. Fitch also affirmed various other transactions in its equipment leasing ABS portfolio. eROOMSYSTEM TECHNOLOGIES: Earns $28,905 in 2006 Third Quarter 2006 ------------------------------------------------------------------ eRoomsystem Technologies Inc. reported $28,905 of net income on $307,135 of total revenues for the quarter ended Sept. 30, 2006, compared with a $42,714 net loss on $406,930 of total revenues for the same period in 2005. The decrease in revenue from revenue sharing arrangements and maintenance fee revenues was due to the decreased number of units in service. The improved results of operations are mainly due to decreases in selling, general and administrative expenses, and in interest expense. At Sept. 30, 2006, the company's balance sheet showed $2.8 million in total assets, $149,650 in total liabilities, and $2.6 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?1893 Going Concern Doubt Hansen, Barnett & Maxwell P.C., in Salt Lake City, Utah, raised substantial doubt about eRoomSystem's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm cited that the company had recurring losses from operations, and that the net income earned for the years ended Dec. 31, 2005, and 2004 was derived primarily from non-recurring items consisting of the sale of assets and proceeds from insurance. About eRoomSystem Based in Lakewood, New Jersey, eRoomSystem Technologies, Inc. (OTCB: ERMS) -- http://www.eroomsystem.com/-- engages in the development and installation of the eRoomSystem, an in-room computer platform and communications network for the lodging and hotel industry worldwide. The eRoomSystem is a computerized platform and processor-based system designed to collect and control data in eRoomServ refreshment centers. EAGLE BROADBAND: Posts $3.5MM Net Loss for 1st Qtr. Ended Nov. 30 ----------------------------------------------------------------- Eagle Broadband Inc. reported a $3.5 million net loss on $968,000 of sales for the first quarter ended Nov. 30, 2006, compared with a $2.6 million net loss on $1.3 million of sales for the same period in 2005. Loss from continuing operations was approximately $2.5 million, which is unchanged from the same period last year. The higher net loss was primarily due to $695,000 in interest expense, $392,000 of which was a non-cash charge, and other non-cash charges of $303,000 related to the conversion provisions contained in the company's debt instruments. "While revenues for the quarter fell short of our goals, our continued efforts to reduce costs resulted in an improvement in our results from continuing operations," said Dave Micek, president and CEO of Eagle Broadband. "In the first quarter of last year, we had the benefit of a one-time, $900,000 credit to bad-debt expense resulting from the collection of a receivable that had been previously deemed uncollectible. Excluding that one-time credit, our operating expenses for the current quarter decreased by more than 34 percent, and our loss from continuing operations decreased by 27 percent." Micek continued, "With our costs under control, our super-headend complete and delivering more than 250 channels of content, and the integration of Connex's business into our IT services division, we are poised to make the rest of fiscal 2007 a success." At Nov. 30, 2006, the company's balance sheet showed $19.5 million in total assets, $17.7 million in total liabilities, and $1.8 million in total stockholders' equity. The company's balance sheet at Nov. 30, 2006, also showed strained liquidity with $2.9 million in total current assets available to pay $15.4 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 30, 2006, are available for free at http://researcharchives.com/t/s?1899 Going Concern Doubt LBB & Associates Ltd. LLP in Houston, Texas, raised substantial doubt about Eagle Broadband Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended Aug. 31, 2006, and 2005. The auditing firm pointed to the company's negative working capital, losses in 2005 and 2006, and need for additionalfinancing necessary to support its working capital requirements. * * * Eagle Broadband Inc. (AMEX: EAG) -- http://www.eaglebroadband.com/ -- provides advanced broadband, Internet Protocol and communications technology and services that create new revenue opportunities for broadband providers and enhance communications for government, military and enterprise customers. FAIRPOINT COMMS: Verizon Deal Cues Moody's to Hold B1 Corp. Rating ------------------------------------------------------------------ Moody's Investors Service has affirmed the B1 corporate family rating of Fairpoint Communications Inc. after the report that it plans to merge with Verizon Communications' Maine, New Hampshire and Vermont wireline operations in a reverse Morris Trust transaction, valued at $2.7 billion in cash and stock. Fairpoint has received $2.1 billion in debt financing commitments to consummate the transaction, and Moody's expects total debt at closing to be about $2.3 billion. The ratings agency also affirmed the existing debt at Fairpoint, which will be withdrawn at closing of the transaction. The outlook remains stable. Moody's has also placed the Baa1 senior unsecured non-guaranteed debt ratings of Verizon-New England on review, direction uncertain. Moody's review of Verizon New England will focus on: -- the ability and willingness of Verizon to reduce debt at VZ-NE commensurate with the decline in cash flow resulting from the loss of about 1.5M access lines as a result of this transaction; -- the operating and competitive profile of the remaining VZ-NE properties in Massachusetts and Rhode Island, two states with high teledensity, attractive demographics and significant cable competition; and -- the potential for credit metrics to significantly weaken over the next few quarters as a result of heightened competition and the impact that capital investment supporting the Fiber-to-the-Premise network upgrade may have on free cash flow. If the review concludes in an upgrade it will likely be limited to no more than one notch because Moody's believes the funding strategy for Verizon's operating companies, in light of the expensive FiOS buildout being undertaken at the operating company level, weakens their individual credit quality to no stronger than the corporate family as a whole. Ratings under review: * Verizon New England, Inc. -- notes and debentures, Baa1, except the $480M of Series B debentures, due 2042, which are affirmed at A3 based on an unconditional and irrevocable guarantee from Verizon Communications, whose ratings remain unchanged. Fairpoint's B1 corporate family rating largely reflects the integration risk of assuming the much larger VZ-NE operation and the continued downward pressure on wireline revenue and cash flow growth in the future. Although Fairpoint's overall adjusted leverage is expected to decrease to about 4.2x from 4.7x as a result of the transaction, the rating agency believes that the integration costs and the additional capital needed to upgrade the acquired lines for higher speed internet access will stress the financial metrics over the intermediate term. Coupled with the significant dividends that Fairpoint expects to continue paying the enlarged shareholder base, steady-state free cash flow available for debt reduction is likely to remain in the 4% - 5% range over the next two years. The ratings and the outlook benefit from the company's increased scale and moderate deleveraging. Pro-forma for the transaction, Fairpoint, headquartered in Charlotte, North Carolina, will become the eight largest wireline telecommunications company in the US, serving about 1.6 million access lines in primarily rural areas and small- and medium-sized cities. Verizon Communications is headquartered in Basking Ridge, New Jersey. FIRST FRANKLIN: Fitch Downgrades Class M-9 Certificates to BB- -------------------------------------------------------------- Fitch Ratings has taken these rating actions on the First Franklin Financial Corporation residential mortgage-backed certificates listed below: Series 2004-FFH1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7, rated 'BBB+', placed on Rating Watch Negative; -- Class M-8 downgraded from 'BBB' to 'BB'; and, -- Class M-9 downgraded from 'BBB-' to 'BB-'. Series 2004-FFH2 -- Class A-1 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; -- Class B-1, rated 'BB+', placed on Watch Negative; and, -- Class B-2, rated 'BB', placed on Watch Negative. The affirmations, affecting approximately $345.4 million of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. The downgrades, affecting approximately $13.1 million of the outstanding certificates, are taken as a result of a deteriorating relationship between credit enhancement and expected loss. In addition, the Rating Watch Negative affects $44.9 million of the outstanding certificates. The collateral of the above transactions consists of first-lien, subprime, fixed-rate mortgage loans and adjustable-rate mortgage loans. In addition, the certificates are supported by two collateral groups, the first consists of loans with principal balances that conform to Fannie Mae and Freddie Mac guidelines and the second consists of loans with principal balances that may or may not conform to Fannie Mae and Freddie Mac guidelines. Series 2004-FFH1 is serviced by HomEq Servicing Corp. and series 2004- FFH2 is serviced by Saxon Mortgage Serviced, Inc. The downgrades and Rating Watch Negative placement on series 2004- FFH1 is the result of losses exceeding excess spread for the past six months and, as a result, eroding the overcollateralization below target. As of the December 2006 remittance date, the OC is $105,252 below the target of $3,969,213. The OC as a percent of the current balance is 2.9%. The cumulative loss as a percentage of the original pool balance is 1.55% and the delinquency rate as a percentage of the current pool balance is 34%. The pool is 32 months seasoned and has a pool factor of 18%. The OC stepped-down in November 2006 when the class A-1 paid off. As the transaction continues to season, losses are expected to increase relative to excess spread and OC will eventually decline. The Rating Watch Negative placement on series 2004-FFH2 is the result of losses exceeding excess spread for the past five months and, as a result, eroding the OC below target. As of the December 2006 remittance date, the OC is $3.9 million below the target of $15 million. The OC as a percent of the current balance is 3.7%. The cumulative loss as a percentage of the original pool balance is 1.31% and the delinquency rate as percentage of the current pool balance is 22.3%. The pool is 29 months seasoned and has a pool factor of 27%. In two months, class A-1 is expected to pay-off and, as a result, the OC will step-down. While the OC will likely be at target in the step-down month, as the transaction continues to season, losses are expected to increase relative to excess spread and OC will eventually decline. FIRST HORIZON: Fitch Upgrades Class B5 Loan Rating to B+ from B --------------------------------------------------------------- Fitch Ratings has taken these rating actions on the First Horizon Home Loan Mortgage Trust issues: Series 2004-1: -- Class A affirmed at 'AAA'; -- Class B1 upgraded to 'AA+' from 'AA'; -- Class B2 upgraded to 'A+' from 'A'; -- Class B3 upgraded to 'BBB+' from 'BBB'; -- Class B4 upgraded to 'BB+' from 'BB'; and, -- Class B5 upgraded to 'B+' from 'B'. Series 2004-2: -- Class A affirmed at 'AAA'. Series 2004-3: -- Class A affirmed at 'AAA'. Series 2004-4: -- Class A affirmed at 'AAA'. Series 2004-6: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; and, -- Class B5 affirmed at 'B'. Series 2004-7: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; and, -- Class B5 affirmed at 'B'. Series 2004-AA4: -- Class A affirmed at 'AAA'. Series 2004-AA6: -- Class A affirmed at 'AAA'. Series 2004-AA7: -- Class A affirmed at 'AAA'. Series 2004-AR2: -- Class A affirmed at 'AAA'. Series 2004-AR3: -- Class A affirmed at 'AAA'. Series 2004-AR4: -- Class A affirmed at 'AAA'. Series 2004-AR6: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; and, -- Class B5 affirmed at 'B'. Series 2004-AR7: -- Class A affirmed at 'AAA'. Series 2004-FA2: -- Class A affirmed at 'AAA'. The mortgage loans consist of conventional 15- and 30-year fixed- rate mortgages extended to prime borrowers and are secured by first liens on one- to four-family residential properties. As of the December 2006 distribution date, the transactions are seasoned from a range of 24 to 35 months and the pool factors range from approximately 47% to 79%. All of the above deals were acquired and are serviced by First Horizon Home Loan Corporation. The affirmations reflect credit enhancement consistent with future loss expectations and affect approximately $2.572 billion of outstanding certificates. The upgrades reflect an improvement in the relationship between CE and future loss expectations and affect approximately $4.3 million of outstanding certificates. All classes in the transactions detailed above have experienced small to moderate growth in CE since closing, and there have been no or minor collateral losses to date. Fitch will closely monitor these transactions. GENERAL MOTORS: Says Too Early to Provide Details on Proton Deal ---------------------------------------------------------------- General Motors Corporation says many parties are seeking stake with Malaysian automaker Proton Holdings Bhd., and it is too early to provide details on the bidding process, Reuters reports. GM's statement relates to Tuesday's article in the Troubled Company Reporter on the U.S. carmaker's interest in buying a stake in Proton, which could reach more than MYR10 for each Proton share. According to Bloomberg, Proton, which has suffered low profits in the past seven years, is seeking a new partner to stem losses following the end of its 21-year partnership with Mitsubishi Motors Corp. in March 2004. Proton disclosed a MYR250.3 million loss in the quarter ended Sept. 30, 2006, compared to a MYR154.3 million loss for the same period in 2005. GM's Shanghai-based spokesman Rob Leggat told reporters that GM held talks with Proton. However, Faridah Idris, a spokeswoman at Proton, declined to comment. In November 2000, GM held talks with Proton about a deal in Malaysia but the discussions did not result in any partnership. 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 US$1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. HEADWATERS INC: Launches Proposed $125 Million Loan Offering ------------------------------------------------------------ Headwaters Inc. intends to offer $125 million of convertible senior subordinated notes due 2014 in a private placement to qualified institutional buyers pursuant to exemptions from the registration requirements of the Securities Act of 1933. The Notes will mature in 2014 and will bear interest at a rate to be determined. The Notes are expected to pay interest semiannually and will be convertible into cash and, if applicable, shares of Headwaters' common stock based on a conversion rate to be determined. The Notes may be repurchased, at the option of the holder, prior to maturity upon the occurrence of certain fundamental changes involving Headwaters' common stock. The company expects to grant an over-allotment option to the initial purchasers for an additional $25 million aggregate principal amount of the Notes. Concurrently with the pricing of the Notes, the company intends to enter into convertible note hedge and warrant transactions in respect of its common stock with an affiliate of one of the initial purchasers. These transactions are intended to reduce the dilution to the company's common stock from potential future conversion of the Notes. In connection with the convertible note hedge and warrant transactions, it is expected that our counterparty to those transactions or its affiliate will enter into various derivative transactions with respect to Headwaters' common stock concurrently with or shortly after the pricing of the Notes. In addition, such counterparty or its affiliate may enter into, or unwind, various derivatives transactions with respect to Headwaters' common stock and to purchase or sell shares of Headwaters' common stock in the secondary market transactions following the pricing of the Notes. These activities could have the effect of increasing or preventing a decline in the price of the company's common stock concurrently with or following the pricing of the Notes. The Company intends to use all of the net proceeds from the offering to repay a portion of its senior secured credit facility. Headquartered in South Jordan, Utah, Headwaters Incorporated (NYSE:HW) -- http://www.hdwtrs.com/-- is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building materials businesses, the company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities. * * * As reported in the Troubled Company Reporter on Aug 1, 2006, Standard & Poor's Ratings Services affirmed its 'BB-' senior secured bank loan and '2' recovery ratings on Headwaters Inc.'s $700 million credit facility and removed them from CreditWatch, where they were placed with positive implications on June 20, 2006. I2TELECOM INT'L: Repaid Outstanding Loans to Cornell Capital ------------------------------------------------------------ i2Telecom International Inc. has repaid in full its outstanding loans to Cornell Capital Partners LP. The loans were originally structured in the form of three convertible debentures with a face amount totaling $1,750,000. To fund the repayment of the debt, the company utilized a combination of cash flow from operations, funds raised in recent private placements and proceeds from a new non-convertible loan. The company's CEO Paul Arena and members of the Board of Directors and Advisory Board participated in the private placement. "I'm extremely pleased that we have fully satisfied this sizeable debt obligation that has adversely impacted the trading in our common stock for some time," commented Paul Arena, Chief Executive Officer of i2Telecom International, Inc. "The elimination of future conversions of debt into equity reduces potential dilution of existing shareholders and represents the passing of an important milestone for the company. Approximately 100 million shares of common stock that served as collateral for the loans will be retired to the Company's treasury as a result of the repayment of all outstanding principal and interest due to the Lender." Pursuant to an agreement between i2Telecom and the Lender, the company recently delivered a principal reduction payment of approximately $1.7 million to the Lender, which included a required 20% redemption fee premium and all accrued interest. The redemption fee premium was a negotiated provision to enable the company to retire the debt and remove the Lender's right to convert any further amounts of debt into the Company's common stock. The lender previously converted $425,000 of the outstanding debt into common shares of the company. "Reflecting my confidence in the future direction of our business, I personally invested in the private placements along with members of our Board of Directors and Advisory Board members. In addition, I accepted a reduction in my salary to $1 annually last June, and the compensation of our senior management team has been reduced by 50%. The lower costs along with increased revenues has helped to lower our operating 'cash burn rate' to less than $30,000 last month." About I2 Telecom Headquartered in Atlanta, GA, I2Telecom International Inc. (OTCBB: ITUI) -- http://www.i2telecom.com/-- provides high-quality international and domestic long distance calling services to subscribers at a fraction of the cost of traditional carriers by leveraging the power of the internet. The company's patents-pending VoiceStick(TM) device enables any telephone or business phone system (PBX) to access the company's global network and advanced routing technologies to complete most of the call over the internet, paying only for the last leg of the connection. Going Concern Doubt Freedman & Goldberg CPAs, in Farmington Hills, MI raised substantial doubt about I2 Telecom International's ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, 2004 and 2003. The auditing firm pointed to the company's ongoing losses from operations since its inception and the uncertain conditions that the company faces relative to its ongoing debt and equity fund- raising efforts. INDYMAC NIM: Moody's Puts Ba1 Rating on Series 2006-LL Notes ------------------------------------------------------------ Moody's Investors Service has assigned a rating of Ba1 to the notes in IndyMac NIM Trust 2006-LL. The notes are backed by the prepayment penalties and excess cashflow generated by six underlying IndyMac lot loan deals consisting of both fixed and adjustable-rate mortgage loans. Rating action: * IndyMac NIM Trust 2006-LL -- Notes, Assigned Ba1 INTELSAT LTD: Fitch Junks Rating on $600 Million Senior Notes ------------------------------------------------------------- Fitch Ratings has affirmed Intelsat, Ltd.'s Issuer Default Rating at 'B'. The Rating Outlook is Stable. A detailed list of Fitch's rating actions appears at the end of the press release. Fitch has assigned these new ratings: * Intelsat Ltd. -- $600 million senior unsecured floating-rate notes due 2015 at 'CCC+/RR6'; and, -- Proposed $1 billion guaranteed senior unsecured term loan due 2014 at BB-/RR2. The senior notes will be used to refinance the $600 million senior unsecured credit facility of Intelsat Bermuda, which is a subsidiary of Intelsat, Ltd. The proceeds from the term loan will be used to refinance $1 billion of senior unsecured floating-rate notes due 2012 that had been issued by Intelsat Subsidiary Holding Company. The term loan is guaranteed by Intelsat, Intelsat Sub Holdco and certain Intelsat Sub Holdco