/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070130.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 30, 2007, Vol. 11, No. 25 Headlines ABITIBI-CONSOLIDATED: Inks All-Stock Merger Deal with Bowater ABITIBI-CONSOLIDATED: Moody's Holds Corporate Family Rating at B1 AEGIS ASSET: Fitch Lowers 2004-1 Cl. B3 Certificate Rating to BB- AEROBOX Composite: Files for Chapter 11 Protection in New Mexico AEROBOX COMPOSITE: Case Summary & 27 Largest Unsecured Creditors AIR AMERICA: Inks Agreement with Stephen Green on Likely Sale AJAY SPORTS: Files Schedules of Assets and Liabilities AJAY SPORTS: U.S. Trustee Picks Four-Member Creditors Committee ASARCO LLC: Asarco Master Can Sell San Francisco Property ASARCO LLC: Court OKs Avalos Realty as Trustee's Real Estate Agent ASARCO LLC: Union to Vote on Agreement on February 5 to 9 ASSOCIATED MATERIALS: Chris Stadler Resigns as Company's Director ASSOCIATED MATERIALS: Holders Pick Kevin Nickelberry as Director ATIBI-CONSOLIDATED: To Form Joint Venture for Ontario Power Plants BASIC ENERGY: S&P Rates Proposed $225 Mil. Credit Facility at BB BOWATER INC: Inks All-Stock Merger Deal With Abitibi-Consolidated BOWATER INC: Abitibi Merger Cues Moody's to Hold Low-B Ratings CAITHNESS COSO: Moody's Lifts 6.263% Secured Notes' Rating to Ba1 CE GENERATION: Moody's Affirms Ba1 Senior Secured Rating CHESAPEAKE ENERGY: Appoints Merrill Miller to Board of Directors CHESAPEAKE ENERGY: Jury Hands $404 Mil. Verdict in Royalties Suit CHIEF CONSOLIDATED: Posts $612,030 Net Loss in Qtr. Ended Sept. 30 CLEAR LAKE: Moody's Rates $15.5MM Class D Subordinate Notes at Ba2 CNH GLOBAL: Core Business Status Prompts S&P to Revise Outlook COMMS CORP: Court Fixes March 1 as General Claims Bar Date CONSTELLATION BRANDS: Third Quarter 2006 Net Sales Up 18% DAIMLERCHRYSLER: Sells Aviation Unit to ATON Group Subsidiary DELPHI CORP: PwC's Scope Expanded to Help Plan Due Diligence Work DELPHI CORP: Mayer Brown's Scope Expanded Adding F&A Services DELPHI CORP: Cerberus May Back Out of $3.4 Billion Investment DELPHI CORP: Inks Sale Agreement with Harco for Brake Hose Biz DELTA AIR: Creditor Group Wants Improved US Airways Bid Evaluated DRYDEN XVI: Moody's Assigns Ba2 Rating on $17.5 Mil. Class D Notes DURA AUTOMOTIVE: Judge Carey Okays Kramer Levin as Panel's Counsel DURA AUTOMOTIVE: Chanin Capital OK'd as Panel's Financial Advisor EARTHSHELL CORP: Organizational Meeting Scheduled on January 31 EARTHSHELL CORPORATION: Auction for Assets Scheduled on March 7 EDDIE BAUER: 4th Qtr. Ended Dec. 30, 2006 Net Sales Up by $4 Mil. ENCORE ACQUISITION: Anadarko Deal Cues S&P to Hold BB Debt Rating FIAT SPA: S&P Holds Low-B Long & Short Term Corp. Credit Ratings FORD MOTOR: U.S. Market Rank May Fall by Two Notches, Mulally Says FORD MOTOR: Loss Wasn't A Surprise, Says UAW President FR BRAND: S&P Junks Rating on Proposed $350 Million 2nd Lien Loan GC IMPSAT: Moody's Rates Proposed $200 Million Senior Notes at B3 GLOBAL GEOPHYSICAL: S&P Holds Junk Rating on Second-Lien Facility GRANT GROVE: Moody's Puts Ba2 Rating on $9 Million Class E Notes GREEN VALLEY: Moody's Affirms B2 Corporate Family Rating HEALTH MANAGEMENT: Returns $2.4 Bil. to Shareholders as Dividend HOLLINGER INC: Receiver Appeals Ravelston Charges by U.S. Attorney HSI ASSET: Fitch Rates $1.3 Million Class B-5 Certificates at B IPCS INC: Says COO Alan G. Morse Left Post by Mutual Agreement J/Z CBO: Fitch Keeps Junk Rating on $36.6 Million Class D Notes JACUZZI BRANDS: Stockholders Okay $1.25 Billion Apollo Merger Deal JACUZZI BRANDS: Settles Four Stockholder Class Action Lawsuits JACUZZI CORP: High Leverage Cues Moody's B2 Corp. Family Rating JP MORGAN: Fitch Assigns BB Rating on Class M-11 Certificates MCJUNKIN CORP: S&P Holds BB Rating on $300 Mil. Credit Facility MCKESSON CORP: Signs New $1.8BB Interim Credit Facility with BofA MCKESSON CORP: Completes Acquisition of Per-se Technologies Inc. MEDIFACTS INT'L: Files for Chapter 11 Protection in Delaware MEDIFACTS INT'L: Case Summary & 20 Largest Unsecured Creditors METSO CORP: Paper Unit Inks EUR100-Million Supply Deal in Japan NASDAQ STOCK: Decides Not to Raise "$24.42 a Share" Offer to LSE NATIONAL CINEMEDIA: Moody's Rates Proposed $805 Mil. Debt at B1 NEENAH FOUNDRY: Closes Private Placements of $300 Mil. Sr. Notes NEWCOMM WIRELESS: Creditors Must File Proofs of Claim by Feb. 7 NOVELIS INC: In Sale Talks, India-based Group May Make an Offer NOVELL INC: Wal-Mart Supports Alliance with Microsoft NOVELL INC: Receives NASDAQ Notice of Non-Compliance PACIFIC LUMBER: Selects Howard Rice as Bankruptcy Counsel PACIFIC LUMBER: Taps Jordan Hyden as Bankruptcy Counsel PACIFIC LUMBER: Wants Access to Cash Collateral Until February 9 PERFORMANCE TRANSPORTATION: Emerges from Bankruptcy PHH: Fitch Rates $1.3 Million Class II-B-5 Certificates at B PREMIER ENT: Unsecured Creditors to Receive 100% of Claims RBS GLOBAL: Moody's Puts B3 Rating on $150 Mil. Sr. Notes Due 2016 READER'S DIGEST: Earns $62 Million in Second Quarter Ended Dec. 31 RESIDENTIAL FUNDING: Fitch Holds Low-B Ratings on 8 Cert. Classes REVLON INC: Completes $100 Million Rights Offering REXNORD CORP: Proposed New $150MM Sr. Notes Get S&P's Junk Rating SALTON SEA: Moody's Upgrades Senior Debt Rating to Baa3 from Ba1 SCOTTISH RE: Shareholders to Vote on MassMutual Deal on Feb. 23 SMARTIRE SYSTEMS: Inks Sale Agreement for $1.8 Million Debentures TASMAN CDO: Moody's Rates $4 Mil. Class C Mezzanine Notes at Ba1 TD AMERITRADE: Earns $146 Mil. in First Fiscal Qtr. Ended Dec. 31 TITAN GLOBAL: Greystone Completes Private Block Purchase of Stock TRANSDIGM INC: S&P Holds B+ Rating on Proposed $1.03 Billion Loan UNIVERSITY HEIGHTS: Wants Until May 10 to Decide on Leases US AIRWAYS: Improved Bid Grants Recovery for Delta Air Creditors US AIRWAYS: Keeps Mum on Upped Delta Air Offer USA COMMERCIAL: Panel Taps Diamond McCarthy as Special Counsel WENDY'S INTERNATIONAL: Enters Employment Deal with Kerrii Anderson WERNER LADDER: U.S. Trustee Appoints Official Creditors Committee WERNER LADDER: Wants Exclusive Plan Filing Period Moved to March 9 WEST TRADE: Moody's Assigns Ba1 Rating to $4.5 Mil. Class F Notes WILLIAM BOWMAN: Organizational Meeting Scheduled on February 7 *Don Pelto Joins Intellectual Property Group of Sheppard Mullin *Lisa H. Lipman Joins Cohen Grigsby's Florida Office as Associate * Large Companies with Insolvent Balance Sheets ********* ABITIBI-CONSOLIDATED: Inks All-Stock Merger Deal with Bowater ------------------------------------------------------------- Abitibi-Consolidated Inc. and Bowater Incorporated disclosed a definitive agreement to combine in an all-stock merger of equals. The combination will create a new leader in publication papers -- an operationally and financially stronger company better able to meet changing customer needs, compete more effectively in an increasingly global market, adapt to lower demand for newsprint in North America, and deliver increased value to shareholders. The combined company, which will be called AbitibiBowater Inc., will have pro forma annual revenues of approximately $7.9 billion or CDN$9.3 billion, making it the third largest publicly traded paper and forest products company in North America and the eight largest in the world. The current combined enterprise value of the two companies is in excess of $8 billion or CDN$9.4 billion. John W. Weaver, president and chief executive officer of Abitibi- Consolidated, will be executive chairman of AbitibiBowater, and David J. Paterson, chairman, president and chief executive officer of Bowater, will be president and chief executive officer of AbitibiBowater. The AbitibiBowater Board of Directors will consist of 14 directors, seven from each company. AbitibiBowater's headquarters and executive office will be located in Montreal, Quebec, with a U.S. regional manufacturing and sales office in Greenville, South Carolina. The company, which will be incorporated in Delaware as the new parent company, will apply to list its shares on the New York and Toronto stock exchanges. Under the terms of the transaction, each common share of Abitibi- Consolidated will be exchanged for 0.06261 common share of AbitibiBowater, and each Bowater common share will be exchanged for 0.52 common share of AbitibiBowater. The exchange ratio will result in 48% of AbitibiBowater being owned by former Abitibi- Consolidated shareholders and 52% of AbitibiBowater being owned by former Bowater shareholders. The combination is expected to generate approximately $250 million or CDN$295 million of annualized cost synergies from improved efficiencies in such areas as production, selling, general and administrative costs, distribution and procurement. These synergies are in addition to cost saving initiatives already in process at both companies. Mr. Weaver said, "The new AbitibiBowater will be a global leader headquartered in Canada with a brighter future than either company would have on its own. The combined company's ability to realize significant synergies will increase shareholder value, improve our financial flexibility and better position us to compete in today's increasingly competitive global marketplace. Combining our companies is also the best way to continue to contribute to the local and regional economies of the communities in which we operate." Mr. Paterson said, "This is a logical strategic step to address the realities of today's marketplace. A more efficient manufacturing platform will enable us to bring our customers better product quality, new product innovation, and improved logistical flexibility. Both Abitibi-Consolidated and Bowater shareholders will benefit from the upside potential of a financially stronger company that is able to generate significant cost synergies, improve its balance sheet, and compete more effectively." AbitibiBowater's product lines will include newsprint, uncoated and coated mechanical papers, market pulp, and wood products. The company will also be one of the world's leading consumers of recycled newspapers and magazines as it builds on the existing efforts of both companies to be leaders in environmentally sustainable production practices. AbitibiBowater will own or operate 32 pulp and paper facilities and 35 wood product facilities located mainly in Eastern Canada and the Southeastern U.S. Pro forma combined paper production capacity is approximately 11.3 million tonnes per year and about 3.1 billion board feet of lumber. Transaction Details The exchanges of Abitibi-Consolidated and Bowater common shares for AbitibiBowater common shares will be tax deferred for U.S. resident holders of Abitibi-Consolidated and Bowater common shares. Taxable Canadian resident holders of Abitibi-Consolidated common shares may elect to receive on a tax-deferred basis exchangeable shares of a Canadian subsidiary of AbitibiBowater. AbitibiBowater will apply to list these exchangeable shares on the Toronto Stock Exchange. These shares will be exchangeable into AbitibiBowater common shares at the option of their holders. For Abitibi-Consolidated, the combination will be achieved through a Canadian Court-approved Plan of Arrangement requiring the affirmative vote of the holders of two-thirds of the Abitibi- Consolidated common shares present or represented by proxy at a meeting of Abitibi-Consolidated shareholders. For Bowater, the combination will be effected through a Delaware merger requiring the affirmative vote of a majority of all outstanding Bowater common shares at a meeting of Bowater shareholders. The combination has been approved unanimously by the Boards of Directors of both companies, which received fairness opinions from their respective financial advisors. The combination is subject to approval by the shareholders of both companies, regulatory approvals, and customary closing conditions. It is expected to be completed in the third quarter of 2007. Abitibi-Consolidated and Bowater will continue to operate separately until the transaction closes. For Abitibi-Consolidated, CIBC World Markets Inc. and Credit Suisse Securities (USA) LLC acted as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Davies Ward Phillips & Vineberg LLP, and McCarthy T,trault LLP acted as legal advisors. For Bowater, Goldman, Sachs & Co. and UBS Investment Bank acted as financial advisors and Troutman Sanders LLP, Ogilvy Renault LLP, and Mayer, Brown, Rowe & Maw LLP acted as legal advisors. About Bowater Incorporated Bowater Inc. (NYSE: BOW, TSX: BWX) -- http://www.bowater.com/-- produces coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada, and South Korea. In North America, it also owns two converting facilities and 10 sawmills. Bowater's operations are supported by approximately 835,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines. About Abitibi-Consolidated Inc. Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/-- is a global supplier in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.9 million tonnes of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands. ABITIBI-CONSOLIDATED: Moody's Holds Corporate Family Rating at B1 ----------------------------------------------------------------- Moody's Investors Service affirmed Abitibi-Consolidated Inc.'s B1 corporate family, B2 senior unsecured and SGL-2 speculative grade liquidity ratings but revised the outlook to developing from stable. The action comes after the company's disclosure of a proposed merger with Bowater Incorporated, and is based on the assessment that the transaction is expected to have a minimal impact on the company's credit profile. In turn, this is based on the fact that both companies have the same ratings and all consideration will be non-cash. Consequently, there is no immediate impact on the relationship between debt and cash flow. In addition, the transaction's expected cost savings and synergy benefits, while potentially significant, are not sufficient to prompt a positive outlook or ratings upgrade. Indeed, with both companies being weakly positioned at the B1 level, the expected benefits serve only to improve relative positioning at the prevailing rating. Owing to the transaction not closing until September and the very significant uncertainties that exist, i.e. the vagaries of shareholder and regulatory approval, composition of a combined management team, formulation of board and financial policies, and the structural status of individual bond issues at each company vis-a-vis the other and vis-a-vis a yet-to-be arranged operating credit facility, the ratings outlook was changed to developing. Moody's considers both predecessor companies to be weakly positioned at the prevailing B1 level, with very poor credit protection measures only being partially off-set by favorable rating signals derived from business profile type measures such as aggregate size and scale and cost competitiveness. However, given the two companies' geographic and product line overlap, the prospective transaction provides good scope for significant cost savings and synergies. Moody's also expects the combined company, AbitibiBowater, Inc., to have an improved ability to appropriately anticipate the evolving supply-demand dynamic in the North American mechanical pulp-based communication paper market. Accordingly, Moody's expects the benefits of the business combination to cause future performance and credit protection measures more appropriate for the B1 rating level. In the interim, the prospect of the transaction's benefits forestalls adverse rating activity. It should be noted that the transaction does not address the fundamental issue of print media being disadvantaged relative to digital. The forces that have generated the past several years' very poor financial performance are in no way combated by this transaction. In addition, $-denominated spot pricing for newsprint and uncoated mechanical papers has recently retreated from highs observed in mid-to-late 2006. This reverses a trend that had seen $-denominated prices increase steadily over a four year period. With the transaction not expected to close for several months, this development creates a concern that a significant proportion of the business combination's benefits may be swamped by extraneous forces before it can be consummated. This is especially the case given that a significant proportion of the expected benefits will not be realized until well into 2008. Accordingly, in the event the transaction does not proceed or is significantly delayed, or if business conditions deteriorate markedly, there is a potential for an adverse rating action. Outlook Actions: * Abitibi-Consolidated Company of Canada -- Outlook, Changed To Developing From Stable * Abitibi-Consolidated Finance L.P. -- Outlook, Changed To Developing From Stable * Abitibi-Consolidated Inc. -- Outlook, Changed To Developing From Stable * Donohue Forest Products Inc. -- Outlook, Changed To Developing From Stable Abitibi-Consolidated Inc., headquartered in Montreal, Quebec, is North America's leader in newsprint and uncoated mechanical paper and also has a significant lumber business. AEGIS ASSET: Fitch Lowers 2004-1 Cl. B3 Certificate Rating to BB- ----------------------------------------------------------------- Fitch has affirmed 98, downgraded 6, and placed 9 classes on Rating Watch Negative from these 11 Aegis Asset-Backed Securities: Series 2003-3 --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B downgraded to 'BBB-' from 'BBB'. Series 2004-1 --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B1 rated 'BBB+', placed on Rating Watch Negative; --Class B2 downgraded to 'BBB-' from 'BBB'; --Class B3 downgraded to 'BB-' from 'BBB-'. Series 2004-2 --Classes A1, A3 and A5 affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B1 downgraded to 'BBB-' from 'BBB+'; --Class B2 downgraded to 'BB' from 'BBB'; --Class B3 downgraded to 'BB-' from 'BBB-'. Series 2004-3 --Classes A1 and A2-B affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 rated 'BBB', placed on Rating Watch Negative; --Class B3 rated 'BBB-', placed on Rating Watch Negative. Series 2004-4 --Classes A1 and A2-B affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'; --Class B3 affirmed at 'BBB-'. Series 2004-5 --Classes IA3 and IIA1 affirmed at 'AAA'; --Class M1 affirmed at 'AA'; --Class M2 affirmed at 'A'; --Class M3 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'; --Class B3 affirmed at 'BBB-'. Series 2005-1 --Classes IA2, IA3, IIA1 and IIA2 affirmed at 'AAA'; --Class M1 affirmed at 'AA+'; --Class M2 affirmed at 'AA'; --Class M3 affirmed at 'AA-'; --Class M4 affirmed at 'A+'; --Class M5 affirmed at 'A'; --Class M6 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'; --Class B3 affirmed at 'BBB-'. Series 2005-2 --Classes IA2, IA3, IIA1 and IIA2 affirmed at 'AAA'; --Class M1 affirmed at 'AA+'; --Class M2 affirmed at 'AA'; --Class M3 affirmed at 'AA-'; --Class M4 affirmed at 'A+'; --Class M5 affirmed at 'A'; --Class M6 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'. Series 2005-3 --Classes A2 and A3 affirmed at 'AAA'; --Class M1 affirmed at 'AA+'; --Class M2 affirmed at 'AA'; --Class M3 affirmed at 'AA-'; --Class M4 affirmed at 'A+'; --Class M5 affirmed at 'A'; --Class M6 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'; --Class B3 affirmed at 'BBB-'. Series 2005-4 --Classes IA1, IA2, IA3, IA4, and IIA affirmed at 'AAA'; --Class M1 affirmed at 'AA+'; --Class M2 affirmed at 'AA+'; --Class M3 affirmed at 'AA'; --Class M4 affirmed at 'AA-'; --Class M5 affirmed at 'A+'; --Class M6 affirmed at 'A-'; --Class B1 affirmed at 'BBB+'; --Class B2 affirmed at 'BBB'; --Class B3 affirmed at 'BBB'; --Class B4 affirmed at 'BBB-'; --Class B5 rated 'BB+', placed on Rating Watch Negative; --Class B6 rated 'BB', placed on Rating Watch Negative. Series 2005-5 --Classes IA1, IA2, IA3, IA4, and IIA affirmed at 'AAA'; --Class M1 affirmed at 'AA+'; --Class M2 affirmed at 'AA+'; --Class M3 affirmed at 'AA'; --Class M4 affirmed at 'AA-'; --Class M5 affirmed at 'A+'; --Class M6 affirmed at 'A'; --Class B1 affirmed at 'A-'; --Class B2 affirmed at 'BBB+'; --Class B3 affirmed at 'BBB'; --Class B4 rated 'BBB', placed on Rating Watch Negative; --Class B5 rated 'BBB-', placed on Rating Watch Negative; --Class B6 rated 'BB', placed on Rating Watch Negative. The collateral for the above pools consists of primarily conventional, first lien, adjustable- and fixed-rate, fully amortizing and balloon, residential mortgage loans extended to sub-prime borrowers. Aegis Mortgage Corporation, the seller, is a privately held mortgage banking company that originates residential mortgage loans. The affirmations affect approximately $3.79 billion in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The classes with negative rating actions and the classes placed on Rating Watch Negative reflect the deterioration in the relationship of CE to future loss expectations and affects $59.86 million and $84.26 million in outstanding certificates, respectively. With the exception of series 2003-3, the overcollateralization (OC) of all the transactions prior to 2005 with negative action is below the target amount and has experienced several months of OC deterioration. Although the OC of 2003-3 is currently above the target amount due to the recent step-down of the target amount in December 2006, the OC had been below the target amount for the nearly one year prior to the step-down date due to losses generally exceeding the available excess spread. The deteriorating relationship of losses to excess spread in the trusts has put negative pressure on the subordinate bonds. Several classes from Series 2005-4 and 2005-5 were placed on Rating Watch Negative due to early trends in the relationship between serious delinquency and credit enhancement. Both transactions have delinquency figures well above the industry average. For 2005-4, the amount of loans 60+ days delinquent at 16 months seasoning as a percentage of the current pool balance is 15.57%. The CE of the B-5 and B-6 classes is 3.49% and 2.33%, respectively. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.96%. For 2005-5, the amount loans 60+ days delinquent at 14 months seasoning as a percentage of the current pool balance is 18.18%. The CE of the B-4, B-5, and B-6 classes is 5.27%, 3.92% and 2.43%, respectively. The excess spread available to cover losses as an annualized percentage of the current pool balance is approximately 1.31%. Master servicer for Series 2004-2, 2004-5, and all the 2005 series is Wells Fargo Home Mortgage, Inc. Series 2003-3, 2004-1, 2004-3, and 2004-4 are being serviced by Chase Manhattan Mortgage Corporation. AEROBOX Composite: Files for Chapter 11 Protection in New Mexico ---------------------------------------------------------------- AeroBox Composite Structures LLC, the main operating subsidiary of AeroBox Plc, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of New Mexico. Under the terms of the petition, ACS is being funded by its previously secured lender Laurus Master Fund. In view of this event the prospects of any returns for shareholders of ARX are likely to be minimal. The Board of ARX continues to examine options for ARX and will make further announcements when appropriate. As previously reported in the TCR-Europe on Sept. 19, 2006, AeroBox Plc suspended the trading of its shares on the AIM market of the London Stock Exchange on Sept. 15, pending clarification of the company's financial position. The company's directors advised that AeroBox Composite Structures should seek court protection under Chapter 11 of the U.S. Bankruptcy Code. The company said that its funding options have now been exhausted and with limited cash resources, the Board has requested an immediate suspension of trading in the company's shares in order to seek the best possible outcome for all shareholders. Headquartered in London, United Kingdom, Aerobox Plc -- http://www.aeroboxPlc.com/-- acts as a holding company and has traded on the AIM market of the London Stock Exchange. It has one 100% owned subsidiary-Aerobox Composite Structures LLC (fka Aerospace Composite Structures LLC) that was formed in September 1998 in Albuquerque, New Mexico, USA, to exploit composites technology and was acquired by Aerobox Plc in March 2003. AEROBOX COMPOSITE: Case Summary & 27 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Aerobox Composite Structures LLC fka Aerospace Composite Structures LLC 4321 B Fulcrum Way Northeast Rio Rancho, NM 87144 Tel: (505) 332-7709 Bankruptcy Case No.: 07-10138 Type of Business: Aerobox Composite Structures LLC and Aerobox Plc, its holding company, manufacture and market robust metal containers for use in the cargo hold of commercial airliners. Their 'Aeroplaz' container uses composite material for panel production that overcomes the drawbacks of the conventional products while providing increased robustness, improved repair-ability, and reduced life cycle costs. See http://www.acsusa.net/ Chapter 11 Petition Date: January 23, 2007 Court: District of New Mexico Judge: Mark McFeeley Debtor's Counsel: Peter Lubitz, Esq. Schiff Hardin LLP 623 5th Avenue New York, NY 10022 Tel: (212) 745-0817 Fax: (212) 753-5044 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 27 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alcoa Engineered Products Trade Debt $331,803 6833 West Willis Road Chandler, AZ 85226 Tel: (520) 796-1098 Butler International Inc. Trade Debt $260,301 P.O. Box 85488 Charlotte, NC 282065 Tel: (505) 883-2700 c/o Terry O'Brien Alcoa Milled Products Trade Debt $186,018 Department LA 21264 Pasadena, CA 91185-1264 Tel: (626) 398-3504 Eagle Global Logistics Trade Debt $153,338 P.O. Box 844650 Dallas, TX 75284-4650 Tel: (214) 242-8000 c/o Jon E. Pickett Wells Fargo Bank $100,790 P.O. Box 348750 Sacramento, CA Euro-Projects (LTTC) Ltd. $90,598 Estex Manufacturing Company Trade Debt $79,941 Ashland Distribution Company Trade Debt $45,280 Profile Precision Extrusions Trade Debt $37,150 Seyfarth Shaw LLP Loan Fee $35,846 Excel Staffing Company Trade Debt $34,472 The Tricont Company Trade Debt $29,083 Accounting Principals Trade Debt $27,917 Schiff Hardin LLP $26,780 ABF Freight System Trade Debt $21,360 Aircraft Hardware West, Inc. $20,974 Keleher & McLeod, P.A. $20,579 EBS Group $18,930 Lofthouse $17,885 Welch Equipment Company $16,054 Desert Machine $14,720 Aluminum Precision Oxnard $10,215 Werner Enterprises, Inc. $10,187 DGI Supply A DoAll Company $8,735 MSI $8,500 A-1 Boiler Service $8,207 Associated Global $8,153 AIR AMERICA: Inks Agreement with Stephen Green on Likely Sale ------------------------------------------------------------- Air America Radio disclosed Monday that it had reached a tentative agreement with Stephen Green, founder and chairman of SL Green Realty Corp., on a possible sale of the company, The Associated Press reports. The sale however would have to be approved by the U.S. Bankruptcy Court for the Southern District of New York. Citing Air America spokeswoman Jamie Horn, AP relates that the company signed a letter of intent to sell itself to Mr. Green and expects to agree on the financial terms soon. SL Green is a real estate investment trust that owns and manages office properties, mainly in Manhattan, with 27 million square feet of space under its control. Air America Radio, aka Piquant LLC -- http://www.airamerica.com/ -- is a full-service radio network and program syndication service in the United States. The network features discussion and information programs reflecting a liberal, left wing, or progressive point of view. Air America filed a voluntary Chapter 11 petition on Oct. 13, 2006 (Bankr. S.D.N.Y. Case No: 06-12423) Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it disclosed total assets of approximately $4.3 million and total debts of over $20 million. AJAY SPORTS: Files Schedules of Assets and Liabilities ------------------------------------------------------ Ajay Sports Inc. and its debtor-affiliates delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Eastern District of Michigan disclosing: Ajay Sports Inc. Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $5,890,429 C. Property Claimed as Exempt D. Creditors Holding $5,493,092 Secured Claims E. Creditors Holding $0 Unsecured Priority Claims F. Creditors Holding $3,799,044 Unsecured Non-priority Claims ----------- ----------- Total $5,890,429 $9,292,136 ProGolf International, Inc. Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $12,418,895 C. Property Claimed as Exempt D. Creditors Holding $12,929,811 Secured Claims E. Creditors Holding $0 Unsecured Priority Claims F. Creditors Holding $3,339,658 Unsecured Non-priority Claims ----------- ----------- Total $12,318,895 $16,269,469 ProGolf of America, Inc. Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $10,675,300 C. Property Claimed as Exempt D. Creditors Holding $10,263,092 Secured Claims E. Creditors Holding $2,839 Unsecured Priority Claims F. Creditors Holding $6,167,072 Unsecured Non-priority Claims ----------- ----------- Total $10,675,300 $16,433,003 ProGolf.com, Inc. Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $1,026,449 C. Property Claimed as Exempt D. Creditors Holding $5,493,092 Secured Claims E. Creditors Holding $0 Unsecured Priority Claims F. Creditors Holding $1,910,519 Unsecured Non-priority Claims ----------- ----------- Total $1,026,449 $7,403,611 Headquartered in Farmington, Mich., Ajay Sports Inc. operates the franchise segment of its business through Pro Golf International, a 97% owned subsidiary, which was formed during 1999 and owns 100% of the outstanding stock of Pro Golf of America, and 80% of the stock of ProGolf.com, which sells golf equipment and other golf- related and sporting goods products and services over the Internet. The company and its affiliates filed for chapter 11 protection on Dec. 27, 2006 (Bankr. E.D. Mich. Case Nos. 06-529289 through 06-529292). Arnold S. Schafer, Esq., and Howard M. Borin, Esq., at Schafer and Weiner, PLLC, represent the Debtor in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets less than $10,000 and debts between $1 million to $100 million. AJAY SPORTS: U.S. Trustee Picks Four-Member Creditors Committee --------------------------------------------------------------- Saul Eisen, the U.S. Trustee for Region 9, has appointed four creditors to serve on an Official Committee of Unsecured Creditors in Ajay Sports Inc. and its debtor-affiliates' chapter 11 cases: 1. Ronald N. Silberstein 30201 Orchard Lake Road, Suite 150 Farmington Hills, Michigan 48334 Tel: (248) 302-3344 2. Mark Jacobs Mars Advertising Company, Inc. 25200 Telegraph Road, 5th Floor Southfield, Michigan 48033 Tel: (248) 936-2332 Fax: (248) 936-2768 3. Henry W. Hooker 360 Vaughn Road Nashville, Tennessee 37221 Tel: (615) 742-8691 Fax: (615) 742-6334 4. Bradford Williamson Hooker 2 St. George's Terrace, Blockley Moreton-in-Marsh, GL569BN, UK Tel: 011-44-1386-700988 Fax: 011-44-1386-700128 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Farmington, Mich., Ajay Sports Inc. operates the franchise segment of its business through Pro Golf International, a 97% owned subsidiary, which was formed during 1999 and owns 100% of the outstanding stock of Pro Golf of America, and 80% of the stock of ProGolf.com, which sells golf equipment and other golf- related and sporting goods products and services over the Internet. The company and its affiliates filed for chapter 11 protection on Dec. 27, 2006 (Bankr. E.D. Mich. Case Nos. 06-529289 through 06-529292). Arnold S. Schafer, Esq., and Howard M. Borin, Esq., at Schafer and Weiner, PLLC, represent the Debtor in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets less than $10,000 and debts between $1 million to $100 million. ASARCO LLC: Asarco Master Can Sell San Francisco Property --------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas has approved uniform bidding procedures that will govern the auction and sale process of the real property owned by ASARCO Master Inc. located in San Francisco, Calif. ASARCO Master Inc. had sought the Court's authority to sell approximately 0.3 acres of real property located in San Francisco, California, free and clear of liens, claims, encumbrances and interests, to 1450 Marin St., LLC. Marin initially offered to purchase the San Francisco Property for $150,000. However, ASARCO Master was able to obtain appraisal from Robertson Partners valuing the Property at $188,400 on a 12-year return, and $210,000 on a 13.3-year return. After negotiations and pursuant to a purchase and sale agreement, Marin agreed to pay $160,000 in cash for the Property, $50,000 of which will be deposited to First American Title Insurance Company, as escrow agent. Because of the San Francisco Property's environmental conditions, ASARCO Master decided to accept Marin's offer, subject to better and higher bids. Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Plaza, relates that the San Francisco Property is a capped repository for a former smelter site. ASARCO Master must maintain the asphalt cap, cannot penetrate the cap with any foundation, and cannot build on the site. The California Department of Toxic Substances Control also requires the Debtors to, among other things: -- maintain a $5,000 bond; -- visually inspect the asphalt payment for cracks or signs of deterioration semi-annually; and -- repair any significant cracks or signs of deterioration promptly. Because of those requirements and the limitations on the use of the San Francisco Property, Mr. Davis contends that there is no readily available market for it. To maximize the value to be realized from the sale of the San Francisco Property, ASARCO Master will subject the proposed sale to a market test through an auction through uniform bidding procedures: (1) Interested bidders must deliver their competing offers to Jack Gracie, Ruth Graham Kern, Baker Botts, L.L.P., and Reed Smith, LLP, so that their bids are received five to seven days before the Auction. (2) The Competing Bid must state the bidder's willingness to purchase the San Francisco Property and must be accompanied by a $50,000 deposit, which will be transferred by wire to the Escrow Agent. (3) The Competing Bid must create value to the San Francisco Property in an amount at least $9,000 greater than the Purchase Price. Bidding will begin initially with the highest Qualifying Bid and continue in minimum increments of at least $1,000 higher than the previous bid. (4) If more than one Qualifying Bid is received, ASARCO Master will conduct an auction at the offices of ASARCO LLC, at 1150 North 7th Avenue, in Tucson, Arizona, on a date yet to be determined. (5) If no Qualifying Bid is received, a hearing to approve the sale of the San Francisco Property to Marin will be held two to three days after the Auction. (6) If ASARCO Master enters into a purchase agreement with another bidder other than Marin, Marin will receive a $4,800 Break-Up Fee. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Court OKs Avalos Realty as Trustee's Real Estate Agent ------------------------------------------------------------------ The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas authorizes Michael Boudloche, Chapter 7 trustee for Encycle/Texas Inc., to retain Armando Avalos Realty Inc. as his real estate agent, for the sale of the company's property in Nueces County, Texas. As reported in the Troubled Company Reporter on Dec. 27, 2006, Armando Avalos Realty will assist the Encycle Trustee in marketing the real property and liquidating it for the best and highest price. Armando Avalos Realty has examined and evaluated the Property and has agreed to advertise it to interested parties. For the marketing of the Dunn Tr. Property, Armando Avalos Realty will receive a commission of: -- 4% for Purchase Price up to $10,000,000; -- 3.5% for Purchase Price from $10,000,001 to $15,000,000; -- 3.5% for Purchase Price from $15,000,001 to $20,000,000; and -- 3% for Purchase Price from and more than $20,000,0001. Armando Avalos, president of Armando Avalos Realty, assures the Court that his firm does not represent any adverse interest to the estate and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Union to Vote on Agreement on February 5 to 9 --------------------------------------------------------- The United Steelworkers disclosed that ratification votes on a tentative 42-month agreement with ASARCO covering some 1,600 hourly workers will be held by the local unions Feb. 5-9, 2007, at locations where union members are employed, according to USW District 12 Director Terry Bonds, who also chairs the USW's Nonferrous Industry Conference. The agreement includes: * a $3,000 ratification bonus; * wage increases of $1 per hour retroactive to Jan. 1, 2007; * $1 increases effective Sept. 30, 2008 and 2009; * quarterly bonuses tied to the price of copper; and * a 20% increase in the pension formula. Other highlights include: * no increase in active health care or prescription drug contributions; * a new SUB Plan and insurance continuation for employees who are laid off; * improvements in other benefit plans; and * restoration of most of the health care benefits for previous retirees whose benefits were cut unilaterally by ASARCO in August 2003, and a sizeable reduction in monthly contributions. The proposed agreement has been unanimously recommended for approval by the entire bargaining committee, which, in addition to the USW, includes representatives from the IBEW, IAM, Boilermakers, Teamsters, Operating Engineers, Millwrights and Pipefitters. The results will be totaled and each member's vote will count equally. The majority of the total votes cast will determine the results. Following ratification, the agreement will be subject to approval of the bankruptcy court. "The proposed agreement was unanimously recommended for approval by the bargaining committee," Mr. Bonds said. "We've negotiated landmark security protections never before achieved in the U.S. mining industry. It's a real milestone for workers in the copper industry." About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASSOCIATED MATERIALS: Chris Stadler Resigns as Company's Director ----------------------------------------------------------------- Christopher J. Stadler has resigned as director of Associated Materials Inc., AMH Holdings, Inc., indirect parent company of AMI, and AMH Holdings II, Inc., direct parent company of AMH. The company states that Mr. Stadler's resignation was not the result of any disagreement with the company, known to any executive officer of the company, on any matter relating to the company's operations, policies or practices. At the time of his resignation, Mr. Stadler was a member of the compensation committee of the company's Board of Directors. About Associated Materials Associated Materials Inc. -- http://www.associatedmaterials.com -- manufactures exterior residential building products which are distributed through company-owned distribution centers and independent distributors across North America. The company produces a range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. The company is a privately held, wholly- owned subsidiary of Associated Materials Holdings Inc., which is a wholly-owned subsidiary of AMH Holdings Inc., which is a wholly- owned subsidiary of AMH Holdings II Inc., which is controlled by affiliates of Investcorp S.A. and Harvest Partners Inc. Founded in 1982, Investcorp S.A. -- http://www.investcorp.com/-- is a global investment group with offices in New York, London and Bahrain. The firm has four lines of business: corporate investment, real estate investment, asset management and technology investment. Harvest Partners Inc. -- http://www.harvpart.com/-- is a private equity investment firm with a long track record of building value in businesses and generating attractive returns on investment. Founded in 1981, Harvest Partners has approximately $1 billion of invested capital under management. * * * Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings, Inc. AMH Holdings' corporate family rating and ratings on the AMI's senior secured credit facilities were downgraded to B3 from B2, effective Jan. 19, 2006. Moody's said the ratings outlook is stable. ASSOCIATED MATERIALS: Holders Pick Kevin Nickelberry as Director ---------------------------------------------------------------- The stockholders of Associated Materials Inc. has elected Kevin C. Nickelberry as director, replacing Christopher J. Stadler. Mr. Nickelberry was a principal at the New York office of Investcorp S.A. Through its affiliates, Investcorp maintains beneficial ownership of 500,000 shares of AMH II's Class A convertible preferred stock, representing a 50% voting interest in AMH II. Pursuant to the AMH II Stockholders Agreement dated Dec. 22, 2004, Investcorp has the right to designate three of the seven members of the Board of Directors of the company. Associated Materials Inc. -- http://www.associatedmaterials.com/ -- manufactures exterior residential building products which are distributed through company-owned distribution centers and independent distributors across North America. The company produces a range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. The company is a privately held, wholly- owned subsidiary of Associated Materials Holdings Inc., which is a wholly-owned subsidiary of AMH Holdings Inc., which is a wholly- owned subsidiary of AMH Holdings II Inc., which is controlled by affiliates of Investcorp S.A. and Harvest Partners Inc. Founded in 1982, Investcorp S.A. -- http://www.investcorp.com/-- is a global investment group with offices in New York, London and Bahrain. The firm has four lines of business: corporate investment, real estate investment, asset management and technology investment. Harvest Partners Inc. -- http://www.harvpart.com/-- is a private equity investment firm with a long track record of building value in businesses and generating attractive returns on investment. Founded in 1981, Harvest Partners has approximately $1 billion of invested capital under management. * * * Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings, Inc. AMH Holdings' corporate family rating and ratings on the AMI's senior secured credit facilities were downgraded to B3 from B2, effective Jan. 19, 2006. Moody's said the ratings outlook is stable. ATIBI-CONSOLIDATED: To Form Joint Venture for Ontario Power Plants ------------------------------------------------------------------ Abitibi-Consolidated Inc. has entered into a binding letter of intent with the Caisse de depot et placement du Quebec to create a joint-venture for the company's Ontario hydroelectric generation facilities. The company will retain a 75% interest in the joint- venture, called ACH Limited Partnership, while the Caisse will acquire a 25% interest. The Caisse has also provided a commitment to ACH Limited Partnership for a 10-year unsecured term loan of $250 million, non-recourse to the company, to partially fund the acquisition of the facilities. The transaction, on a consolidated basis, is expected to yield gross proceeds of $297.5 million to Abitibi-Consolidated. ACH Limited Partnership is intended to be Abitibi-Consolidated's growth vehicle in energy generation. Abitibi-Consolidated's substantial ownership interest in the joint-venture reflects the ongoing strategic importance of its electricity generation assets. The company will enter into agreements by virtue of which it will continue to operate and manage the facilities. Closing of the transaction is expected to take place in the first half of 2007 and is subject to execution of definitive agreements and certain other conditions and approvals. Scotia Capital and CIBC World Markets have advised the company in regards to this transaction. ACH Limited Partnership encompasses eight hydroelectric facilities located in Ontario, representing an aggregate installed capacity of 136.8 MW and a normalised annual generation of approximately 828 GWh. About Abitibi-Consolidated Abitibi-Consolidated, Inc. (TSX: A) (NYSE: ABY) -- http://www.abitibiconsolidated.com/-- produces newsprint and commercial printing paper products from its 45 operating facilities. The Company also recycler newspapers and magazines, diverting approximately 1.9 million tonnes of waste paper from landfills annually approximately 1.9 million tonnes of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands. * * * As reported in the Troubled Company Reporter on Nov. 17, 2006, Standard & Poor's Ratings Services revised its outlook on Abitibi- Consolidated to negative from stable. S&P affirmed the ratings on the company, including the long-term corporate credit rating at 'B+'. BASIC ENERGY: S&P Rates Proposed $225 Mil. Credit Facility at BB ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on domestic oilfield services provider Basic Energy Services Inc. At the same time, Standard & Poor's assigned its 'BB' debt rating and '1' recovery rating to the company's proposed $225 million revolving credit facility. The outlook remains positive. Pro forma for the recently announced $120 million acquisition of JetStar Consolidated Holding Inc., Midland, Texas-based Basic will have about $335 million in total debt. "The positive outlook is predicated on Basic's improved operating performance and our expectation that the company will continue to fund growth initiatives in a prudent and balanced manner," said Standard & Poor's credit analyst Jeffrey Morrison. Basic is the third-largest workover rig provider in the U.S. BOWATER INC: Inks All-Stock Merger Deal With Abitibi-Consolidated ----------------------------------------------------------------- Bowater Incorporated and Abitibi-Consolidated Inc. disclosed a definitive agreement to combine in an all-stock merger of equals. The combination will create a new leader in publication papers -- an operationally and financially stronger company better able to meet changing customer needs, compete more effectively in an increasingly global market, adapt to lower demand for newsprint in North America, and deliver increased value to shareholders. The combined company, which will be called AbitibiBowater Inc., will have pro forma annual revenues of approximately $7.9 billion or CDN$9.3 billion, making it the third largest publicly traded paper and forest products company in North America and the eight largest in the world. The current combined enterprise value of the two companies is in excess of $8 billion or CDN$9.4 billion. John W. Weaver, president and chief executive officer of Abitibi- Consolidated, will be executive chairman of AbitibiBowater, and David J. Paterson, chairman, president and chief executive officer of Bowater, will be president and chief executive officer of AbitibiBowater. The AbitibiBowater Board of Directors will consist of 14 directors, seven from each company. AbitibiBowater's headquarters and executive office will be located in Montreal, Quebec, with a U.S. regional manufacturing and sales office in Greenville, South Carolina. The company, which will be incorporated in Delaware as the new parent company, will apply to list its shares on the New York and Toronto stock exchanges. Under the terms of the transaction, each common share of Abitibi- Consolidated will be exchanged for 0.06261 common share of AbitibiBowater, and each Bowater common share will be exchanged for 0.52 common share of AbitibiBowater. The exchange ratio will result in 48% of AbitibiBowater being owned by former Abitibi- Consolidated shareholders and 52% of AbitibiBowater being owned by former Bowater shareholders. The combination is expected to generate approximately $250 million or CDN$295 million of annualized cost synergies from improved efficiencies in such areas as production, selling, general and administrative costs, distribution and procurement. These synergies are in addition to cost saving initiatives already in process at both companies. Mr. Weaver said, "The new AbitibiBowater will be a global leader headquartered in Canada with a brighter future than either company would have on its own. The combined company's ability to realize significant synergies will increase shareholder value, improve our financial flexibility and better position us to compete in today's increasingly competitive global marketplace. Combining our companies is also the best way to continue to contribute to the local and regional economies of the communities in which we operate." Mr. Paterson said, "This is a logical strategic step to address the realities of today's marketplace. A more efficient manufacturing platform will enable us to bring our customers better product quality, new product innovation, and improved logistical flexibility. Both Abitibi-Consolidated and Bowater shareholders will benefit from the upside potential of a financially stronger company that is able to generate significant cost synergies, improve its balance sheet, and compete more effectively." AbitibiBowater's product lines will include newsprint, uncoated and coated mechanical papers, market pulp, and wood products. The company will also be one of the world's leading consumers of recycled newspapers and magazines as it builds on the existing efforts of both companies to be leaders in environmentally sustainable production practices. AbitibiBowater will own or operate 32 pulp and paper facilities and 35 wood product facilities located mainly in Eastern Canada and the Southeastern U.S. Pro forma combined paper production capacity is approximately 11.3 million tonnes per year and about 3.1 billion board feet of lumber. Transaction Details The exchanges of Abitibi-Consolidated and Bowater common shares for AbitibiBowater common shares will be tax deferred for U.S. resident holders of Abitibi-Consolidated and Bowater common shares. Taxable Canadian resident holders of Abitibi-Consolidated common shares may elect to receive on a tax-deferred basis exchangeable shares of a Canadian subsidiary of AbitibiBowater. AbitibiBowater will apply to list these exchangeable shares on the Toronto Stock Exchange. These shares will be exchangeable into AbitibiBowater common shares at the option of their holders. For Abitibi-Consolidated, the combination will be achieved through a Canadian Court-approved Plan of Arrangement requiring the affirmative vote of the holders of two-thirds of the Abitibi- Consolidated common shares present or represented by proxy at a meeting of Abitibi-Consolidated shareholders. For Bowater, the combination will be effected through a Delaware merger requiring the affirmative vote of a majority of all outstanding Bowater common shares at a meeting of Bowater shareholders. The combination has been approved unanimously by the Boards of Directors of both companies, which received fairness opinions from their respective financial advisors. The combination is subject to approval by the shareholders of both companies, regulatory approvals, and customary closing conditions. It is expected to be completed in the third quarter of 2007. Abitibi-Consolidated and Bowater will continue to operate separately until the transaction closes. For Abitibi-Consolidated, CIBC World Markets Inc. and Credit Suisse Securities (USA) LLC acted as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP, Davies Ward Phillips & Vineberg LLP, and McCarthy T,trault LLP acted as legal advisors. For Bowater, Goldman, Sachs & Co. and UBS Investment Bank acted as financial advisors and Troutman Sanders LLP, Ogilvy Renault LLP, and Mayer, Brown, Rowe & Maw LLP acted as legal advisors. About Bowater Incorporated Bowater Inc. (NYSE: BOW, TSX: BWX) -- http://www.bowater.com/-- produces coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada, and South Korea. In North America, it also owns two converting facilities and 10 sawmills. Bowater's operations are supported by approximately 835,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines. About Abitibi-Consolidated Inc. Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/-- is a global supplier in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.9 million tonnes of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands. * * * As reported in the Troubled Company Reporter on June 27, 2006, Fitch Ratings has assigned a 'BB' rating to Bowater Inc.'s senior secured bank debt. The company's issuer default ratings, 'BB-' and senior unsecured bond ratings, 'BB-', remain unchanged. The Rating Outlook remains Stable. BOWATER INC: Abitibi Merger Cues Moody's to Hold Low-B Ratings -------------------------------------------------------------- Moody's Investors Service affirmed Bowater Incorporated's B1 corporate family, B2 senior unsecured and SGL-2 speculative grade liquidity ratings but revised the outlook to developing from stable. The action follows the company's disclosure of a proposed merger with Abitibi-Consolidated Inc., and is based on the assessment that the transaction is expected to have a minimal impact on the company's credit profile. In turn, this is based on the fact that both companies have the same ratings and all consideration will be non-cash. Consequently, there is no immediate impact on the relationship between debt and cash flow. In addition, the transaction's expected cost savings and synergy benefits, while potentially significant, are not sufficient to prompt a positive outlook or ratings upgrade. Indeed, with both companies being weakly positioned at the B1 level, the expected benefits serve only to improve relative positioning at the prevailing rating. Owing to the transaction not closing until September and the very significant uncertainties that exist, i.e. the vagaries of shareholder and regulatory approval, composition of a combined management team, formulation of board and financial policies, and the structural status of individual bond issues at each company vis-a-vis the other and vis-a-vis a yet-to-be arranged operating credit facility, the ratings outlook was changed to developing. Moody's considers both predecessor companies to be weakly positioned at the prevailing B1 level, with very poor credit protection measures only being partially off-set by favorable rating signals derived from business profile type measures such as aggregate size and scale and cost competitiveness. However, given the two companies' geographic and product line overlap, the prospective transaction provides good scope for significant cost savings and synergies. Moody's also expects the combined company, AbitibiBowater, Inc., to have an improved ability to appropriately anticipate the evolving supply-demand dynamic in the North American mechanical pulp-based communication paper market. Accordingly, Moody's expects the benefits of the business combination to cause future performance and credit protection measures to improve modestly and be more appropriate for the B1 rating level. In the interim, the prospect of the transaction's benefits forestalls adverse rating activity. It should be noted that the transaction does not address the fundamental issue of print media being disadvantaged relative to digital. The forces that have generated the past several years' very poor financial performance are in no way combated by this transaction. In addition, $-denominated spot pricing for newsprint and uncoated mechanical papers has recently retreated from highs observed in mid-to-late 2006. This reverses a trend that had seen $-denominated prices increase steadily over a four year period. With the transaction not expected to close for several months, this development creates a concern that a significant proportion of the business combination's benefits may be swamped by extraneous forces before it can be consummated. This is especially the case given that a significant proportion of the expected benefits will not be realized until well into 2008. Accordingly, in the event the transaction does not proceed or is significantly delayed, or if business conditions deteriorate markedly, there is a potential for an adverse rating action. Outlook Actions: * Bowater Canada Finance Corp. -- Outlook, Changed To Developing From Stable * Bowater Incorporated -- Outlook, Changed To Developing From Stable Bowater Incorporated, headquartered in Greenville, South Carolina is a global leader in newsprint, with additional operations in coated and uncoated groundwood papers, bleached kraft pulp, and lumber products. CAITHNESS COSO: Moody's Lifts 6.263% Secured Notes' Rating to Ba1 ----------------------------------------------------------------- Moody's Investors Service upgraded Caithness Coso Funding Corp.'s 5.489% senior secured bonds due 2019 to Baa2 from Baa3 and 6.263% subordinated secured notes due 2014 to Ba1 from Ba2. Caithness Coso's rating outlook remains stable. The upgrade reflects: -- the project's relatively consistent operating and financial performance; -- strong debt service coverage ratios which are expected to be in excess of 2.0x for senior debt in each year and 1.50x for total debt in each year over the foreseeable future; -- the benefits to Caithness Coso's cash flows of receiving a higher fixed energy rate of 6.15 cents/kWh beginning on May 1, 2007; -- the continued improvement in off-taker credit quality along with the more reliable regulatory environment that is evolving in California; and, -- the report by Southern California Edison Company that it had signed new 20 year contracts with the Coso partnerships. Upon the effectiveness of these new contracts, which still require state regulatory approval, the Coso partnerships' exposure to energy price risk will be largely mitigated. Caithness Coso's ratings reflect the predictable cash flows generated from energy and capacity payments received under three power purchase agreements that currently expire at varying times though 2019 with SCE. The ratings incorporate the strong operating history of these plants, the experience of the operator, Coso Operating Company, which has operated the plants since their inception in the 1980's and the experience of Caithness Energy, COC's parent, which obtained a controlling interest in these plants in 1999 and owns other geothermal plants. The ratings further consider the importance of these geothermal assets to the California electric market, given the state's focus on renewable resources as a core component of their energy policy. The ratings further recognize the plants' very competitive operating cost profile relative to other generating resources within the region, as the Coso partnerships' variable costs of around 1.4 cents/kWh are below all fossil-fuel options in the western US, including base load coal. The rating outlook is stable and incorporates an expectation of continued strong operating and financial performance due to COC's history of being able to effectively manage this geothermal resource, the existence of a predictable contracted cash flow over the intermediate term, and the prospects for the continuation of contracted cash flow over the life of the securities given the long-term contracts recently signed with SCE. Upgrades: * Caithness Coso Funding Corp. -- Subordinate Regular Bond/Debenture, Upgraded to Ba1 from Ba2 -- Senior Secured Regular Bond/Debenture, Upgraded to Baa2 from Baa3 Caithness Coso is a special purpose corporation owned entirely by the three Coso partnerships -- Coso Finance Partners, Coso Energy Developers, and Coso Power Developers. Each of the Coso partnerships guarantee, jointly and severally, on a senior secured basis, repayment of the senior secured bonds, and guarantee, jointly and severally, on a subordinated secured basis, repayment of the subordinated secured notes. The Coso projects consist of three 80 megawatt geothermal power plants as well as their transmission lines, wells, gathering system and related facilities. The Coso projects are located near one another in the Mojave Desert approximately 150 miles northeast of Los Angeles, California, and have been generating electricity since the late 1980s. Caithness Energy L.L.C., through its affiliates, owns about 70% of the Coso partnerships. Caithness Energy is privately held and majority owned by Caithness Equities, which is headquartered in New York City. CE GENERATION: Moody's Affirms Ba1 Senior Secured Rating -------------------------------------------------------- Moody's Investors Service upgraded the senior secured debt rating of Salton Sea Funding Corporation to Baa3 from Ba1. The rating outlook remains stable. Moody's also affirmed the Ba1 senior secured rating of CE Generation LLC which is a 100% owner of Salton Sea with a stable outlook. The upgrade reflects: -- a recent agreement on a higher fixed energy rate to be received by the project from its principal offtaker, Southern California Edison, starting May 1, 2007, and running for five years to April 30, 2012; -- the improving credit quality of SCE; sustained improvements in operational and financial performance since the project overcame operational issues in 2002 and 2003; and, -- the expectation that financial performance will continue to show improvement with coverage ratios of over 2x in a few years time, although coverages are likely to be slightly lower in the short-term due to outlays for a pipe replacement program that is expected to enhance operational and financial performance over the longer term. The rating action considers the benefits of greater predictability and stability to Salton Sea's cash flows from receiving a higher fixed energy rate of 6.15 cents/kWh from SCE for five years beginning May, 1, 2007. The California Public Utilities Commission granted approval of this agreement on Oct. 19, 2006. SCE's ratings were upgraded on Oct. 16, 2006, reflecting expectations of continued strong financial performance and indications of a more supportive and more reliable regulatory environment in California. The rating action further considers the importance of these geothermal assets to the California electric market, given the state's focus on renewable resources as a core component of its energy policy. The rating affirmation of CE Gen's Ba1 rating reflects the effect of greater geographic and fuel source diversification that results from its ownership of the three gas fired projects located in New York, Texas, and