subsidiaries. Intelsat's ratings reflect the strength and scale of the company, owing to its position as the largest fixed satellite services operator following the acquisition of PanAmSat Holding Corporation on July 3, 2006, the high proportion of revenues from contract services, the company's diverse revenue base, and strong operating cash flow. Concerns include the company's significant leverage after the debt-financed PanAmSat acquisition, competition from fiber-optic cable providers in certain legacy portions of the business, and in the longer term, the capital intensive nature of the satellite business. As of Sept. 30, 2006 the company's revenue backlog was approximately $8 billion, or approximately 3.8x the pro forma last twelve months revenue. Approximately 95% of the backlog is related to non-cancellable contracts or contracts with substantial termination penalties. In the third quarter 2006, which incorporated nearly a full quarter of results from PanAmSat, 38% of Intelsat's revenues were derived from the media sector, 47% from voice and data services provided to corporate customers, 14% of its revenues were from government services and 1% of its revenues were from other services. Geographically, in the third quarter of 2006, 50% of its revenues came from North American customers, while Europe and Africa/Middle East each produced 15% of revenues. The remaining revenues were divided between Asia and Latin America. The fixed satellite services segment is characterized by its high operating EBITDA margins. Intelsat's EBITDA margins on a quarterly basis have generally been in the 60-70% range over the past two years. After the acquisition of PanAmSat for $6.4 billion in cash and assumed debt, Intelsat's debt increased to $11.3 billion at Sept. 30, 2006. Debt-to-EBITDA was 7.45x at Sept. 30, 2006, based on annualized EBITDA for the third quarter. Liquidity is provided by cash on hand and two credit facilities. Cash on hand amounted to $497 million at the end of the third quarter of 2006. Credit facilities consist of an undrawn $300 million credit facility due 2012 located at Intelsat Sub Holdco and a $250 million facility due 2012 at indirect subsidiary Intelsat Corporation. The Intelsat Sub Holdco facility has a financial covenant restricting pro forma senior secured leverage to no greater than 1.5x at the end of each fiscal quarter, and the Intelsat Corporation facility requires pro forma senior secured leverage to be no greater than 4.25x at the end of each fiscal quarter. The $1 billion credit facility at Intelsat contains a leverage covenant of 6.75x, as do the senior unsecured notes of Intelsat and Intelsat Corporation. Fitch has affirmed these ratings: Intelsat, Ltd. -- Issuer Default Rating 'B'; and, -- Senior unsecured notes 'CCC/RR6'. Intelsat (Bermuda), Ltd. -- Issuer Default Rating 'B'; -- Senior unsecured guaranteed notes 'BB-/RR2'; and, -- Senior unsecured non-guaranteed notes 'CCC+/RR6'. Intelsat Intermediate Holding Company, Ltd. -- Issuer Default Rating 'B'; and, -- Senior unsecured discount notes 'B-/'RR5'. Intelsat Subsidiary Holding Company, Ltd. -- Issuer Default Rating 'B'; -- Senior secured credit facilities 'BB/RR1'; and, -- Senior unsecured notes 'BB-/RR2'. Intelsat Corporation --Issuer Default Rating 'B'; --Senior secured credit facilities 'BB/RR1'; --Senior secured notes 'BB/RR1'; and, --Senior unsecured notes 'B/RR4'. In addition, Fitch has withdrawn these rating due to its refinancing: Intelsat, Ltd. -- $600 million senior unsecured credit facility 'CCC+/RR6'. Intelsat Holding Corporation -- Issuer Default Rating 'B'. INTERPOOL CAPITAL: Investors' Offer Cues Moody's Ratings Review --------------------------------------------------------------- Moody's Investors Service placed all ratings of Interpool Inc. on review for possible downgrade. The review was prompted by Interpool's disclosure that its Board of Directors has received an offer from an investor group to acquire all of the outstanding common stock of the company, which is not currently held by the investor group. The investor group is comprised of Interpool's current chairman and CEO, other shareholders, and an investment fund affiliated with Fortis Merchant Banking. The review will focus on the current proposal that would represent a change in the corporate and capital structure of the company, if approved and closed. As outlined in Moody's published credit opinion on Interpool, an increase is leverage beyond 3.5x debt/equity could put pressure on the rating. In Moody's view, based upon the publicly available information, it appears the company would operate with leverage metrics beyond that threshold. Moody's notes that it will also evaluate the terms and structure of the transaction in light of Interpool's rated securities' "change of control" provisions. These provisions may obligate the firm to offer to repurchase some or all of the rated securities. These ratings were placed on review for possible downgrade: * Interpool, Inc. -- Corporate Family B1 -- Senior Unsecured Notes B2 * Interpool Capital Trust -- Capital Trust Securities Caa1 Interpool Inc., headquartered in Princeton, New Jersey, reported approximately $2.4 billion in total assets as of Sept. 30, 2006. INTERPOOL INC: Buyout Offer Prompts S&P's Negative CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Interpool Inc., including the 'BB' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement is based on Interpool's report that it has received an offer to be acquired by its non-public stockholders, which include Martin Tuchman, other significant stockholders, and their families and investment affiliates, who currently own 18.5 million of the 29.3 million shares outstanding. Debt financing for up to $1.8 billion has already been committed for the proposed acquisition, a portion of which could refinance the company's outstanding debt of approximately $1.4 billion. It is intended that current management would remain in place. "If an acquisition were to be consummated, by either the non- public stockholders or another party, it could result in a weaker financial profile for Interpool," said Standard & Poor's credit analyst Betsy Snyder. Standard & Poor's will assess the effect of any such acquisition on Interpool's pro forma financial profile to resolve the CreditWatch. Interpool is the largest lessor of chassis in North America, with a fleet of 236,000 chassis. Chassis are wheeled frames attached to cargo containers that, when combined, are equivalent to a trailer that can be trucked to its destination. Interpool's only major competitor in this business is privately held Flexi-Van Leasing Inc. Interpool also manages chassis for shipping lines and neutral pools at railroad and marine terminals. The chassis leasing business has tended to generate strong and stable cash flow, even in periods of economic weakness. Interpool's other major business is marine cargo container leasing, in which it is one of the larger participants in this market, with a fleet of 749,000 owned and managed TEU's at Sept. 30, 2006. The company focuses on long-term operating and finance leases. Marine cargo container leasing is a more cyclical business, dependent on global economic merchandise trends. However, Interpool's earnings and cash flow from marine cargo container leasing benefit from the long-term nature of its leases. In March 2006, Interpool sold approximately 74% of its dry marine cargo container fleet, with proceeds used to repay $462 million of related debt, and recorded a gain of approximately $61 million in connection with the sale. As a result, the company's debt to capital declined to around 71% at Sept. 30, 2006, from 81% at Dec. 31, 2005. Interpool will continue to manage the fleet for the new buyers, generating fee income for this service. On Oct. 1, 2006, Interpool sold its stake in Container Applications International Inc. for $77.5 million, comprised of a $40 million cash payment and the balance, a note that matures in 2010. Interpool expects to record a gain of approximately $30 million in the fourth quarter of 2006. INTERSTATE BAKERIES: Wants to Extend Exclusivity Period to June 2 ----------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Missouri to extend their exclusive periods to: a) file a plan of reorganization through June 2, 2007; and b) file and solicit acceptances of that plan through Aug. 1, 2007 J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, asserts that the Debtors require additional time to (i) negotiate additional long-term extensions with their unions, (ii) refine their business plan, (iii) complete the valuation analysis and explore exit financing alternatives necessary to develop the plan of reorganization, and (iv) hire a new, long-term CEO and allow that individual, as well as the two other new directors an opportunity to adequately review the Debtors' operations. Mr. Ivester assures the Court that there is no harm in granting the requested extensions because they will be without prejudice to the right of any party to request a termination of exclusivity at any time. Besides, Mr. Ivester continues, the Debtors' relations with their various constituent groups -- the prepetition secured lender steering group, the Creditors' Committee and the Equityholders' Committee -- remain strong. The relationships have been fostered to a great degree by the Debtors' attempts to keep the groups well informed through regular meetings and prompt provision of requested information. Mr. Ivester notes that the Debtors' restructuring efforts have borne fruit. Cost-cutting initiatives have reduced fixed costs by approximately $440,000,000, and new products have been introduced to reduce the historical decline in white bread sales. In addition, the Debtors are in talks with their unions and have completed or commenced negotiations of long-term extensions for most of the 420 collective bargaining agreements with union- represented employees. Given these circumstances, the Debtors' request to extend their Exclusive Periods is justified, Mr. Ivester tells Judge Venters. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Posts $26.3 Million Net Loss in 2nd Quarter ---------------------------------------------------------------- Interstate Bakeries Corp. reported a $26.3 million net loss on $671.9 million of net sales for the twelve weeks ended Nov. 18, 2006, compared with a $53.3 million net loss on $702.4 million of net sales for twelve weeks ended Nov. 12, 2005. Wholesale operations net sales for the second quarter of fiscal 2007 were approximately $596.2 million, a decrease of approximately $23.9 million, or 3.9%, from net sales of approximately $620.1 million in fiscal year 2006. The decrease in net sales was due to unit volume declines as a result of sales discontinued as part of the company's restructuring efforts, partially offset by an overall unit value increase, related to selling price increases and product mix changes, of approximately 4.1% for the second quarter of fiscal 2007 as compared to the prior year. Retail operations net sales for the second quarter of fiscal 2007 were approximately $75.7 million, a decrease of approximately $6.6 million, or 8%, from net sales of approximately $82.3 million for the same period in fiscal year 2006. The decline in revenue is mainly attributable to the closing of retail outlets in conjunction with the company's restructuring efforts. Gross profit was approximately $324.4 million, or 48.3% of net sales, for the second quarter of fiscal year 2007, in comparison with approximately $345.4 million, or 49.2% of net sales, for the same period in fiscal 2006. Selling, delivery and administrative expenses were approximately $318.7 million, representing 47.4% of net sales, for the second quarter of fiscal 2007 down from approximately $353.1 million, or 50.3% of net sales when compared with the same period in fiscal 2006. A substantial portion of the cost decreases relates directly to consolidation of routes, depots and retail outlets. During the second quarter of fiscal 2007, the company incurred a net restructuring credit of approximately $4.2 million related to the continuation of certain restructuring plans to close and restructure certain bakeries and retail stores as compared to approximately $16.4 million for the same period in fiscal 2006. The restructuring charges in the second quarter of fiscal 2007 were composed of approximately $100,000 severance, a $4.8 million net gain on sale of assets and $500,000 net exit costs such as utility costs, security, taxes and clean up activities. The operating loss for the second quarter of fiscal 2007 was approximately $6.8 million, a decrease in the loss of approximately $35.1 million from the prior year's operating loss of approximately $41.9 million. For the second quarter ended Nov. 18, 2006, reorganization charges were approximately $10 million and relate to expense or income items that was incurred under the company's bankruptcy proceedings. Reorganization charges for the twelve weeks ended Nov. 12, 2005, were approximately $7.5 million. At Nov. 18, 2006, the company's balance sheet showed $1.147 billion in total assets, $1.15 billion in total liabilities, and $289.1 million in liabilities subject to compromise, resulting in a $292.7 million total stockholders' deficit. The company's balance sheet at Nov. 18, 2006, also showed strained liquidity with $380.6 million in total current assets available to pay $803.3 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the twelve week period ended Nov. 18, 2006, are available for free at http://researcharchives.com/t/s?1890 Liquidity During the twenty-four weeks ended Nov. 18, 2006, the company generated $3.4 million of cash, which was the net impact of $29.6 million in cash used in operating activities, $78.8 million in cash generated from investing activities, and $45.8 million in cash used in financing activities. Cash provided by investing activities during fiscal 2007 was $78.9 million, $92.8 million more than the cash used during fiscal 2006 of $13.9 million. This significant increase is primarily attributable to the release, pursuant to the eighth amendment to the DIP Facility, of restricted cash previously held as collateral and unavailable to the company in the amount of $89.2 million at Aug. 25, 2006, the effective date of the eighth amendment to the DIP Facility. Cash used in financing activities for fiscal 2007 was 45.8 million, primarily due to a reduction in the company's pre- petition secured debt of $45.4 million. This compares to cash generated from financing activities in fiscal 2006 which totaled $13 million due mostly to an increase in the company's pre- petition secured revolving credit facility of $13.4 million. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. INTERSTATE BAKERIES: SEC Files Complaint Against Ex-IBC Officer --------------------------------------------------------------- The Securities and Exchange Commission disclosed on its Web site that on Dec. 20, 2006, it filed a complaint in the United States District Court for the Western District of Missouri against Paul E. Yarick, the former principal financial officer of Interstate Bakeries Corporation. The complaint alleges that Mr. Yarick violated or aided and abetted violations of the anti-fraud, record-keeping, internal controls and reporting provisions of the federal securities laws by misleading the Debtor's investors about the adequacy of the Debtors's workers' compensation reserves and, consequently, the the Debtor's earnings. According to the SEC's complaint, related to the Debtor's fiscal 2004 second and third quarters, Mr. Yarick disregarded workers' compensation liabilities estimates provided by the Debtor's insurance consultant, on which the Debtor historically had relied to set its workers' compensation reserve. Instead, the SEC says, Mr. Yarick used obsolete information that he had been advised was unreliable to set the Debtor's quarterly workers' compensation reserve for these quarters. Accordingly, the Debtor failed to account for its workers' compensation reserve in accordance with Generally Accepted Accounting Principles. The complaint further alleges that, as a result of Mr. Yarick's conduct, the Debtor filed financial statements in its Forms 10-Q for the fiscal 2004 second and third quarters that understated the Debtor's reserves by at least $30,000,000. Consequently, the Debtor materially overstated its pre-tax income in its Form 10-Q for the period ended Nov. 15, 2003, and its cumulative fiscal third quarter pre-tax income in its Form 10-Q for the period ended Mar. 6, 2004. According to the SEC, Mr. Yarick, without admitting or denying the allegations in the complaint, consented to the entry of a permanent injunction by the United States District Court enjoining him from violating Sections 10(b) and 13(b)(5) of the Exchange Act of 1934 and Rules 10b-5, 13a-14, 13b2-1, 13b2-2, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-11, and 13a-13. The agreed court order also imposed a five-year officer and director bar and ordered him to pay a civil penalty of $50,000. Separately, Interstate Bakeries Corp. consented, on a neither admit-nor-deny basis, to the entry of a Commission order to cease and desist from future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-11, and 13a-13, the SEC says. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) IRVINE SENSORS: All Credit Facility Defaults Cured or Waived ------------------------------------------------------------ Both senior bank debt and subordinated convertible notes of Irvine Sensors Corporation have been refinanced. The refinancing occurred in two transactions each funded by two institutional investors. In a senior debt transaction, Irvine Sensors borrowed $8.25 million pursuant to a two-year term loan bearing interest at 11% per annum and requiring interest-only debt service until maturity. As long as Irvine Sensors is current in payments due to the investors under the term loan, the new term loan does not require adherence to financial covenant compliance measurements of the type that triggered the default of Irvine Sensors' senior debt credit facility with Square 1 Bank. A substantial portion of the proceeds of the new term loan was used to retire approximately $3.9 million of senior term loan debt owed to Square 1 Bank with a maturity date of Dec. 29, 2009 and a $2 million revolving line-of- credit from Square 1 Bank, which was due on Dec. 29, 2006. The balance of the new term loan proceeds was used for transaction costs and general corporate purposes. As an inducement for issuance of the new senior loan on such terms, the company issued the investors five-year warrants to purchase an aggregate of 3 million shares of Irvine Sensors common stock at an exercise price of $1.30 per share, the approximate market price of the company's common stock when the basic economic terms of the transaction were negotiated. The firm of Dominick & Dominick, LLC provided investment-banking services for Irvine Sensors in the senior debt refinancing. In a concurrent transaction, the same investors purchased Irvine Sensor's aggregate $10 million subordinated convertible Series 1 and Series 2 notes from two investment funds managed by Pequot Capital Management, Inc. and elected to extend the maturity of the Series 2 notes from Dec. 30, 2007 to Dec. 30, 2009, the same maturity date as the Series 1 notes. Pequot assigned the Series 1 and Series 2 notes to the new investors and the other terms of the subordinated convertible notes were substantially unchanged as a result of the assignment, although the price anti-dilution feature of the notes and related warrants was triggered by the senior debt transaction, resulting in adjustment of the conversion price of the notes to $1.30 per share and the adjustment of the Pequot warrants' exercise price to $1.30 per share, along with a corresponding increase in the number of shares issuable upon conversion of the Series 1 and Series 2 Notes and upon exercise of the Pequot warrants. In connection with the assignment of the notes, Pequot agreed to exercise warrants to purchase approximately 1.3 million shares of Irvine Sensors common stock for aggregate gross proceeds of $1.75 million, and Irvine Sensors agreed to pay Pequot $1.25 million in settlement of all existing disputes between Irvine Sensors and Pequot. Asserted defaults under the subordinated convertible notes were cured or permanently waived concurrent with the assignment of the Notes to the investors and the settlement with Pequot. "Because of the number of entities involved and the scale of the transactions, this was a complex and time-consuming refinancing," John Carson, Irvine Sensors CEO said. "We appreciate the patience of our customers, lenders, creditors, stockholders and employees during this process. We will report the substantial intangible effects of the transactions as quickly as we can complete the complex accounting analysis required. In the meantime, though, we are very pleased that the refinancing is behind us and anticipate focusing our resources to business execution and the fulfillment of our significant backlog." Based in Costa Mesa, California, Irvine Sensors Corporation (Nasdaq: IRSN; Boston Exchange: ISC) -- http://www.irvine- sensors.com/ -- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies, the manufacture and sale of optical systems and equipment for military applications through its Optex subsidiary and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. JEAN DUPLESSIS: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtors: Jean Y. Duplessis Virginia L. Duplessis 30 Isabell Circle Randolph, MA 02368 Bankruptcy Case No.: 07-10206 Chapter 11 Petition Date: January 12, 2007 Court: District of Massachusetts (Boston) Judge: Robert Somma Debtor's Counsel: David G. Baker, Esq. 105 Union Wharf Boston, MA 02109 Tel: (617) 367-4260 Fax: (866) 661-5328 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Option One Mortgage Corp. $58,900 Citi Cards $27,373 Discover Financial Services $7,000 The Law Office of John P. Frye, P.C. $4,288 Regional Adjustment Bureau $3,324 CCB Credit Services, Inc. $2,392 HSBC Card Services $2,303 Boston Water and Sewer Commission $1,770 Denene Sledge $1,750 Allied International Credit Corp $1,610 National Grid $1,578 Kay Jewelers $1,224 Progressive Management Systems $656 One Touch Communication $625 Home Depot Credit Services $612 Verizon $510 NEBS $463 Avon Products, Inc. $447 Verizon Wireless $380 KARA HOMES: Court Approves $2.6 Mil. Loan Payment to Bear Stearns ----------------------------------------------------------------- The Honorable Michael B. Kaplan of the U.S. Bankruptcy Court for the Western District of New Jersey allowed Kara Homes Inc. to pay off a $2.6 million loan from investment bank Bear Stearns with a loan from Plainfield Special Situations Master Fund Ltd., a hedge fund based in Greenwich, Connecticut, David Willis of Home News Tribune reports. Since filing for bankruptcy in October, the hedge fund loan is the second loan Kara Homes has received. In December, Judge Kaplan approved the $2.6 million loan from Bear Stearns, which at least $1.85 million was spent, the paper said. Citing Kara's lawyers, Home News Tribune relates that Kara is grateful to Bear Stearns for the loan but the companies' relationship didn't work out. A lawyer for a committee of unsecured creditors disclosed that Kara has been having difficulty in getting approval for any future financing from the investment company. In addition to paying Bear Stearns, the report said that Kara will use the money Judge Kaplan approved for administrative expenses such as employee wages, rent and utilities. On Jan. 29, 2007, Judge Kaplan will decide whether Kara can receive the balance of a proposed $5 million line of credit from Plainfield. The court has given Kara authority to sell two developments: Woodland Estates in North Edison and Kara at Monroe, to the highest bidder, Home News Tribune notes. A joint venture between Fenix Investment and Development, a Morristown homebuilder, and Riverside Capital Management, a Shrewsbury investment company, had agreed to pay $11.6 million for Woodland Estates and $2.8 million for Kara at Monroe. According to the source, the proceeds from the sale would be used to pay off Investors Savings Bank, Kara's lender on both developments. The results of the auction is set for approval by the court on March 1, 2007. Headquartered in East Brunswick, New Jersey, Kara Homes, Inc., aka Kara Homes Development LLC, builds single-family homes, condominiums, town homes, and active-adult communities. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al., represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $350,179,841 and total debts of $296,840,591. On Oct. 9, 2006, nine affiliates filed separate chapter 11 petitions in the same Bankruptcy Court. On Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions. MAAX CORP: Poor Performance Cues S&P to Junk Corp. Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Quebec-based bathroom fixtures manufacturer MAAX Holdings Inc. to 'CCC-' from 'CCC+'. At the same time, Standard & Poor's lowered its rating on the company's senior discount notes to 'CC' from 'CCC-'. The long- term corporate credit rating on MAAX's subsidiary, MAAX Corp., was also lowered to 'CCC-' from 'CCC+'. In addition, Standard & Poor's withdrew its 'CCC+' bank loan rating, with a recovery rating of '3', on MAAX Corp.'s secured bank facilities because they were repaid, and lowered the long- term debt rating on the subsidiary's senior subordinated debt notes to 'CC' from 'CCC-'. The outlook for both companies is negative. "The ratings on MAAX were lowered because liquidity continues to deteriorate, cash flow is showing no signs of meaningful improvement in the near-to-medium term, and weak conditions persist in its core bathroom fixtures markets," said Standard & Poor's credit analyst Kevin Hibbert. "In addition to the company's weaker fundamental performance, the rating action reflects the increased risk of a near-term filing for bankruptcy protection," Mr. Hibbert added. MAAX is a midsize manufacturer and distributor of gel-coated, acrylic, and hermoplastic bathtubs, showers, and whirlpools, with an approximate 15% share of the North American market. It also manufactures semi-custom cabinetry and spas. The company has restructured operations, and recently announced that it will exit the cabinetry business to reduce its costs and Canadian dollar exposure; nevertheless, the high Canadian dollar will continue to have a negative effect on margins. Profitability will also be susceptible to the slowdown in home renovation activity, and potentially increased competitive behavior from larger competitors. The outlook is negative. The slowdown in housing starts coupled with the pull-back in home renovation activity is increasingly affecting MAAX, as seen by the sharp decline in net sales and EBITDA and the increase in negative free cash flow on a last 12 months basis. Standard & Poor's expects this environment to continue, further pressuring MAAX's liquidity. MAAX's debt load has become more onerous with the higher interest payments, more frequent interest payment schedule, and tighter covenants, adding to the company's vulnerability. MAAX HOLDINGS: Strained Liquidity Prompts S&P to Junk Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Quebec-based bathroom fixtures manufacturer MAAX Holdings Inc. to 'CCC-' from 'CCC+'. At the same time, Standard & Poor's lowered its rating on the company's senior discount notes to 'CC' from 'CCC-'. The long- term corporate credit rating on MAAX's subsidiary, MAAX Corp., was also lowered to 'CCC-' from 'CCC+'. In addition, Standard & Poor's withdrew its 'CCC+' bank loan rating, with a recovery rating of '3', on MAAX Corp.'s secured bank facilities because they were repaid, and lowered the long- term debt rating on the subsidiary's senior subordinated debt notes to 'CC' from 'CCC-'. The outlook for both companies is negative. "The ratings on MAAX were lowered because liquidity continues to deteriorate, cash flow is showing no signs of meaningful improvement in the near-to-medium term, and weak conditions persist in its core bathroom fixtures markets," said Standard & Poor's credit analyst Kevin Hibbert. "In addition to the company's weaker fundamental performance, the rating action reflects the increased risk of a near-term filing for bankruptcy protection," Mr. Hibbert added. MAAX is a midsize manufacturer and distributor of gel-coated, acrylic, and hermoplastic bathtubs, showers, and whirlpools, with an approximate 15% share of the North American market. It also manufactures semi-custom cabinetry and spas. The company has restructured operations, and recently announced that it will exit the cabinetry business to reduce its costs and Canadian dollar exposure; nevertheless, the high Canadian dollar will continue to have a negative effect on margins. Profitability will also be susceptible to the slowdown in home renovation activity, and potentially increased competitive behavior from larger competitors. The outlook is negative. The slowdown in housing starts coupled with the pull-back in home renovation activity is increasingly affecting MAAX, as seen by the sharp decline in net sales and EBITDA and the increase in negative free cash flow on a last 12 months basis. Standard & Poor's expects this environment to continue, further pressuring MAAX's liquidity. MAAX's debt load has become more onerous with the higher interest payments, more frequent interest payment schedule, and tighter covenants, adding to the company's vulnerability. MAIN STREET: Trustees Taps Freeman & Partners as Accountants ------------------------------------------------------------ Lewis B. Freeman, the Chapter 7 Trustee appointed in the bankruptcy cases of Main Street USA Inc. and its debtor- affiliates, asks the U.S. Bankruptcy Court for the Middle District of Florida in Orlando for permission to employ his firm, Lewis B. Freeman & Partners Inc., as forensic accountants, nunc pro tunc to Dec. 13, 2006. The firm will provide necessary services for the Chapter 7 Trustee including, but not limited to: a) the analysis and investigation of historical transactions; and b) the evaluation of preferences, fraudulent conveyance and litigation matters. The hourly rate for the firm's principals ranges from $200 to $350 per hour. This rate will be discounted to $200 per hour for this engagement. The firm's Forensic accountants, financial investigators, valuation analysts and other technical persons, charge at $50 to $175 per hour. This rate will be discounted to $100 per hour. Mr. Freeman assures the Court that his firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Kissimmee, Florida, Main Street USA Inc. and its debtor-affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. M.D. Fl. Case No. 06-02582). On Oct. 13, 2006, Lewis B. Freeman was appointed as the Debtors' chapter 11 Trustee. Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MASTEC INC: Moody's Rates Proposed $150 Million Senior Notes at B1 ------------------------------------------------------------------ Moody's Investors Service has assigned a B1 rating to the proposed $150 million senior unsecured notes of MasTec, Inc. In addition, Moody's affirmed the company's existing Ba3 corporate family rating. The ratings assigned to the notes reflect both the overall probability of default of the company, to which Moody's affirms the Ba3 rating, and a loss given default of LGD4 for the senior unsecured notes. The rating outlook is stable. The rating on the notes is subject to final documentation. Proceeds from the issuance of the notes will be used to redeem the company's 7.75% senior subordinated notes due February 2008 with the remaining proceeds to be used for general corporate purposes including working capital, acquisitions or organic growth. The new senior unsecured notes are being sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. Ratings assigned with a stable outlook: -- B1, LGD4, 68% for the $150 million senior unsecured notes Ratings affirmed with a stable outlook: -- Ba3 corporate family rating, -- Ba3 probability of default rating, LGD4, 50% loss given default assessment; and, -- B2, LGD5, 84% for the $121 million 7.75% senior subordinated notes. The existing B2 rating on the 7.75% senior subordinated notes will be withdrawn upon the completion of the company's planned redemption of the notes. The Ba3 corporate family rating reflects MasTec's strong market position as a relatively large-sized specialty contractor. The rating acknowledges that MasTec's improved geographic diversification somewhat offsets the company's reliance on the communications and satellite sectors, with roughly half its combined communications and satellite revenues concentrated with one customer. Although Moody's expects that the company's performance will remain strong, driven partly by strengthening industry demand and an increasing trend toward the outsourcing of network installation and maintenance, the rating reflects historically weak, but improving operating margins and cash flow. Finally, the rating reflects management's commitment to maintain its improved leverage and strong balance sheet, the agency's expectation of increased cash flow generation and a renewed focus on profitable organic growth, complemented by strategic acquisitions. In addition, the agency notes that MasTec continues to be subject to an ongoing SEC formal investigation into its accounting restatement in 2003 and significant shareholder concentrations, allowing a small number of shareholders to influence corporate decisions. The stable rating outlook reflects Moody's expectation that MasTec's operating results will remain strong over the near term given the ongoing strength in its core end markets and existing relationships with key communications and, to a lesser extent, utility customers. Sustainability in recent, positive free cash flow generation trends, which should be bolstered upon completion of the planned divestiture of the Department of Transportation businesses, could likely result in positive ratings implications. The B1 rating for the senior unsecured notes reflects the effective subordination to the company's unrated $150 million senior secured credit facility. The notes will be guaranteed by all material domestic subsidiaries and are expected to contain traditional high yield covenants. Moody's said the refinancing of the senior subordinated notes due February 2008 is viewed positively. Moody's previous rating action on MasTec was the Sept. 22, 2006 assignment of a Ba3 probability of default rating. MasTec, Inc., headquartered in Coral Gables, Florida, is a leading specialty contractor operating mainly in the United States. Core activities include the building, installation, maintenance and upgrade of communications and utility infrastructure. The company generated revenues $879 million for the twelve months ending Sept. 30, 2006. MASTEC INC: S&P Puts B+ Rating on $150 Mil. Senior Unsecured Notes ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'BB-' corporate credit rating to Coral Gables, Florida-based engineering and construction contractor MasTec Inc. At the same time, Standard & Poor's assigned its 'B+' rating to MasTec's $150 million senior unsecured notes maturing in 2017. The outlook is stable. "The ratings reflect MasTec's exposure to the cyclicality of the telecom and utilities industries as well as its significant customer concentration and aggressive financial risk profile, partially offset by the company's competitive and improving operating margins and currently good liquidity," said Standard & Poor's credit analyst Robert Wilson. With the divestiture of its Florida Department of Transportation assets, MasTec's continuing operations have exhibited significant improvement, although inconsistent cash flow generation remains a concern. A negative outlook or downgrade could result from a greater-than-expected cyclical downturn or a departure from MasTec's expected financial policies, including its acquisition strategy. Competitive margins and strong niche market shares temper downside risk, although upside ratings potential is limited due to its narrow scope of operations and inherent cyclicality. MAYCO PLASTICS: Asks Court to Fix Administrative Claims Bar Date ---------------------------------------------------------------- Mayco Plastics Inc. is in the process of preparing its proposed combined plan of liquidation and disclosure statement. For that Plan to be confirmed, Section 1129(a)(9) of the Bankruptcy Code requires the Debtor to pay, on the effective date of the Plan, all allowed administrative claims against the estate. In this regard, the Debtor asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division to establish the date two business days before the hearing on confirmation of its Plan of Liquidation as the bar date for the assertion or request for payment or allowance of any unpaid administrative claims against the Debtors' estate. The Debtor also asks the Court to set an omnibus hearing to hear and decide objections to any filed administrative claim request approximately 30 days after the Bar Date. Headquartered in Sterling Heights, Michigan Mayco Plastics Inc. -- http://www.mayco-mi.com/-- is an automotive supplier of injection molded plastics. Stonebridge Industries Inc., the majority shareholder and parent of Mayco Plastics, is an investment firm that acquires companies and helps them grow their business in order to increase shareholder value. Mayco and Stonebridge filed for chapter 11 protection on Sept. 12, 2006 (Bankr. E.D. Mich. Case Nos. 06-52727 & 06-52743). Stephen M. Gross, Esq., and Jeffrey S. Grasl, Esq., at McDonald Hopkins Co. LPA represent the Debtors. AlixPartners LLC serves as the Debtors' financial advisor. Shannon L. Deeby, Esq., at Clark Hill PLC is counsel to the Official Committee of Unsecured Creditors while Grant Thornton LLP serves as its Financial Advisor. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. MAYCO PLASTICS: Liquidation Plan Gets Court's Preliminary Approval ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, granted preliminary approval to the combined plan of liquidation and disclosure statement filed by Mayco Plastics Inc. The Court scheduled a hearing to consider final approval of the Disclosure Statement and confirmation of the Liquidation Plan at 11:00 a.m. on Feb. 23, 2007. Any objection to the confirmation of the Plan are due on Feb. 16, 2007. Treatment of Claims The Debtor's Plan of Liquidation proposes to pay Class I Priority Claims in full, in cash, on the effective date of the Plan from proceeds of the prepetition collateral of the Debtor's prepetition lender, PNC Bank. The secured claims of PNC Bank will also be paid from the proceeds of the prepetition collateral when liquidated. The secured claims of the Debtor's postpetition lender, Citizens Bank, and the participating customers: Lear Corporation, Daimler- Chrysler Corporation, TRW Automotive U.S. LLC, and General Motors Corporation, will retain any and all liens in the Debtor's assets to secure their claims, which will be paid from the proceeds of postpetition collateral. Holders of Allowed Unsecured Claims will receive a pro rata distribution of: 1) $250,000 from the unsecured carveout; 2) 1/2 of the proceeds recovered from avoidance actons, after payment of allowed administrative claims and priority claims; 3) proceeds of prepetition collateral, if any, after claim classes II and III are paid in full; and 4) the proceeds of postpetition collateral, if any, after the claims in class III are paid in full. Interests of the equity security holders will receive a pro rata distribution to the extent that funds are available after payment in full of all claims in the previous classes. All interests and equity in the Debtor will be cancelled after confirmation of the Plan. Headquartered in Sterling Heights, Michigan Mayco Plastics Inc. -- http://www.mayco-mi.com/-- is an automotive supplier of injection molded plastics. Stonebridge Industries Inc., the majority shareholder and parent of Mayco Plastics, is an investment firm that acquires companies and helps them grow their business in order to increase shareholder value. Mayco and Stonebridge filed for chapter 11 protection on Sept. 12, 2006 (Bankr. E.D. Mich. Case Nos. 06-52727 & 06-52743). Stephen M. Gross, Esq., and Jeffrey S. Grasl, Esq., at McDonald Hopkins Co. LPA represent the Debtors. AlixPartners LLC serves as the Debtors' financial advisor. Shannon L. Deeby, Esq., at Clark Hill PLC is counsel to the Official Committee of Unsecured Creditors while Grant Thornton LLP serves as its Financial Advisor. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. MILLS CORP: Farallon Offers to Purchase $499 Million of Shares -------------------------------------------------------------- Farallon Capital Management LLC submitted a term sheet to The Mills Corp.'s financial advisors, Goldman Sachs & Co. and J.P. Morgan Securities, for a proposed $499 million acquisition of additional shares. Farallon said Mills solicited the offer. Under the Term Sheet, Farallon will purchase $499 million of shares at a price of $20.00 per share. The Term Sheet will terminate if Mills will not sign on or before Jan. 19, 2007. Farallon investors will receive a commitment fee equal to 4% of the total subscription amount upon execution of an agreement relating to the shares. The commitment to purchase shares will terminate if Mills will enter into a competing transaction. Under that scenario, Mills would be required to pay a break-up fee of $15 million. Pursuant to the Term Sheet, Farallon would have the right to terminate all of its obligations, if (i) the conditions set forth in the Term Sheet are not met within 15 days from the date that Mills signs the Term Sheet, except to the extent such failure is due to Farallon's breach of its obligation to use good faith efforts to consummate the transactions under the Term Sheet, or (ii) Mills enters into or consummates a Competing Transaction from the date the Term Sheet is executed by Mills through and including Sept. 30, 2007. The proposed transaction is subject to Mills signing the Term Sheet and specified terms and conditions being met, including but not limited to: (a) Mills' board of directors being reduced to 11 members, with the composition of the remaining members to be reasonably acceptable to Farallon, (b) Mills agreeing to nominate a 2007 board slate reasonably acceptable to Farallon, which would include two directors that are acceptable to Farallon in their sole discretion, (c) all required approvals and consents being obtained, (d) the absence of any material adverse change since Jan. 1, 2005, that has not been disclosed to Farallon, (e) the termination of standstill arrangements entered into with Mills, (f) a waiver of the REIT limitations, if applicable, and (g) Mills' receipt of a fairness opinion with respect to the proposed transaction. A full-text copy of the company's Schedule 13D filing is available for free at http://ResearchArchives.com/t/s?1898 Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE:MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, The Mills Corp. issued a warning in a Securities and Exchange Commission filing saying that it could file for bankruptcy protection if it cannot sell all or part of the company amidst accounting errors and speculations of possible executive misconduct. As reported in the Troubled Company Reporter on March 24, 2006, the Securities and Exchange Commission has commenced a formal investigation on The Mills Corp. after the company reported the restatement of its prior period financials. Mills is restating its financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly owned taxable REIT subsidiary, Mills Enterprises Inc. and changes in the accrual of the compensation expense related to its Long-Term Incentive Plan. MILLS CORP: Gazit-Globe Offers $1.1B Revised Recapitalization Plan ------------------------------------------------------------------ Gazit-Globe Ltd. chairman Chaim Katzman submitted a Revised Recapitalization Proposal to The Mills Corp. It said Mills solicited the offer. Israeli real estate firm Gazit-Globe proposes to recapitalize Mills with $1.1 billion of new capital. Gazit-Globe will immediately contribute $500 million through a private investment in public equity, or PIPE, transaction. Gazit-Globe will also contribute $600 million through a rights offering in which all of Mills' stockholders would participate. Gazit-Globe agrees to fully "backstop" as a standby purchaser to ensure that Mills achieves the desired capital infusion. In exchange, Gazit-Globe will invest $500 million in Mills' publicly traded common stock. The PIPE transaction would have a two-tier structure with the initial $250 million of shares to be purchased at $23.50 per share. The remaining $250 million will be purchased at $18.50 per share, resulting in an average price of $21.00 per share for the entire $500 million. Gazit-Globe's offer represents a premium of approximately 38% over the closing price of $15.21 on Jan. 12, 2007. Gazit-Globe disregarded the traditional 30-, 60- and 90-day volume weighted averages trading price metrics due to the public financial disclosures of this past week. The proceeds of the PIPE transaction would be used to pay down the loan Mills received from Goldman Sachs & Co. In addition, pursuant to the Revised Recapitalization Proposal, Gazit-Globe would make available a commitment it has obtained from Royal Bank of Canada for an aggregate of $675 million to (i) refinance the entire remaining balance of the Goldman Sachs loan (after application of the proceeds from the PIPE transaction) ($575 million) and (ii) provide a working capital facility ($100 million). Gazit-Globe also provided Goldman Sachs & Co. and J.P. Morgan Inc. with a draft Securities Purchase Agreement proposed to be used in connection with the proposed PIPE transaction. Gazit-Globe wants to be entitled to appoint a majority of the Mills Board. It wants to reduce the board's size to nine members, but subsequently agreed to revise this aspect of its proposal. Following Gazit-Globe's submission of the Revised Plan, JP Morgan requested that it provide additional background for its proposal that could be used by the Mills Board in its assessment of the various bids received. Gazit-Globe proposed to drop its request to be entitled to appoint a majority of Mills Board and proposed that it would be willing to accept a "one share one vote" structure. It would amend the Revised Recapitalization Proposal and reduce its proposed representation on the Mills Board from a majority to a number that approximates its stock ownership after the recapitalization, i.e., 4 out of 11 members, provided that Mills eliminated its staggered board structure in favor of the more stockholder-friendly structure with one-year terms for all board members. A full-text copy of the Revised Recapitalization Proposal is available for free at http://ResearchArchives.com/t/s?1895 Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE:MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, The Mills Corp. issued a warning in a Securities and Exchange Commission filing saying that it could file for bankruptcy protection if it cannot sell all or part of the company amidst accounting errors and speculations of possible executive misconduct. As reported in the Troubled Company Reporter on March 24, 2006, the Securities and Exchange Commission has commenced a formal investigation on The Mills Corp. after the company reported the restatement of its prior period financials. Mills is restating its financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly owned taxable REIT subsidiary, Mills Enterprises Inc. and changes in the accrual of the compensation expense related to its Long-Term Incentive Plan. MILLS CORP: Inks $1.35 Billion Agreement with Brookfield Asset -------------------------------------------------------------- The Mills Corporation and Brookfield Asset Management Inc. has entered into a definitive agreement pursuant to which Brookfield will acquire The Mills for cash at a price of $21 per share, representing a total transaction value of approximately $1.35 billion for all of the outstanding common stock of The Mills and common units of The Mills Limited Partnership, and approximately $7.5 billion including assumed debt and preferred stock. Brookfield is a global asset manager focused on property and other infrastructure assets with over $50 billion of assets under management. Under the terms of the agreement, The Mills will merge into a newly formed subsidiary of Brookfield, and The Mills common stockholders will receive $21 in cash for each share of Mills common stock. Common stockholders will also have the ability to elect instead to receive up to a maximum of 20% of the outstanding shares of a continuing public company managed by Brookfield that will hold the assets of The Mills. The stock alternative will be subject to proration if holders of more than 20% of The Mills shares elect to receive stock. If the holders of fewer than 10% of the shares elect this stock rollover, all common shares of The Mills will be exchanged for cash in the merger. In the merger, preferred stockholders of The Mills will receive preferred stock with substantially the same terms. Limited partners in The Mills Limited Partnership will be offered the same consideration as common stockholders of The Mills, and will have the opportunity to elect instead to roll over all or a portion of such units into limited partnership interests, subject to the terms and conditions of the merger agreement. Brookfield has also agreed to provide The Mills with debt financing until the completion of the merger by assuming The Mills' approximately $1 billion Senior Term Loan from Goldman Sachs Mortgage Company and subsequently revising the terms of such loans and providing a $500 million revolving line of credit on terms to be contained in a restated credit and guaranty agreement. Mark Ordan, chief executive officer and president of The Mills, said, "With this transaction, we have completed our strategic alternatives process by joining with a world class real estate owner and operator. "After a very competitive process, in which our Board considered numerous alternatives for the company, we believe we have achieved an outcome that is the best possible result for all involved. "We believe the transaction with Brookfield not only provides certain value to The Mills' stockholders, but also affords them the opportunity to participate in the upside potential created by this transaction. "This merger will provide the resources to upgrade our properties, reinforce our organization and continue to attract premium tenants to The Mills concept." Bruce Flatt, managing partner and chief executive officer of Brookfield, said, "We are pleased to be able to work with The Mills Corporation to move beyond the recent issues it has encountered. "We look forward to working with management of The Mills in getting back to business and focusing on service excellence to attract premium tenants to this high quality retail portfolio." The Mills Board of Directors unanimously approved the transaction, with those directors affiliated with Kan Am abstaining. The transaction is subject to approval by The Mills' stockholders at a special meeting of stockholders, as well as other customary closing conditions. The Mills and Brookfield expect to file a proxy statement and prospectus in connection with the special meeting of stockholders following the filing of The Mills' Annual Report on Form 10-K for the year ended Dec. 31, 2006. The merger is expected to close in the second half of 2007. J.P. Morgan Securities Inc. and Goldman, Sachs & Co. served as financial advisors and Wachtell, Lipton, Rosen & Katz and Hogan & Hartson LLP served as legal advisors to The Mills. Credit Suisse and Brookfield Financial Real Estate Group served as financial advisors and Sidley Austin LLP served as legal advisor to Brookfield. About Brookfield Asset Management Brookfield Asset Management Inc. (NYSE/TSX: BAM) -- http://www.brookfield.com/-- is focused on property, power, and infrastructure assets. The company has over $50 billion of assets under management. About The Mills Corporation Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE: MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, The Mills Corp. issued a warning in a Securities and Exchange Commission filing saying that it could file for bankruptcy protection if it cannot sell all or part of the company amidst accounting errors and speculations of possible executive misconduct. MIRANT CORP: Selling 6 U.S. Gas Plants for $1.4 Bil. to LS Power ---------------------------------------------------------------- Mirant Corporation entered into a definitive purchase and sale agreement with LS Power Equity Partners, a member of the LS Power Group, for the sale of six U.S. natural gas fired plants for a purchase price of $1.407 billion, which includes estimated working capital. The net proceeds to Mirant from the sale after extinguishing $83 million of project-level debt are expected to be $1.324 billion. The company does not expect to recognize any significant tax or book gain on the transaction. The U.S. plants being sold are: Zeeland (903 MW), West Georgia (613 MW), Shady Hills (469 MW), Sugar Creek (561 MW), Bosque (546 MW) and Apex (527 MW), constituting a total of 3,619 MW. The transaction is expected to close by the second quarter of 2007 after the satisfaction of certain customary conditions to closing. "Although these plants do not fit within our business strategy, they are excellent facilities," said Edward R. Muller, Chairman and Chief Executive Officer of Mirant Corporation. "We wish LS Power great success with them." Mirant plans to continue returning cash to its shareholders upon completion of its planned asset and business sales. The amount of cash returned will be determined based on the outlook for the continuing business: (1) to preserve the credit profile of the continuing business, (2) to maintain adequate liquidity for expected cash requirements including, among other things, capital expenditures for the continuing business, and (3) to retain sufficient working capital to manage fluctuations in commodity prices. Proceeds from the sales of the Zeeland and Bosque plants, expected to be approximately $500 million, will be reinvested in Mirant North America, a subsidiary of Mirant Americas Generation, and/or used to retire debt at Mirant North America. Mirant Corporation was advised in the transaction by J. P. Morgan Securities Inc., as financial advisor, and King & Spalding, as legal counsel. LS Power Equity Partners was advised by Barclays Capital, as financial advisor, and Latham & Watkins, as legal counsel. About LS Power Group LS Power Group -- http://www.lspower.com/-- was founded in 1990 and is a fully integrated development, investment and asset management group of companies focused on the power industry. LS Power maintains offices in New York, New Jersey, Missouri, California, Florida and Massachusetts. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. * * * Moody's Investors Service assigned its B2 corporate family rating, effective July 13, 2006, on Mirant Corporation NORAMPAC INC: S&P Cuts Rating on $250 Mil. 6.75% Sr. Notes to BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services removed the ratings on Cascades Inc. and Norampac Inc. from CreditWatch with negative implications, where they were placed Dec. 6, 2006. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit rating on Kingsey Falls, Quebec-based Cascades after reviewing the effects of the company's acquisition of the remaining 50% of Norampac that it did not previously own. The outlook is stable. Standard & Poor's also assigned its 'BB+' secured debt rating to Cascades' new CDN$650 million revolving credit facility and CDN$100 million term loan, with a recovery rating of '1', indicating an expectation of 100% recovery of principal in a default scenario. In addition, the rating on Norampac's $250 million 6.75% senior notes due 2013 was lowered to 'BB-' from 'BB+', as the obligations now rank alongside Cascades' unsecured obligations, which are also affirmed at 'BB-'. Finally, the corporate credit rating on Norampac was withdrawn after the company was amalgamated into Cascades. "The ratings on Cascades reflect the company's weak, but improving, earnings; aggressive debt leverage; and exposure to cyclical forest product pricing," said Standard & Poor's credit analyst Donald Marleau. These weaknesses are offset by the company's good diversity of revenue streams and more stable earnings than most of its forest products peers. "The acquisition of Norampac improves the company's business risk profile by giving it full access to Norampac's fairly stable stream of operating income, rather than the less predictable residual equity distributions it has received in recent years," Mr. Marleau added. Cascades issued CDN$250 million of equity to fund the CDN$560 million acquisition, thereby increasing its debt leverage only modestly. Despite persistently high energy costs and the strength of the Canadian dollar, Cascades improved its credit measures in the past year in contrast with many of its competitors. The company benefits from good product diversity among various packaging businesses and tissue, with operations in Canada, the U.S., and, to a lesser extent, Europe. The financial performance of both Cascades and Norampac has improved in recent quarters, as the companies have taken several measures to reduce costs and close unprofitable assets. Overall, Cascades' consolidated revenues are more stable than most of its forest products peers, owing to steady demand growth and higher degrees of concentration in the paper packaging and tissue segments, which combine to contribute to less volatile commodity prices. The stable outlook reflects the expectation that Cascades' credit profile will continue to improve modestly in the near term, as commodity pricing and margin pressure from energy costs and a higher Canadian dollar subside. Nevertheless, the company's credit metrics remain weak, and the ratings or outlook could be pressured in the absence of a sustained improvement in profitability and debt reduction in 2007. OMEGA HEALTHCARE: Board Increases Dividend on Series D Stock ------------------------------------------------------------ The Board of Directors of Omega Healthcare Investors Inc. declared a common stock dividend of $0.26 per share, increasing the quarterly common dividend by $0.01 per share over the prior quarter, and declared its regular quarterly dividend for the Company's Series D preferred stock. The company's Board of Directors reported a common stock dividend of $0.26 per share, to be paid February 15, 2007 to common stockholders of record on Jan. 31, 2007. At the date of this release the Company had approximately 60 million outstanding common shares. The company's Board of Directors also declared its regular quarterly dividend for the Series D preferred stock, payable Feb. 15, 2007 to preferred stockholders of record on Jan. 31, 2007. Series D preferred stockholders of record on Jan. 31, 2007 will be paid dividends in the approximate amount of $0.52344, per preferred share, respectively, on Feb. 15, 2007. The liquidation preference for the Company's Series D preferred stock is $25.00 per share. Regular quarterly preferred dividends represent dividends for the period Nov. 1, 2006, through Jan. 31, 2007. About Omega Healthcare Headquartered in Timonium, Maryland, Omega HealthCare Investors, Inc. (NYSE:OHI) -- http://www.omegahealthcare.com/-- is a real estate investment trust investing in and providing financing to the long-term care industry. At Sept. 30, 2006, the company owned or held mortgages on 239 skilled nursing facilities and assisted living facilities with approximately 27,446 beds located in 27 states and operated by 33 third-party healthcare operating companies. * * * As reported in the Troubled Company Reporter on June 29, 2006, Fitch upgraded Omega Healthcare Investors' senior unsecured notes to 'BB' from 'BB-' and its preferred stock to 'B+' from 'B'. Additionally, Fitch assigned the company's secured credit facility at 'BB+'. The Outlook on all Ratings is Stable. PAETEC COMMS: Moody's Affirms Corporate Family Rating at B2 ----------------------------------------------------------- Moody's Investors Service has confirmed Paetec Communications Inc.'s corporate family rating at B2, concluding the review initiated on Aug. 16, 2006, after the company's report that it is acquiring US LEC Corp. for about $560 million, net of cash. The acquisition will consist of an exchange of common stock, valued at about $160 million, the redemption of $268 million in US LEC's preferred stock and the refinancing of $158 million in US LEC debt. In addition, Moody's also assigned a B1 rating to the proposed $50 million revolving credit facility and $625 million first lien secured term loan, and Caa1 rating to the $175 million second lien secured term loan at PAETEC Holding, a new holding company created by the merger. Moody's has assigned a B2 corporate family rating to PAETEC. The outlook is stable. The new financing will pay for the acquisition and refinance the $374 million of Paetec's existing debt. Since Paetec Communications' existing credit facilities are expected to be refinanced with the transaction, Moody's has affirmed the bank facility ratings, which will be withdrawn at closing. Moody's has also affirmed US LEC's ratings. At the closing of the transaction, the US LEC ratings will be withdrawn. "Although the increased leverage and the free cash flow drain during the integration period will stress the company's capital structure, the company's enhanced operating scale in the eastern US, and the potential for EBITDA growth driven by merger synergies should provides sufficient momentum to maintain the corporate family rating at B2," says Moody's senior analyst Gerald Granovsky. The potential financing will increase PAETEC's pro forma adjusted leverage to about 5.3x at closing, from 4.8x at June 30, 2006. Moody's has taken these ratings actions: * PAETEC Holdings -- Corporate Family Rating, Assigned B2; -- Probability of Default Rating, Assigned B2; -- Senior Secured Revolving Credit Facility, Assigned B1, LGD3, 40%; -- 1st Lien Senior Secured Term Loan, Assigned B1, LGD3, 40%; and, -- 2nd Lien Senior Secured Term Loan, Assigned Caa1, LGD5, 89%. The outlook is stable. * Paetec Communications, Inc. -- Corporate Family Rating, confirmed B2 to be withdrawn; -- Senior Secured Revolving Credit Facility, affirmed B1 to be withdrawn; -- 1st Lien Senior Secured Term Loan, affirmed B1 to be withdrawn; and, -- 2nd Lien Senior Secured Term Loan, affirmed Caa1 to be withdrawn. * US LEC Corp. -- Corporate Family Rating Affirmed Caa1 to be withdrawn; and, -- 2nd Lien Senior Secured Notes Affirmed B3 to be withdrawn. Paetec Communications, headquartered in Fairport, New York, is a CLEC and generated revenues of $509 million in 2005. US LEC, headquartered in Charlotte, North Carolina, is a CLEC and generated revenues of $388 million in 2005. PAETEC HOLDING: S&P Junks Rating on $175 Mil. Senior Secured Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Fairport, New York-based competitive local exchange carrier Paetec Holding Corp., the newly formed entity resulting from the merger of Paetec Corp. and US LEC Corp. in a transaction valued at about $1.8 billion. The outlook is stable. As part of the transaction, which is expected to close imminently, debt at the merging entities Paetec Corp. and US LEC Corp. will be fully repaid and ratings on these entities will be withdrawn at that time. PAETEC Holding's debt will be about $875 million on an operating lease-adjusted basis. Additionally, Standard & Poor's assigned ratings to PAETEC Holding's $850 million aggregate facilities: -- 'B' bank loan rating was assigned to the company's $50 million senior secured first-lien revolver and $625 million senior secured first-lien term loan; and, -- 'CCC+' bank loan rating was assigned to the company's $175 million senior secured second-lien term loan. The recovery rating for the first-lien revolver and term loan is '5', indicating Standard & Poor's expectation for negligible recovery of principal in the event of a payment default or bankruptcy. The second-lien term loan is rated two notches below the corporate credit rating, based on the significant amount of priority obligations from the first-lien term loan and revolver. The recovery rating for the second-lien term loan is '5' as well. Total bank proceeds of $800 million, combined with $25.2 million of available cash and $373.6 million in new equity will be used to refinance $522.4 million of existing Paetec Corp. and US LEC debt, pay down $268.4 million of US LEC's preferred stock, finance the $373.6 million equity purchase price, and pay related fees and expenses. "The ratings on PAETEC reflect a vulnerable business risk profile stemming from significant competition from larger, better- capitalized regional Bell operating companies and other CLECs, integration risks, the lack of any sustainable competitive advantages, low barriers to entry, and a highly leveraged financial profile," said Standard & Poor's credit analyst Allyn Arden. PAETEC competes with Verizon Communications Inc. and AT&T Inc. for midsize and and large business customers. These customers generate average monthly recurring revenue of about $1,800 to $1,900 each, considerably higher than other rated CLECs. Additionally, PAETEC