Arizona in addition to Salton Sea and the low leverage of these projects. Nevertheless, this credit positive is offset against the effect of structural subordination to project level debt below CE Gen, primarily at Salton Sea. Because cash flow from Salton Sea is projected to increase, while cash flow from CE Gen's other projects is expected to decline, structural subordination to the debt at Salton Sea becomes more important over time. This trend is particularly marked after 2009 when the existing contract expires at Saranac, another CE Gen project subsidiary. At that time, the vast majority of the cash flows at CE Gen will be coming from Salton Sea, which must maintain at least a 1.5x coverage ratio to make distributions up to CE Gen. Salton Sea is forecast to be comfortably above that distribution test threshold, but its ability to make distributions up to CE Gen will take on greater significance in the future. As a result, Moody's feels it is appropriate to recognize this structural subordination issue with a one notch difference between the ratings of CE Gen and Salton Sea. The stable outlook for both Salton Sea and CE Gen reflects the contractual nature of the cash flows, an expectation of strong operational and financial performance going forward, along with the expectation that the credit quality of SCE will be maintained. Sea Salton Funding Corporation is the funding vehicle for ten California-based geothermal projects. Salton Sea is a wholly-owned subsidiary of CE Generation LLC, which in turn, is jointly-owned by MidAmerican Energy Holdings Company and by TransAlta USA Inc. CHESAPEAKE ENERGY: Appoints Merrill Miller to Board of Directors ---------------------------------------------------------------- Chesapeake Energy Corporation, on Jan. 16, 2007, disclosed the appointment of Merrill A. (Pete) Miller, Jr. to the Chesapeake Board of Directors until the June 8, 2007 annual meeting of shareholders, after which he will stand for re-election by Chesapeake's shareholders for a term expiring in 2010. Mr. Miller, age 56, is Chairman, President and Chief Executive Officer of Houston-based National Oilwell Varco, Inc. (NYSE:NOV), a leading supplier of oilfield services, equipment and components to the worldwide oil and natural gas industry. Miller joined NOV in February 1996 as Vice President of Marketing, Drilling Systems and was promoted in April 1997 to President of the Company's Products and Technology Group. In November 2000, he was named President and Chief Operating Officer, in May 2001 was elected President and Chief Executive Officer, and in May 2002 was elected Chairman of the Board. Miller has broad industry experience, having served as President of Anadarko Drilling Company from 1995 to 1996, a company that Chesapeake helped form and that was acquired by Nabors Drilling, Inc. (NYSE:NBR) in 1997. Prior to his service at Anadarko, Miller spent 15 years at Helmerich & Payne International Drilling Company (NYSE:HP) in Tulsa, Oklahoma, serving in various senior management positions, including Vice President, U.S. Operations. Mr. Miller graduated from the U.S. Military Academy, West Point, New York in 1972 with a degree in Applied Science and Engineering. Upon graduation, Mr. Miller served five years in the U.S. Army and then earned his MBA from Harvard Business School in 1980. Mr. Miller serves on the Board of Directors for the Offshore Energy Center, Petroleum Equipment Suppliers Association, Spindletop International and is a member of the National Petroleum Council. Mr. Miller's appointment increases the size of Chesapeake's Board to eight members. Management is represented by Aubrey K. McClendon, the company's co-founder and Chairman and Chief Executive Officer. Chesapeake's other Board members are Richard K. Davidson of Omaha, Nebraska; Frank Keating of Washington, D.C.; Breene M. Kerr of Easton, Maryland; Charles T. Maxwell of Bronxville, New York; Don Nickles of Washington, D.C.; and Frederick B. Whittemore of New York City. Management Comment Aubrey K. McClendon, Chairman and Chief Executive Officer of Chesapeake said of Mr. Miller's appointment, "We are extremely proud to have Pete join Chesapeake's Board. I have known and respected Pete for over 11 years, having first met him when we were helping to build Oklahoma City-based Anadarko Drilling Company in the mid-1990's. I believe Pete's experiences as the CEO of a 25,000 employee public corporation that is a leading supplier to the worldwide oil and gas industry will be of great benefit to Chesapeake, our Board and our shareholders. We are very honored to announce his appointment to Chesapeake's Board." About Chesapeake Energy Chesapeake Energy Corporation --- http://www.chkenergy.com/-- (NYSE: CHK) is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on oil and gas exploration and production company Chesapeake Energy Corp., and revised the outlook to positive from stable. CHESAPEAKE ENERGY: Jury Hands $404 Mil. Verdict in Royalties Suit ----------------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) said Sunday that a jury in the Circuit Court of Roane County, West Virginia returned a verdict on Saturday in the case of the Estate of Garrison G. Tawney, et al., v. Columbia Natural Resources, L.L.C., et al. against one of its subsidiaries, Chesapeake Appalachia, LLC, the successor to Columbia Natural Resources, L.L.C., and also against NiSource, Inc. (NYSE:NI) and its subsidiary Columbia Energy Group. The case alleges that the defendants did not pay royalties on gas production in West Virginia as required by law. The total verdict against all defendants in the case was approximately $404 million, consisting of $134 million in compensatory damages and $270 million in punitive damages. The case was filed in 2003 and inherited by Chesapeake when it acquired Columbia Natural Resources, L.L.C. in November, 2005. The case involves facts and conduct that occurred before Chesapeake's acquisition of the company and the vast majority of the liability for the case was reserved by CEG/NiSource in the purchase and sale agreement conveying the stock of CNR to the predecessor owner of CNR before Chesapeake; however, Chesapeake has previously set aside a legal reserve which it believes will be adequate to cover its share of any judgment, should one be entered and survive the appeals process. Chesapeake is surprised and disappointed by the jury's verdict. If allowed to stand, the verdict would have far-reaching negative implications for all gas producers in West Virginia and would reinforce the hostile legal environment all businesses face in West Virginia. A judgment has not yet been entered in the case. Important motions must be filed and considered by the trial court before judgment is entered. When judgment is entered, Chesapeake will analyze the judgment and decide the proper course of action including any appeal. Chesapeake Energy Corporation --- http://www.chkenergy.com/-- (NYSE: CHK) is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on oil and gas exploration and production company Chesapeake Energy Corp., and revised the outlook to positive from stable. CHIEF CONSOLIDATED: Posts $612,030 Net Loss in Qtr. Ended Sept. 30 ------------------------------------------------------------------ Chief Consolidated Mining Inc. reported a $612,030 net loss on $108,962 of revenues for the third quarter ended Sept. 30, 2006, compared with a $727,410 net loss on zero revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $3.7 million in total assets, $56.7 million in total liabilities, $24,727 in minority interest in consolidated subsidiaries, and $53 million in total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $2 million in total current assets available to pay $2.7 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?1917 Suspended Mining Operations The company's Burgin Mine is not in operation. In late 2001, the company began mining ore from the Trixie Mine, and began processing ore in the company's Tintic Mill in January 2002. In March 2002, the company encountered unstable mining conditions in the Trixie Mine and suspended mining and processing operations. As a result of the suspended mining and processing operations, the company is not generating any revenues from mining operations and does not have sufficient funding to make the significant safety improvements required in the Trixie Mine or to continue exploration efforts related to the Burgin Mine. As a result, the company has had no significant operating activity since early 2002. EPA Settlement During 2001, the Environmental Protection Agency placed Eureka Mills Superfund Site on the National Priorities List, as authorized under the Comprehensive Environmental Response, Compensation and Liability Act of 1980. According to the EPA, samples indicate that, approximately 150 acres of soil in the Town of Eureka were contaminated with lead and, to a lesser extent, arsenic. In February 2005, the company confessed to a judgment with the EPA in the amount of $60 million. The judgment will remain in effect until the company has complied with all the requirement of the Consent Decree. As of the current date, the company has not fully complied with all terms of the agreement. The judgment amount of $60 million represents the future value of clean up costs when the terms of the Consent Decree are satisfied on Feb. 9, 2010. Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 20, 2006, Hansen, Barnett & Maxwell expressed substantial doubt about Chief Consolidated Mining Company's ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, 2004, 2003, and 2002. The auditing firm pointed to the company's working capital and capital deficits, and significant losses from operations. In addition, the auditing firm cited that the company has little unrestricted cash, and has significant reclamation and EPA settlement obligations and environmental contingencies. About Chief Consolidated Chief Consolidated Mining Company(NASD: CFCM.pk) -- http://www.chiefmines.com/-- through its principal subsidiaries Tintic Utah Metals LLC, a Colorado limited liability company, and Chief Gold Mines Inc., a Delaware corporation, owns interests in mining properties, including the Burgin Mine and the Trixie Mine. Neither mine is currently in production but are subject to the development efforts. The company owns a 75% membership interest in Tintic Utah. Chief Gold Mines is a wholly owned subsidiary. The company also owns or controls approximately 6,000 acres of land in an area known as the Main Tintic District in Utah. The majority of this land is generally considered to be non-mining land and is subject to being sold pursuant to a Consent Decree approved by the United States District Court for the District of Utah in January 2005 on behalf of the Environment Protection Agency. As a result of the suspension of the company's mining operation, the company was forced to lay-off all of its employees in 2002. The company currently has no employees. CLEAR LAKE: Moody's Rates $15.5MM Class D Subordinate Notes at Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned these ratings to notes issued by Clear Lake CLO, Ltd.: -- Aaa to $343,000,000 Class A-1 Floating Rate Senior Notes Due 2020; -- Aa2 to $21,500,000 Class A-2 Floating Rate Senior Notes Due 2020; -- A2 to $27,000,000 Class B Floating Rate Deferrable Senior Subordinate Notes Due 2020; -- Baa2 to $20,000,000 Class C Floating Rate Deferrable Senior Subordinate Notes Due 2020 and -- Ba2 to $15,500,000 Class D Floating Rate Deferrable Subordinate Notes Due 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 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. Jefferies Capital Management, Inc. will manage the selection, acquisition and disposition of collateral on behalf of the issuer. CNH GLOBAL: Core Business Status Prompts S&P to Revise Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on CNH Global N.V., rated 'BB', to positive from stable following the same rating action by Standard & Poor's on CNH's parent company, Italy-based Fiat SpA. "The corporate credit rating and outlook on publicly traded CNH Global are the same as those of its parent company, because of the close ties between the two entities," said Standard & Poor's credit analyst Dan Picciotto. "Fiat views CNH as a core business and continues to provide strong liquidity support to CNH by way of intercompany loans and bank loan guarantees." Auto and truck manufacturer Fiat has an approximate 90% equity ownership stake in CNH. At Dec. 31, 2006, CNH had $497 million of cash deposited with Fiat affiliates' cash management pools. CNH also had $490 million of intercompany borrowings with Fiat affiliates. With executive headquarters in Lake Forest, Illinois, CNH has a satisfactory business position as the world's second-largest agricultural equipment maker and as a major manufacturer of construction equipment. "We could upgrade the rating if the trading profits of Fiat Auto continue to grow and free cash flows continue to improve," Mr. Picciotto said. "In addition, we expect CNH's earnings and cash flows to continue to strengthen modestly during the next year because of reasonably favorable business conditions and the benefits of the company's cost-reduction programs." COMMS CORP: Court Fixes March 1 as General Claims Bar Date ---------------------------------------------------------- The Honorable Gerald H. Schiff of the U.S. Bankruptcy Court for the Western District of Louisiana set March 5, 2007, at 4:30 p.m., as the deadline for all creditors owed money by Communications Corporation of America, White Knight Holdings, Inc., and their debtor-affiliates, on account of claims arising prior to June 7, 2006, to file their proofs of claim. Proofs of claim must be sent or hand delivered on or before the March 5 Claims Bar Date to: The Clerk of the U.S. Bankruptcy Court Western District of Louisiana 300 Fannin Street, Suite 2201 Shreveport, Louisiana 71101 Headquartered in Lafayette, Louisiana, Communications Corporation of America is a media and broadcasting company. Along with media company White Knight Holdings, Inc., it owns and operates around 23 TV stations in Indiana, Texas and Louisiana. Communications Corporation and 10 of its affiliates filed for bankruptcy protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410 through 06-50421). Douglas S. Draper, Esq., William H. Patrick III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, represents Communications Corporation and its debtor-affiliates. Taylor, Porter, Brooks & Phillips LLP serves as counsel to the Official Committee of Unsecured Creditors. When Communications Corporation and its debtor-affiliates filed for protection from their creditors, they estimated assets and debts of more than $100 million. CONSTELLATION BRANDS: Third Quarter 2006 Net Sales Up 18% --------------------------------------------------------- Constellation Brands Inc. reported record net sales of $1.5 billion for the quarter ended Nov. 30, 2006. Net sales were up 18% over prior year, primarily due to the June 5, 2006 acquisition of Vincor International Inc., and from growth in the base business. Branded business net sales grew 18%. This increase was due to the addition of Vincor and four percent growth for branded business organic net sales on a constant currency basis. "Strong imported beer performance, growth from branded wine in North America, and the addition of Vincor generated solid results for the quarter," said Richard Sands, Constellation Brands chairman and chief executive officer. "We continue to be very optimistic about our portfolio's long-term growth potential, although our third quarter results reflect ongoing softness in our U.K. branded wine business as very challenging market conditions persist." Branded wine net sales growth reflects the addition of Vincor and a one percent decrease in branded wine organic net sales on a constant currency basis. Organic growth of branded wine for North America was more than offset by a decrease in Europe. Net sales of branded wine for North America increased 29 percent due to the Vincor acquisition and four percent growth in the base business. Branded wine net sales for Australia/New Zealand increased nine percent due to Vincor and a decrease of two percent in the base business. Net sales of branded wine for Europe increased four percent reflecting the addition of Vincor and a decrease of nine percent in the base business. The decrease in Europe was primarily in the U.K., reflecting lower volumes and the impact of the large retailers benefiting from a highly competitive environment, particularly given the availability of low cost bulk Australian wine. Additionally, competitive conditions have not allowed the annual U.K. duty increase to be passed on to retailers. The company believes this situation is unlikely to change in the near term, and Constellation continues to focus on increasing its operating efficiencies in this intensely competitive market. There are signs that the industry could see a firming of the Australian bulk wine market. In Australia, ongoing drought and late spring frost could reduce the wine grape harvest by approximately 15 to 25% in 2007 according to industry projections, versus the large 2006 harvest. The effects of ongoing drought conditions may also impact the size of the 2008 harvest. Significant reductions in the 2007 and 2008 harvests could impact the oversupply and may result in firming prices for Australian bulk wine. Organic net sales for wholesale and other increased six percent on a constant currency basis, primarily from growth in the company's U.K. wholesale business. The 16% increase in imported beers net sales was primarily due to volume growth in Constellation's Mexican beer portfolio, which includes Corona Extra, Corona Light, Pacifico, Modelo Especial and Negra Modelo, as well as growth in the St. Pauli Girl brand. "Constellation's imported beer business delivered strong third quarter growth as consumers continued to trade up in the category, and both the bottle supply and inventory levels for Corona Extra and Corona Light improved during the quarter," stated Mr. Sands. "Crown Imports LLC, the joint venture formed by Constellation Brands and Grupo Modelo to import and market beer in the United States and Guam, commenced operations on Jan. 2, 2007, and the transition to a single importer and marketer is progressing as planned." Total spirits net sales increased four percent for third quarter 2007. Investments behind the company's premium spirits brands helped drive a six percent increase in branded spirits, while contract production services decreased seven percent. "We continue to build our premium spirits portfolio with focus on our investment brands including Effen Vodka, Cocktails by Jenn and Ridgemont Reserve 1792 bourbon, and priority growth brands such as Black Velvet Canadian whisky, Meukow cognac and Chi-Chi's prepared cocktails," said Mr. Sands. "We continue to harvest opportunities from our existing portfolio, new product development, strategic partnerships and acquisitions," explained Mr. Sands. "We are evaluating strategic options to address challenges in the U.K. market and strengthen our long-term position, while we maintain our focus on improving efficiency. Our commitment to improving upon Constellation's leadership position in beverage alcohol and creating shareholder value, while increasing our return on invested capital, is unwavering. Opportunities such as our acquisition of Vincor expand and complement Constellation's portfolio breadth and geographic and distribution scale, and we are pleased with the performance of the Vincor brands, as well as with the seamless integration of Vincor operations into Constellation's international footprint. Additionally, we are encouraged and optimistic about the growth potential for our Crown Imports beer joint venture in fiscal 2008 and beyond. We believe there continue to be opportunities to harvest additional long-term growth and value creation," concluded Mr. Sands. About Constellation Brands Constellation Brands, Inc. (NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- is an international producer and marketer of beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well- known brands in Constellation's portfolio include: Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Goundrey, Nobilo, Kim Crawford, Alice White, Ruffino, Kumala, Robert Mondavi Private Selection, Rex Goliath, Toasted Head, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Inniskillin, Jackson-Triggs, Simi, Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet, Mr. Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi-Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl, Tsingtao. The company has operations in Australia, Japan and New Zealand * * * Moody's Investors Service assigned a Ba2 rating to Constellation Brands Inc.'s new $3.5 billion secured credit facility, which replaced its $2.9 billion secured credit facility. The ratings outlook was placed at negative. DAIMLERCHRYSLER: Sells Aviation Unit to ATON Group Subsidiary ------------------------------------------------------------- DaimlerChrysler AG has sold its Stuttgart-based 100% subsidiary DaimlerChrysler Aviation GmbH to a subsidiary of ATON GmbH in Fulda, Germany. The transaction is subject to the approval of the relevant antitrust and aviation authorities and is expected to be completed in the first quarter of 2007. The parties have agreed to keep the purchase price confidential. The sale is part of the measures currently being taken to increase efficiency and optimize the Group's portfolio with the goal of improving the return on net assets. DaimlerChrysler Aviation GmbH primarily provides tailored air- transport services to business travelers and currently employs approximately 200 persons. In 2006, DCA generated revenues with companies of the DaimlerChrysler Group and third parties of approximately EUR65 million. ATON GmbH makes long-term investments in innovative companies in the future-oriented fields of raw materials, services and applied technology. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DELPHI CORP: PwC's Scope Expanded to Help Plan Due Diligence Work ----------------------------------------------------------------- At Delphi Corp. and its debtor-affiliates' request, the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York authorizes the expansion of the scope of PricewaterhouseCoopers LLP's services to help facilitate the Debtors' plan of reorganization due diligence process, nunc pro tunc to Dec. 15, 2006. PwC's additional services will include, but will not be limited to: -- holding discussions with certain of the Debtors' officers, employees and outside consultants; -- performing financial analysis of the Debtors' historical results and trends; -- commenting on projected financial information prepared by management; and -- performing certain other procedures. Subject to a work plan to be authorized by the Debtors, PwC will: -- obtain an understanding of the company's accounting policies and how those policies impact reported results, and assess the overall adequacy of the company's compliance with Sarbanes-Oxley rules and reporting responsibilities; -- obtain an understanding of the status of significant "investigations" into the company's financial reporting and its current estimate, if any, of the range of the potential effects to its reported earnings; -- understand significant joint-venture agreements and how their accounting treatment impacts reported EBITDA and cash flow; -- summarize the key financial aspects of transactions and agreements between the company and General Motors; -- perform appropriate due diligence procedures on these subject areas: * Quality Of Earnings/Cash Flow, * Operating Division Analysis & Corporate Headquarters, * 2007 To 2012 Business Plan, * Balance Sheet, * Tax Due Diligence, and * Employee Benefits Due Diligence. PwC estimates that its fees for the additional services will range from $3,500,000 to $5,500,000. If PwC's fees will exceed the estimates, it promises to inform the Debtors immediately and not undertake any additional work. The Debtors will continue to pay PwC its standard hourly rates: Professional Hourly Rates ------------ ------------ Partner & Managing Director $775 to $900 Director $515 to $600 Manager $390 to $450 Senior $325 to $375 Associate $290 to $325 Administration $100 to $150 The Debtors and PwC also agree on certain dispute resolution processes: (a) Any controversy or claim in connection with the PwC Supplemental Retention Application or the Statement Of Work will be brought in the Bankruptcy Court or the United States District Court for the Southern District of New York if the District Court withdraws the reference; (b) They consent to the jurisdiction and venue of the Bankruptcy Court as the sole and exclusive forum for the resolution of claims, causes of actions or lawsuits; (c) They waive trial by jury; (d) If the Bankruptcy Court or the District Court does not have jurisdiction over the subject claims and controversies, they will submit first to non-binding mediation; and, if mediation is not successful, then to binding arbitration, in accordance with the dispute resolution procedures; (e) Judgment on any arbitration award may be entered in any court having proper jurisdiction; and (f) PwC will not assert any defense based on jurisdiction, venue, abstention or otherwise to the jurisdiction and venue of the Bankruptcy Court or the District Court to hear any controversy or claims in connection with the PwC Supplemental Retention Application and the services it provides. Colin Wittmer, a partner at PwC, assures the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Wittmer adds that PwC professionals providing the additional services will not have any access to the team members, working papers, or reports of any PwC professional engaged in the Debtors' Chapter 11 cases without prior consent. Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) -- 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. 55; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: Mayer Brown's Scope Expanded Adding F&A Services ------------------------------------------------------------- Delphi Corp. and its debtor-affiliates obtained authority from the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to expand the responsibilities of Mayer, Brown, Rowe & Maw LLP, to include services in connection with a financial and accounting outsourcing services contract, nunc pro tunc to July 1, 2006. The consummation of the F&A Project will enable the Debtors to outsource to a third-party service provider certain of their functions, like accounts payable and receivable, fixed assets accounting, general ledger, travel and expense processing and contract administration, on a global basis, according to John D. Sheehan, the company's vice president and chief restructuring officer. Mayer Brown's additional services will include: (a) drafting, revising, and editing a form of outsourcing agreement appropriate for the applicable business processing services; (b) negotiating specific business process outsourcing agreements with third-party bidders to: -- obtain commitments to provide a defined scope of services at agreed-upon levels of service quality and agreed pricing; -- provide for ongoing improvement and change in the Debtors' needs and available technology; -- establish a framework for governing the outsourcing relationship; and -- allocate legal and business risks associated with the services arrangement; and (c) assisting the Debtors in selecting a finalist from the bidding process and finalizing the documentation to be entered into by the Debtors with the selected service provider. The Debtors expect Mayer Brown professionals Paul Roy, Brad Peterson, Paul Chandler, Sonia Baldia, Greg Manter, and Kristina Herrmann to lead in providing the additional services. Mayer Brown has agreed to discount its rates by: -- 5% for the first $400,000 of fees with respect to each of the application development management and network infrastructure phases of the project; -- 5% for the first $500,000 of fees with respect to the F&A Project; and -- 10% for the portion of its fees for each portion of the engagement that exceeds the threshold. The Debtors will also reimburse Mayer Brown for its necessary out-of-pocket expenses. Paul J.N. Roy, member of Mayer, Brown, Rowe & Maw, LLP, assures the Court that his firm does not hold an interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) -- 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. 55; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: Cerberus May Back Out of $3.4 Billion Investment ------------------------------------------------------------- Cerberus Capital Management LP may back out of its planned $3.4 billion investment in Delphi Corp. due to the United Auto Workers union's resistance to pay cuts, Bloomberg reported. Cerberus also disagreed with the union regarding wages and benefits, pay increases, severance pay, and factories and jobs to remain, Bloomberg added. As reported in the Troubled Company Reporter on Jan. 17, 2007, the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York gave Delphi Corp. and its debtor- affiliates authority to enter into an equity purchase commitment agreement and a plan framework support agreement with their plan investors. The Plan Investors are: -- A-D Acquisition Holdings LLC, an affiliate of Appaloosa Management L.P.; -- Harbinger Del-Auto Investment Co. Ltd., an affiliate of Harbinger Capital Partners Master Fund I, Ltd.; -- Dolce Investments LLC, an affiliate of Cerberus Capital Management, L.P.; -- Merrill Lynch, Pierce, Fenner & Smith Incorporated; and -- UBS Securities LLC. The deal, however, is dependent upon Delphi reaching an agreement with its unions, TCR reported on Jan. 26, 2007. The investors and Delphi have the right to end the deal by Jan. 31, 2007, if the company fails to reach a pact with its unions and a parts supply deal with General Motors Corp. Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- 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 CORP: Inks Sale Agreement with Harco for Brake Hose Biz -------------------------------------------------------------- Delphi Corporation has entered into an asset sale and purchase agreement with Harco Manufacturing Group, LLC for the sale of its brake hose business. Pursuant to the procedures outlined in the Bankruptcy Code, the company filed a motion with the U.S. Bankruptcy Court for the Southern District of New York to request a bidding procedures hearing on Feb. 15, 2007. Following the completion of the bidding procedure process, a final sale hearing is anticipated to be set for March 22, 2007. The final sale of the Delphi Brake Hose business is subject to the approval of the U.S. Bankruptcy Court, and waiver of any "no sale" clause in any agreements between Delphi and the Steel Workers of America, Local 87L, AFL-CIO/CLC. As outlined in the court filing, the asset sale and purchase agreement between Delphi and Harco includes: * Machinery and equipment; * Intellectual property; and * Assignment and assumption of certain customer contracts. The sale agreement does not include any real estate/production facility or the transfer of the Delphi workforce to Harco. Under a manufacturing services agreement, Delphi would continue to produce brake hose products for a maximum of 12 months or until such earlier time as the transition of the business line is completed. A full-text copy of the Asset Sale and Purchase Agreement is available for free at http://ResearchArchives.com/t/s?1928 Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- 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. DELTA AIR: Creditor Group Wants Improved US Airways Bid Evaluated ----------------------------------------------------------------- The Unofficial Committee of Unsecured Claimholders of Delta Air Lines, Inc., urged the Official Creditors' Committee to carefully consider the meaningfully improved proposal by US Airways Group, Inc., to merge with Delta and commit an open process that would allow a full exploration of strategic alternatives. The Unofficial Committee believes it is essential that creditors be given a chance to decide whether to pursue a standalone reorganization plan or a viable alternative means of maximizing value. The US Airways bid is a viable alternative that should be explored. The Unofficial Committee believes this proposal provides a superior recovery for creditors compared to what they would receive under Delta's standalone Chapter 11 plan. Investors have also concluded the US Airways offer is economically superior, as evidenced by their pricing of Delta bonds in recent weeks, as well as on Jan. 29, 2007, in response to press reports about the improved merger proposal. As the largest organized group of unsecured claimholders of Delta, the Unofficial Committee members are vitally concerned that creditor recoveries be maximized. Other creditors agree -- since Thursday, numerous holders of Delta claims have contacted the Unofficial Committee to register their support for its position. While there are risks inherent in any transaction, these risks have been minimized under the terms of the latest proposal by US Airways. The Official Creditors' Committee should urge Delta management to: * Provide reasonable and customary access for US Airways to perform its due diligence in a manner consistent with similar transactions. * Fully cooperate with US Airways to make the required filings under HSR. * Agree to a 30-day continuance of the disclosure statement hearing to allow for due diligence. Given the magnitude of creditor support for a complete evaluation of the US Airways proposal, the Official Creditors' Committee should take these reasonable steps so that creditors may have an opportunity to decide for themselves whether they prefer a merger alternative or standalone reorganization. The Unofficial Committee's financial advisor is Jefferies & Company, Inc., and its legal counsel is Paul, Weiss, Rifkind, Wharton & Garrison LLP. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DRYDEN XVI: Moody's Assigns Ba2 Rating on $17.5 Mil. Class D Notes ------------------------------------------------------------------ Moody's Investors Service assigned these ratings to notes issued by Dryden XVI-Leveraged Loan CDO 2006: -- Aaa to $375,000,000 Class A-1 Senior Secured Floating Rate Notes Due Oct. 20, 2020; -- Aa2 to $20,000,000 Class A-2 Senior Secured Floating Rate Notes Due Oct. 20, 2020; -- A2 to $32,500,000 Class B Mezzanine Secured Deferrable Floating Rate Notes Due Oct. 20, 2020; -- Baa2 to $16,250,000 Class C Mezzanine Secured Deferrable Floating Rate Notes Due Oct. 20, 2020 and -- Ba2 to $17,500,000 Class D Mezzanine Secured Deferrable Floating Rate Notes Due Oct. 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 ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting mainly of senior secured loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Pramerica Investment Management will manage the selection, acquisition and disposition of collateral on behalf of the issuer. DURA AUTOMOTIVE: Judge Carey Okays Kramer Levin as Panel's Counsel ------------------------------------------------------------------ The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in Dura Automotive Systems Inc. and its debtor-affiliates' chapter 11 cases to retain Kramer Levin Naftalis & Frankel LLP as its counsel, effective as of Nov. 7, 2006. As reported in the Troubled Company Reporter on Jan. 9, 2007, in addition to acting as primary spokesman for the Committee, Kramer Framer Levin's services will include, without limitation, assisting, advising and representing the Committee with respect to these matters: a. The administration of these cases and the exercise of oversight with respect to the Debtors' affairs including all issues in connection with the Debtors, the Committee or the Chapter 11 cases; b. The preparation on behalf of the Committee of necessary applications, motions, memoranda, orders, reports and other legal papers; c. Appearances in Court and at statutory meetings of creditors to represent the interests of the Committee; d. The negotiation, formulation, drafting and confirmation of a plan or plans of reorganization and matters related thereto; e. The investigation, if any, as the Committee may desire concerning, among other things, the assets, liabilities, financial condition, sale of any of the Debtors' businesses, and operating issues concerning the Debtors that may be relevant to the Chapter 11 Cases; f. Communications with the Committee's constituents and others at the direction of the Committee in furtherance of its responsibilities, including, but not limited to, communications required under Section 1102 of the Bankruptcy Code; and g. The performance of all of the Committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules and the performance of other services as are in the interests of those represented by the Committee. Kramer Levin will be paid on an hourly basis based on its customary rates: Professional Hourly Rate ------------ ----------- Partners $500 to $795 Counsel $505 to $855 Associates $295 to $545 Legal Assistants $190 to $220 Kramer Levin will also seek reimbursement of out-of-pocket expenses. The firm regularly charges its clients for the expenses and disbursements incurred in connection with the client's case, including, inter alia, word processing, secretarial time, telecommunications, photocopying, postage and package delivery charges, court fees, transcript costs, travel expenses, expenses for "working meals" and computer-aided research. Thomas Moers Mayer, Esq., a member at Kramer Levin, assured the Court that: (i) the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code; (ii) neither Kramer Levin nor its professionals have any connection with the Debtors, the creditors or any other party-in-interest; and (iii) Kramer Levin does not hold or represent any interest adverse to the Committee in the matters for which it is to be retained. About DURA Automotive Systems Inc. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Chanin Capital OK'd as Panel's Financial Advisor ----------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors to retain Chanin Capital Partners as its financial advisors, nunc pro tunc Nov. 10, 2006, in Dura Automotive Systems Inc. and its debtor-affiliates' chapter 11 cases. As reported in the Troubled Company Reporter on Jan. 9, 2007, the Committee needs Chanin Capital's assistance in collecting and analyzing financial and other information in relation to the Debtors' Chapter 11 cases. The Committee expects the firm to: (a) analyze and evaluate the liquidity position, assets and liabilities, and financial condition of the Debtors; (b) review and analyze the Debtors' financial and operating statement; (c) review and analyze the Company's business and financial projections; (d) evaluate the Company's debt capacity in light of its projected cash flows; (e) assist in the determination of an appropriate capital structure for the Company; (f) determine a theoretical range of values for the Company on a going concern basis; (g) assist the Committee in identifying and evaluating candidates for the potential acquisition of certain assets of the Company; (h) analyze proposed sales of assets of the Debtors, the terms and options and related issues, including available strategic alternatives; (i) review, analyze and monitor the Debtor-In-Possession financing and other financing alternatives; (j) advise the Committee on tactics and strategies for negotiating with the Company and other purported stakeholders; (k) determine a theoretical range of values for any securities to be issued or distributed in connection with the Chapter 11 case, including without limitation any securities to be distributed under a plan; (l) advise and assist the Committee in the review and analysis of the Debtors' business plan; (m) advise and assist the Committee in the review of all plans; (n) assist with a review of the Debtors' short-term cash management procedures and monitoring of cash flow; (o) assist with a review of the Debtors' employee benefit programs; (p) assist and advise the Committee with respect to the Debtors' management of their supply chain, including critical and foreign vendors; (q) assist with a review of the Debtors' performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts involving vendors and customers; (r) assist in the evaluation of the Debtors' operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (s) assist in the review and preparation of information and analysis necessary for the confirmation of a plan; (t) assist in the review of potential claims levels and the Debtors' reconciliation process; (u) assist with various tax matters; (v) provide testimony in any proceeding before the Court; and (w) provide the Committee with other appropriate general restructuring advice. Chanin Capital will be paid $150,000 per month and will be reimbursed for expenses incurred in connection with the engagement. A $1,500,000 transaction fee will also be paid to the firm on the effective date of a plan of reorganization. Brent Williams, managing director at Chanin Capital, disclosed that the firm represents certain Committee members or parties- in-interest in the Debtors' Chapter 11 cases. Chanin Capital, however, has not identified any material relationships with any party that would otherwise affect its judgment or ability to perform services for the Committee. Chanin Capital assured the Court that it has not and will not provide any professional services to the Debtors, any of the creditors, other parties-in-interest with regard to any matter related to the Debtors' Chapter 11 cases. Mr. Williams attestd that Chanin Capital is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About DURA Automotive Systems Inc. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EARTHSHELL CORP: Organizational Meeting Scheduled on January 31 --------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Earthshell Corporation's chapter 11 case on Jan. 31, 2007, 11 a.m., at Room 2112, J. Caleb Boggs Federal Building, 844 North King Street, in Wilmington, Del. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not a meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtors will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Lutherville, Maryland, Earthshell Corporation -- http://www.earthshell.com/-- is engaged in the commercialization of composite material technology for the manufacture of foodservice disposable packaging. The company filed for chapter 11 protection on January 19, 2007 (Bankr. D. Del. Case No. 07- 10086). Derek C. Abbott, Esq., at Morris, Nichols, Arsht, & Tunnell, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $16,173 in total assets, and $11,865,460 in total liabilities. EARTHSHELL CORPORATION: Auction for Assets Scheduled on March 7 --------------------------------------------------------------- EarthShell Corp. obtained approval form the U.S. Bankruptcy Court for the District of Delaware to sell its assets at an auction for at least $1 million, The Associated Press reports. The auction is set for March 7. According to documents filed with the Court, the stalking horse bidder is a subsidiary of Renewable Products Inc., on of the Debtor's sub-licensees. Pursuant to an agreement, RPI is entitled to a $300,000 break up fee. AP relates that the assets up for sale in all of EarthShell's remaining inventory, equipment, intellectual property and certain contracts, records and licenses. Initial bids are due on March 2 with an accompanying $300,000 good-faith deposit. Headquartered in Lutherville, Maryland, EarthShell(R) Corporation (OTCBB: ERTH) -- http://www.earthshell.com/-- is a technology company and innovator of a revolutionary development in food service packaging. The company makes fast-food packaging from biodegradable materials like limestone and food starch. The company filed for chapter 11 protection on Jan. 19, 2007 (Bankr. D. Del. Case No. 07-10086). Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $16,173 and total debts of $11,865,460. EDDIE BAUER: 4th Qtr. Ended Dec. 30, 2006 Net Sales Up by $4 Mil. ----------------------------------------------------------------- Eddie Bauer Holdings Inc. has reported its preliminary sales results for the fourth quarter and full year 2006. For the fourth quarter ended Dec. 30, 2006, net merchandise sales totaled $365 million, compared to $361 million in the fourth quarter of 2005. Net merchandise sales include sales from the Company's retail and outlet stores and its direct channel, which includes its catalogs and websites, but does not include licensing revenue or revenue generated by the Company's joint ventures. Comparable store sales for the fourth quarter of 2006 increased 4.6% from the fourth quarter of 2005. Comparable store sales in the fourth quarter of 2005 had declined 7.1% from the same period in 2004. Sales from the Company's direct channel, which includes sales from its catalogs and websites, increased by 0.1% from the fourth quarter of 2005. For the fiscal year ended Dec. 30, 2006, net merchandise sales declined 4.5%, totaling $957 million in 2006 compared to $1,002 million in fiscal 2005. Comparable store sales for fiscal 2006 declined 2.0% from fiscal 2005, which compares to a 2.2% decrease in comparable store sales in fiscal 2005 from fiscal 2004. Sales from the Company's direct channel, which includes sales from its catalogs and websites, decreased by 4.4% from fiscal 2005. On Nov. 13, 2006, the Company reported that it had entered into a definitive agreement for the sale of Eddie Bauer to Eddie B Holding Corp., an affiliate of Sun Capital Partners and Golden Gate Capital, for $9.25 per share in cash. The Board of Directors of the Company has unanimously determined that the merger agreement is advisable and in the best interests of the Company's stockholders and recommends that stockholders vote for the adoption of the merger agreement at the upcoming special meeting of stockholders to be held on Jan. 25, 2007. The transaction is expected to close in the first quarter of 2007. "Our fourth quarter sales results were moderately below our expectations. Our Board of Directors continues to unanimously believe that the sale to Sun Capital and Golden Gate represents the best opportunity to maximize stockholder value. The transaction will provide stockholders with fair and certain value as well as an immediate cash return," said William End, Chairman of the Board of Directors of Eddie Bauer. In connection with the proposed merger and related transactions, Eddie Bauer has filed a definitive proxy statement with the Securities and Exchange Commission. About Eddie Bauer Holdings Inc. Headquartered in Redmond, Washington, Eddie Bauer Holdings Inc. (NASDAQ: EBHI) -- http://www.eddiebauer.com/-- is a specialty retailer that sells casual sportswear and accessories for the "modern outdoor lifestyle." Established in 1920 in Seattle, Eddie Bauer products are available at approximately 380 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebaueroutlet.com/ The company also participates in joint venture partnerships in Japan and Germany and has licensing agreements across a variety of product categories. Eddie Bauer employs approximately 10,000 part-time and full-time associates in the United States and Canada. * * * As reported in the Troubled Company Reporter on Oct. 13, 2006, Moody's Investors Service confirmed Eddie Bauer Inc.'s B2 Corporate Family Rating. Moody's also confirmed its B2 rating on the company's 300 million term loan. ENCORE ACQUISITION: Anadarko Deal Cues S&P to Hold BB Debt Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on oil and gas exploration and production company Encore Acquisition Co. The outlook is negative. Fort Worth, Texas-based Encore had $594 million of balance sheet debt as of Sept. 30, 2006. The affirmation follows Encore's report of its $410 million cash acquisition of oil- and gas-producing properties in the Williston Basin of Montana and North Dakota from Anadarko Petroleum Corp. Combined with the Big Horn acquisition from Anadarko a week earlier, the transactions add about 41 million barrels of oil equivalent of proved developed reserves to Encore at a price of $810 million. Standard & Poor's views the acquisitions as solidly fitting Encore's operating strengths and regional focus. The cost of $20 per proved boe is high, and the purchase price raises debt leverage to about $6 per boe, which is very high relative to similarly rated peers. "The affirmation incorporates our assessment that the operational benefits of the acquisitions, coupled with the company's commitment to reduce debt in the near term, are sufficient to mitigate the substantial immediate increase in leverage," said Standard & Poor's credit analyst Ben Tsocanos. The ratings on Encore reflect a weak business risk profile, incorporating participation in the competitive, capital-intensive, and highly cyclical oil and gas industry, as well as an aggressive financial risk profile. The aggressive financial profile derives in part from high pro forma leverage resulting from an acquisitive growth strategy and an ambitious capital spending program. The negative outlook reflects the considerable increase in financial leverage incurred to pursue acquisitions. Failure to use asset sale and equity proceeds to reduce debt aggressively will likely result in lower ratings. Conversely, a more moderate capital structure, coupled with successful integration of the acquired properties, could lead to ratings stability. FIAT SPA: S&P Holds Low-B Long & Short Term Corp. Credit Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Italian industrial group Fiat SpA to positive from stable. At the same time, the 'BB' long-term and 'B' short-term corporate credit ratings on Fiat were affirmed. "The outlook revision reflects Fiat's improved trading margin and cash generation, and significantly reduced debt," said Standard & Poor's credit analyst Barbara Castellano. Fiat's financial profile has constantly improved over the past 18 months. The group's main subsidiaries Fiat Auto SpA, Iveco SpA, and CNH Global N.V. all achieved better operating performances in 2006 than in 2005. As a result, Fiat's trading profit was EUR1.95 billion, with a relevant contribution from the auto sector, equal to EUR441 million. Fiat also achieved a 7.6% market share in Western Europe, compared with 6.5% in 2005. In addition, operating results for the auto division turned to positive outside of Brazil for the first time in the last quarter of 2006. Standard & Poor's expects this trend to continue in the coming quarters. In 2006, CNH reported a slightly higher trading profit of 7.0% compared with 6.8%& in 2005, while Iveco delivered a 6.0% trading profit, up from 3.9% the previous year. Standard & Poor's expects both companies to achieve better results in 2007 as a consequence of the group's recently disclosed restructuring efforts. The ratings on Fiat could be raised if the group confirms in the next few months that its improved trading margin and cash generation are sustainable. Standard & Poor's will also look closely at the launch of the group's new Fiat Bravo car. Standard & Poor's considers the launch of an additional, large-volume, and profitable car to be important for the group. The outlook could be revised back to stable if Fiat does not sustain its improved financial results and if there is evidence that the new Fiat Bravo is not going to be able to meet the yearly targets given by the group. FORD MOTOR: U.S. Market Rank May Fall by Two Notches, Mulally Says ------------------------------------------------------------------ Ford Motor Co. may fall from second to fourth place this year in the American market, behind General Motors Corp., Toyota Motor Corp., and DaimlerChrysler AG, Micheline Maynard of The New York Times reports, citing Alan R. Mulally, the company's president and chief executive. Mr. Mulally's forecast of a much smaller Ford follows the release of the automaker's preliminary financial results for the year and quarter ended Dec. 31, 2006. In its financial report, Ford posted $12.75 billion in losses against $160.1 billion in revenues for the full year 2006, compared with $1.4 billion in net profit against $176.9 billion in revenues for 2005. Ford also posted $5.76 billion in net loss against $40.3 billion in revenues for the fourth quarter of 2006, compared with $74 million in net loss against $46.3 billion in revenues for the same period in 2005. Full-text copies of Ford Motor Co.'s 2006 results are available at no charge at: http://researcharchives.com/t/s?190d Commenting on the results, Mr. Mulally said, "we began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes and with a product mix that better reflects consumer demand for smaller, more fuel efficient vehicles. We fully recognize our business reality and are dealing with it. We have a plan and we are on track to deliver." Deep Trouble Analysts, however, are skeptical that Ford's products are strong enough to turn the company around, AFX News relays. "There is no question that Ford is in deep trouble -- probably the worst trouble they have been in since the Depression," Gerald Meyers, a University of Michigan business professor and former chief executive of American Motors Corp, told Bloomberg News. "It is going to be a while before it gets out." "The basic story of Ford's stunning collapse in its home-market profitability remains the same," David Healy, Burnham Securities analyst, told Reuters. "Ford's finances were wrecked by the collapse in volume and pricing of its most profitable truck models." Ford's losses are likely to have huge impact on its Credit-default swaps -- financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt, Mark Altherr, a Credit Suisse Group analyst in New York, said. Credit-default swap prices for Ford debt will continue to tighten "unless there are big negative surprises to the downside, in this market," Mr. Altherr stressed. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between $17.5 billion and $18.5 billion, up from $15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. FORD MOTOR: Loss Wasn't A Surprise, Says UAW President ------------------------------------------------------ United Auto Workers president Ron Gettelfinger said Monday that Ford Motor Co.'s loss didn't come as a surprise, Bryce G. Hoffman of The Detroit News reports. As reported in the Troubled Company Reporter on Jan. 26, 2007, Ford released preliminary financial results disclosing $12.75 billion in losses for the full year 2006 compared to a $1.4 billion net profit in 2005. Detroit News further reports that speaking to Detroit radio station WJR, Mr. Gettelfinger said that he knew Ford was "headed down a bad road" after reviewing the company's books a year ago. "That's why we made the movement that we did on healthcare," Detroit New quotes Mr. Gettelfinger, referring to an agreement between the company and UAW to cut some retiree healthcare benefits. However, he added that Ford "is in a pretty strong position right now. They've got financing behind them. We're looking forward to them pulling this thing out." Detroit News further reports that the union is currently in talks with the company regarding its planned bonuses for white-collar employees. "We have discussed the fact that we would be making concessions and (salaried workers) would be getting bonuses. The discussions that we have with the corporation are between us and them." Detroit News relates quoting Mr. Gettelfinger. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between $17.5 billion and $18.5 billion, up from $15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. FR BRAND: S&P Junks Rating on Proposed $350 Million 2nd Lien Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to FR Brand Acquisition Corp. The outlook is negative. Standard & Poor's also assigned its 'B' rating and '2' recovery rating to FR Brand's proposed $680 million first-lien bank facilities, and its 'CCC+' rating and '5' recovery rating to the proposed $350 million second-lien bank facilities. The corporate credit rating on scaffolding services provider Brand Services Inc. was affirmed at 'B' based on the expectation that the company's debt leverage, following Brand's acquisition by FR Brand, will return to previous levels over the medium term. At the same time, the ratings on Brand were removed from CreditWatch with negative implications, where they were placed on Jan. 17, 2007. Pro forma the close of the transaction, the corporate credit rating on Brand will be removed because the company will become a wholly owned subsidiary of FR Brand. Ratings on the 12% $150 million notes due 2012 will also be withdrawn on the close of the transaction, when the notes will be removed. FR Brand, an affiliate of private equity firm First Reserve Corp., entered into an agreement to purchase Brand on Dec. 29, 2006. It is financing the purchase with a $150 million revolving credit facility, $530 million of first-lien debt, $350 million of second-lien debt, and $280 million in equity from First Reserve. The $150 million revolver will remain undrawn as of closing. At the close of the transaction, based on pro forma EBITDA for the 12 months ended Sept. 30, 2006, debt to EBITDA will be about 6.6x and EBITDA interest coverage around 1.6x. These credit measures are weak for the rating. Pro forma the transaction, Brand will have $892 million in debt, adjusted for operating leases. "The ratings on Brand reflect its highly leveraged financial profile, operations that depend largely on the volatile energy sector, and customer concentration," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. "These weaknesses are only partially offset by the company's position as the largest provider of scaffolding services in North America, long-term customer relationships, and strong maintenance component (65%) of its revenues," Ms. Saha-Yannopoulos continued. The outlook is negative. The marginal credit measures make the ratings susceptible to a downgrade if there are any operational setbacks, if financial performance deteriorates, or if management is unable to meet financial targets. An outlook revision to stable is contingent on improved credit measures and decreasing leverage. GC IMPSAT: Moody's Rates Proposed $200 Million Senior Notes at B3 ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating to GC Impsat Holdings I Plc with a stable outlook. The rating agency also assigned a B3 rating to the proposed $200 million senior unsecured note issuance. The proceeds of the notes will be used to fund a portion of the roughly $367 million of total funding required to consummate the purchase of Impsat Fiber Networks by Global Crossing, Ltd. The ratings reflect Impsat's exposure to heavy competition from large incumbent telecommunications providers in the company's Latin American territories and the company's relatively weak financial metrics. In addition, the ratings reflect the political risks inherent in operating in Pan-Latin American countries, along with exchange rate risks. Impsat's revenues may be exposed to adverse movements of local currencies, while a significant portion of the company's costs -- such as lease payments for satellite and fiber optic capacity, purchases of capital equipment, and the debt servicing costs -- will be denominated in U.S. dollars. The rating is supported by Moody's expectations that the company will improve its operating performance driven by realization of cost synergies and the ownership by Global Crossing. Moody's has taken these rating actions: * GC Impsat Holdings I Plc -- Corporate Family Rating - Assigned B3 -- $200 million Senior Unsecured Notes - Assigned B3 The outlook is stable. The stable outlook reflects Moody's expectation that despite the highly competitive operating environment, the company will improve its financial profile supported by its contract-based revenues and the realization of cost synergies with its parent company. Impsat Fiber Networks, Inc., headquartered in Buenos Aires, Argentina, is a leading provider of private telecommunications network and internet services in Latin America. Global Crossing provides telecommunications solutions over an integrated global IP-based network. The company is based in Bermuda. GLOBAL GEOPHYSICAL: S&P Holds Junk Rating on Second-Lien Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its bank loan and recovery ratings on Global Geophysical Services Inc.'s bank facilities, after the news that the company will increase the size of the first-lien loan to $100 million and decrease the second- lien loan to $30 million. The outlook on the company remains stable. Pro forma for the change, the first-lien credit facilities will consist of a $30 million revolving facility due 2013, and a $70 million first-lien term loan, while the second-lien credit facility due 2014 will consist of $30 million. The first-lien credit facilities are rated 'B', one notch above the corporate credit rating, with a recovery rating of '1', indicating Standard & Poor's expectation of full recovery of the principal in a default scenario. The second-lien facility is rated 'CCC' with a '4' recovery rating, reflecting a 25% to 50% of expected principal recovery. Standard & Poor's, however, recognizes that the increased first- lien facility barely qualifies for a recovery rating of '1'. The recovery is marginal, indicating that the potential exists for the second-lien holders to jeopardize the full recovery by the first- lien holders in a default scenario. "The outlook on Global is stable, because its current backlog and favorable industry conditions indicate cash flow improvement for the company," noted Standard & Poor's credit analyst Aniki Saha- Yannopoulos. "However, an aggressive use of debt for growth or the significant weakening of operating metrics and liquidity (most likely to occur during a prolonged industry