will be challenged to successfully integrate the two companies while maintaining its customer base as competition increases in its markets. Tempering factors include reasonable prospects for solid discretionary cash flow generation, the potential for meaningful operating and capital expenditure synergies as a result of the merger, long average contract durations and low churn, and geographic diversity. The merged business creates one of the largest CLECs in the U.S. with over two million access lines and 45,000 midsize and large business customers in 52 tier one and some tier two markets in the eastern and Midwest regions, as well as California. PENINSULA GAMING: Sells $22 Million Senior Secured Notes -------------------------------------------------------- Peninsula Gaming LLC and its subsidiaries, Diamond Jo Worth LLC and Diamond Jo Worth Corp., issued and sold to a third party investor in a private placement $22 million aggregate principal amount of their 8-3/4% Senior Secured Notes due 2012. Diamond Jo LLC and Peninsula Gaming Corp., in a private placement, previously issued and sold to a third party investor $36.5 million aggregate principal amount of their 11% Senior Secured Notes due 2012. The company intends to use the net proceeds from the issuance of the PGL Notes and the DJW Notes to finance in part the construction of a new moored barge facility to expand its existing casino operations at the Diamond Jo casino in Dubuque, Iowa and the development and construction of a hotel and events center contiguous to its racetrack and casino at The Old Evangeline Downs in Opelousas, Louisiana. In connection with the issuance of the DJW Notes, Diamond Jo Worth also obtained the consent of the holders of the DJW Notes to the use of proceeds. The company also amended its senior credit facility to, among other things, increase available borrowings under the revolver portion of the facility by $15 million effective upon the satisfaction of certain specified conditions and permit the issuance of the PGL Notes. Headquartered in Dubuque, Iowa, Peninsula Gaming, LLC, owns and operates the Evangeline Downs pari-mutuel horse racetrack and casino in Opelousas, Louisiana, and the Diamond Jo riverboat casino in Dubuque, Iowa. Through a wholly owned unrestricted subsidiary, the company is in the process of constructing a new casino property in Worth County, Iowa. * * * As reported in the Troubled Company Reporter on Oct. 4, 2006, Moody's Investors Service, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, confirmed Peninsula Gaming, LLC's B2 Corporate Family Rating. PILGRIM'S PRIDE: Moody's Cuts Senior Unsecured Credit Rating to B1 ------------------------------------------------------------------ Moody's Investors Service downgraded the senior unsecured credit rating for Pilgrim's Pride Corporation to B1 from Ba3, its senior subordinated notes to B2 from B1, and its corporate family ratings to Ba3 from Ba2. Moody's also assigned a B1 rating to PPC's planned new $250 million senior unsecured notes and a B2 to its new $200 million senior subordinated notes. The outlook on all ratings is stable. This rating action comes after the company's report that it has completed the acquisition of Gold Kist, Inc. for approximately $1.1 billion in cash plus the assumption of Gold Kist debt. The rating on GKIS's debt will be withdrawn upon PPC's repayment of this debt. The downgrade reflects the increase in PPC's debt and leverage, and the weakening of its debt protection measures after its debt-financed acquisitions of Gold Kist for $1.1 billion in cash and assumed debt. It also reflects the challenges the company faces in integrating Gold Kist's operations into its own. "While the acquisition makes strategic sense and is a good addition to Pilgrim's portfolio, the transaction will add a significant amount of leverage to the company and at a time when Pilgrim's earnings have been under alot of pressure" stated Moody's Senior Vice President Peter Abdill. The stable outlook reflects Moody's expectation that PPC will effectively integrate Gold Kist's operations into its own, and will seek to improve debt protection measures and financial flexibility in the years following the acquisition. PPC's ratings reflect the company's narrow product mix, highly volatile earnings stream, and history of periodic debt-financed acquisitions. The ratings also reflect the recent severe earnings pressure in the overall poultry industry, the possibility that earnings and margins could remain under pressure due to continuing industry challenges, and the integration risk of the debt funded GKIS acquisition. The ratings are supported by PPC's strong market position in the U.S. chicken industry, its attractive returns on assets, as well as its historically conservative capital structure and financial policy. Ratings assigned: -- New $250 Million Sr. Notes of B1, LGD5, 79% -- New $200 Million Sr. Sub Notes of B2, LGD6, 94% Ratings downgraded: -- Corporate family rating to Ba3 from Ba2; -- Probability of default rating Ba3 from Ba2; -- Senior unsecured notes at to B1, LGD5, 79% from Ba3, LGD5, 82%; and -- Senior subordinated notes to B2, LGD6, 94% from B1, LGD6, 95%. Headquartered in Pittsburgh, Texas, Pilgrim's Pride is a major US chicken processor and producer of value-added chicken products. PITTSBURGH BREWING: Has Until Feb. 6 to File Amended Plan --------------------------------------------------------- The Honorable M. Bruce McCullough of the U.S. Bankruptcy Court for the Western District of Pennsylvania extended Pittsburgh Brewing Company Inc.'s time to file an amended plan to Feb. 6, 2007. The extension intends to allow union workers of IUE/Communications Workers of America to vote on a crucial labor deal with Pittsburgh Brewing Acquisition the company formed to buy the brewery out of bankruptcy. About 160 employees will vote the labor contract on Sunday, Jan. 28. Union representatives agreed on the deal, which included vacation, wages, and health care concessions, Daniel Lovering of The Associated Press said. The contract is an important component of the amended plan put forward by PBC and an investor group headed by private equity fund manager John Milne of Westport, Conn. Under the amended plan, Mr. Milne will become the reorganized company's chief executive officer. Judge McCullough rejected PBC's chapter 11 plan filed in October 2006, the Troubled Company Reporter said on Oct. 27, 2006, citing The AP. He said PBC's plan for infusing $7 million in debt and equity is unworkable. Headquartered in Pittsburgh, Pennsylvania, Pittsburgh Brewing Company Inc. -- http://www.pittsburghbrewingco.com/-- manufactures malt liquors, such as beer and ale. Its products include Iron City Beer, IC Light Beer, and Augustiner Amber Lager. The company filed for chapter 11 protection on Dec. 7, 2005 (Bankr. W.D. Penn. Case No. 05-50347). Robert O. Lampl, Esq., at Law Office Robert O. Lampl, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its assets and debts were estimated at $1 million to $10 million. Keystone Brewers Holding Co, a holding company for PBC's intellectual property assets, also filed a voluntary chapter 11 petition on March 10, 2006. REFCO INC: Court Denies Michael McNeil's Stay Request ----------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York denied the request of Michael A. McNeil to grant a stay on the Dec. 15, 2006 Court order confirming the Modified Chapter 11 Plan filed by Refco Inc. and its debtor- affiliates, so that the Debtors' assets would not be distributed until the Jan. 9, 2007 hearing. Judge Drain said the request is not appropriate under given circumstances. Mr. McNeil, a commodity futures customer of Refco F/X Associates LLC, states that if Judge Drain denies his request, he will be completing the process of his appeal from the Plan Confirmation Order to the District Court, to have any of his requests considered by the appellate court. Plan Administrators Supports Denying Stay Motion Priort to the Court's order, RJM, LLC, as Plan Administrator, and Marc S. Kirschner, Chapter 11 Trustee of Refco Capital Markets, Ltd., and acting as the RCM Plan Administrator under the Modified Plan, ask the Court to deny the Stay Motion because Mr. McNeil has failed to: (a) show that the extraordinary remedy of substantive consolidation would be appropriate in the Debtors' cases; (b) demonstrate that FXA should be considered a commodity broker, and that the Court erred as a matter of fact when it found that the Debtors' case presents "unusual circumstances" sufficient to permit the Debtors, including a Debtor preliminarily adjudged to be broker, to be in Chapter 11; or (c) prove an entitlement to a constructive trust that would prefer him over similarly situated creditors. Timothy B. DeSieno, Esq., at Bingham McCutchen LLP, in New York, tells Judge Drain that Mr. McNeil should not be permitted to jeopardize the myriad debtor-creditor, inter-debtor and inter- creditor compromises, and releases as embodied in the Plan. Mr. DeSieno states that since the entry of the Confirmation Order, the Plan has been substantially consummated. "This renders Mr. McNeil's appeal moot, further reducing the chances that Mr. McNeil can prevail on appeal," Mr. DeSieno states. In addition, Mr. DeSieno argues that Mr. McNeil has failed to show any risk of irreparable injury to himself if the requested stay is not granted. Mr. DeSieno notes that Mr. McNeil is a creditor with a $68,000 claim against FXA and is currently entitled to all of the benefits afforded under the Plan to others similarly situated. Mr. DeSieno further contends that the risks to the settlements embodied in the Plan would be greatly increased by an indefinite stay, and the remaining distributions to other FXA creditors and the other Refco estates would be delayed. Other creditors in the Debtors' Chapter 11 cases should not be the ones to bear those risks and delays, Mr. DeSieno maintains. Moreover, Mr. DeSieno avers that Mr. McNeil has failed to show that the public interest would favor granting a stay. Indeed, Mr. DeSieno points out, the interests of the bulk of creditors in the Debtors' case would be harmed, not served, by the requested stay. In the unlikely event that the Court is inclined to grant a stay, the Administrators insist that Mr. McNeil should be required to post a bond to protect the thousands of other creditors against the harm that will befall them if Mr. McNeil is unsuccessful in his appeal. The Administrators maintain that the creditors must await the resolution of Mr. McNeil's appellate litigation order to receive their Plan-specified distributions. About Refco Inc. Headquartered in New York City, Refco Inc. (OTC: RFXCQ) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). (Refco Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along with Marc S. Kirschner, the Chapter 11 Trustee for the estate of Refco Capital Markets, Ltd., delivered a Chapter 11 plan of reorganization and accompanying Disclosure Statement to the Court. On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure Statement and on Oct. 13, filed a Modified Amended Disclosure Statement. On Oct. 16, 2006, the Court gave its tentative approval on the Disclosure Statement and the Court Clerk entered an order on Oct. 20, 2006. On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed by the Court. That Plan became effective on Dec. 26, 2007. REFCO INC: Court Directs Grant Thornton to Produce Documents ------------------------------------------------------------ The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York granted the request of Joshua R. Hochberg, the duly appointed examiner in Refco Inc. and its debtor-affiliates' Chapter 11 cases, to compel Grant Thornton LLP to produce certain documents under its custody. The Lead Plaintiff's objection is overruled. Judge Drain requires Grant Thornton to produce the documents on or before the date that is 20 days after service of subpoenas compelling the production as authorized by the Order. Absent further Court order, the documents designated as "Confidential" and produced in response to the subpoenas will or may be made available to, and may be reviewed by: (a) the Examiner and attorneys McKenna Long & Aldridge LLP, which has been retained by the Examiner to aid in the discharge of his duties; (b) consultants retained by the Examiner; (c) attorneys employed by Milbank, Tweed, Hadley & McCloy, LLP, counsel to the Official Committee of Unsecured Creditors; (d) consultants retained by the Committee, the Additional Official Committee of Unsecured Creditors or the Joint Subcommittee, including Houlihan Lokey Howard and Zukin, FTI Consulting Inc. and Alix Partners; (e) attorneys employed by Kasowitz, Benson, Torres & Friedman LLP, conflicts counsel to the Committee and counsel to the Additional Official Committee; (f) attorneys employed by Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Refco Debtors; (g) consultants employed by the Debtors, including Goldin Associates, LLC, and any of the consultants; (h) Marc S. Kirschner, the Chapter 11 Trustee of Refco Capital Markets, Ltd., and Bingham McCutchen LLP; (i) consultants retained by the RCM Trustee; (j) the United States Attorney's Office for the Southern District of New York; and (k) individuals who have been noticed for depositions, scheduled for interviews, or subpoenaed for testimony at a trial or hearing. The production, review and handling of the Documents and materials produced in response to the Subpoenas will be governed by the terms of a protective order governing the production and use of confidential material. The Examiner believes that Grant Thornton is likely in possession of documents detailing: (i) the procedures and policies applicable to audits and reviews performed on the Debtors' financial statements from Aug. 1, 2002, to Nov. 30, 2005; and (ii) the activities of individual Grant Thornton members, professionals, and staff in connection with the audits or reviews during the period. Grant Thornton became the auditor for several of the Refco companies from August 2002 through the Petition Date. Grant Thornton also conducted quarterly reviews of the Debtors' financial statements. For a significant period of time prior to becoming Refco's auditor, Grant Thornton served as tax accountants to Phillip Bennett, Refco's chairman and chief executive officer. Based on his understanding of standard practice in the accounting industry, the Examiner believes it is likely that other members of Refco's senior management may have been tax clients of Grant Thornton or may have received tax-related information or services from the firm as well. The Examiner states that the documents and information could have a significant impact on his assessment of the potential existence of claims against those within the scope of his investigation. The Examiner reserves his right to seek depositions at a future date and to serve requests for supplemental and additional documents. A schedule of the Documents to be produced by Grant Thornton is available at no charge at http://researcharchives.com/t/s?1894 Brokerage Customer Class Plaintiffs Object The Court-appointed lead plaintiff in In re Refco Capital Markets, Ltd. Brokerage Customer Securities Litigation, 06-CIV 643 (GEL), pending in the U.S. District Court for the Southern District of New York opposes to the Motion to the extent that it does not enumerate the Lead Plaintiff's counsel -- Cole, Schotz, Meisel, Forman & Leonard, P.A., and Kirby McInerney and Squire, LLP -- as one of the several parties which will be permitted access to the Documents under certain restrictions. The Lead Plaintiff wants the proposed order expanded to provide its Lead Counsel the same access to the Documents as the other listed entities. About Refco Inc. Headquartered in New York City, Refco Inc. (OTC: RFXCQ) -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). (Refco Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along with Marc S. Kirschner, the Chapter 11 Trustee for the estate of Refco Capital Markets, Ltd., delivered a Chapter 11 plan of reorganization and accompanying Disclosure Statement to the Court. On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure Statement and on Oct. 13, filed a Modified Amended Disclosure Statement. On Oct. 16, 2006, the Court gave its tentative approval on the Disclosure Statement and the Court Clerk entered an order on Oct. 20, 2006. On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed by the Court. That Plan became effective on Dec. 26, 2007. ROBINSON CONSTRUCTION: Case Summary & 56 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Robinson Construction Co., Inc. 4029 Old 27 South Gaylord, MI 49735 Bankruptcy Case No.: 07-20069 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Robinson Pipeline Contractors, L.P. 07-20072 Cross Country Pipeline Contractors 07-20073 Type of Business: The Debtors are pipeline contractors. Chapter 11 Petition Date: January 11, 2007 Court: Eastern District of Michigan (Bay City) Judge: Daniel S. Opperman Debtor's Counsel: Rozanne M. Giunta, Esq. Lambert, Leser, Isackson, Cook & Giunta, P.C. 916 Washington Avenue, Suite 309 Bay City, MI 48708 Tel: (989) 893-3518 Fax: (989) 894-2232 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million A. Robinson Construction Co., Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michigan Cat Parts/Service $73,815 P.O. Box 77000, Department 77576 Detroit, MI 48277-0576 Holt Parts/Service $52,973 P.O. Box 991975 Dallas, TX 75391-1975 Recs Fuel $47,659 P.O. Box 520 Prosper, TX 75078 Pipeline Skid Supplies $37,718 Johnson Oil Company Fuel $22,165 Dineasaurus Fuel $20,029 Dougs Underground Subcontractor $18,600 DMI Supplies $17,168 Total Oilfield Subcontractor $16,682 State of Michigan - WH Payroll Tax $16,325 Huggler Fuel $14,661 Doug's Welding Inc. Reg. AP Vendor $14,440 Wilbur Automotive Supply Reg. AP Vendor $13,772 State of Michigan - MESC Payroll Tax $12,269 Rehmann Robson P.C. Reg. AP Vendor $12,150 Bell Supply Reg. AP Vendor $10,826 American Express Reg. AP Vendor $10,195 Pipe Specialists Supplies $9,902 Home Depot Reg. AP Vendor $9,898 Vermeer Great Parts $9,851 B. Robinson Pipeline Contractors, L.P.'s 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IUOE 178 Fringe Benefit $145,955 Department 76 Washington, DC 20055-0076 Lebpct Fringe Benefit $51,764 Plan Collection Trust P.O. Box 630771 Baltimore, MD 21263-0771 Worldwide Rent Equipment $35,275 P.O. Box 952092 Dallas, TX 75395-2092 Pipeline 798 Fringe Benefit $15,617 Alliance Trenching Subcontractor $13,086 Pipe Specialists Reg. AP Vendor $13,021 Jam Fuel $10,732 General Agency Insurance $6,259 Ram Ind. Rent Equipment $3,247 Shale Reg. AP Vendor $2,384 Hundley Equipment Repairs $1,463 Tire Factory Reg. AP Vendor $1,443 Burleson Reg. AP Vendor $1,395 Blue Ice Reg. AP Vendor $1,287 Valley Industrial Reg. AP Vendor $648 Martins Reg. AP Vendor $402 C. Cross Country Pipeline Contractors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IUOE Fringe Benefit $36,130 Department 76 Washington, DC 20055 Hawkeye Under Subcontractor $35,190 P.O. Box 326 Roanoke, TX 76262 Western Supply Supplies $34,736 P.O. Box 551 Wichita Falls, TX 76307 Operating Eng. Fringe Fringe Benefit $22,142 IUOE - Pension Fringe Benefit $17,711 Laborers - Employer's Benefit Fringe Benefit $16,771 MI Labors Fringe Benefit $15,757 Greens Welding $12,104 General Agency Insurance $8,882 State of Michigan Payroll Taxes $4,438 IUOE Local 178 Fringe Benefit $3,835 Wilson Supplies $3,815 Pipeline Local 798 Fringe Benefit $2,921 Rehman Accountant $2,920 Pipe 798 Benefit Fringe Benefit $2,716 NT Oper Eng. Fringe Benefit $2,331 Teamsters Fringe Benefit $899 Nations Rent Rent Equipment $660 Texas WF Commission Unemployment Tax $566 Operating Engineers Fringe Benefit $309 ROUNDY'S SUPERMARKETS: Moody's Holds Corporate Family Rating at B2 ------------------------------------------------------------------ Moody's Investors Service changed the rating outlook of Roundy's Supermarkets, Inc. to negative from stable and affirmed the company's debt ratings including its B2 corporate family rating. Moody's affirmation comes after Roundy's agreement to acquire five Jewel-Osco stores in Milwaukee metro area from Supervalu. The purchase will be financed by proceeds from the $57.5 million add- on to the company's existing Term Loan B, which will result in approximately $800 million to be outstanding under the term loan at closing. Ratings affirmed: -- Corporate Family Rating at B2 -- Probability of Default Rating at B3 -- Gtd. 1st Lien Sr. Sec Revolver at Ba3, LGD2, 18% -- Gtd. 1st Lien Sr. Sec Term Loan at Ba3, LGD2, 18% The negative rating outlook reflects Roundy's accelerating negative comparable store sales and the challenge of reversing this trend given the extent of competition. Ratings could be downgraded if comparable store sales are likely to remain negative, if market share erodes due to competition, or if debt to EBITDA rises above 6x. Conversely, the rating outlook could stabilize if comparable store sales become positive, if operating profitability further improves and if debt to EBITDA is likely to be sustained below 5.5x. The affirmation of Roundy's B2 corporate family rating recognizes the company's position as the leading supermarket operator in Wisconsin, its relatively modern store base, and the improvement achieved in its operating profit margins despite intense and increasing competition from other indigenous supermarket chains and non-traditional grocery retailers like Wal-Mart. The company's B2 corporate family rating is one notch below the B1 rating generated by Moody's Global Retail Rating Methodology, reflecting Moody's concerns that competition will challenge Roundy's ability to generated strongly positive comparable store sales in the near term, and that the long term objectives of the company's private owner will limit leverage reductions over the intermediate term. Roundy's