downturn) could adversely affect ratings," she continued. GRANT GROVE: Moody's Puts Ba2 Rating on $9 Million Class E Notes ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by Grant Grove CLO Ltd.: -- Aaa to $50,000,000 Class A-1 Delayed Drawdown Floating Rate Notes, Due 2021; -- Aaa to $170,500,000 Class A-2 Floating Rate Notes, Due 2021; -- Aa2 to $18,000,000 Class B Floating Rate Notes, Due 2021; -- A2 to $15,750,000 Class C Deferrable Floating Rate Notes, Due 2021; -- Baa2 to $14,250,000 Class D Deferrable Floating Rate Notes, Due 2021; and -- Ba2 to $9,000,000 Class E 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. Tall Tree Investment Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the issuer. GREEN VALLEY: Moody's Affirms B2 Corporate Family Rating -------------------------------------------------------- Moody's Investors Service affirmed Green Valley Ranch LLC's corporate family rating and probability of default rating at B2. At the same time, Moody's lowered the company's senior secured credit rating to B1 from Ba3. The rating outlook is stable. The downgrade in the senior secured ratings follows the upsizing of Green Valley's proposed first lien term loan to $550 million from $500 million. The rating revision reflects the decreased support the second lien term loan provides to the higher priority revolver and term loan B facilities as well as the modest deterioration in the company's loss given default assessment. Green Valley Ranch Gaming, LLC owns and operates the Green Valley Ranch Resort Spa Casino in Henderson, Nevada. The company is owned by GCR Gaming, LLC and GV Ranch Station, Inc. on a 50/50 basis. Reported net revenues and EBITDAM for the 12-month period ended Sep. 30, 2006 were approximately $256 million and $110 million, respectively. HEALTH MANAGEMENT: Returns $2.4 Bil. to Shareholders as Dividend ---------------------------------------------------------------- Health Management Associates Inc. recapitalized its balance sheet to deliver immediate value to its shareholders while enabling them to participate in the company's future growth. The recapitalization will reduce HMA's overall cost of capital, enabling the company to achieve a more optimal capital structure intended to enhance its enterprise value. Part of the recapitalization, HMA will return approximately $2.4 billion to shareholders through a $10 per share one-time special cash dividend. The special dividend is payable on March 1, 2007, to shareholders of record on Feb. 27, 2007, and HMA's common stock will start trading on the ex-dividend basis beginning on March 2, 2007, in accordance with New York Stock Exchange listing rules. Shareholders who sell their shares prior to or on the payment date of March 1, 2007, will also be selling their right to receive the special cash dividend. Shareholders are advised to contact their financial advisor before selling their shares. "The recapitalization enables HMA to deliver value to shareholders," Joseph V. Vumbacco, CEO and Vice Chairman, said. "While fulfilling our commitment to invest in our hospitals and ensuring their ability to provide care to patients and service to our physicians and communities. We are capitalizing on current capital market conditions, which present debt financing options for strong, well-managed companies. We believe our plan represents prudent and efficient use of our balance sheet capacity that will enable HMA to continue generating sustainable free cash flow to meet our capital needs and growth objectives." HMA will recapitalize its balance sheet through $3.25 billion of new senior secured credit facilities, including the refinancing of amounts outstanding under the company's current revolving line of credit. The $3.25 billion senior secured credit facilities, which are pre-payable without penalty, consist of a seven-year $2.75 billion term loan and a $500 million six-year revolving credit facility, which will be secured by a portion of the company's assets. HMA's $400 million of 6.125% senior notes and $588 million of convertible subordinated notes will remain outstanding; however, the 6.125% Senior Notes will be secured pari passu with the senior credit facility. Bank of America Securities LLC is acting as financial advisor to HMA in this transaction. HMA reached three central conclusions: (1) HMA will shift its sources of capital away from equity and toward debt. (2) HMA will reinforce and strengthen its ability to meet all commitments and opportunities to invest capital in hospitals and communities. (3) HMA will issue a one-time dividend as a means of returning excess capital to the shareholders. HMA believes the transaction it have chosen will support these central conclusions and thus benefit its patients, its physicians, and the communities it serves, well as its shareholders and employees. In the fourth quarter of 2006, HMA will record $200 million of bad debt expense as additional reserve for self-pay receivables. HMA will now begin reserving a significant portion of self-pay accounts as of the date of service consistent with emerging industry practice in the first quarter of 2007. HMA will record a $14 million gain in the fourth quarter from insurance reimbursement related to property damages incurred at HMA's Biloxi Regional Medical Center as a result of Hurricane Katrina during the year ended Sept. 30, 2005. HMA is previewing its results from operations for the fourth quarter ended Dec. 31, 2006, excluding the insurance-related gain and the bad debt reserve adjustment. Strategic Outlook "The recapitalization we have chosen to pursue is intended to enable us to execute every element of HMA's ongoing business strategy," said Mr. Vumbacco. "The delivery of high-quality health care close to home will continue to be the primary focus for HMA." In support of the company's operational strategy, its recapitalized financial position and cash flow will fund ongoing capital expenditures at its existing hospitals and further growth opportunities. The company believes this level of capital spending will continue to upgrade its hospital facilities and medical equipment to the most modern standards while allowing the company to service its debt and deleverage the balance sheet. In addition to these investments, HMA will continue to drive organic growth by further improving physician relations through collaborative efforts and recruitment so as to expand its hospitals' breadth of services. HMA will also continue to implement proven hospital practices that improve the quality of care while optimizing resource utilization. HMA anticipates increasing earnings per share in excess of 10% on an annual basis. Moreover, the company expects to use its consistent cash flow generation to repay debt and deleverage over a reasonable timeframe. HMA believes these are highly attractive fundamentals for investors. About HMA Health Management Associates Inc. (NYSE: HMA) -- http://www.hma- corp.com/ or via http://www.streetevents.com/-- owns and operates general acute care hospitals communities in the United States. Upon completion of the pending transaction to sell the 125-bed Southwest Regional Medical Center, the 103-bed Summit Medical Center, and the 76-bed Williamson Memorial Hospital, HMA will operate 57 hospitals in 14 states with approximately 8,300 licensed beds. * * * As reported in the Troubled Company Reporter on Jan. 19, 2007, Moody's Investors Service assigned a Ba2 rating to the proposed senior secured credit facilities of Health Management Associates, Inc. Moody's also assigned HMA a Corporate Family Rating of Ba3. The outlook for the ratings is stable. Standard & Poor's Ratings Services lowered its ratings on Naples, Florida-based Health Management Associates Inc. The corporate credit rating was lowered to 'B+' from 'BBB', and the rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to HMA's proposed $3.25 billion senior secured bank facilities, consisting of a $500 million revolving credit due 2013 and a $2.75 billion term loan B due 2014. The facilities are rated 'B+' with a recovery rating of '3', indicating the expectation for meaningful recovery of principal in the event of a payment default. In addition, the rating on the company's $400 million senior unsecured notes due 2016 was lowered to 'B+' from 'BBB'. These notes will become secured by the same collateral as the bank facility on an equal and ratable basis; therefore, Standard & Poor's also assigned them a recovery rating of '3'. Fitch Ratings has downgraded Health Management Associates, Inc.'s Issuer Default Rating to 'BB-' from 'BBB+'; its Newly secured senior notes to 'BB' from 'BBB+'; and, its Subordinated convertible notes to 'B+' from 'BBB'. Fitch has also assigned a 'BB' to HMA's new senior secured bank facility and simultaneously withdrawn the unsecured 'BBB+' existing bank facility. The Rating Outlook is Stable. HOLLINGER INC: Receiver Appeals Ravelston Charges by U.S. Attorney ------------------------------------------------------------------ The Ontario Superior Court of Justice commenced a hearing into a motion brought by RSM Richter Inc. in its capacity as Receiver of The Ravelston Corporation Limited and its debtor-affiliates on Jan. 25, 2007, whereby the Receiver seeks, among other things, approval of a plea agreement negotiated with the U.S. Attorney's office in respect of indictments laid in the United States against Ravelston. The motion is supported by Hollinger Inc. and Sun- Times and is opposed by Conrad Black Capital Corporation, Peter G. White and Peter G. White Management Limited. On Jan. 22, 2007, Hollinger and its wholly owned subsidiary Domgroup Ltd. served a motion in the insolvency proceedings regarding The Ravelston Entities. In the motion, Hollinger and Domgroup seek an order confirming the secured obligations owed by Ravelston to the company and Domgroup and declaring that the applicable security agreements are valid, perfected and enforceable in accordance with their terms. Sun-Times Media Group, Inc. has advised that it intends to bring a motion to stay the motion. In the motion, Hollinger and Domgroup claim that the secured obligations owing by Ravelston total more than $25,000,000. The Board of Directors of Hollinger has set Monday, May 7, 2007, as the date of the company's Annual Meeting of shareholders. The time and location of the meeting will be announced in due course. Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a newspaper publisher with assets, which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger Inc. faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on Sept. 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a Nov. 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on Nov. 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. On April 20, 2005, the Court issued two orders by which the Ravelston Corporation Limited and Ravelston Management Inc. were: (i) placed in receivership pursuant to the Bankruptcy & Insolvency Act (Canada) and the Courts of Justice Act (Ontario); and (ii) granted protection pursuant to the Companies' Creditors Arrangement Act (Canada). HSI ASSET: Fitch Rates $1.3 Million Class B-5 Certificates at B --------------------------------------------------------------- HSI Asset Loan Obligation Trust 2007-AR1, which closes on Jan. 26, 2007, is rated by Fitch Ratings: --$414.6 million classes I-A-1, II-A-1, II-A-2, III-A-1, III- A-2, IV-A-1, and IV-A-2 'AAA'; --$9.8 million class B-1 'AA'; --$3.3 million classes B-2 'A'; --$2.4 million class B-3 'BBB'; --$1.7 million class B-4 'BB'; --$1.3 million class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 4.50% total credit enhancement provided by the 2.25% class B-1, 0.75% class B-2, 0.55% class B-3, 0.40% privately offered class B-4, 0.30% privately offered class B-5, and 0.25% privately offered class B-6. The ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the capabilities of American Home Mortgage Servicing, Inc., Countrywide Home Loans Servicing LP, HSBC Mortgage Corporation, Residential Funding Company, LLC and SunTrust Mortgage, Inc. as servicers and CitiMortgage, Inc. as Master servicer. Deutsche Bank National Trust Company is the trustee. As of the statistical cut-off date, the collateral pool consists of 844 adjustable-rate loans and totals $434,092,081. Approximately 10.25% are adjustable-rate and 89.75% are interest-only rate mortgage loans. The weighted average original loan-to-value ratio is 72.31%. The average outstanding principal balance is approximately $514,327, the weighted average coupon is 6.455% and the weighted average remaining term to maturity is 355 months. The weighted average credit score is 734. The loans are geographically concentrated in California, Florida and Virginia. IPCS INC: Says COO Alan G. Morse Left Post by Mutual Agreement -------------------------------------------------------------- iPCS Inc., a Sprint PCS Affiliate of Sprint Nextel, said that Alan G. Morse, its chief operating officer, has left the company by mutual agreement. "Alan was instrumental in integrating our merger with Horizon PCS and he has been an important part of our management team since joining us from Horizon PCS in mid-2005," said Tim Yager, president and chief executive officer of the company. "I want to thank Alan for his contributions in a wide range of areas during his time with the company. I wish him all the best in his future endeavors." The company will immediately begin its search for a new chief operating officer. Until a replacement is found, Mr. Yager will assume the duties previously performed by Mr. Morse. About iPCS, Inc. Headquartered in Schaumburg, Illinois, iPCS Inc. (NASDAQ: IPCS) -- http://www.ipcswirelessinc.com/-- is the Sprint PCS Affiliate of Sprint Nextel with the exclusive right to sell wireless mobility communications network products and services under the Sprint brand in 80 markets including markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. As of Sept. 30, 2006, iPCS's licensed territory had a total population of approximately 15 million residents, of which its wireless network covered approximately 11.4 million residents, and iPCS had approximately 534,300 subscribers. * * * As reported in the Troubled Company Reporter on March 29, 2006, Standard & Poor's Ratings Services raised its ratings on Schaumburg, Illinois-based iPCS Inc., including the corporate credit rating, which was raised to 'B-' from 'CCC+'; and the senior unsecured debt rating, which was raised to 'B-' from 'CCC'. J/Z CBO: Fitch Keeps Junk Rating on $36.6 Million Class D Notes --------------------------------------------------------------- Fitch has upgraded two classes of notes issued by J/Z CBO, LLC. These rating actions are effective immediately: --$13,902,957 class B notes upgraded to 'AAA' from 'BBB-'; --$30,212,050 class C notes upgraded to 'BBB-' from 'B-/DR1'; --$36,560,917 class D notes revised to 'C/DR2' from 'C/DR5'. J/Z CBO is a collateralized bond obligation that closed on May 16, 2000 and is managed by Babson Capital Management LLC. J/Z CBO has a portfolio composed primarily of high yield bonds. The reinvestment period ended in May 2006. The upgrades are the result of improved credit enhancement levels due to the amortization of the class A notes and the partial amortization of the class B notes. J/Z CBO is structured to divert all collateral interest and principal proceeds to the distributions of the senior-most class in the capital structure before any distributions are made to the notes subordinate to that class. As a result, the class B notes will continue to receive all of the collateral pool's interest and principal proceeds until they are paid in full, while the class C and D notes continue to capitalize interest payments. Although these classes are deferring interest payments, the increasing note balances fall within Fitch's expectations, and distributions will be made to the class C notes once the class B notes are PIF. The ratings of the class B, C and class D notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated principal balances by the legal final maturity date of May 31, 2015. The class C and D notes have deferred interest totaling approximately $10.8 million and $17.2 million, respectively, and they are expected to continue deferring interest at their stated coupon rates of 10.09% and 14.59% until the class B notes are PIF. Fitch will continue to monitor and review this transaction for future rating adjustments. JACUZZI BRANDS: Stockholders Okay $1.25 Billion Apollo Merger Deal ------------------------------------------------------------------ Jacuzzi Brands Inc.'s stockholders have approved the adoption of the merger agreement with affiliates of Apollo Management L.P. at the company's annual meeting of stockholders. "We are pleased with the outcome of [the] vote," Jacuzzi Brands chairman Thomas B. Waldin said. "We believe that our merger with Apollo is the best outcome for our stockholders, our employees and the future of Jacuzzi Brands. "On behalf of Jacuzzi Brands' Board of Directors, I want to thank our stockholders and hard-working employees for their support throughout this process. We look forward to completing this transaction with Apollo as quickly as possible and we anticipate a smooth transition." Larry Berg of Apollo added, "We are very excited about the transaction and look forward to a smooth transition and working with the strong management team at Jacuzzi." The transaction is expected to close in early to mid-February 2007. All required regulatory approvals for the merger have been obtained, including early termination under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Jacuzzi Brands Inc. and affiliates of Apollo Management L.P. previously announced on Oct. 11, 2006, that they entered into a definitive merger agreement, pursuant to which Apollo would acquire all of the outstanding common stock of Jacuzzi Brands for $12.50 per share in cash and assume all outstanding debt, valuing the total transaction at approximately $1.25 billion. About Jacuzzi Brands Jacuzzi Brands Inc. (NYSE: JJZ) -- http://www.jacuzzibrands.com/ -- through its subsidiaries, manufactures and distributes branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The Company's products are marketed under its portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R), and ASTRACAST(R). * * * On October 2006, Moody's Investors Service placed Jacuzzi Brands Inc.'s corporate family rating at B2; $380 million 9.625% gtd notes due 2010 at B2 on review for possible downgrade. JACUZZI BRANDS: Settles Four Stockholder Class Action Lawsuits -------------------------------------------------------------- Jacuzzi Brands Inc. has reached an agreement in principle to settle four putative stockholder class action lawsuits related to its merger with a wholly owned subsidiary of Apollo Management L.P. The lawsuits were filed between October 13 and Nov. 8, 2006, in the Court of Chancery of the State of Delaware naming Jacuzzi Brands, each of its directors, and Apollo as defendants. Under the terms of the agreement, which remains subject to approval by the Court, the parties have agreed to settle all claims raised, or which could be raised, by the proposed plaintiff class relating to the merger. Pursuant to the terms of the proposed settlement, the company has agreed to amend the merger agreement such that (1) the termination fee payable by the company on the occurrence of certain specified events, is reduced from $25 million to $22.5 million and (2) the time period during which the company's entry into an alternative acquisition proposal would trigger payment of the termination fee under certain circumstances, is reduced from 12 months to 9 months. The parties also agreed that, in connection with a settlement, counsel for plaintiffs may seek an award from the court of attorneys' fees and expenses in an amount not to exceed $725,000 if the merger is consummated. The company noted that there can be no assurance that the Court will approve the proposed settlement or that any ultimate settlement will be under the same terms as those contemplated by the agreement. The proposed settlement of these lawsuits will not affect the amount of merger consideration to be paid in the merger or any other terms of the merger. As previously announced on Oct. 11, 2006, Jacuzzi Brands Inc. and affiliates of Apollo entered into a definitive merger agreement, pursuant to which Apollo would acquire all of the outstanding common stock of Jacuzzi Brands for $12.50 per share in cash and assume all outstanding debt, valuing the total transaction at approximately $1.25 billion. Jacuzzi Brands and its directors, executive officers and other members of management and its employees may be deemed to be participants in the solicitation of proxies from the stockholders of Jacuzzi Brands in connection with the merger. Information about Jacuzzi Brands' directors and executive officers is set forth in Jacuzzi Brands' proxy statements and annual reports on Form 10-K, previously filed with the SEC, and the proxy statement relating to the merger. About Jacuzzi Brands Jacuzzi Brands Inc. (NYSE: JJZ) -- http://www.jacuzzibrands.com/ -- through its subsidiaries, manufactures and distributes branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The Company's products are marketed under its portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R), and ASTRACAST(R). * * * On October 2006, Moody's Investors Service placed Jacuzzi Brands Inc.'s corporate family rating at B2; $380 million 9.625% gtd notes due 2010 at B2 on review for possible downgrade. JACUZZI CORP: High Leverage Cues Moody's B2 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned Jacuzzi Corporation a B2 corporate family rating, a B1 rating to its proposed $135 million senior secured first lien term loan B and $15 million synthetic letter of credit facility, and a B3 rating to its proposed $185 million second lien term loan facility. Jacuzzi Corporation is an affiliate of Apollo Management formed to purchase Jacuzzi Brands, Inc.'s bath segment. The assigned ratings reflect the company's high leverage and low free cash flow generation relative to debt levels as well as a continued challenging new residential construction and remodeling markets. The ratings also consider the benefits derived from the company's strong brand recognition, leading market share, and extensive geographical presence. The ratings outlook is stable. Moody's has assigned these ratings to Jacuzzi Corporation: -- $135 million senior secured first lien term loan B, due 2014, rated B1, LGD3, 33%; -- $15 million synthetic letter of credit facility, due 2014, rated B1, LGD3, 33%; -- $185 million second lien term loan, due 2014, rated B3, LGD5, 74%; -- Corporate Family Rating, rated B2; and, -- Probability of default rating, rated B2. Moody's has confirmed these rating for Jacuzzi Brands, Inc.: -- Corporate Family Rating, rated B2; -- Probability of default rating, rated B2; and, -- $380 million 9.625% Gtd. Notes, due 2010, rated B2, LGD3, 49%. This action concludes the review undertaken on Oct. 12, 2006. Moody's notes that Jacuzzi Brands Inc.'s ratings will be withdrawn upon the tender of the notes and close of the transaction. The outlook or ratings may improve if the company's free cash flow generation to total debt increased to over 8% on an annual sustainable basis and if its debt to EBITDA were under 3.5x and deemed to be improving. The outlook or ratings may deteriorate if free cash flow to debt was to decline to under 3%. Furthermore, the ratings could come under pressure due to debt financed acquisitions or an aggressive dividend policy resulting in an increase in debt to EBITDA above 6.5x. Jacuzzi Corporation is a leading global producer of premium branded water therapy and water comfort products for the residential remodeling and construction markets with LTM revenues for the period ended Sept. 30, 2006 of $766 million. JP MORGAN: Fitch Assigns BB Rating on Class M-11 Certificates ------------------------------------------------------------- Fitch has taken these actions on J.P. Morgan Mortgage Acquisition Corp., asset-backed pass-through certificates, series 2005-FRE1: --Classes AI, AII-F-1, AII-F-2, AII-F-3, AII-F-4, AII-V-1, AII-V-2 and AII-V-3 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 M-10 affirmed at 'BB+'; and, --Class M-11 rated 'BB', placed on Rating Watch Negative; The collateral pool consists of fixed- and adjustable-rate mortgage loans extended to sub-prime borrowers. All of the mortgage loans were originated or acquired by Fremont Investment and Loan and subsequently purchased by J.P. Morgan Mortgage Acquisition Corp. The affirmations affect approximately $629 million in outstanding certificates and are the result of a stable relationship between credit enhancement and future loss expectations. Class M-11 was placed on Rating Watch Negative due to early trends in the relationship between serious delinquency and credit enhancement. The amount of loans in foreclosure and REO is 9.1%, which is well above the industry average. At 13 months seasoned, the trust had experienced two months in which losses exceed excess spread causing a decline in the overcollateralization amount. The mortgage loans are being serviced by Litton Loan Servicing LP as servicer. MCJUNKIN CORP: S&P Holds BB Rating on $300 Mil. Credit Facility --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' rating and '1' recovery rating on McJunkin Corp.'s $300 million asset-backed revolving credit facility. Standard & Poor's also affirmed the 'B+' rating on McJunkin's $575 million secured term loan but lowered the recovery rating to '4' from '3'. This update comes after the company's decision to increase the ABL facility to $300 million from $200 million. Because the ABL facility's advance rates and other structural features have not changed, Standard & Poor's maintains that the loan should remain fully collateralized, despite its larger size. The ABL lenders will also no longer have a second lien on the company's other assets. Standard & Poor's had not assigned material value to this second-lien position in its prior analysis. When assessing the term loan's recovery prospects, S&P now assumes $300 million of revolver outstandings at the time of default. This leaves $200 million in residual collateral value available to cover the term loan, which would result in an expected recovery of 25%-50%. Ratings Affirmed: * McJunkin Corp. -- Corporate Credit Rating at B+/Stable/ -- $300 million asset-backd revolving credit facility at BB, Recovery Rating: 1 Rating Affirmed: * McJunkin Corp. Recovery Rating Lowered To From -- ---- $575 mil. B+; Recovery B+; Recovery 2nd term loan Rating 4 Rating 3 MCKESSON CORP: Signs New $1.8BB Interim Credit Facility with BofA ----------------------------------------------------------------- McKesson Corp. has entered into a new $1.8 billion 364-day unsecured interim term credit facility provided by Bank of America N.A., as administrative agent, Wachovia Bank, National Association, as syndication agent, the other Lenders party thereto, and Banc of America Securities LLC and Wachovia Capital Markets LLC as joint lead arrangers and joint book managers. The company will make a single drawdown of a portion of the total amount available under the interim credit facility, and the proceeds of such drawdown, together with certain cash on hand, will be used to (i) pay the merger consideration under the agreement and plan of merger, dated as of Nov. 5, 2006, by and among McKesson Corporation, Packet Merger Sub Inc. and Per-Se Technologies Inc., (ii) refinance certain indebtedness of Per-Se outstanding immediately prior to the closing of the acquisition and (iii) pay transaction costs associated with the acquisition and the interim credit facility. McKesson Corp. expects to replace the interim credit facility with a permanent bond financing in an amount up to $1.2 billion prior to the end of the interim credit facility's 364-day term. The interim credit facility includes a mandatory prepayment provision requiring the repayment of the interim credit facility in full upon the entering into of the permanent bond financing to replace such facility. A full-text copy of the interim credit agreement dated Jan. 26, 2007, is available for free at: http://researcharchives.com/t/s?1922 About McKesson Corp. Headquartered in San Francisco, California, McKesson Corp. (NYSE: MCK) -- http://www.mckesson.com/-- is a Fortune 15 healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 172-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. * * * McKesson Corp.'s junior subordinated debt carries Moody's Ba1 rating with positive outlook. MCKESSON CORP: Completes Acquisition of Per-se Technologies Inc. ---------------------------------------------------------------- McKesson Corporation successfully completed on Jan. 26, 2007, the acquisition of Per-Se Technologies Inc. in an all-cash transaction. As reported in the Troubled Company Reporter on Nov. 9, 2006, McKesson Corporation and Per-Se Technologies Inc. signed a definitive agreement under which McKesson will acquire, under the terms of the agreement, all of the outstanding shares of Per-Se for $28 per share in cash. In total, including Per-Se's outstanding debt, the transaction is valued at approximately $1.8 billion. About McKesson Corp. Headquartered in San Francisco, California, McKesson Corp. (NYSE: MCK) -- http://www.mckesson.com/-- is a Fortune 15 healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 172-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. * * * McKesson Corp.'s junior subordinated debt carries Moody's Ba1 rating with positive outlook. MEDIFACTS INT'L: Files for Chapter 11 Protection in Delaware ------------------------------------------------------------ Medifacts International filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware. Medifacts plans to sell its clinical research unit through a Court supervised acution and reorganize around its cardiac-safety- monitoring services division, The Associated Press reports. "The operations of the business have been challenged in recent months," AP quotes Chief Executive Michael Woehler. "The company anticipates that through ... the restructuring of the company's balance sheet and our existing investors' preliminary indications of interest to invest further in the company through a plan of reorganization, (Medifacts) will quickly emerge from bankruptcy leaner and adequately capitalized." Medifacts International Inc. -- http://www.medifacts.com/-- provides quality clinical trial services to pharmaceutical, biotech and medical device companies that are developing therapeutic drugs and products. The company consists of three fully-integrated divisions: Clinical Research Services, Cardiac Safety Services, and Medifacts International Research Center. The company employs 176 people in the North America, China and Europe. MEDIFACTS INT'L: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Medifacts International, Inc. aka M2 Worldwide Corp. aka Medifacts, Ltd. aka Medifacts International Consulting, LLC aka MS (Asia) Ltd. aka Medifacts International Consultants, LLC aka M2 Worldwide Corporation 2101 Gaither Road, Suite 400 Rockville, MD 20850 Bankruptcy Case No.: 07-10110 Type of Business: The Debtor provides quality clinical trial services to pharmaceutical, biotech and medical device companies that are developing therapeutic drugs and products. The company employs 176 people in the North America, China and Europe. See http://www.medifacts.com/ Chapter 11 Petition Date: January 28, 2007 Court: District of Delaware (Delaware) Debtor's Counsel: Joseph A. Malfitano, Esq. Young, Conaway, Stargatt & Taylor LLP The Brandywine Building P.O. Box 391 1000 West Street, 17th Floor Wilmington, DE 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Scios $400,000 6500 Paseo Padre Parkway Fremont, CA 94555 Crosstree Capital Partner $100,000 c/o Shane Senior 4902 Eisenhower Boulevard, Suite 125 Tampa, FL 33634 Dr. Joan Albert Barbera $71,016 c/o Pulmonary Hypertension 801 Roeder Road, Suite 400 Silver Spring, MD 20910 Citicorp Vendor Finance $36,858 P.O. Box 7247-0118 Philadelphia, PA 19170-0118 Software House International $33,537 Global Headquarters 2 Riverview Drive Somerset, NJ 08873 Tarchalski Janusz Lech Kardiologia $15,780 MCI Worldcom Conferencing $15,349 Medical Uni Graz $15,302 Aronson & Company $14,932 Pharma eMarket LLC $13,889 Pharma Clinical $13,364 G.E. Healthcare Financial Services $12,973 Bird & Bird $12,839 Dr. Anja Bruske $11,113 Therapeutic Development $9,125 Global Drug Development $9,010 Consulta Treuhand GmbH $8,853 Iron Mountain Records Management $8,739 ClinSource, Inc. $8,317 Clinical Resource Network $7,388 METSO CORP: Paper Unit Inks EUR100-Million Supply Deal in Japan --------------------------------------------------------------- Metso Paper, a unit of Metso Oyj, will supply a large OptiConcept papermaking line to a Japanese paper mill. The name of the customer was not disclosed. The new line will come on stream during the 2nd quarter of 2008. The order, valued at more than EUR100 million, has been recorded in the 4th quarter 2006 order intake. The line will produce more than 400,000 t/y of woodfree-coated paper. Metso's scope of supply contains stock preparation equipment; a 1,800 m/min, 10.7-meter-wide OptiConcept paper machine, air systems, auxiliary systems and automation systems. About Metso Headquartered in Helsinki, Finland, Metso Corp. aka Metso Oyj -- http://www.metso.com/-- is a global engineering and technology corporation with 2005 net sales of around EUR4.2 billion. Its 22,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The company's principal production plants are located in Brazil, China, Finland, France, Germany, India, Italy, South Africa, Sweden, the United Kingdom and the United States. * * * As reported on April 11, 2006, Standard & Poor's Ratings Services revised its outlook on Finland-based machinery and engineering group Metso Corp. to positive from stable, reflecting improvements in the group's operating performance and capital structure that offer it the potential to return to a low investment-grade rating. The 'BB+' long-term and 'B' short-term corporate credit ratings, as well as the 'BB' senior unsecured debt rating on the group were affirmed. NASDAQ STOCK: Decides Not to Raise "$24.42 a Share" Offer to LSE ---------------------------------------------------------------- Nasdaq Stock Market Inc. said it won't raise its $24.42 offer for London Stock Exchange PLC after LSE's board failed to agree to a new bid Saturday midnight, The Wall Street Journal reports. Nasdaq set Saturday midnight as the deadline for both parties to come up to a negotiated price on the deal. LSE has resisted Nasdaq's offer indicating it could do some kind of a deal if the price is right, WSJ said in a previous report. "We have made our position quite clear that it wouldn't be in our shareholders' interests. . . ," an LSE spokesman told WSJ. Nasdaq, WSJ says, can only increase it offer for the LSE if, pursuant to British takeover laws, the LSE's board recommends a higher price or if a rival bidder appears. However, analysts see a rival bidder's sudden appearance as unlikely. Nasdaq owns a 29% stake in the London exchange. The Nasdaq Stock Market Inc. -- http://www.nasdaq.com/-- is the largest electronic equity securities market in the United States with approximately 3,200 companies. * * * In December 2006, Standard & Poor's Rating Services lowered its long-term counterparty credit rating on The Nasdaq Stock Market Inc. to 'BB' from 'BB+'. The 'BB+' rating on Nasdaq's existing bank loan facility, which financed the initial 29% stake in the London Stock Exchange, is affirmed, while the Recovery Rating is revised to '1' from '2'. The ratings were removed from CreditWatch Negative where they were placed on Nov. 20, 2006. S&P said the outlook is stable. At the same time, Standard & Poor's has assigned its 'BB+' bank loan rating to $750 million senior secured Term Loan B, $2 billion senior secured Term Loan C, and $75 million revolver issued by Nasdaq, as well as the $500 million senior secured Term Loan C issued by Nightingale Acquisition Ltd., a U.K.-based subsidiary of Nasdaq. The rating agency has assigned a Recovery Rating of '1', which indicates full recovery of principal in the event of default. In addition, Standard & Poor's has assigned its 'B+' rating to $1.75 billion senior unsecured bridge loan issued by Nasdaq and NAL. Moody's Investors Service assigned in April 2006 ratings to three bank facilities of The Nasdaq Stock Market Inc.: a $750 million Senior Secured Term Loan B, a $1.1 billion Secured Term Loan C, and a $75 million Senior Secured Revolving Credit Facility. Moody's said each facility is rated Ba3 with a negative outlook. NATIONAL CINEMEDIA: Moody's Rates Proposed $805 Mil. Debt at B1 --------------------------------------------------------------- Moody's Investors Service assigned a B1 corporate family rating to National CineMedia, LLC and a B1 rating to its proposed senior secured bank credit facility, which consists of a $725 million term loan and an $80 million revolving credit facility. The outlook is stable. Consummation of an initial public offering is a condition precedent to the proposed facility, and the ratings assume concurrent debt and equity financing. NCM distributes advertising and entertainment programming to movie theaters primarily through its 30 year agreements with founding members Regal Entertainment Group, AMC Entertainment Inc., and Cinemark Holdings, Inc. Proceeds of the proposed term loan will fund the redemption of the founding members' preferred membership units in NCM, and NCM intends to distribute IPO proceeds to its founding members in connection with modifying payment obligations under existing agreements. After the IPO, the founding members will have a common ownership stake in NCM. The B1 corporate family rating reflects NCM's plan to distribute all free cash flow not required for operating needs to its founding members and parent holding company, National CineMedia, Inc., as well as minimal lender protection within the credit agreement, which permits distributions of 100% of free cash flow at up to 6.5x leverage. The rating also incorporates the company's lack of scale and track record as a standalone public company and some vulnerability to studios' ability to create content that both drives attendance and provides an appropriate medium for advertising. NCM's capacity to generate strong free cash flow and its good growth prospects support the rating. The company benefits from EBITDA margins of approximately 50%, a highly variable cost base, and low capital expenditure requirements. Based on pro forma estimated 2006 results, Moody's estimates NCM leverage at approximately 5x debt-to-EBITDA. The stable outlook anticipates no debt repayment and assumes margins remain in the 50% range or greater. Moody's expects strong EBITDA growth that could result in a decline in leverage to the low 4x range by year end 2007, but recognizes that the flexibility within the credit agreement permits management to increase leverage substantially. This flexibility poses risk since EBITDA growth could benefit equity holders rather than lenders. NCM could achieve a Ba3 rating with evidence of commitment to maintaining leverage below 5x debt-to-EBITDA. An upgrade would require a longer track record of both management commitment to this leverage level and of operating performance as a standalone public company. Moody's would consider a downgrade or negative outlook if NCM increased borrowing to fund a special dividend such that leverage rose to over 5.5x debt-to-EBITDA over the near term, or with evidence of deterioration of NCM's fundamental operations. Additionally, a substantial deterioration of the credit profile of any founding member resulting from weakened operating performance, or the termination of the exhibitor services agreement with any founding member could pressure the rating. These are the rating actions: * National CineMedia LLC -- Assigned B1 Corporate Family Rating -- Assigned B2 Probability of Default Rating -- Assigned B1 senior secured bank rating, LGD 3, 35% -- Stable Outlook National CineMedia LLC operates the largest digital in-theater network in North America, which allows it to distribute advertisements and other content through its digital content network. The company maintains its headquarters in Centennial, Colorado. NEENAH FOUNDRY: Closes Private Placements of $300 Mil. Sr. Notes ---------------------------------------------------------------- Neenah Foundry Company closed its private placement of $225 million of 9-1/2% Senior Secured Notes due 2017. The company also closed a separate private placement of $75 million of 12-1/2% Senior Subordinated Notes due 2013 in exchange for $75 million of its outstanding 13% Senior Subordinated Notes due 2013. Neenah will use the net proceeds from the Senior Secured Notes to repay its outstanding indebtedness under its existing credit facility, which has been replaced by a new credit facility, as well as to repurchase all $133.13 million of its outstanding 11% Senior Secured Notes due 2010 that were tendered in Neenah's tender offer and consent solicitation relating to such notes, and redeem the remaining $25 million of its 13% Senior Subordinated Notes due 2013. Headquartered in Neenah, Wisconsin, Neenah Foundry Company -- http://www.nfco.com/-- manufactures and markets iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. * * * As reported in the Troubled Company Reporter on Dec. 28, 2006 Standard & Poor's Ratings Services assigned its 'B' senior secured rating and its '3' recovery rating to Neenah Foundry Co.'s proposed $225 million senior secured fixed rate note issuance. The corporate credit rating on Neenah is B/Stable/--. As reported in the Troubled Company Reporter on Dec. 19, 2006 Moody's affirmed the Corporate Family rating of Neenah Foundry Company at B2, and its Probability of Default rating at B2. Moody's also assigned a B2 rating to the company's new senior secured notes. NEWCOMM WIRELESS: Creditors Must File Proofs of Claim by Feb. 7 --------------------------------------------------------------- The United States Bankruptcy Court for the District of Puerto Rico set Feb. 7, 2007, at 5 p.m. as the deadline for all persons and entities, owed money by Newcomm Wireless Services Inc. on account of claims arising prior to Nov. 28, 2006, to file proofs of claim and proofs of interest. Creditors must file written proofs of claim on or before the Feb. 7 Claims Bar Date and those forms must be delivered to: Newcomm Wireless, Inc. c/o Logan & Company, Inc. 546 Valley Road Upper Montclair, New Jersey 07043 Any proof of claim or interest submitted by facsimile or e-mail will not be accepted and will not be deemed filed until such proof of claim is sent through the United States mail or through a courier. For governmental units, the claims bar date is set for May 28, 2007. Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc. is a PCS company that provides wireless service to the Puerto Rico market. The company is a joint venture between ClearComm, L.P. and Telefonica Larga Distancia. The company filed for chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported assets and liabilities of more than $100 million. NOVELIS INC: In Sale Talks, India-based Group May Make an Offer --------------------------------------------------------------- Novelis Inc. is in talks with various parties that could lead to a potential sale of the company, Dale Crofts writes for Bloomberg. Bloomberg says Kumar Mangalam Birla's Aditya Birla Group might make an offer soon following Novelis' disclosure. However, the company stated that there could be no assurance that any deal would happen. Mumbai-based Aditya Birla Group, the Hindustan Times says, might make a $5 billion to $6 billion deal, citing an unknown source. MorningStar Inc. metals analyst Ben Butwin said the Novelis' recent results were not remarkable and the company suffered enough debt. Novelis had a $170 million loss for the nine-month period ended Sept. 30, 2006, with $3.2 billion in debt and loans outstanding, Bloomberg notes. According to the data compiled by Bloomberg, the company's shares rose CDN$8.40 to CDN$44.05 on the Toronto Stock Exchange last week, which have almost doubled in the past 12 months surging 24% to a record. Its market value is about CDN$3.26 billion (US$2.76 billion). Management Changes On Jan. 2, 2007, Novelis appointed Edward A. Blechschmidt as a substitute CEO. Bloomberg relates that the company is looking for a permanent replacement after ousting Brian W. Sturgell in August 2006 following a jump in metal prices led to losses. Mr. Blechschmidt, a board member, succeeded Chairman William T. Monahan, who had been interim CEO since ousting Mr. Sturgell, an Alcan Inc. executive VP when he was named as Novelis CEO in 2004, Bloomberg adds. Based in Atlanta, Georgia, Novelis, Inc., (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- provides customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. The company operates in 11 countries and has around 13,000 employees. Through its advanced production capabilities, the company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. The company has facilities in Hongkong, Malaysia, Canada, U.S. and Switzerland, among others. * * * As reported in the Troubled Company Reporter on Oct. 20, 2006, Moody's Investors Service, in connection with its implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors, confirmed Novelis Inc.'s B1 corporate family rating. The rating agency held the bank revolver rating to Ba2 from Ba3, the bank term loan rating to Ba2 from Ba3, and senior unsecured notes to B3 from B2. Moody's also upgraded Novelis Corp.'s bank term loan rating to Ba2 from Ba3. NOVELL INC: Wal-Mart Supports Alliance with Microsoft ----------------------------------------------------- Microsoft Corp. and Novell Inc. disclosed that Wal-Mart Stores Inc., the world's largest retailer, became the latest customer to take advantage of the benefits of the new collaboration on interoperability between Microsoft Windows and Linux. Under the agreement, Microsoft will deliver SUSE Linux Enterprise Server subscription certificates to Wal-Mart for use in Wal-Mart's IT infrastructure. The engagement among the three companies opens a host of other potential opportunities for both Microsoft and Novell to provide Wal-Mart with additional software resources and support, building on future joint research and developments around virtualization and interoperability. Wal-Mart, already a significant user of Microsoft products, is pleased that the collaboration will improve interoperability among various systems. "We have wanted information technology vendors to deliver true interoperability and IP assurance between multiple platforms for some time now, and we are pleased that Microsoft and Novell are committed to fulfilling that need," said Nancy Stewart, senior vice president and chief technology officer of Wal-Mart. "Wal-Mart is known around the world for its innovative use of technology. Selecting Microsoft and Novell is another step in that strategy. The net result is a win for us and, more importantly, for our customers." "Customers tell us every day that they need to operate a cost- effective IT organization and leverage the most they can out of their investments," said Ron Hovsepian, president and CEO of Novell. "Through our relationship with Microsoft, we've created new opportunities for enterprise interoperability and virtualization that ultimately result in real savings for our customers. We are delighted that Wal-Mart has chosen SUSE Linux Enterprise, and we look forward to collaborating with them for many years." By working together with Microsoft and Novell, Wal-Mart gains the ability to manage Windows and Linux by extending its existing Microsoft management tool set and authentication platform: Systems Management Server, Active Directory and Microsoft Operations Manager. Wal-Mart can also move to lower- cost commodity server hardware while simultaneously improving the customer experience. "Customers tell us that they need interoperability and that they want their technology vendors to manage the underlying intellectual property issues in software," said Steve Ballmer, CEO of Microsoft. "We are delivering this to Wal-Mart and giving them peace of mind so they can focus on their business and build for the future." The Microsoft-Novell Agreement On Nov. 2, 2006, Novell and Microsoft announced a series of agreements to jointly build, market and support new solutions to improve interoperability, deliver powerful new virtualization capabilities, make Microsoft and Novell products work better together, and give customers peace of mind that both companies stand behind the products they deliver. As part of this five- year agreement, Microsoft agreed to use, resell or distribute certificates that customers redeem to receive SUSE Linux Enterprise Server subscriptions for upgrades, updates and technical support from Novell. Since the announcement, more than 35,000 new certificates for three-year priority support subscriptions to SUSE Linux Enterprise Server have been activated under the Microsoft and Novell collaboration agreement. About Novell Inc. Headquartered in Waltham, Massachusetts, Novell, Inc. -- http://www.novell.com/-- delivers Software for the Open Enterprise. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. Novell has sales offices in Argentina, Brazil and Colombia. Waiver of Default As reported in the Troubled Company Reporter on Sept. 29,2006, Novell Inc., received a letter from Wells Fargo Bank, NA, the trustee with respect to company's US$600 million 0.50% convertible senior debentures due 2024, which asserts that Novell is in default under the indenture because of the delay in filing its Form 10-Q for the period ended July 31, 2006. On Nov. 10, 2006, Novell completed its consent solicitation with respect to certain amendments to, and a waiver of rights to pursue remedies available with respect to certain alleged defaults under, the provisions of the indenture, governing its 0.50% convertible senior debentures due 2024. Under the terms of the Consent Solicitation Statement, Novell will pay an additional 7.33% per annum in special interest on the Debentures from and after Nov. 9, 2006, to Nov. 8, 2007. NOVELL INC: Receives NASDAQ Notice of Non-Compliance ---------------------------------------------------- Novell Inc. received an additional notice of non-compliance from the staff of the NASDAQ Stock Market, pursuant to NASDAQ marketplace rule 4310(c)(14), due to the delay in filing its annual report on Form 10-K for the fiscal year ended Oct. 31, 2006. On Sept. 14, 2006, Novell received a NASDAQ notice of non- compliance in relation to the delay in filing its report on Form 10-Q for the quarter ended July 31, 2006. Novell has delayed the filing of its Third Quarter Form 10-Q and Form 10-K filing pending the completion of the review by its Audit Committee of the company's historical stock-based compensation practices. In response to the first notice of non-compliance, Novell requested a hearing before a NASDAQ Listing Qualifications Panel. On Jan. 9, 2007, the Panel granted Novell's request for continued listing subject to the requirements that, on or before March 1, 2007, Novell provide the Panel with certain information relating to the Audit Committee's review and, on or before March 13, 2007, Novell file the Third Quarter Form 10-Q and any necessary restatements. The current NASDAQ notice requests that Novell make a new submission to the Panel. Accordingly, Novell intends to provide the Panel with a submission describing its efforts to file the Form 10-K and requesting a further extension to make that filing. About Novell Inc. Headquartered in Waltham, Massachusetts, Novell, Inc. -- http://www.novell.com/-- delivers Software for the Open Enterprise. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. Novell has sales offices in Argentina, Brazil and Colombia. Waiver of Default As reported in the Troubled Company Reporter on Sept. 29,2006, Novell Inc., received a letter from Wells Fargo Bank, NA, the trustee with respect to company's $600 million 0.50% convertible senior debentures due 2024, which asserts that Novell is in default under the indenture because of the delay in filing its Form 10-Q for the period ended July 31, 2006. On Nov. 10, 2006, Novell completed its consent solicitation with respect to certain amendments to, and a waiver of rights to pursue remedies available with respect to certain alleged defaults under, the provisions of the indenture, governing its 0.50% convertible senior debentures due 2024. Under the terms of the Consent Solicitation Statement, Novell will pay an additional 7.33% per annum in special interest on the Debentures from and after Nov. 9, 2006, to Nov. 8, 2007. PACIFIC LUMBER: Selects Howard Rice as Bankruptcy Counsel --------------------------------------------------------- Pacific Lumber Company and its debtor-affiliates, with the exception of Scotia Pacific Company LLC, ask the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ Howard Rice Nemerovski Canady Falk & Rabkin as their bankruptcy counsel. According to Gary Clark, the Debtors' vice president and chief financial officer, the Debtors have selected Howard Rice based on the firm's experience in the bankruptcy field. The Debtors believe that Howard Rice is well qualified to represent them in their chapter 11 cases. As the Debtors' bankruptcy counsel, Howard Rice will: (a) advise and represent the Debtors with respect to virtually all matters and proceedings; (b) advise the Debtors with respect to their affairs and duties as debtors-in-possession; (c) deal with parties-in-interest and their attorneys and agents as is necessary during the pendency of the bankruptcy cases; (d) prepare necessary applications, motions, pleadings, orders and other legal papers; and (e) counsel the Debtors with respect to the bankruptcy and other issues related to their cases, and perform all other necessary legal services. The Debtors will pay for Howard Rice's services according to the firms' standard hourly rates: Category Hourly Rate -------- ----------- Attorneys $215 to $750 Legal Assistants $80 to $230 The Howard Rice professionals who are contemplated to render services to the Debtors are: Professional Hourly Rate ------------ ----------- Jeffrey L. Schaffer, Esq. $595 William J. Lafferty, Esq. $525 Gary M. Kaplan, Esq. $475 Jeremy Kamras, Esq. $405 Shaudy Danaye-Elmi, Esq. $285 Katy A Sakamoto, Esq. $170 Ashley Ray, Esq. $120 Mr. Clark notes that prior to the filing of the bankruptcy case, the Debtors paid Howard Rice a $250,000 retainer for the work contemplated under the chapter 11 cases. The total prepetition payments to Howard Rice on account of bankruptcy-related matters equal to $700,000, including for services rendered dating back to 2005 in connection with advice pertaining to potential restructuring matters. In view of the interrelationships and the potential for conflicts among the Debtors, Scotia Pacific Co. LLC has retained separate bankruptcy counsel. Mr. Clark assures the Court that the Debtors and Howard Rice will cooperate with Scotia Pacific and its counsel where their interests are aligned with those of Scotia Pacific, and to avoid duplication of effort wherever possible. Because of the common interests of and close cooperation expected between the Debtors, Scotia Pacific and their counsel, the parties have entered into a joint-defense type of information-sharing agreement. Mr. Clark is aware that there may be certain technical conflicts inherent in Howard Rice concurrently representing Britt, Salmon Creek, Scotia Development, Scotia Inn, and Pacific Lumber. Mr. Clark, however, perceives these conflicts to be non-material for practical purposes, and believe that the Debtors' interests and strategies are fundamentally aligned for purposes of bankruptcy and relevant litigation advice. Jeffrey L. Schaffer, Esq., a shareholder of Howard Rice, discloses these potential conflicts that have been dealt with: * Howard Rice has represented and continues to represent Pacific Gas and Electric Company in connection with its Chapter 11 case. The firm understands that Pacific Lumber is a power provider that for many years has sold its excess power to PG&E. * Howard Rice has represented Carl Magruder in connection with litigation brought against Magruder and others by Pacific Lumber arising from an alleged willfull trespass on the land of Pacific Lumber. Except as disclosed, Mr. Schaffer assures the Court that Howard Rice neither holds nor represents any interest adverse to the Debtors' estates and is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on April 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Taps Jordan Hyden as Bankruptcy Counsel ------------------------------------------------------- Pacific Lumber Company and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Jordan, Hyden, Womble, Culbreth & Holzer, P.C., as their bankruptcy counsel. James Shanks, the Debtors' president, relates that the Debtors first contacted Jordan Hyden in May 2006 for the provision of legal services. Subsequently, prior to the filing of the bankruptcy case, Jordan Hyden billed the Debtors, and was paid in the ordinary course of business, $123,539 as compensation for fees earned and reimbursement for expenses incurred. The Debtors believe that Jordan Hyden is thoroughly familiar with and experienced in Chapter 11 matters relating to the operation and management of their assets, and are well qualified to represent them. As the Debtors' counsel, Jordan Hyden will: (a) give professional advice regarding continued operation of the Debtors' businesses and management of its property, and duties and responsibilities; (b) prepare all schedules and statements; (c) prepare all necessary applications, notices, answers, adversaries, orders, reports and other legal papers regarding the Debtors' obligations and operations under Chapter 11; (d) assist the Debtors in the negotiation of a plan satisfactory to the parties-in-interest; (e) prepare a Disclosure Statement which will be submitted to the parties-in-interest; and (f) perform all other legal services as may be necessary and appropriate. The Debtors will pay Jordan Hyden at its normal hourly rates charges, subject to periodic adjustment to reflect economic, experience and other factors: Attorneys Hourly Rate --------- ----------- Shelby A. Jordan, Esq $425 Harlin C. Womble, Jr., Esq. $375 Nathaniel Peter Holzer, Esq. $325 Kenneth Culbreth, Esq. $325 Kevin Franta, Esq. $275 Michael Urbis, Esq. $275 Barbara Smith, Esq. $135 Shaun Jones, Esq. $125 Jordan Hyden expects to be paid by Debtors, on a monthly basis, 80% of fees and 100% of expenses. On Jan. 12, 2007, Jordan Hyden received a $75,000 retainer, which was deposited in the firm's trust account. Jordan Hyden's Jan. 18, 2007, invoice, totaling $65,957, was drawn from the retainer and paid to the firm prior to the Petition Date. The balance of the retainer in the Jordan Hyden's Trust Account is $9,042. In view of the interrelationships between the Debtors, Scotia Pacific Co. LLC has retained separate bankruptcy counsel. The Debtors inform the Court that they, with Jordan Hyden, will cooperate with Scotia Pacic and its counsel where their interests are aligned with those of Scotia Pacific, and to avoid duplication of effort wherever possible. The parties have entered into a joint-defense type of information-sharing agreement. Mr. Shanks says there may be certain technical conflicts inherent in Jordan Hyden concurrently representing the Debtors. "(The Debtors') respective operations are related and they have and may in the future have certain contractual and other business relationships with one another," Mr. Shanks says. "(T)hose conflicts, (however, are) non-material for practical purposes." Nathaniel Peter Holzer, Esq., a shareholder of Jordan Hyden, assures the Court that his firm neither holds nor represents any interest adverse to the Debtors' estates and is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transactions pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on April 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Wants Access to Cash Collateral Until February 9 ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 24, 2007, Pacific Lumber Company and its debtor-affiliates, excluding Scotia Pacific Company LLC, obtained authority from the United States Bankruptcy Court for the Southern District of Texas to use the Lenders' cash collateral, through Jan. 26, 2007, as outlined in a budget. Harlin C. Womble, Jr., Esq., at Jordan, Hyden, Womble, Culbreth, & Holzer, P.C., in Corpus Christi, Texas, the Debtors' proposed bankruptcy counsel, emphasized that a sufficient equity cushion adequately protects the Lenders. Moreover, the Debtors proposed to grant a replacement lien for the Lenders' benefit in collateral acquired postpetition, Mr. Womble added. The amount secured by the Replacement Lien will be equal to any diminution of the Lenders' Cash Collateral interest existing as of the Petition Date. Pacific Lumber and its debtor affiliates, with the exception of Scotia Pacific Company LLC, now ask the U.S. Bankruptcy Court for Southern District of Texas for authority to use cash collateral in which their Lenders and the Loggers and Haulers assert an interest, through Feb. 9, 2007, pursuant to the amounts set forth on the Budget, if an agreement can be reached. The Pacific Lumber Company and its debtor-affiliates, excluding Scotia Pacific Company LLC, delivered a revised budget with the Court on Jan. 24, 2007. The Debtors also ask the Court to schedule a final hearing on their request prior to Feb. 9, 2007 -- ideally on February 6 -- regarding their continued use of cash collateral. If no agreement can be reached, the Debtors seek authority to use cash collateral in which the Lenders and the Loggers and Haulers assert an interest, through Feb. 16, 2007, pursuant to the amounts set forth on the Budget. They asked Judge Richard S. Schmidt to convene a final hearing prior to February 16. PALCO reports that the Debtors expect to need approximately $2,990,000 for operating and other business expenses during the week ending Jan. 26, 2007. The Debtors intend to use cash resources as of the Petition Date of approximately $1,163,000 and anticipated cash generated from operations aggregating approximately $1,520,000. Currently there is approximately $900,000 in postpetition cash collections held at LaSalle Bank National Association, which will also be required by the Debtors. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on April 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 2, http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANSPORTATION: Emerges from Bankruptcy --------------------------------------------------- Performance Transportation Services Inc.'s Plan of Reorganization became effective on Jan. 29, 2007, marking the company's emergence from its voluntary Chapter 11 proceeding. The company's Plan of Reorganization was confirmed on Dec. 21, 2006 less than a year after PTS and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of New York. PTS has met all requirements to emerge from bankruptcy and the implementation of the court approved Plan of Reorganization brings to a conclusion the company's financial restructuring process. "Since commencing our voluntary reorganization, we have successfully restructured our financial position," said Jeffrey L. Cornish, chief executive officer and president of PTS. "Through this restructuring we have effectively put many challenges of our past behind us, permitting the company to emerge from Chapter 11 with a significantly less leveraged balance sheet, cash to fund operations and a financial structure that will allow us to compete successfully in today's auto industry. All of this forms a stronger foundation for success." The terms of the plan call for secured creditors to be fully repaid in cash and shares. The Yucaipa Companies LLC, which holds the majority of the second lien debt, will receive New Common Stock. General unsecured creditors will receive proceeds from a Liquidating Trust. The Trust will pursue recoveries through avoidance actions and other litigation. Holders of Old common Stock will not receive any distribution and their equity interests will be cancelled. All the company's new equity will be held privately; going forward the New Common Stock issued pursuant to the Plan will not trade over any public exchange. Pursuant to the Plan, PTS will continue to operate its three business segments -- E. and L. Transport, Hadley Auto Transport, and Leaseway Motorcar Transport. The management team will continue to manage these businesses in their current positions as the company emerges. "Today, PTS is a stronger, more competitive company. We remain committed to a market philosophy that is based on solid long-term relationships with our customers and vendors," Mr. Cornish noted. We have been a recognized leader for innovation and customer service in our industry for years, and we intend for our leadership to continue." About Performance Transportation Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. PHH: Fitch Rates $1.3 Million Class II-B-5 Certificates at B ------------------------------------------------------------ Fitch rates PHH Alternative Mortgage Trust's mortgage pass-through certificates, series 2007-1, group II: --$220.5 million classes II-1A, II-2A1, II-2A2, II-1AX, II- 2AX, II-1PO, II-2PO, II-AR 'AAA'; --$5.3 million class II-B-1 certificates 'AA'; --$2.8 million class II-B-2 certificates 'A'; --$1.6 million class II-B-3 certificates 'BBB'; --$1.6 million privately offered class II-B-4 certificates 'BB'; and, --$1.3 million privately offered class II-B-5 certificates 'B'. The 'AAA' rating on the senior certificates reflects the 5.75% subordination provided by the 2.25% class II-B-1, 1.20% class II-B-2, 0.70% class II-B-3, 0.70% non-offered class II-B-4, 0.55% non-offered class II-B-5, and 0.35% non-offered class II-B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. The ratings also reflect the quality of the mortgage collateral, the capabilities of Wells Fargo Bank, National Association, as Master Servicer, and Fitch's confidence in the integrity of the legal and financial structure of the transaction. The group II mortgage loans in aggregate contain fully amortizing, adjustable-rate mortgage loans with an aggregate principal balance of $233,902,115 and an average principal balance of $249,895. The weighted average original loan-to-value ratio is 73.89%, and the weighted average FICO is 704. The states with the largest concentration of mortgage loans are California, Florida, and New York. All other states represent less than 8% of the aggregate pool balance as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Deutsche Alt-A Securities, Inc., a Delaware corporation, will assign all its interest in the mortgage loans to the trustee for the benefit of certificate holders. For federal income tax purposes, an election will be made to treat the trust as multiple real estate mortgage investment conduits. HSBC Bank USA, National Association will act as trustee. PREMIER ENT: Unsecured Creditors to Receive 100% of Claims ---------------------------------------------------------- Premier Entertainment Biloxi LLC, dba Hard Rock Hotel & Casino Biloxi, and Premier Finance Biloxi Corp. filed a Joint Plan of Reorganization and disclosure statement explaining that plan with the U.S. Bankruptcy Court for the Southern District of Mississippi. The plan provides for a 100% recovery to all holders of allowed claims. Treatment of Claims Holders of Allowed Administrative Expense Claims will receive cash on the later of the Plan effective date or the date the claim became allowed. Holders of Allowed Professional Compensation and Reimbursement Claims will be paid in full in cash as approved by the Bankruptcy Court. Holders of Allowed Priority Tax Claims will receive cash and interest at the applicable rate on the Plan effective date. All Allowed Priority Tax Claims not due on that date will be paid in the ordinary course of business as they become due. Holders of Class 1 Allowed Other Priority Claims will receive cash on the later of the plan effective date or the date the claim became allowed. At the sole option of the Debtors, holders of Class 2 Allowed Secured Tax Claims will receive cash, or equal semiannual cash payments over a period not exceeding five years starting on the plan effective date together with interest at applicable rate. At the sole option of the Debtors, holders of Class 3 Allowed Other Secured Claims: a. will be reinstated on the plan effective date; b. will receive cash including interest at applicable rate on the latter of the plan effective date or the date the claim became allowed, or c. will receive the collateral securing its claim on the latter of the plan effective date or the date the claim became allowed. Holders of Class 4 Allowed Secured PEB Bond Claims and holders of Class 5 Allowed Secured Premier Finance Bond Claims will receive their pro rata share of: a. any principal amount of the bonds outstanding on the plan effective date plus accrued interest in cash on the plan effective date; and b. the amount, if any, of the Disputed Liquidated Damages Escrow, as defined in the plan, in cash, promptly after resolution of the Disputed Liquidated Damages Claims, as defined in the plan, by settlement or final order. Holders of Class 6 Allowed General Unsecured PEB Claims and Class 7 Allowed General Unsecured Premier Finance Claims will receive 50% of its allowed claim on the plan effective date. The remaining 50% will be paid within 60 days or as soon as practicable. Class 8 PEB Equity Interests and Class 9 Premier Finance Equity Interest remain the same. A full-text copy of the debtors' disclosure statement is available for free at: http://www.researcharchives.com/bin/download?id=070129034206 About Premier Entertainment Based in Biloxi, Mississippi, Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi -- http://www.hardrockbiloxi.com/ -- owns and operates hotels. The Company filed for chapter 11 protection on Sept. 19, 2006 (Bankr. S.D. Ms. Case No. 06-50975). Nicholas Van Wiser, Esq., and Robert Alan Byrd, Esq., at Byrd & Wiser, represent the Debtors. Corby Davin Boldissar, Esq., at Locke Liddell & Sapp, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $252,862,215 in assets and $226,069,921 in debts. RBS GLOBAL: Moody's Puts B3 Rating on $150 Mil. Sr. Notes Due 2016 ------------------------------------------------------------------ Moody's Investors Service has affirmed the corporate family rating of RBS Global, Inc., the parent company of Rexnord Corporation, and assigned new debt rating in connection with its pending acquisition of Jacuzzi Brands' water management product business. Moody's also affirmed a SGL-2 liquidity rating reflecting good liquidity and expected covenant compliance. The rating outlook is stable. Ratings affirmed: -- Corporate Family Rating at B2; -- Probability-of-default rating at B2; -- $960 million Senior Secured Bank Credit Facilities at Ba2, LGD2, 17%; -- $795 million Senior Unsecured Bonds due 2014 at B3, LGD4, 67%; -- $300 million Senior Subordinated Bonds due 2016 at Caa1, LGD6, 93%; and, -- Speculative Grade Liquidity Rating at SGL-2. The outlook is stable. Ratings assigned: -- B3 to $150 million Senior Notes due 2016, LGD4, 67%. RBS is acquiring Zurn for approximately $942 million. Zurn is a leading manufacturer and distributor in the multi-billion dollar non-residential construction market for water management products. This acquisition will create a new strategic water management platform for RBS. At closing, RBS will assume approximately $660 million in incremental funded debt which will actually decrease the company's pro forma leverage to approximately 6.2x from approximately 6.8x at LBO. Moody's estimates that free cash flow will decline to the low single digits as a percentage of reported debt from approximately 7% prior to the LBO and Zurn acquisition. The primary factors supporting the ratings are: (1) the breadth of RBS' product offering and the company's significant installed base which is even further enhanced through the Zurn acquisition.; (2) the increased diversity of the company's end-markets, which can mitigate the economic or industry-specific cyclicality; and, (3) Moody's expectation that the Zurn acquisition will be accretive and further improve RBS' free cash flow profile. RBS' ratings reflects the speculative characteristics of the credit and are constrained by: (1) the increased debt load assumed by RBS in connection with its acquisition; (2) the resulting deterioration in some of its credit metrics, such as free cash flow-to-debt and interest coverage; as well as, (3) an aggressive financial policy driven by its private equity ownership. The SGL-2 liquidity rating reflects good liquidity over the next twelve months. Moody's anticipates continued positive operating cash flow generation which, together with availability under the new revolving credit facility, should cover all of the company's operating needs. The stable outlook reflects Moody's expectation that the company's financial and operating profile will improve as RBS benefits from favorable demand dynamics in many of its and Zurn's end-markets and expected discretionary cash flow is used to reduce debt. RBS' ratings outlook would improve if its debt levels were reduced such that free cash flow as a percentage of total adjusted debt improve to approximately 10%, debt to EBITDA decrease to 5x and interest coverage improve to above 1.8x on a sustainable basis. RBS' ratings could experience downward pressure if the company were to make another material debt-funded acquisition or pay a dividend to its private equity owners so that the free cash flow as a percentage of total adjusted debt becomes negative or break-even and leverage stays over 6x for an extended period of time. RBS Global, Inc., headquartered in Milwaukee, Wisconsin, is a manufacturer of motion technology products, primarily focused on power transmission products serving industrial and aerospace end-markets. Zurn is a manufacturer and distributor in the non-residential construction market for water management products. Pro forma for the Zurn acquisition, RBS is expected to generate sales of approximately $1.5 billion. READER'S DIGEST: Earns $62 Million in Second Quarter Ended Dec. 31 ------------------------------------------------------------------ The Reader's Digest Association Inc. reported $62 million of net income on $802 million of revenues for the second quarter ended Dec. 31, 2006, compared with a $122 million net loss on $765 million of revenues for the same period ended Dec. 31, 2005, reflecting stronger operating results at RD North America and RD International. For fiscal 2007, reported results for the quarter included a loss on the sale of American Woodworker of $6 million, and costs related to the pending merger with an entity formed by an investor group led by Ripplewood Holdings L.L.C. totaling $5 million, which included higher stock-based compensation expenses as a result of increases in the company's stock price and non-operating transaction costs. Excluding these items, adjusted operating profits were $122 million. For Fiscal 2006, reported results included a non-cash charge of $188 million in connection with the write-down of goodwill associated with Books Are Fun and a gain on an asset sale of $1 million. Excluding these items, fiscal 2006 adjusted operating profits were $111 million. . Free Cash Flow was $133 million in the quarter, favorable to last year's free cash flow by $13 million. The improvement is attributable to improved operating results, proactive working capital management across the divisions, and the final installment of $10 million from the sale of the Pleasantville headquarters facility. "The improved operating results for this quarter were in line with our expectations," said Eric W. Schrier, President and Chief Executive Officer. "We had strong performances from our North America and International divisions, and we saw signs of improvement at Consumer Business Services, especially Books Are Fun. Free cash flow increased, as we had projected, building on our cash flow improvement in the first quarter. In particular, I am very encouraged by the performance of our new initiatives, which are increasingly contributing to the company's growth." Reader's Digest North America (RDNA) In the second quarter, revenues for RDNA were $275 million, up 11 percent over last year, and operating profits were $37 million, up 31 percent. Revenue and profit gains were driven by the favorable impact of investments in new businesses including Every Day with Rachael Ray, Taste of Home Entertaining, and the acquisition of http://Allrecipes.com/. Further driving results were recent cookbook launches including The Taste of Home Cookbook. Increased sales of U.S. Books and Home Entertainment products also contributed to higher RDNA revenues. These gains were partly offset by lower advertising sales at Reader's Digest magazine and reduced revenues from American Woodworker magazine, which was sold in December 2006. Reader's Digest International (RDI) Revenues for RDI were $330 million, versus $301 million in the 2006 quarter. Foreign currency fluctuations increased revenues in fiscal 2007 by $23 million. Higher revenues reflected strong continuous and attached mail campaigns in Australia, and strong product performance in Germany, including new products. Revenues improved in many of the newer markets, including Ukraine, Bulgaria and Romania. These results were partly offset by lower revenues for Books and Home Entertainment products in the United Kingdom, Poland, Portugal and Hungary as a result of lower response rates from outside list customers, and postal disruptions in Poland and Portugal. Operating profits were $47 million, versus $39 million in the prior-year quarter, an increase of 22 percent, or 13 percent currency-neutral. Foreign currency fluctuations increased operating profits by $3 million. The revenue improvement, as well as a shift in timing of certain promotional campaigns, contributed to the profit increase. Consumer Business Services (CBS) In the second quarter, CBS reported revenues of $211 million, down 8 percent from last year, and operating profits of $49 million, down 9 percent. At BAF, revenue declines were driven by fewer corporate events, reflecting higher vacancies of corporate sales representatives in certain markets due to the departure of those sales reps in fiscal 2006, as well as the absence of revenue from exited lines of business. BAF has made significant progress in replacing sales reps, as well as gaining traction with initiatives designed to lower the cost base, upgrade the management team, improve the effectiveness of the sales force and strengthen cash flow. At QSP, revenues and profits declined principally because of lower magazine and gift sales. Corporate unallocated expenses were $13 million, versus $10 million in the year-ago quarter. The increase in these costs was driven by additional stock-based compensation expense attributed to a 29 percent increase in the price of RDA common stock during the second quarter of Fiscal 2007. In addition, the variance was driven by lower expense in Fiscal 2006 because of the reversal of a litigation-related reserve that was no longer necessary. Merger Agreement The company has entered into a merger agreement under which an investor group led by Ripplewood Holdings L.L.C. will acquire all of the outstanding common shares of RDA for $17.00 per share. The transaction is expected to close by the end of February 2007, and is subject to the funding of the investor group's committed financing and the approval of the holders of a majority of the outstanding shares of RDA common stock, as well as other customary closing conditions. A shareholders meeting to consider adoption of the merger agreement is scheduled for Feb. 2, 2007. About Reader's Digest The Reader's Digest Association Inc. (NYSE: RDA) -- http://www.rda.com/-- is a global publisher and direct marketer of products that inform, entertain and inspire people of all ages and cultures around the world. The corporate website is Global headquarters are located at Pleasantville, New York. As reported in the Troubled Company Reporter on Nov. 20, 2006, Standard & Poor's Ratings Services reported that the 'BB' ratings on Reader's Digest Association Inc. remain on CreditWatch with negative implications, where they were placed on Aug. 15, 2006. RESIDENTIAL FUNDING: Fitch Holds Low-B Ratings on 8 Cert. Classes ----------------------------------------------------------------- Fitch Ratings has affirmed 33 classes of Residential Funding Mortgage Securities I, Inc residential mortgage-backed certificates: Series 2004-S1 --Class A at 'AAA'. Series 2004-S4 Group 1 --Class I-A at 'AAA'. Series 2004-S4 Group 2 --Class II-A at 'AAA'. Series 2004-S5 Group 1 --Class I-A at 'AAA'. Series 2004-S5 Group 2 --Class II-A at 'AAA'. Series 2004-S6 Groups 1 & 2 --Classes I-A and II-A at 'AAA'. Series 2004-S6 Group 3 --Class III-A at 'AAA'. Series 2004-S9 Group 1 --Class I-A at 'AAA'. Series 2004-S9 Group 2: --Class II-A at 'AAA'; --Class II-M-1 at 'AA'; --Class II-M-2 at 'A'; --Class II-M-3 at 'BBB'; --Class II-B-1 at 'BB'; --Class II-B-2 at 'B'. Series 2005-S5: --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class B1 at 'BB'; --Class B2 at 'B'. Series 2005-S6: --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class B1 at 'BB'; --Class B2 at 'B'. Series 2005-S9: --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class B1 at 'BB'; --Class B2 at 'B'. The affirmations reflect credit enhancement consistent with future loss expectations and affect approximately $2.63 billion of outstanding certificates. All classes in the transactions detailed above have experienced slight to moderate growth in CE since closing and there have been only minimal collateral losses to date. The pools are seasoned from a range of only 12 to 34 months. The pool factors range from approximately 55% to 92% outstanding. The mortgage loans consists of conventional, fully amortizing, 15 and 30-year fixed-rate mortgages secured by first liens on one to four-family residential properties. GMAC-RFC, rated 'RMS1' by Fitch, is the master servicer. REVLON INC: Completes $100 Million Rights Offering -------------------------------------------------- Revlon Inc. has disclosed the completion of its over-subscribed $100 million rights offering and the related private placement it launched on Dec. 18, 2006, with public shareholders seeking to subscribe for approximately 72 million shares, which was approximately 34 million shares in excess of the 37,847,472 shares sold to the public in the rights offering at $1.05 per share. MacAndrews & Forbes Holdings Inc., Revlon's majority stockholder, which is wholly-owned by Ronald O. Perelman, has purchased in a private placement directly from Revlon a total of 57,390,623 shares of Revlon's Class A common stock, pursuant to a previously- disclosed Stock Purchase Agreement between Revlon and MacAndrews & Forbes, at the same price of $1.05 per share, representing the number of shares that MacAndrews & Forbes would otherwise have been entitled to subscribe for in the rights offering pursuant to its basic subscription privilege. The shares sold to MacAndrews & Forbes were sold in reliance on Rule 506 under the Securities Act of 1933, as amended. The issuance of shares to MacAndrews & Forbes was not registered under the Securities Act of 1933, as amended, and, accordingly, such shares may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. As a result of these transactions, Revlon will have issued a total of 95,238,095 new shares of its Class A common stock, increasing the number of outstanding shares of Revlon's Class A common stock to 476,688,940 shares and increasing the total number of shares of common stock outstanding, including the company's existing 31,250,000 shares of Class B common stock, to 507,938,940 shares. With the completion of these transactions, MacAndrews & Forbes beneficially owns approximately 58% of Revlon's Class A common stock and approximately 60% of Revlon's total common stock outstanding, which shares represent approximately 74% of the combined voting power of such shares. Revlon also announced that Revlon Consumer Products Corporation, Revlon's wholly owned operating subsidiary, will use approximately $50 million of the proceeds of the rights offering and related private placement to redeem approximately $50 million aggregate principal amount of its 8 5/8% Senior Subordinated Notes due 2008, at a redemption price of 100% of the principal amount of such Notes, plus accrued and unpaid interest up to, but not including, the redemption date. In addition, Revlon announced that on or about Jan. 25, 2007, RCPC used the remainder of such proceeds to repay approximately $43 million of indebtedness outstanding under RCPC's $160 million revolving credit facility (which represented all of the indebtedness outstanding under this facility at that time), without any permanent reduction in that commitment, after paying fees and expenses incurred in connection with the rights offering and related private placement, with the remaining approximately $5 million available for general corporate purposes. About Revlon Revlon Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a cosmetics, skin care, fragrance, and personal care products company. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). * * * At Sept. 30, 2006, Revlon Inc.'s balance sheet showed $925 million in total assets and $2.1 billion in total liabilities, resulting in a $1.2 billion stockholders' deficit. REXNORD CORP: Proposed New $150MM Sr. Notes Get S&P's Junk Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' ratings to Rexnord Corp.'s proposed new issuance of $150 million senior unsecured notes due 2016. At the same time, Standard & Poor's affirmed its 'CCC+' rating on the company's currently outstanding 9.5% senior unsecured notes due 2014 following the $310 million add-on. Also, Standard & Poor's affirmed its 'B+' rating and '1' recovery rating on the company's existing senior secured credit facility following the proposed $200 million add-on to its term loan B. In addition, Standard & Poor's affirmed its 'B' corporate credit rating on the Milwaukee, Wisconsin-based diversified industrial manufacturer. The outlook is stable. Proceeds from the proposed new debt issuances, along with an equity infusion by Rexnord's equity sponsor, Apollo Management LP and its affiliates, will be used to finance the acquisition of Jacuzzi Brands Inc.'s water management business. All ratings are based on preliminary offering statements and are subject to review upon final documentation. SALTON SEA: Moody's Upgrades Senior Debt Rating to Baa3 from Ba1 ----------------------------------------------------------------- Moody's Investors Service upgraded the senior secured debt rating of Salton Sea Funding Corporation to Baa3 from Ba1. The rating outlook remains stable. Moody's also affirmed the Ba1 senior secured rating of CE Generation, LLC which is a 100% owner of Salton Sea with a stable outlook. The upgrade reflects: -- a recent agreement on a higher fixed energy rate to be received by the project from its principal offtaker, Southern California Edison, starting May 1, 2007, and running for five years to April 30, 2012; -- the improving credit quality of SCE; sustained improvements in operational and financial performance since the project overcame operational issues in 2002 and 2003; and, -- the expectation that financial performance will continue to show improvement with coverage ratios of over 2x in a few years time, although coverages are likely to be slightly lower in the short-term due to outlays for a pipe replacement program that is expected to enhance operational and financial performance over the longer term. The rating action considers the benefits of greater predictability and stability to Salton Sea's cash flows from receiving a higher fixed energy rate of 6.15 cents/kWh from SCE for five years beginning May, 1, 2007. The California Public Utilities Commission granted approval of this agreement on Oct. 19, 2006. SCE's ratings were upgraded on Oct. 16, 2006, reflecting expectations of continued strong financial performance and indications of a more supportive and more reliable regulatory environment in California. The rating action further considers the importance of these geothermal assets to the California electric market, given the state's focus on renewable resources as a core component of its energy policy. The rating affirmation of CE Gen's Ba1 rating reflects the effect of greater geographic and fuel source diversification that results from its ownership of the three gas fired projects located in New York, Texas, and Arizona in addition to Salton Sea and the low leverage of these projects. Nevertheless, this credit positive is offset against the effect of structural subordination to project level debt below CE Gen, primarily at Salton Sea. Because cash flow from Salton Sea is projected to increase, while cash flow from CE Gen's other projects is expected to decline, structural subordination to the debt at Salton Sea becomes more important over time. This trend is particularly marked after 2009 when the existing contract expires at Saranac, another CE Gen project subsidiary. At that time, the vast majority of the cash flows at CE Gen will be coming from Salton Sea, which must maintain at least a 1.5x coverage ratio to make distributions up to CE Gen. Salton Sea is forecast to be comfortably above that distribution test threshold, but its ability to make distributions up to CE Gen will take on greater significance in the future. As a result, Moody's feels it is appropriate to recognize this structural subordination issue with a one notch difference between the ratings of CE Gen and Salton Sea. The stable outlook for both Salton Sea and CE Gen reflects the contractual nature of the cash flows, an expectation of strong operational and financial performance going forward, along with the expectation that the credit quality of SCE will be maintained. Sea Salton Funding Corporation is the funding vehicle for ten California-based geothermal projects. Salton Sea is a wholly-owned subsidiary of CE Generation LLC, which in turn, is jointly-owned by MidAmerican Energy Holdings Company and by TransAlta USA Inc. SCOTTISH RE: Shareholders to Vote on MassMutual Deal on Feb. 23 --------------------------------------------------------------- Scottish Re Group Limited will hold an Extraordinary General Meeting of Shareholders at 11 a.m. local time on Feb. 23, 2007 to vote on its agreement between Scottish Re Group Limited and MassMutual Capital Partners LLC and certain affiliates of Cerberus Capital Management, L.P. The meeting will be held at: Fairmont Hamilton Princess Hotel 76 Pitts Bay Road, Pembroke HM11 Hamilton, Bermuda Scottish Re set Jan. 19, 2007 as the record date for the determination of shareholders entitled to vote at the Extraordinary General Meeting. About Scottish Re Group Scottish Re Group Limited -- http://www.scottishre.com/-- provides reinsurance of life insurance, annuities and annuity-type products through its operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. At March 31, 2006, the reinsurer's balance sheet showed $12.2 billion assets and $10.8 billion in liabilities * * * Moody's Investors Service continues to review the ratings of Scottish Re Group Ltd. with direction uncertain following the announcement by the company that it has entered into an agreement to sell a majority stake to MassMutual Capital Partners LLC, a member of the MassMutual Financial Group and Cerberus Capital Management, L.P., a private investment firm. Ratings under review include Scottish Re Group Limited's senior unsecured debt which is rated at Ba3 and preferred stock rated at B2. Standard & Poor's Ratings Services has also revised the CreditWatch status of its ratings on Scottish Re Group Ltd., Scottish Re's operating companies, and dependent unwrapped securitized deals to positive from negative. Scottish Re has a 'CCC' counterparty credit rating, and Scottish Re's operating companies have 'B+' counterparty credit and financial strength ratings. These ratings were placed on CreditWatch negative on July 31, when Scottish Re announced poor second-quarter results and that liquidity was tight. Fitch Ratings added that Scottish Re Group Ltd.'s ratings remain on Rating Watch Negative following the announcement that SCT has entered into an agreement which will result in a new equity investment into the company of $600 million. SCT's ratings were placed on Rating Watch Negative on July 31, due to concerns regarding the company's ability to repay $115 million of senior convertible notes that are expected to be put to the company on Dec. 6. Ratings on Rating Watch Negative include the company's BB issuer default rating and the BB- rating on its 4.5% $115 million senior convertible notes. A.M. Best Co. has downgraded the Financial Strength Rating to B from B+ and the issuer credit ratings to "bb+" from "bbb-" of the primary operating insurance subsidiaries of Scottish Re Group Limited. A.M. Best has also downgraded the ICR of Scottish Re to "b" from "bb-" and all of Scottish Re's debt ratings. All ratings remain under review with negative implications. SMARTIRE SYSTEMS: Inks Sale Agreement for $1.8 Million Debentures ----------------------------------------------------------------- SmarTire Systems Inc. entered into an agreement providing for the sale of convertible debentures in the amount of up to $1,800,000. On Jan. 23, 2007, SmarTire sold one convertible debenture for gross proceeds of $684,000. The Agreement provides that SmarTire may sell convertible debentures for the balance of up to $1,116,000 at any time over the next six months. "As reported on Dec. 10, 2006, our first quarter results showed a continuing trend of year-on-year revenue growth and major players in the commercial vehicle industry have advised us that they plan to begin ordering our products," SmarTire CFO Jeff Finkelstein said. "This indication was further supported last week with the announcement by DaimlerChrysler Commercial Buses that they will begin supplying SmarTire products to their customers. As this revenue growth trend continues throughout 2007, it is most important that we have the working capital necessary to respond to this increase in product demand. The actions recently undertaken to reduce our operating costs and the infusion of the net proceeds from the first tranche of this financing represent major steps in satisfying our working capital requirements going forward." About SmarTire Headquartered in Richmond, British Columbia, Canada, SmarTire Systems Inc. (OTC BB: SMTR.OB) -- http://smartire.com/--develops and markets technically advanced tire pressure monitoring systems for the transportation and automotive industries that monitor tire pressure and tire temperature. Its TPMSs are designed for improved vehicle safety, performance, reliability and fuel efficiency. The company has three wholly owned subsidiaries: SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited. As reported in the Troubled Company Reporter on Jan. 8, 2007, the company's balance sheet at Oct. 31, 2006, showed $6.1 million in total assets, $38.7 million in total liabilities, and 2.2 million in preferred shares subject to mandatory redemption, resulting in a stockholders' deficit of $34.8 million. TASMAN CDO: Moody's Rates $4 Mil. Class C Mezzanine Notes at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by Tasman CDO, Ltd.: -- Aaa to $164,000,000 Class A1S Senior Secured Floating Rate Notes Due 2047; -- Aaa to $30,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047; -- Aa2 to $58,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047; -- A2 to $20,000,000 Class A3 Secured Deferrable Floating Rate Notes Due 2047; -- Baa2 to $12,000,000 Class B Mezzanine Secured Deferrable Floating Rate Notes Due 2047 and -- Ba1 to $4,000,000 Class C Mezzanine Secured Deferrable Floating Rate Notes Due 2047. 