Supermarkets, Inc., with headquarters in Milwaukee, Wisconsin, operates 147 retail grocery stores primarily under the Pick 'n Save, Copps, and Rainbow banners. Sales for over twelve months ending in September 2006 were approximately $3.6 billion. SABRINA TURMAN: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Sabrina R. Turman aka Sabrina R. Jones 10020 Edgewater Terrace Fort Washington, MD 20744 Bankruptcy Case No.: 07-10407 Chapter 11 Petition Date: January 12, 2007 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Bennie R. Brooks, Esq. 8201 Corporate Drive, Suite 260 Landover, MD 20785 Tel: (301) 731-4160 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Option One Mortgage 1st Deed of Trust $709,000 3 Ada Way 10020 Edgewater Irvine, CA 92618 Terrace Ft. Washington MD 20744 Option One Mortgage 1st Deed of Trust $388,000 3 Ada Way 614 Gallatin St. Irvine, CA 92618 Washington, DC 20011 Option One Mortgage 1st Deed of Trust $235,000 3 Ada Way 4322 Gormon Terrace Irvine, CA 92618 Washington, DC 20019 Suntrust Bank Purchase Money $46,000 P.O. Box 85032 Security Richmond, VA 23285 2004 430 Mercedes HFC Auto Purchase Money $45,000 6602 Convoy Court Security San Diego, CA 92111 2004 Yukon Denali SUV Barclays Bank Consumer Debt $19,210 801 Cherry Street, #3900 Ft. Worth, TX 76102 Internal Revenue Services Statutory Lien $18,000 31 Hopkins Plaza, Room 1150 10020 Edgewater Baltimore, MD 21201 Terrace Ft. Washington MD 20744 Equity One 2nd Deed of Trust $16,000 301 Lippincott Drive 10020 Edgewater Marlton, NJ 08053 Terrace Ft. Washington MD 20744 HFC Consumer Debt $7,026 P.O. Box 1547 Chesapeake, VA 23327 Equity One Consumer Debt $6,012 301 Lipponcott Drive Marlton, NJ 08053 Merrick Bank Consumer Debt $1,165 P.O. Box 5000 Draper, UT 84020 Macys Closed Bank Account $647 9111 Duke Blvd Mason, OH 45040 HSBC Visa Consumer Debt $497 P.O. Box 19360 Portland, 97280 Capitol One Consumer Debt $346 P.O. Box 85520 Richmond, VA 23229 SANMINA-SCI: 10-K Filing Prompts Moody's to Affirm Low-B Ratings ---------------------------------------------------------------- Moody's has confirmed the Ba3 corporate family rating for Sanmina -- SCI Corporation after Sanmina's recent filing of its fiscal 2006 Form 10-K with the Securities and Exchange Commission. At the same time, Moody's has revised the outlook to stable and lowered the company's liquidity rating to SGL-2. The filing has brought Sanmina in compliance with covenants per its borrowing program and removed Moody's concern over the company's liquidity, caused by the delay of filing of its financial statements. As part of the filing, Sanmina restated financial statements for the past 9 fiscal years for a cumulative amount of $224 million due to backdating of stock options. However, Moody's understands that cash impact is minimal from the restatement. The stable outlook reflects Moody's expectation that potential liability, if any, that may arise from derivative lawsuits surrounding the options backdating should be sufficiently covered by the company's insurance policies as well as the expectation that Sanmina should be at least free cash flow neutral in fiscal 2007. Deviations from such expectations may cause Moody's to re- examine Sanmina's outlook. This concludes the review process on Sanmina's rating commenced in August 2006. The recent downgrade of Sanmina's corporate family rating to Ba3 from Ba2 reflects the uncertainty surrounding the company's evolving business model, its weak financial performance, and deterioration in credit metrics. Sanmina generated negative free cash flow of $470 million in fiscal 2006 as a result of declining funds from operations and a sizable increase in working capital. Given the contraction in cash flow generation and significant reduction in its cash balance, Moody's revised Sanmina's liquidity rating to SGL-2 from SGL-1. Sanmina's business model appears to be in transition as the company searches for a more sustainable and profitable model in terms of product mix and strategic initiatives. Sanmina recently reported scaling back its ODM initiative, which caused inventory write-off for Q4 2006 further impacting profitability. Factors supporting Sanmina's Ba3 rating include Sanmina's size, its tier one status in the EMS industry, generally favorable outsourcing trend by the OEMs, growing diversity in Sanmina's end markets served, and the company's strength in some of the newer industries such as medical and defense industries. The stable outlook reflects Moody's expectations that Sanmina's credit profile is unlikely to change significantly over the intermediate term. These ratings were confirmed; -- Corporate family rating at Ba3; -- Probability-of-default rating at Ba3; -- $400 million senior subordinated notes due 2013 at B2, LGD5, 85%; -- $600 million senior subordinated notes due 2016 at B2, LGD5, 85%; -- $600 million senior unsecured term loan due 2008 at Ba3, LGD3, 45%; This rating was revised; -- Speculative grade liquidity rating to SGL-2 from SGL-1. Sanmina-SCI Corporation, headquartered in San Jose, California, is one of the largest electronics contract manufacturing services companies providing a full spectrum of integrated, value added solutions. SAPPHIRE VALLEY: Moody's Rates $18 Million Class E Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Sapphire Valley CDO I, Ltd.: -- Aaa to $5,000,000 Class X Notes Due 2013; -- Aaa to $418,500,000 Class A Senior Notes Due 2022; -- Aa2 to $73,000,000 Class B Senior Notes Due 2022; -- A2 to $20,000,000 Class C Deferrable Mezzanine Notes Due 2022; -- Baa2 to $20,000,000 Class D Deferrable Mezzanine Notes Due 2022; and, -- Ba2 to $18,000,000 Class E Deferrable Mezzanine Notes Due 2022. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans, Collateralized Loan Obligations and Total Return Swaps due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Babson Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SIX FLAGS: Park Sale Not to Affect Fitch's B- Issuer Dflt. Rating ----------------------------------------------------------------- Six Flags Inc.'s 'B-' Issuer Default Rating and Negative Outlook are not affected by the reported sale of its seven parks at this time, according to Fitch Ratings. Six Flags has reported that it has entered into a definitive agreement with PARC Management LLC to sell seven of the nine parks that were under consideration for $312 million, consisting of $275 million in cash and a 10-year note receivable for $37 million. Combined with a land sale for $77 million in June 2006, Six Flags will have gross cash proceeds of $352 million for debt reduction. Fitch recognizes that the completion of the park sales will enhance Six Flags' financial flexibility. In addition to a sustained improvement in Six Flags' financial profile, Fitch will continue to evaluate the company's strategy and attempted operational turn-around. The Negative Outlook reflects Six Flags' operating trends which continued to deteriorate in 2006. Operating performance was also affected due to higher costs associated with the implementation of the new management team's operating turn- around strategy. As of Sept. 30, 2006, liquidity is supported by $58.6 million in cash and $222 million in revolver availability. Six Flags has received covenant waivers and amendments from its lenders through the fourth quarter of 2007. The lenders also retain the first- option on asset sale proceeds. Six Flags faces minimal maturities in 2007. In 2008, its revolver matures and it is required to repay its entire outstanding term loan at the end of that year if its preferred stock is outstanding at that time. Fitch will determine if either Issue or Recovery Ratings are affected when more details regarding use of proceeds become available. Fitch currently assigned these ratings: Six Flags Theme Parks, Inc. -- Issuer Default Rating 'B-'; -- Bank credit facility 'BB-/RR1'. Six Flags, Inc. -- Issuer Default Rating 'B-'; -- Senior unsecured notes 'CCC+/RR5'; -- Preferred stock 'CCC-/RR6'. SMART ONLINE: Amends Registration Rights Pact and Settles Penalty ----------------------------------------------------------------- Smart Online Inc. entered into amendments to certain registration rights agreements with certain existing investors in connection with certain private placements that took place during 2005 and 2006. The company settled the penalties due under the prior registration rights agreement for an aggregate amount of $233,122 with the investors. Under the terms of the amendment, the existing investors will receive a predetermined payment as Smart Online has not registered the subject shares. At the company's sole discretion, the amount may be paid in shares of common stock, which is determined by dividing the penalty amount by the purchase price of the shares under the applicable subscription agreement. Under the original rights agreements, the investors have been accruing a late registration penalty based on a formula using the time between the target registration date, which has passed, and the actual registration date, which has not yet occurred. The company is still unable to predict when the actual registration rights agreements registration date will be. As of Nov. 30, 2006, the aggregate penalty amount due under the prior registration rights agreement would have been $340,789.54 to the investors who amended their registration rights agreement. If the company had not settled the registration penalties with the existing investors, the penalty would have continued to accrue until a registration agreement was filed. Following the execution of the agreements, no further penalties will accrue for those existing stockholders that entered into the amendment. Smart Online Inc. -- http://www.SmartOnline.com/-- develops and markets Internet-delivered Software-as-Service software applications and data resources to start, run, protect and grow small businesses. Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about Smart Online, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations and working capital deficit. SMART ONLINE: Atlas Capital Increases Loan Credit to $2.5 Million ----------------------------------------------------------------- Smart Online Inc. reported that Atlas Capital S.A. has agreed to increase its existing irrevocable letter of credit to $2.5 million from $1.3 million to enable Smart Online to further execute on its business plan and to fund the iMart Incorporated acquisition payments. "We are pleased our investors and executive management are committed to the opportunities that lie ahead for Smart Online without the need for immediate share dilution" said Michael Nouri, Smart Online chief executive officer. In addition, I am pleased by the dedication of our executives to look at the upside of our profitability by electing to cut their base salaries in support of Smart Online's future." In return for this commitment, Smart Online has entered into a Stock Purchase Warrant and Agreement with Atlas Capital granting Atlas Capital the right to purchase Smart Online common stock at $2.70 per share. This agreement provides for the purchase of a maximum of 444,444 shares of common stock and can be exercised only after the termination of the two-year letter of credit or in the event of default under the letter of credit. Furthermore, the executive officers and management team have voluntarily elected to take base salary reductions in return for a performance based quarterly bonus. Smart Online Inc. -- http://www.SmartOnline.com/-- develops and markets Internet-delivered Software-as-Service software applications and data resources to start, run, protect and grow small businesses. Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about Smart Online, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations and working capital deficit. SMART ONLINE INC: Posts $1.9 Million Net Loss in 3rd Quarter 2006 ----------------------------------------------------------------- Smart Online Inc. reported a $1.9 million net loss on $749,206 of total revenues for the third quarter ended Sept. 30, 2006, compared to a $2.2 million net loss on $344,692 of total revenues for the same period in 2005. The increase in revenues is primarily attributable to revenue from the company's newly acquired subsidiary, Smart Commerce, in the amount of $661,439. There was no comparable revenue generated by this subsidiary for the third quarter of 2005 as that was a pre-acquisition period. This increase was partially offset by the decreases in integration fees of $197,292 and syndication fees of $46,250 fees. Operating expenses decreased to $1.8 million, or 28%, for the third quarter of 2006 from $2.5 million during the third quarter of 2005. At Sept. 30, 2006, the company's balance sheet showed $8.3 million in total assets, $5.1 million in total liabilities, and $3.2 million in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1.5 million in total current assets available to pay $5 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?16c0 Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about Smart Online, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's recurring losses from operations and working capital deficit. * * * Smart Online Inc. (OTCBB: SOLN) -- http://www.SmartOnline.com/-- offers a private-label syndicated online business platform that enables Web delivery of applications and services used to start and manage small businesses. SNOQUALMIE ENTERTAINMENT: Moody's Rates $200 Mil. Sr. Notes at B3 ----------------------------------------------------------------- Moody's Investors Service assigned a B3,LGD4 rating to Snoqualmie Entertainment Authority's $200 million fixed rate senior notes and $120 million floating rate senior notes. A B3 corporate family rating, B3 probability of default rating, and stable ratings outlook were also assigned. Proceeds from the new senior notes along with a furniture, furnishings and equipment loan that the Authority plans to obtain in the future will be used primarily to fund the development and construction of Casino Snoqualmie, a Las Vegas style casino facility to be located approximately 26 miles outside of Seattle, Washington. The casino will be owned and operated by the Snoqualmie Indian Tribe. The Authority's B3 corporate family rating considers its large, debt financed ground-up development plans, pro forma small size & single asset profile, and the existence of seven Las Vegas- style casinos within 50 miles of Casino Snoqualmie's planned location. The rating also takes into account that the Tribe does not have any casino operating history or earnings and has never operated or managed a business comparable to Casino Snoqualmie. The Tribe has only recently hired a Chief Executive Officer for the Authority and has not yet hired any other senior operating personnel. The Tribe has however, identified individuals to fill the Chief Operating Officer and Chief Financial Officer positions and is confident they will join the Authority shortly after the financing is in place, but these individuals have no obligation to accept employment. Positive ratings consideration is given to the proposed casino's location and favorable market demographics. Casino Snoqualmie will be the only Las Vegas-style casino along the six-lane Interstate Highway 90 in western Washington State and will be the closest Las Vegas-style casino to downtown Seattle, based on drive time. The Authority's primary market and secondary market areas have significant populations as well as above average household incomes. Additionally, Casino Snoqualmie will operate in an established gaming market that has exhibited growth in the number of video gaming terminals suggesting that favorable demand characteristics currently exist. The stable ratings outlook reflects the inclusion of an interest reserve that will cover the first four semi-annual interest payments. The outlook also anticipates that the Authority will successfully obtain at least $38 million of furniture, furnishings and equipment financing six to nine months prior to the expected opening date of Casino Snoqualmie. The successful completion and opening of Casino Snoqualmie along with demonstrated management and tribal stability during the development period could result in a one-notch upgrade. Ratings could be negatively impacted by material scope changes, construction delays and disruption, or slower than expected ramp-up. The Snoqualmie Entertainment Authority is an unincorporated instrumentality of the Snoqualmie Indian Tribe, formed in September 2006 to develop and operate all gaming and related businesses of the Tribe, including Casino Snoqualmie. The Authority will own, operate and manage Casino Snoqualmie on the Tribe's reservation near Seattle, Washington. SOLUTIA INC: Asks Court to Increase Total OCP Payment to $15 Mil. ----------------------------------------------------------------- Solutia Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to increase the aggregate total amount payable to ordinary course professionals from $10,000,000 to $15,000,000, without prejudice to requests for further increase. The Court, in January 2004, entered an order approving Solutia's request to employ and pay ordinary course professionals. The OCPs could be retained and paid without having to file individual retention and fee applications as long as the aggregate amount of fees do not exceed $10,000,000. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, New York, tells the Court that due to the duration of the Debtors' Chapter 11 cases, Solutia will soon exceed the OCP Cap. If the OCP Cap is not increased, Solutia will no longer have the ability to employ and compensate its OCPs without their preparation and filing of retention and fee applications, Mr. Henes avers. The preparation and filing of the applications is an unnecessary financial burden to Solutia and its estates as the OCPs are being retained in the ordinary course of business, Mr. Henes asserts. Hence, he maintains, an increase in the OCP Cap by $5,000,000 is in the best interests of the estates. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Committee Wants to Intervene in Calpine Arbitration ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Solutia Inc. and its debtor-affiliates' chapter 11 cases seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to intervene in the arbitration of the contested claims of Decatur Energy Center LLC and Calpine Central L.P. pursuant to Rule 24(a)(2) of the Federal Rules of Bankruptcy Procedure, and Section 1109(b) of the Bankruptcy Code. Before it filed for bankruptcy, Solutia entered into a series of 20-year term contracts scheduled to commence in 2002, with Calpine Central, Calpine Power Services Company, and Decatur pursuant to which Calpine built a natural gas co-generation facility on land leased from Solutia at Solutia's plant in Decatur, Alabama. Calpine and Solutia, however, agreed to delay commencement of performance until June 1, 2004, because of the unanticipated increase in natural gas prices. In 2004, Solutia determined that the then-current and forecasted price of natural gas rendered it more cost-effective for Solutia to return to its historical practice of purchasing energy of the Decatur plant from the Tennessee Valley Authority and generating its own steam, rather than buying energy and steam from Calpine. On May 13, 2004, Solutia filed a motion seeking to reject certain Contracts. The Court entered a stipulated order on May 24, 2004, settling the motion and approving the rejection of certain Contracts. Calpine was permitted to submit proofs of claim for damages allegedly resulting from the rejection of the Contracts. Solutia objected to two of the three claims filed by Calpine for damages relating to the Rejected Contracts. Both claims aggregate $382,717,333. The Court entered an order dated November 2005, compelling arbitration of the contested claims of Calpine Central and Decatur. The parties agreed to stay the Arbitration to conduct settlement negotiations; however, no resolution materialized between the parties and, consequently, the Arbitration will proceed. The Creditors Committee then sought and obtained approval, in August 2006, to retain conflicts counsel to represent the interests of unsecured creditors in the Arbitration. The Creditors Committee and the Debtors have consulted extensively about the merits of the Arbitration, and the Debtors have granted the Creditors Committee access to documents produced in the Arbitration. John J. Jerome, Esq., at Saul Ewing LLP, in Philadelphia, Pennsylvania, conflicts counsel to the Creditors Committee, tells the Court that the outcome of the Arbitration will affect the ultimate recoveries available to unsecured creditors, therefore, it is essential for the Creditors Committee to become a formal party to the Arbitration in order to assert and protect the interests of the unsecured creditors. The Creditors Committee's request to intervene is also timely as the Arbitration remains in the early stages -- fact discovery is ongoing and the deadline to disclose experts and exchange expert reports is in late March 2007. The Arbitration hearing is not until August 27, Mr. Jerome notes. The Creditors Committee does not intend to raise new issues, assert new or different objections to the Calpine Claims, or take any other actions that would adversely affect the scheduling order entered by the Arbitration Panel in September 2006. Moreover, no party will be prejudiced by the intervention, Mr. Jerome maintains. He clarifies that the Committee merely seeks to ensure that its constituents' interests are represented. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Equity Committee Hires Two Experts for Pharmacia Case ------------------------------------------------------------------ In accordance with the U.S. Bankruptcy Court for the Southern District of New York's order approving procedures for the retention of experts entered on Dec. 15, 2005, the Official Committee of Equity Security Holders of Solutia Inc. filed separate notices of the retention of David O. Carpenter and Walter P. Schuetze, as experts in the adversary proceeding commenced by the Equity Committee against Monsanto Company and Pharmacia Corporation. Solutia Inc. and its debtor-affiliates have consented to the retention of Messrs. Carpenter and Schuetze. Mr. Carpenter is knowledgeable on the effects of PCBs on human health and PCB regulation by federal and international agencies before September 1997. He has been retained to provide analyses and opinions regarding Pharmacia Corporation's, "Old Monsanto", knowledge of the distribution of and health effects of PCBs at the time of the spin-off of Solutia. Mr. Carpenter's analysis will focus on, among other things, the contrast between: * the facts in Old Monsanto's possession at the time of the spin related the human health effects of PCBs; and * the characterization of the risks by Old Monsanto in its spin related disclosure statements. Mr. Carpenter will be paid $400 per hour and reimbursed for out- of-pocket expenses incurred in connection with his services. The Equity Committee also seeks the retention of Mr. Schuetze, an expert on Federal Accounting Standards Board Statement No. 5. He has been retained to provide analyses and opinions regarding Old Monsanto's compliance with FAS 5 at the time of the spin-off of Solutia from Old Monsanto based on statements contained in various spin-related disclosure documents, including the July 14, 1997 proxy statement seeking shareholder approval of the spin. The opinions will include Old Monsanto's spin-related compliance with FAS 5 as to the Anniston PCB toxic tort litigation and the disclosure and accrual of other legacy liabilities. Mr. Schuetze's analysis will focus on, among other things, the contrast between: * the facts in Old Monsanto's possession at the time of the spin related the economic risks that the legacy liabilities posed to the economic viability of Solutia; and * the characterization of the economic risks by Old Monsanto in its spin related disclosure statement. Mr. Schuetze will receive $1,000 per hour and will be reimbursed for out-of-pocket expenses incurred in connection with the services. Reservation of Rights Pharmacia Corporation and Monsanto Company reserve any and all rights relating to the proposed witnesses, Messrs. Carpenter and Schuetze, beyond the mere issue of retention, including the right to object to the qualifications of each of the proposed witnesses; to the subject matter of the testimony purported to be given; to the admissibility of any testimony from the witnesses; and to the fees and expenses for the proposed witnesses under any standard. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOUTH COAST: Moody's Cuts Rating on $32 Mil. Class B Notes to Ba1 ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings on the class of notes issued in 2002 by South Coast Funding II Ltd., an investment grade collateralized debt obligation issuer: * The $32,500,000 Class B Floating Rate Senior Subordinate Notes due 2037 -- Prior Rating: Baa2, on watch for possible downgrade -- Current Rating: Ba1 According to Moody's, the rating action reflects the overall deterioration in the credit quality of the transaction's underlying collateral portfolio. As reported in the December 2006 trustee report, the weighted average rating factor of the portfolio was 973, significantly higher than the transaction's trigger level of 430. In addition, the weighted average coupon and the weighted average spread of the portfolio have dropped below their trigger levels. The WAC stood at 6.44, compared to the trigger level of 6.75; the WAS stood at 2.13 compared to the trigger level of 2.25. SPECTRUM BRANDS: To Cut 100 Jobs Pursuant to Reorganization ----------------------------------------------------------- Spectrum Brands Inc. will cut approximately 100 jobs pursuant to the company's plan to streamline its business into three units. Spectrum Brands disclosed plans to realign the company's four operating segments into three vertically integrated, product- focused operating units: Global Batteries & Personal Care, Home & Garden and Global Pet Supplies. Spectrum said that the consolidation of the operating segments will begin immediately and will be reflected in its financial report for the second quarter of fiscal 2007. According to Dave Jones, Spectrum Chairman and Chief Executive Officer, the realignment will make the company a stronger, more efficient and competitive company. "By streamlining the business into three product-oriented operating units, we will significantly enhance our competitive focus and improve our cost structure," Mr. Jones says. "These changes will allow us to go to market faster with new, innovative products, as well as improve our ability to efficiently allocate resources on a worldwide basis. This business unit realignment will also facilitate the orderly execution of the asset sale process we announced in July." With the changes, the company plans to undertake steps to cut down costs including a reduction in employee headcount by around 100 employees. "Our new structure will enable Spectrum to operate more efficiently and profitably by eliminating duplicative staff functions and overhead in each of our business units, and downsizing our corporate infrastructure," Mr. Jones adds. Moreover, the company unveiled appointments including: * David Lumley as President of Global Batteries & Personal Care and Home & Garden, and Co-Chief Operating Officer of Spectrum Brands; * Remy Burel as President of Europe/ROW; * John Heil as Co-Chief Operating Officer of Spectrum Brands; and * Kent Hussey as Vice Chairman of Spectrum Brands. About Spectrum Brands Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a consumer products company and a supplier of batteries and portable lighting, lawn and garden care products, specialty pet supplies, shaving and grooming and personal care products, and household insecticides. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in 120 countries around the world. The company has manufacturing and distribution facilities in China, Australia and New Zealand, and sales offices in Melbourne, Shanghai, and Singapore. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Moody's Investors Service confirmed Spectrum Brands Inc.'s B3 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. SPECTRUM BRANDS: Receives Notice of Default from Noteholders ------------------------------------------------------------ Spectrum Brands Inc. received a purported notice of default from entities claiming to be the holders of or to have discretionary authority in respect of its 8-1/2% Senior Subordinated Notes due 2013. The Notice asserted that the company's incurrence of indebtedness under its Fourth Amended and Restated Credit Agreement dated as of Feb. 7, 2005, gave rise to certain defaults relating to the incurrence of indebtedness, incurrence of liens and delivery of proper notice under the Indenture, dated as of Sept. 30, 2003, between the company and the U.S. Bank National Association, as trustee, governing the Notes. The company believes that it is not in default under the terms of the Indenture. The company believes that all existing indebtedness was incurred in compliance with the provisions of the Indenture and that no default has occurred under the Indenture. The default provisions of the Indenture provide that if the company had incurred indebtedness other than in compliance with the Indenture and thereafter received written notice of a default from either the Trustee or holders representing 25% or more of the aggregate principal amount of the Notes then outstanding, the failure by the company for 60 days after such written notice to comply with the agreements set forth in the Indenture would constitute an "Event of Default" under the Indenture. If an "Event of Default" were found to have occurred, the Trustee or holders of at least 25% in aggregate principal amount of the Notes then outstanding would have the contractual right to declare all unpaid principal, and any accrued, default or additional interest, on the Notes then outstanding to be due and payable. Such an "Event of Default" could also result in the acceleration of indebtedness under (i) the company's 7-3/8% Senior Subordinated Notes due 2015 by action of the trustee under the indenture governing those notes or the respective holders of at least 25% in principal amount of those notes outstanding and (ii) the Credit Agreement by action of the requisite lenders under the Credit Agreement. The company has carefully considered the allegations set forth in the Notice and has concluded that there is no default under the Indenture. The Credit Agreement, the indebtedness under which ranks senior to the indebtedness under the Notes and the 7-3/8% Notes, includes a revolving credit facility for borrowings of up to $300 million; contains customary minimum interest coverage and maximum leverage ratio tests; and contains a customary debt incurrence covenant permitting the indebtedness under the Notes and the 7-3/8% Notes, indebtedness necessary to support its ordinary course operations and a general basket for other unsecured indebtedness in the aggregate amount of $50 million. It believes that the company and its subsidiary borrowers are in compliance with the terms and provisions of the Credit Agreement, including those relating to limitations on indebtedness. As of Sept. 30, 2006, there was: (a) approximately $350 million in aggregate principal amount of the Notes outstanding and approximately $15 million of accrued but unpaid interest, (b) approximately $700 million in aggregate principal amount of the 7-3/8% Notes outstanding and approximately $9 million of accrued but unpaid interest, and (c) approximately $26 million under the Revolving Credit Facility and approximately $1,144 million in other indebtedness was outstanding under the Credit Agreement. A full-text copy of the Notice of Default is available for free at http://ResearchArchives.com/t/s?189e A full-text copy of the company's response is available for free at http://ResearchArchives.com/t/s?189f Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a consumer products company and a supplier of batteries and portable lighting, lawn and garden care products, specialty pet supplies, shaving and grooming and personal care products, and household insecticides. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in 120 countries around the world. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Moody's Investors Service confirmed Spectrum Brands Inc.'s B3 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. TENFOLD CORP: Raises $1.3 Million from Sale of Convertible Stock ---------------------------------------------------------------- TenFold Corporation completed a capital raising transaction for gross proceeds of approximately $1.3 million, from the sale of 312,009 shares of unregistered convertible preferred stock and warrants. The preferred shares are convertible into 4,225,809 shares of common stock. The warrants are to purchase 2,112,904 shares of common stock at an exercise price of $0.62 per share, with a 5 year term. "I am very pleased these investors in TenFold sought out an opportunity to take a position in the company without our solicitation. What began as one person inquiring if he could invest attracted others. All of these investors did so on the same terms as our March 2006 capital raising transaction," said Robert W. Felton, TenFold's Chairman, president and chief executive officer. "This additional capital is welcome and we believe signals to our stockholders, customers and staff, that TenFold has real value from an investment standpoint because our strategy of building the company brick by brick is helping us grow stronger in the marketplace. With this additional backing, we look forward to continuing our success in introducing our powerful technology to more prospects and to continuing to serve our expanding customer base." TenFold Corporation (OTCBB: TENF) -- http://www.tenfold.com/-- licenses its patented technology for applications development, EnterpriseTenFold(TM), to organizations that face the daunting task of replacing obsolete applications or building complex applications systems. EnterpriseTenFold technology lets a small, team of business people and IT professionals design, build, deploy, maintain, and upgrade new or replacement applications. Going Concern Doubt Tanner LC expressed substantial doubt about TenFold Corporation's ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm points to the Company's reliance on significant balances of its cash for its operating activities and the likelihood that the Company will not have sufficient resources to meet operating needs based on its present levels of cash consumption. U.S. ENERGY: Can Access New Funding Under Countryside Agreement --------------------------------------------------------------- U.S. Energy Biogas Corp. has reached an agreement in principle with Countryside Power Income Fund concerning the principal issue in the company's Chapter 11 filing in the United States Bankruptcy Court for the Southern District of New York. The agreement will enable the company and its parent, U.S. Energy Systems Inc., to establish new financing for the company that should enable it to pay all of its creditors in full, exit bankruptcy quickly, and support the growth of the business for the benefit of USEY's shareholders. Upon approval of the agreement by the United States Bankruptcy Court in the Southern District of New York overseeing the company's Chapter 11 reorganization case, as well as each party's respective boards, the company expects to be able to move immediately toward an expedited confirmation of a Chapter 11 plan of reorganization. "We are elated with the agreement we were able to reach with Countryside," said Asher E. Fogel, Chairman of USEB and Chief Executive Officer of USEY. "With approval of this agreement, USEB can move forward to establish new financing, its management can move forward to capitalize on USEB's attractive growth opportunities, and USEY shareholders can benefit from the value of USEB. We also are very pleased that our settlement should expedite the conclusion of USEB's restructuring and facilitate the payment in full of existing creditors' claims." The agreement in principle, which USEY is filing in a Form 8-K with the SEC, provides for Countryside Canada Power Inc, a subsidiary of Countryside, to have an allowed secured claim of approximately $99,000,000. Under the agreement, the secured claim is the only allowed claim that Countryside will have in the Chapter 11 case. Countryside has agreed to forgo any claim concerning USEB's April 8, 2004 Royalty Agreement with Countryside, as well as any claim against USEY under its Apr. 8, 2004 Development Agreement with Countryside. The agreement provides for installment cash payments of $3,000,000 on or before Jan. 31, 2007, $30,000,000 on or before March 31, 2007, and the remaining balance of the secured claim on or before maturity at May 31, 2007. Outstanding principal amounts shall be deemed over secured for purposes of adequate protection and the use of cash collateral in the USEB bankruptcy cases and shall bear interest at a rate of 10% per annum from Feb. 1, 2007, payable monthly in U.S. dollars to the Fund. The parties will work together to pursue a "take-out" financing before the final installment date of May 31, 2007. Mutual general releases will be exchanged among the parties involved and will cover certain individuals affiliated with the Fund who have been threatened with lawsuits arising out of their prior employment by USEY. The settlement resulted from a mediation that took place in New York City on January 12 and 13, 2007, and the Court is expected to consider the company's motion to approve the settlement later this month. Ronald Barliant of the law firm of Goldberg Kohn of Chicago, a former United States bankruptcy judge, presided over the mediation. Peter S. Partee of Hunton & Williams LLP served as lead counsel to the company in connection with the mediation and its Chapter 11 cases, assisted by Benjamin C. Ackerly and Michael Wilson, also of Hunton & Williams LLP. Philip Anker of Wilmer Cutler Pickering Hale and Dorr LLP served as special counsel to USEY in connection with the mediation and serves as special counsel to USEY in connection with the company's Chapter 11 cases. Court action follows the company's Nov. 30, 2006 announcement that it had voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, as well as the Court's Dec. 1, 2006 approval of the Subsidiary's critical "first day pleadings". The company's Chapter 11 filing did not include USEB's parent company, USEY, or the parent company's other subsidiary, a UK- based natural gas exploration and development business, UK Energy Systems. Moreover, neither USEY's nor UKES's operations are affected by USEB's Chapter 11 filing. About U.S. Energy Headquartered in Avon, Connecticut, U.S. Energy Biogas Corp. -- http://www.usenergysystems.com/-- develops landfill gas projects in the United States. Formerly known as Zahren Alternative Power Corporation or ZAPCO, the company was formed in May 2001 after ZAPCO's acquisition by U.S. Energy Systems, Inc. Currently, the Debtor owns and operates 23 LFG to energy projects with 52 megawatts of generating capacity. The Debtor and 31 of its affiliates filed separate voluntary chapter 11 petitions on Nov. 29, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12827 through 06- 12857). Joseph J. Saltarelli, Esq., at Hunton & Williams represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. U.S. ENERGY: Expects Acceleration of Chapter 11 Plan Confirmation ----------------------------------------------------------------- U.S. Energy Biogas Corp. expects to accelerate its Chapter 11 reorganization plan confirmation, once the U.S. Bankruptcy Court for the Southern District of New York approves the agreement, Reuters reports. As reported in the Troubled Company Reporter on Dec. 27, 2006, U.S. Energy Biogas Corp. received approximately $2.7 million in connection with the termination of currency swap agreements by which the company serviced its loan from Countryside Power Income Fund prior to the company's recent Chapter 11 filing. The funds received by the company and added to its estate consist of approximately $670,000, the remaining value of unsettled swap transactions under its swap agreements with Royal Bank of Canada and The Toronto-Dominion Bank, and $2 million in collateral that had been held by TD Bank in support of the swap agreements. Headquartered in New York City, U.S. Energy Systems Inc. -- http://www.usenergysystems.com/-- owns and operates energy and power projects in the United States and the United Kingdom through its two subsidiaries, UK Energy Systems, Ltd. and U.S. Energy Renewables, Inc. Going Concern Doubt Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey, expressed substantial doubt about U.S. Energy Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses and capital deficits. UNITED COMPONENTS: Earns $2.1 Million in Quarter Ended Sept. 30 --------------------------------------------------------------- United Components Inc.'s financial statements for the third quarter ended Sept. 30, 2006, reported net income of $2.1 million, including $6.9 million in special charges, primarily costs related to the acquisition of ASC Industries and facilities consolidation costs. Excluding these charges, adjusted net income would have been $6.4 million for the quarter. Adjusted net income for the third quarter of 2005 was $6.6 million, excluding a $600,000 special charge. Revenue of $252.4 million increased $28.5 million compared to the year-ago quarter. The quarter included $25.3 million in sales by water pump manufacturer ASC Industries, which was acquired by the company during the second quarter. The company reported revenue increases in the retail, OEM and heavy duty channels, and declines in the original equipment service and traditional channels. Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the company's continuing operations, as adjusted consistent with the company's historical presentations, was $34.6 million for the third quarter, compared with $29.6 million for the year-ago quarter. "This was an important quarter for United Components, as we took significant steps to integrate our historical water pump operations with ASC Industries, and continued our initiatives to streamline our business and make operational improvements," said Bruce Zorich, Chief Executive Officer of UCI. "The water pump integration is right on track, with the combination of the distribution operations being completed ahead of schedule, and the manufacturing integration now underway and on schedule. We are well on the way toward delivering our expected cost savings in the quarters ahead." "In addition, the strategic initiatives we have undertaken over the past several quarters have allowed our core business to show continuing improvement in our operating results, even as the overall market is showing softness," continued Zorich. "These initiatives include targeted new business wins, additional cost reduction projects and consolidation of manufacturing and distribution facilities. We are working to continue this progress and, leveraging ASC's China operations, expand UCI into an efficient global manufacturer." As of Sept. 30, the company's debt stood at $532.7 million. The company ended the quarter with $41.4 million in cash. In addition, on Oct. 27, 2006, the company repaid $30 million of its senior credit facility borrowings with cash flow from operations. About United Components United Components, Inc. -- http://www.ucinc.com/ -- supplies a range of products to the automotive, trucking, marine, mining, construction, agricultural, and industrial vehicle markets. The company's customer base includes leading aftermarket companies as well as a diverse group of original equipment manufacturers in North America. * * * As reported in the Troubled Company Reporter on Dec. 14, 2006, Moody's Investors Service assigned a Caa2 rating to the unguaranteed senior unsecured notes of UCI Holdco Inc., the ultimate parent of United Components Inc. The rating agency also lowered the Corporate Family and Probability of Default ratings to B3 from B2, and repositioned these ratings at the Holdco level. Standard & Poor's Ratings Services lowered its corporate credit rating on United Components Inc. to 'B+' from 'BB-' and its rating on UCI's $230 million senior subordinated notes to 'B-' from 'B'. USI HOLDINGS: Fitch Places $210MM Secured Term Loan Rating at BB- ----------------------------------------------------------------- Fitch Ratings has placed the ratings for USI Holdings Corporation on Rating Watch Evolving after its disclosure that it has entered into a definitive merger agreement to be acquired by GS Capital Partners, a private equity affiliate of Goldman Sachs Group. The transaction is valued at roughly $1.4 billion, which includes repayment of USIH's current debt outstanding equal to Fitch's current estimate of $380 million. Fitch currently rates USIH as: -- Issuer Default Rating 'BB-'; and, -- $210 million five-year secured term loan due March 24, 2011 'BB-'. USIH debt currently consists of a $385 million senior secured credit facility, including the $310 million secured term loan and a $75 million revolving line of credit. USIH also has various notes payable associated with past acquisitions. The Evolving Rating Watch indicates that the IDR and issue ratings for USIH could potentially be upgraded, downgraded, or affirmed, depending on the outcome of the pending acquisition. Although USIH has disclosed a general outline of the transaction, it has not yet provided all the details about how the transaction will be completed. Some of the details that will be important in determining Fitch's ultimate rating actions include USIH's pro forma capital structure and operating plan. Fitch appreciates the potential strategic benefits that such a private equity acquisition might afford USIH, with a more significant balance sheet and market position, increasing opportunities for acquisitions and organic revenue growth. A significant decrease in financial leverage with the corresponding large increase in equity could also lead to a possible rating upgrade. Factors that could lead a possible rating downgrade include a material increase in USIH's financial leverage, changes to its operating strategy, and/or changes to senior management. Fitch appreciates that in many instances, private equity investments lead to a leveraged capital structure and a significant increase in debt. However, Fitch also believes that this potential debt may have better terms and conditions than USIH's existing debt, as a result of a larger equity base and a well known and reputable equity investor as its owner. Fitch expects to learn more regarding USIH's future capital structure in the coming weeks and could potentially move to Rating Watch Positive or Negative from Rating Watch Evolving at that time. The Rating Watch will ultimately be resolved upon completion of the acquisition, currently projected for second quarter 2007. VITRO SA: To Offer $750 Million Notes to Institutional Buyers ------------------------------------------------------------- Vitro, S.A.B. de C.V. disclosed a $750 million debt offering to refinance existing third-party debt at the Vitro holding company level and substantially all of the third-party debt at its subsidiary Vitro Envases Norteamerica, S.A. de C.V. ("VENA"). The Offering will consist of bank and/or bond financing in at least two tranches and will be guaranteed by VENA and its wholly- owned subsidiaries and Vimexico, S.A. de C.V. ("Vimexico") and its wholly-owned subsidiaries. The Offering will be made to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act of 1933 and to non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act of 1933. The Offering, to the extent it is in the form of notes, will be issued with registration rights. 10.75% Notes Tender Offer Concurrently with the Offering, VENA also made an offer to purchase for cash any and all of its outstanding 10.75% senior secured guaranteed notes due 2011 and is soliciting consents from the holders of the Notes to proposed amendments to the indenture under which the Notes were issued. The Amendments will, among other things, enable the release of certain liens on the collateral for the 2011 Notes. The Tender Offer and Consent Solicitation are subject to consummation of the Offering and the Offering is subject to receipt of the required consents in the Consent Solicitation. About Vitro, S.A. de C.V. Headquartered in Nuevo Leon, Mexico, Vitro, S.A. de C.V., (NYSE: VTO; BMV: VITROA) -- http://www.vitro.com/-- through its subsidiaries, produces flat glass, glass containers and glassware. Its subsidiaries serve multiple product markets, including construction and automotive glass; food and beverage, wine, liquor, cosmetics and pharmaceutical glass containers; glassware for commercial, industrial and retail uses. Vitro also produces raw materials and equipment and capital goods for industrial use, which are vertically integrated in the Glass Containers business unit. Vitro's subsidiaries have facilities and distribution centers in nine countries, located in North, Central and South America, and Europe, and export to more than 45 countries worldwide. * * * Standard & Poor's Ratings Services lowered its long-term local and foreign currency corporate credit ratings assigned to glass manufacturer Vitro S.A. de C.V. and its glass containers subsidiary Vitro Envases Norteamerica S.A. de C.V. (Vena) to 'B-' from 'B'. Standard & Poor's also lowered the long-term national scale corporate credit rating assigned to Vitro to 'mxBB+' from 'mxBBB-'. The outlook is negative. Standard & Poor's also lowered the rating assigned to Vitro's notes due 2013 and Servicios y Operaciones Financieras Vitro S.A. de C.V. notes due 2007 (which are guaranteed by Vitro) to 'CCC' from 'CCC+'. Standard & Poor's also lowered the rating assigned to Vena's notes due 2011 to 'B-' from 'B'. VOLT INFORMATION: Closes $70 Mil. Credit Facility for Volt Delta ---------------------------------------------------------------- Volt Information Sciences Inc. closed on a new three-year $70 million secured stand-alone credit facility for its wholly owned subsidiary, Volt Delta Resources, LLC. The Delta Credit Facility is established under a secured, syndicated, revolving credit agreement with Wells Fargo Bank, National Association as the administrative agent, arranger, and lender. Three additional lenders participated under the Delta Credit Facility; Lloyds TSB Bank Plc, Bank of America, N.A and JPMorgan Chase N.A. The Delta Credit Facility is guaranteed, on a secured basis, by certain domestic subsidiaries of Delta. Wells Fargo and the three additional lenders also participate in the company's own $40 million revolving credit facility. Neither the company nor Delta is a guarantor of the other's facility. Steven A. Shaw, president and chief executive officer, commented: "Volt Delta Resources has enjoyed tremendous growth over the past few years. The new credit facility better aligns the assets and liabilities of the Company's subsidiaries and provides Delta with the stand-alone capital to take advantage of market opportunities as they arise." The new Delta Credit Facility will be used in part to pay down approximately $38 million in inter-company debt now owed by Delta to Volt. The company currently has no outstanding debt under its own revolving facility but has $100 million currently financed under its $200 million securitization program. The Delta Credit Facility provides for the maintenance of various financial ratios and covenants, and imposes limitations on, among other things, the incurrence of additional indebtedness, the incurrence of additional liens, sales of assets, the level of annual capital expenditures, and the amount of investments and loans that may be made by Delta and its subsidiaries. Volt Information Sciences Inc. (NYSE: VOL) -- http://www.volt.com/ -- provides national Staffing Services and Telecommunications and Information Solutions to Fortune 100 customers. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. * * * As reported in the Troubled Company Reporter on July 4, 2006 Fitch Ratings upgraded Volt Information Sciences' Issuer Default Rating to 'BB' from 'BB-', and has affirmed its senior secured rating at 'BBB-'. The Rating Outlook is Stable. WOODWIND & BRASSWIND: Creditors' Meeting on Open-Ended Schedule --------------------------------------------------------------- The U.S. Trustee for Region 10 will continue a meeting of Dennis Bamber Inc. dba The Woodwind & the Brasswind's creditors at an undetermined date, at One Michiana Square, 5th Floor, 100 East Wayne Street, in South Bend, Indiana. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in South Bend, Indiana, The Woodwind & the Brasswind -- http://www.wwbw.com/-- sells musical instruments and accessories. The Company filed for chapter 11 protection on Nov. 24, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Chad H. Gettleman, Esq., Henry B. Merens, Howard L. Adelman, Esq., and Nathan Q. Rugg, Esq., at Adelman, Gettleman, Ltd., represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected James M. Carr, Esq., at Baker & Daniels LLP as its counsel. When the Debtor filed for protection from its creditors, they estimated assets and debts between $1 million and $100 million. * Carl Marks Advisory Group Names Richard Heller as Partner ----------------------------------------------------------- Carl Marks Advisory Group LLC names Richard A. ("Rick") Heller as partner. Mr. Heller, who joined CMAG in 2003, was previously a managing director of the firm. "Rick Heller's performance as an interim executive for CMAG client firms has been outstanding," said Mark L. Claster, president of Carl Marks & Co. Inc. "In helping them to improve their performance, and to restore or increase shareholder value, he has made a significant contribution to our success, and we are proud to have Rick as a partner." Mr. Heller will continue to focus on the turnaround of financially distressed companies and on driving top line growth in consumer product, manufacturing and service businesses. As an interim executive, he has completed the turnaround of a $220 million consumer products company. As chief restructuring officer for a $60 million manufacturer of made-to order building and office products, he improved EBITDA by $5 million within 12 months by implementing a comprehensive turnaround and restructuring plan. Mr. Heller also has improved operations and completed divestitures for a bankrupt $550 million equipment rental company; restored growth and transformed an operating loss into a substantial profit for a $50 million food company; and completed an operational turnaround of an underperforming $450 million company in the consumer products industry. Prior to joining the Firm, Mr. Heller was chief executive officer of The Steak-umm Company; vice president of marketing at ConAgra Foods; vice president of marketing and manufacturing at Lea & Perrins; and has held other senior sales and marketing positions at Frito Lay and Richardson Vicks, a division of Proctor and Gamble. He holds a Bachelor of Science in Business from Boston University and a Master of Business Administration from the University of Chicago. Carl Marks Advisory Group LLC provides investment banking and advisory services to middle market companies by assisting with mergers and acquisitions; providing access to debt and equity; developing and executing financial restructuring plans; conducting strategic business assessments; developing and executing improvement plans; and providing interim management. * Jeff Marwil and Mark Thomas Join Winston & Strawn LLP ------------------------------------------------------- Winston & Strawn LLP announced Jeff J. Marwil and Mark K. Thomas and their team of Paul V. Possinger and Brian I. Swett have all joined its Chicago office as partners from Jenner & Block. Marwil and Thomas have worked together for more than 15 years, and bring nearly 50 years of combined experience in the workout, bankruptcy and restructuring area. Mr. Marwil will co-chair Winston & Strawn's restructuring and insolvency practice with partners Matt Botica and Eric Sagerman, in the firm's Chicago and Los Angeles offices, respectively. "We are extremely pleased that Jeff and Mark have joined Winston & Strawn's highly-regarded national bankruptcy practice," said Thomas Fitzgerald, Winston & Strawn's firmwide managing partner. "The hiring of Jeff, Mark and their accomplished team provides Winston & Strawn's bankruptcy practice additional depth, and furthers our strategic vision for the practice," added Fitzgerald. Winston & Strawn's insolvency practice boasts approximately 50 attorneys with numerous veteran practitioners in Chicago, New York, Los Angeles and San Francisco. Mr. Marwil focuses his practice on bankruptcy, workouts and corporate restructuring. He regularly represents public and private companies, senior secured lenders, official committees and hedge fund investors. Additionally, Marwil is well respected as an independent fiduciary investigating fraud. He consults on a federal level with bipartisan leadership of several Senate Committees, and recent hedge fund legislation contained language that Marwil specifically recommended. Mr. Marwil is a popular speaker at M&A, bankruptcy and legal industry events, and has authored several articles. He earned his juris doctor from DePaul University, where he was a member of the Law Review, and his bachelor's degree in economics from the University of Michigan. Mark Thomas also concentrates his national practice in corporate bankruptcies, workouts and restructurings for secured lenders, syndicated loan agents, debtors and borrowers, involving both public and private companies. He has handled a number of high profile bankruptcy cases, including Fruit of the Loom, Montgomery Ward, Metal Management Company and Archibald Candy Corporation. Mr. Thomas' work as lead bankruptcy counsel for Archibald Candy Corporation was recognized in 2004 by both M&A Advisor as the "U.S. Middle Market Deal of the Year," and by the Chicago Chapter of the Turnaround Management Association as the "Transaction of the Year." Mr. Thomas served as law clerk for the Honorable Robert L. Eisen, U.S. Bankruptcy Court, Northern District of Illinois. He holds a juris doctor from the University of San Diego School of Law and a bachelor's degree from Northwestern University. "I have worked with Jeff and Mark in a number of cases over a 20-year period, and I'm excited to have them join our restructuring group," said Matt Botica, co-chair of the practice. Paul Possinger focuses his practice on corporate reorganization, creditors' rights and bankruptcy, and primarily represents financially troubled entities and secured lenders in debt restructuring and reorganization. He earned his juris doctor from the College of William and Mary and was a member of the William and Mary Law Review for two years and was executive professional articles editor. He received a bachelor's degree, with university honors, from LaSalle University. Brian Swett represents senior secured lenders and other secured creditors, as well as public and private companies, including debtors in possession, sellers, purchasers, shareholders and investors, in all aspects of in-court and out-of-court workout, restructuring and reorganization matters. Over the last year, Swett has published several articles on such topics as included PBGC underfunding liens and insider asset sales. He also recently spoke on PBGC underfunding liens. Winston & Strawn LLP is an international commercial law firm with more than 850 attorneys in nine offices including Chicago, New York, Washington, D.C., Los Angeles, San Francisco, London, Paris, Geneva and Moscow. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Modular Furniture Group, Inc. Bankr. E.D. Va. Case No. 06-11775 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/vaeb06-11775.pdf In re Miles Drawhorn Bankr. E.D. Tenn. Case No. 06-33064 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/tneb06-33064.pdf In re Esteban Diaz Vega Bankr. D. P.R. Case No. 06-05255 Chapter 11 Petition filed December 22, 2006 See http://bankrupt.com/misc/prb06-05255.pdf In re Paul's Discount Center, Inc. Bankr. E.D. Va. Case No. 06-72000 Chapter 11 Petition filed December 22, 2006 See http://bankrupt.com/misc/vaeb06-72000.pdf In re Robert Lee Gant Bankr. M.D. Tenn. Case No. 06-07626 Chapter 11 Petition filed December 22, 2006 See http://bankrupt.com/misc/tnmb06-07626.pdf In re Arancello Inc. Bankr. D. P.R. Case No. 06-05382 Chapter 11 Petition filed December 28, 2006 See http://bankrupt.com/misc/prb06-05382.pdf In re B.Y. Enterprises, Inc. Bankr. W.D. Tex. Case No. 06-61031 Chapter 11 Petition filed December 27, 2006 See http://bankrupt.com/misc/txwb06-61031.pdf In re Gamez Produce, LLC Bankr. S.D. Tex. Case No. 06-50284 Chapter 11 Petition filed December 27, 2006 See http://bankrupt.com/misc/txsb06-50284.pdf In re Steve-N-Son Termite & Pest Control Co. Bankr. M.D. Tenn. Case No. 06-07659 Chapter 11 Petition filed December 27, 2006 See http://bankrupt.com/misc/tnmb06-07659.pdf In re French Style Corporation Bankr. D. P.R. Case No. 06-05412 Chapter 11 Petition filed December 29, 2006 See http://bankrupt.com/misc/prb06-05412.pdf In re Hang 10 Brakes, Inc. Bankr. E.D. Tenn. Case No. 06-14563 Chapter 11 Petition filed December 29, 2006 See http://bankrupt.com/misc/tneb06-14563.pdf In re Law Holdings Ltd. Bankr. S.D. Tex. Case No. 07-10003 Chapter 11 Petition filed January 2, 2007 See http://bankrupt.com/misc/txsb07-10003.pdf In re A.T. Security Services, Inc. Bankr. M.D. Pa. Case No. 07-00014 Chapter 11 Petition filed January 3, 2007 See http://bankrupt.com/misc/pamb07-00014.pdf In re SalAnna Realty, LLC Bankr. E.D. Pa. Case No. 07-10057 Chapter 11 Petition filed January 4, 2007 See http://bankrupt.com/misc/paeb07-10057.pdf In re Ronald C. Stanislawczyk Bankr. W.D. Pa. Case No. 07-20117 Chapter 11 Petition filed January 5, 2007 See http://bankrupt.com/misc/pawb07-20117.pdf In re Sexton Oil & Minerals Corporation Bankr. S.D. Tex. Case No. 07-20012 Chapter 11 Petition filed January 5, 2007 See http://bankrupt.com/misc/txsb07-20012.pdf In re Sirius Systems, Inc. Bankr. W.D. Okla. Case No. 07-10032 Chapter 11 Petition filed January 5, 2007 See http://bankrupt.com/misc/okwb07-10032.pdf In re ADM Real Estate LLC Bankr. W.D. Pa. Case No. 07-20161 Chapter 11 Petition filed January 7, 2007 See http://bankrupt.com/misc/pawb07-20161.pdf In re 700 North 43rd, Inc. Bankr. E.D. Pa. Case No. 07-10150 Chapter 11 Petition filed January 8, 2007 See http://bankrupt.com/misc/paeb07-10150.pdf In re Hampton House Furniture, Inc. Bankr. W.D. Pa. Case No. 07-20170 Chapter 11 Petition filed January 8, 2007 See http://bankrupt.com/misc/pawb07-20170.pdf In re WCS Enterprises, Inc. Bankr. E.D. Va. Case No. 07-10054 Chapter 11 Petition filed January 8, 2007 See http://bankrupt.com/misc/vaeb07-10054.pdf In re Ardsey, Inc. Bankr. W.D. Tex. Case No. 07-50073 Chapter 11 Petition filed January 9, 2007 See http://bankrupt.com/misc/txwb07-50073.pdf In re B & J Bikes, Inc. Bankr. E.D. Va. Case No. 07-30075 Chapter 11 Petition filed January 9, 2007 See http://bankrupt.com/misc/vaeb07-30075.pdf In re Matthew Linn Bankr. N.D. Ind. Case No. 07-20037 Chapter 11 Petition filed January 9, 2007 See http://bankrupt.com/misc/innb07-20037.pdf In re New Millennium Suites, Inc. Bankr. D. N.J. Case No. 07-10357 Chapter 11 Petition filed January 9, 2007 See http://bankrupt.com/misc/njb07-10357.pdf In re The Jewelry Doctor, Inc. Bankr. S.D. Ind. Case No. 07-00138 Chapter 11 Petition filed January 9, 2007 See http://bankrupt.com/misc/insb07-00138.pdf In re Allied Fabricating & Welding Company, Inc. Bankr. E.D. Tex. Case No. 07-10019 Chapter 11 Petition filed January 10, 2007 See http://bankrupt.com/misc/txeb07-10019.pdf In re Junish Holdings LLC Bankr. M.D. Fla. Case No. 07-00214 Chapter 11 Petition filed January 10, 2007 See http://bankrupt.com/misc/flmb07-00214.pdf In re Star Clifton, Inc. Bankr. D. N.J. Case No. 07-10412 Chapter 11 Petition filed January 10, 2007 See http://bankrupt.com/misc/njb07-10412.pdf In re Fandorin Restaurant, Inc. Bankr. N.D. Calif. Case No. 07-30037 Chapter 11 Petition filed January 11, 2007 See http://bankrupt.com/misc/canb07-30037.pdf In re Group Insurance Administration of Georgia, Inc. Bankr. N.D. Ill. Case No. 07-00491 Chapter 11 Petition filed January 11, 2007 See http://bankrupt.com/misc/ilnb07-00491.pdf In re Kara at Atlantic Hills LLC Bankr. D. N.J. Case No. 07-10489 Chapter 11 Petition filed January 12, 2007 See http://bankrupt.com/misc/njb07-10489.pdf In re Michael Neuman Company, Inc. Bankr. W.D. Tex. Case No. 07-10061 Chapter 11 Petition filed January 12, 2007 See http://bankrupt.com/misc/txwb07-10061.pdf In re Szivos Enterprises, Inc. Bankr. M.D. La. Case No. 07-10045 Chapter 11 Petition filed January 12, 2007 See http://bankrupt.com/misc/lamb07-10045.pdf In re Universal Construction & Fabrication, Inc. Bankr. E.D. La. Case No. 07-10066 Chapter 11 Petition filed January 12, 2007 See http://bankrupt.com/misc/laeb07-10066.pdf In re Westlake Clinic, Inc. Bankr. W.D. Tex. Case No. 07-10058 Chapter 11 Petition filed January 12, 2007 See http://bankrupt.com/misc/txwb07-10058.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Robert Max Victor M. Quiblat II, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Melvin C. Tabao, 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 ***