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 CDO Securities and CDS Transactions due to defaults, the transaction's legal structure and the characteristics of the underlying assets. TD AMERITRADE: Earns $146 Mil. in First Fiscal Qtr. Ended Dec. 31 ----------------------------------------------------------------- TD AMERITRADE Holding Corporation's net income increased 14%, to $146 million for the first fiscal quarter ended Dec. 31, 2006, from $128 million in the quarter ended Sept. 29, 2006. The company's net revenues for the quarter ended Dec. 31, 2006, also increased to $535 million from $489 million in the previous quarter. At Dec. 31, 2006, the company had $17 billion in total assets, $16 billion in total liabilities, and $1.7 billion in total stockholders' equity. December Quarter Highlights -- Record net income of $146 million -- Record non-GAAP net income of $173 million -- Record pre-tax income of $239 million, or 45% of net revenues -- Operating margin of $278 million, or 52% -- Record EBITDA of $291 million, or 54% -- Net revenues of $535 million -- Average client trades per day of approximately 238,000 -- Annualized return on equity of 34% for the quarter -- Client assets of approximately $278.2 billion, including $39.8 billion of client cash and money market funds -- Liquid assets of $499 million; cash and cash equivalents of $441 million -- 109,000 new accounts at an average cost per account of $360; 40,000 closed accounts; 6,260,000 Total Accounts; 3,255,000 Qualified Accounts -- Average client margin balances of approximately $7.3 billion. On Dec. 31, 2006, client margin balances were approximately $7.6 billion. "After 4 record years, we've begun the new year with our best quarter ever. Pre-tax margin of 45 % and ROE of 34 % puts us near the 90th %ile of the S&P 500," said Joe Moglia, chief executive officer. "We've delivered all of this while executing on the integration of TD Waterhouse and our client segmentation strategy." Expanded Stock Repurchase Program As part of its active management of equity capital, the company utilized $130 million to repurchase 7.7 million shares of its common stock during the quarter. As of Dec. 31, 2006, TD AMERITRADE had repurchased approximately 11.5 million shares under the expanded 32 million share repurchase program. Headquartered in Omaha, Nebraska, TD AMERITRADE Holding Corp. -- http://www.amtd.com/-- through its brokerage subsidiaries, provides a dynamic balance of investment products and services that furthers the Independent Spirit of individual investors. The Company's full spectrum of services include a leading active trader program and long-term investor solutions, including a national branch system, as well as relationships with one of the largest networks of independent registered investment advisors. The company's common stock trades under the ticker symbol AMTD. * * * TD AMERITRADE Holding Corp.'s bank loan debt carries Moody's Ba1 rating. The rating was placed on Dec. 15, 2005, with a stable outlook. On the same date, Standard & Poor's placed the company's long-term local issuer credit rating at BB with a stable outlook. Fitch also placed, on the same date, the company's bank loan debt and long-term issuer default ratings at BB with positive outlook. TITAN GLOBAL: Greystone Completes Private Block Purchase of Stock ----------------------------------------------------------------- Titan Global Holdings Inc. has learned that an affiliate of Greystone Business Credit LLC, its senior lender, completed the private block purchase of 1,250,000 common shares of Titan previously owned by Capital Source LLC. The transaction followed the company's $22.6 million refinancing agreement with Greystone. This purchase followed Titan's repayment of all sums owed to Capital Source LLC under various loan agreements on Dec. 29, 2006. Titan and Capital Source LLC have no ongoing business relationship. The private block sale between Greystone and Capital Source LLC didn't involve Titan and had no impact on Titan's outstanding common shares. "We are pleased to learn that Greystone bought the common shares previously owned by Capital Source," said Bryan Chance, President and Chief Executive Officer of Titan Global Holdings. "Greystone is an excellent finance partner: both smart and with an entrepreneurial fervor that fits growth companies like Titan. This transaction reflects our ongoing commitment to building shareholder value." Recently, Titan consummated its previously announced repurchase of 1,250,000 common shares from Laurus Master Fund, Ltd. The repurchase followed Titan's repayment of all sums owed to Laurus under various loan agreements. Titan and Laurus have no ongoing business relationship. About Titan Global Headquartered in Salt Lake City, Utah, Titan Global Holdings Inc. (OTCBB: TTGL) -- http://www.titanglobalholdings.com/-- is a diversified holding company with a dynamic portfolio of subsidiaries that capitalize on the ever-expanding worldwide demand for new communications and connectivity services and products. Titan's Telecommunications Division includes Oblio Telecom Inc., a market leader in prepaid telecommunications and the second largest publicly-owned company in the international prepaid telecommunications space, StartTalk Inc., Pinless, Inc. and Titan Wireless Communications, Inc., a prepaid wireless communications and mobile virtual network operator. Titan's Electronics and Homeland Security Division includes Titan PCB East Inc. and Titan PCB West Inc. These companies specialize in the manufacturing of advanced circuit boards and other high tech products for military and high-tech clients. * * * At Nov. 30, 2006, Titan Global's balance sheet showed $54.3 million in total assets and $69 million in total liabilities, resulting in a $15.2 million total stockholders' deficit. TRANSDIGM INC: S&P Holds B+ Rating on Proposed $1.03 Billion Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' bank loan rating and '2' recovery rating on TransDigm Inc.'s proposed, amended $1.03 billion credit facility, indicating expectations of a substantial recovery of principal in the event of a payment default. The facility consists of a $200 million revolving credit facility, which is being increased from $150 million, and $830 million term loan, which is being increased from $650 million. The proceeds from the $180 million term loan increase and $250 million of new subordinated notes will be used to finance the pending $430 million acquisition of Aviation Technologies Inc. by TransDigm's parent, TransDigm Group Inc. The revolver is expected to be undrawn at close. The corporate credit rating is 'B+' and the outlook is stable. "The ratings on TransDigm reflect a highly leveraged balance sheet, the cyclical and competitive pressures of the commercial aerospace industry, an active acquisition program, and a relatively modest scale of operations [around $550 million revenues pro forma for the acquisition], but incorporate the firm's leading positions in niche markets and very strong profit margins," said Standard & Poor's credit analyst Christopher DeNicolo. TransDigm is a well-established supplier of highly engineered aircraft components for nearly all commercial and military airplanes as well as engines. Although the ATI acquisition will weaken credit protection measures, including consolidated debt to EBITDA to a relatively high 5.7x from the current 4.5x, anticipated material debt reduction from free cash flow should restore an appropriate financial profile in the intermediate term. Still, the ATI transaction significantly limits flexibility for additional acquisitions. UNIVERSITY HEIGHTS: Wants Until May 10 to Decide on Leases ---------------------------------------------------------- University Height Association Inc. asks the U.S. Bankruptcy Court for the Northern District of New York to further extend the period within which it can elect to assume or reject non-residential real property leases, until May 10, 2007. Francis J. Smith, Esq., attorney at McNamee Lochner Titus & Williams P.C., points out that the Debtor's leases must be assumed or rejected with 120 days after the Debtor's bankruptcy filing date or the leases will be deemed rejected. Hence, the extension must be sought before the time period expires, Mr. Smith says. The Debtor's leases will expire on Feb. 9, 2007. Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb. 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Judge Littlefield dismissed the Debtor's chapter 11 case due to bad faith filing. On Oct. 12, 2006, the Debtor filed a chapter 22 petition (Bankr. N.D.N.Y. Case No. 06-12672). Francis J. Smith, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its second chapter 11 bankruptcy proceeding. When the Debtor filed its second bankruptcy, it estimated assets and liabilities between $10 million and $50 million. US AIRWAYS: Improved Bid Grants Recovery for Delta Air Creditors ---------------------------------------------------------------- The Unofficial Committee of Unsecured Claimholders of Delta Air Lines, Inc., urged the Official Creditors' Committee to carefully consider the meaningfully improved proposal by US Airways Group, Inc., to merge with Delta and commit an open process that would allow a full exploration of strategic alternatives. The Unofficial Committee believes it is essential that creditors be given a chance to decide whether to pursue a standalone reorganization plan or a viable alternative means of maximizing value. The US Airways bid is a viable alternative that should be explored. The Unofficial Committee believes this proposal provides a superior recovery for creditors compared to what they would receive under Delta's standalone Chapter 11 plan. Investors have also concluded the US Airways offer is economically superior, as evidenced by their pricing of Delta bonds in recent weeks, as well as on Jan. 29, 2007, in response to press reports about the improved merger proposal. As the largest organized group of unsecured claimholders of Delta, the Unofficial Committee members are vitally concerned that creditor recoveries be maximized. Other creditors agree -- since Thursday, numerous holders of Delta claims have contacted the Unofficial Committee to register their support for its position. While there are risks inherent in any transaction, these risks have been minimized under the terms of the latest proposal by US Airways. The Official Creditors' Committee should urge Delta management to: * Provide reasonable and customary access for US Airways to perform its due diligence in a manner consistent with similar transactions. * Fully cooperate with US Airways to make the required filings under HSR. * Agree to a 30-day continuance of the disclosure statement hearing to allow for due diligence. Given the magnitude of creditor support for a complete evaluation of the US Airways proposal, the Official Creditors' Committee should take these reasonable steps so that creditors may have an opportunity to decide for themselves whether they prefer a merger alternative or standalone reorganization. The Unofficial Committee's financial advisor is Jefferies & Company, Inc., and its legal counsel is Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. US AIRWAYS: Keeps Mum on Upped Delta Air Offer ---------------------------------------------- US Airways Group Inc. wouldn't comment on reports that it offered to add $1 billion to its bid for Delta Air Lines Inc., the Associated Press reports. The Wall Street Journal reported Monday, citing people familiar with the matter, that US Airways was willing to up its bid on the condition that Delta's Official Committee of Unsecured Creditors: * demand that Delta open itself to due diligence by US Airways; * ask the Court to postpone Delta's disclosure statement hearing scheduled on February 7; and * support the start of a formal antitrust review. WSJ further related that the increased offer came after US Airways was approached by a group of Delta creditors consisting of short- term investors who were not part of the Creditors' Committee. AP quotes Valerie Wunder, a US Airways spokeswoman as saying, "our advisers are in regular contact with (Delta's) ad hoc committee, and the advisers to the creditors committee." "We expect this will continue as the Feb. 1 deadline on our offer to continue the process approaches. However, we are not going to comment on the specifics of any conversation." Ms. Wunder adds. AP also quotes US Airways spokesman Phil Gee saying that US Airways hasn't officially decided to change its offer and would have to notify the SEC if it did. WSJ had reported that although the upped bid was final, it wasn't yet official, as it needed director approval. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. * * * As reported in the Troubled Company Reporter on Jan. 11, 2007, Standard & Poor's Ratings Services stated that its ratings on US Airways Group, including the 'B-' corporate credit ratings on US Airways Group and its major operating subsidiaries America West Holdings Corp., America West Airlines Inc., and US Airways Inc., remain on CreditWatch with developing implications, where they were initially placed on Nov. 15, 2006. USA COMMERCIAL: Panel Taps Diamond McCarthy as Special Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in USA Commercial Mortgage Company and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the District of Nevada for authority to employ Diamond McCarthy Taylor Finley & Lee LLP as its special litigation counsel. Diamond McCarthy will assist the Committee, and then the USACM Liquidating Trust established under the confirmed plan of reorganization, to investigate and prosecute the causes of action against the insiders and the affilates of the Debtors, including but not limited to former officers and directors Thomas Hangtes, Joseph Milanowski and USA Investment Partners, LLC as well as potential third party professionals. Allan B. Diamond, Esq., a Diamond McCarthy managing partner, informs the Court that it will look solely to the Trust for compensation and reimbursement of its expenses for its services in accordance with the provisions of the confirmed Plan and the USACM Liquidating Trust Agreement. Court papers did not disclose how much the Firm would be paid for its services. Mr. Diamond assures the Court that the firm does not represent any interest adverse to the Debtor or its estate. About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. On Jan. 8, 2007, the Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization. WENDY'S INTERNATIONAL: Enters Employment Deal with Kerrii Anderson ------------------------------------------------------------------ Wendy's International Inc. entered into an employment agreement with Kerrii B. Anderson, the company's chief executive officer and president. The employment agreement became effective as of Nov. 10, 2006, the day after the company reported her appointment as Chief Executive Officer and President, and has a three-year term, with an automatic renewal of successive one-year periods. The employment agreement provides for an initial annual base salary of $950,000, which may be increased from time to time at the discretion of the Board of Directors or its Compensation Committee. The agreement provides also for an annual cash bonus payout opportunity based on performance targets, both of which will be established by the Compensation Committee. Mrs. Anderson's annual bonus payout for fiscal 2006 will be at least $900,000, and may exceed that amount based on the performance of the Company and determined by aggregating: i) the pro-rata bonus based on target bonus criteria established for the CFO position plus; ii) the pro-rated bonus based on the 2006 target bonus of $1.8 million established for the CEO position. For fiscal 2007 and years thereafter, Mrs. Anderson's annual target bonus will, at a minimum, be set at 100% of her base salary then in effect and she will also be eligible for threshold and maximum bonus amounts as established by the Compensation Committee. The agreement provides also for an annual award, commencing in 2007, of equity-based compensation having an aggregate value of 285% of the base salary as of the grant date; however, Mrs. Anderson's eligibility for and the amount of those grants are subject to the company's compensation policy for senior executives, as determined by the Board of Directors or its Compensation Committee from time to time. During the term of the employment agreement, Mrs. Anderson will also be entitled to participate in the company's executive employee benefit plans and programs. If the Company terminates Mrs. Anderson's employment for "cause", she will only be entitled to any accrued, but unpaid, obligations. If Mrs. Anderson is terminated without cause or resigns for "good reason", she will be entitled to: i) all accrued, but unpaid, obligations, ii) a pro-rata portion of the target bonus of the year in which the termination occurs, iii) one year's base salary plus payment of the target bonus opportunity for the one-year period following termination, iv) any stock options or stock appreciation rights that would have otherwise vested within 12 months of the termination, and v) continuation of employee benefits for one year following the termination event. If Mrs. Anderson dies or becomes disabled during the term of the agreement, her employment will terminate and she will be entitled to: a) all amounts earned or accrued and not previously paid, b) a pro-rata portion of the target bonus of the year in which the termination occurs, c) the immediate vesting of all unvested equity awards, and d) continuation of employee benefits for one year following the termination event. In addition, Mrs. Anderson has also agreed to certain non- competition provisions during the term of the employment agreement and for up to eighteen months thereafter, depending on the manner of termination. Headquartered in Dublin, Ohio, Wendy's International Inc. -- http://www.wendysintl.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the United States, Canada, and internationally. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006, Moody's Investors Service held its Ba2 Corporate Family Rating for Wendy's International Inc. Additionally, Moody's held its Ba2 ratings on the company's $200 million 6.25% Senior Unsecured Notes Due 2011 and $225 million 6.2% Senior Unsecured Notes Due 2014. Moody's assigned the debentures an LGD4 rating suggesting noteholders will experience a 54% loss in the event of default. WERNER LADDER: U.S. Trustee Appoints Official Creditors Committee ----------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, informed the U.S. Bankruptcy Court for the District of Delaware that Levine Leichtman Capital Partners III L.P. has resigned from the Official Committee of Unsecured Creditors in the Chapter 11 cases of Werner Holding Co. (DE) Inc. and its debtor-affiliates. The Creditors Committee now comprises: (1) The Bank of New York, as Successor Trustee Attn: Kenny Tang 101 Barclay Street, 8 West Corporate Trust New York, NY 10286 Tel: (212) 815-2816 Fax: (212) 815-5131 (2) Saint-Gobain Corporation Attn: Thomas L. Fitzpatrick 1 New Bond Street, Worcester, Massachusetts 01615 Tel: (508) 795-5409 Fax: (508) 795-5266 (3) Venture Plastics Attn: Steve Trapp P.O. Box 249, 4000 Warren Road Newton Falls, Ohio 44444 Tel: (330) 872-5774 Fax: (330) 872-3597 (4) WXP, Inc. Attn: John E. Thigpen 93 Werner Road, Building A Greenville, Pennsylvania 16125 Tel: (724) 588-2000 Fax: (724) 589-4286 (5) ReCap International (BVI) Ltd. c/o Murray Capital Management, Inc. Attn: Joseph Galzerano 26th Floor, 680 Fifth Avenue New York, NY 10019 Tel: (212) 582-5505 Fax: (212) 582-5525 (6) Pension Benefit Guaranty Corporation Attn: Adi Berger 1200 K Street Washington, D.C. 20005 Tel: (202) 326-4000 Fax: (202) 842-2643 (7) Claren Road Asset Management Attn: Trent Roderick Porter Suite 1401 900 3rd Avenue New York, NY 10022 Tel: (212) 310-5805 Fax: (212) 888-1033 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co- counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Wants Exclusive Plan Filing Period Moved to March 9 ------------------------------------------------------------------ Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates ask the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file a plan of reorganization through March 9, 2007, and to solicit acceptances of that plan through May 8, 2007. The Debtors' exclusive period to file a plan expired on Jan. 15, 2007. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Debtors' Chapter 11 cases are large and complex, with a prepetition capital structure that includes two secured prepetition credit facilities, a public bond issuance, thousands of trade creditors, and several classes of stock. He adds that the Debtors have prepetition debts of more than $1,100,000,000 listed on their scheduled liabilities. Mr. Brady tells the Court that the Debtors have delivered to parties-in-interest an operating budget for 2007, and have recently begun negotiations with their creditors in formulating a consensual plan of reorganization. The Debtors anticipate delivering to the parties-in-interest the long-term budget that will form the predicate for a valuation of their business before the end of January. Mr. Brady asserts that termination of the Debtors' Exclusive Periods will adversely impact their business operations and the progress of their Chapter 11 cases because it could result in any party-in-interest being free to propose a competing plan, which could result in a chaotic environment with no central focus. Mr. Brady assures Judge Carey that the requested extension will not prejudice the creditors' legitimate interests because the Debtors continue to pay all of their undisputed postpetition obligations as they become due. The Court will convene a hearing tomorrow, Jan. 31, 2007, to consider the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Debtors' Exclusive Periods is automatically extended through the conclusion of that hearing. Responses 1. Second Lien Committee An ad hoc committee of second lien claimholders believes that maintenance of the Debtors' exclusive right to file a plan should facilitate an orderly marketing, auction, and sale process that is part and parcel of an investor group's offer to purchase substantially all of the Debtors' assets for $175,000,000, and to act as stalking horse bidder in a Court-approved auction process. The Second Lien Committee even suggests that the Debtors' Exclusive Period should be extended until May 8, 2007, and their Solicitation Period should be extended until July 6, 2007, to allow for an orderly marketing and auction process that culminates with a sale hearing on April 26, 2007. However, the Second Lien Committee reserves its right to have the extended periods reduced if the Debtors fail to timely pursue the Investor Group's proposed Section 363 Sale Process. The Second Lien Committee consists of holders of a majority in amount of a Second Lien Credit Facility entered into by the Debtors in May 2005, as well as holders of a substantial portion, but less than a majority in amount, of a June 2003 First Lien Credit Facility. 2. Creditors Committee The Creditors Committee complains that the Debtors have not yet delivered their 2007 Budget as of January 25, 2007, even though the first exclusivity order required them to deliver their long- term business plan by January 7. Victoria W. Counihan, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware, relates that on January 24, the Committee received from the Debtors a revised proposed order extending their Exclusive Period, provided that if by the date the Debtors seek approval of bid procedures for the sale of all of their assets, then the period will extend to March 9. The Revised Order also extends the Solicitation Period to April 16, and provides a further extension to May 8 if the Debtors file a Procedures Motion. The Creditors Committee is willing to support any Chapter 11 plan or sale transaction proposed by the Debtors as part of the Procedures Motion. However, the Committee insists that the transaction must provide, at a minimum: (a) an opportunity for the general unsecured creditors to invest 9.9% of the equity of the new company for $12,000,000; (b) the general unsecured creditors' right to appoint one member of the Debtors' board of directors; (c) payment of all administrative claims incurred through the closing date of the sale, including any transaction fees owed to estate-retained professionals; (d) a $3,000,000 wind-down fund for (i) fees and expenses of Loughlin Meghji, Greenberg Traurig and Willkie Farr to complete a liquidating plan, and (ii) a litigation trust; (e) waiver by all participants in the stalking horse bid of any unsecured, deficiency, superpriority, adequate protection, and Section 507(b) claims at closing of the sale; and (f) consideration for unsecured creditors with regard to bid procedures. The Committee reserves its right to seek termination of the Exclusivity Periods for cause, including if any transaction proposed by the Debtors fails to meet those minimum terms. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co- counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) WEST TRADE: Moody's Assigns Ba1 Rating to $4.5 Mil. Class F Notes ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by West Trade CDO II Ltd.: -- Aaa to $900,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes due 2051; -- Aaa to $375,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2051; -- Aaa to $50,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes due 2051; -- Aaa to $103,000,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes due 2051; -- Aa2 to $26,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes due 2051; -- Aa3 to $11,000,000 Class C Sixth Priority Senior Secured Floating Rate Notes due 2051; -- A2 to $13,000,000 Class D Seventh Priority Secured Deferrable Floating Rate Notes due 2051; -- Baa2 to $13,000,000 Class E Eighth Priority Mezzanine Deferrable Floating Rate Notes due 2051; and, -- Ba1 to $4,500,000 Class F Ninth Priority Mezzanine Deferrable Floating Rate Notes due 2051. 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 mainly of CDO Obligations and Mortgage Backed Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. NIR Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the issuer. WILLIAM BOWMAN: Organizational Meeting Scheduled on February 7 -------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in William Bowman Associates Inc.'s chapter 11 case on Feb. 7, 2007, 10:00 a.m., at the U.S. Trustee's Office, Suite 102, Bridge View Building, 800-840 Cooper Street, in Camden, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtors will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Based in West Berlin, New Jersey, William Bowman Associates, Inc. -- http://www.bowmangrp.com/-- is a full-service land improvement and building contractor. The Debtor filed for chapter 11 protection on January 11, 2007 (Bankr. D. N.J. Case No. 07-10441). Arthur Abramowitz, Esq., at Cozen O'Connor, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. *Don Pelto Joins Intellectual Property Group of Sheppard Mullin ---------------------------------------------------------------- Don J. Pelto has joined the Washington, D.C. office of Sheppard, Mullin, Richter & Hampton LLP as part of the firm's Intellectual Property practice group. Mr. Pelto, and his team of IP specialists who are joining Sheppard Mullin with him, most recently practiced with Kirkpatrick & Lockhart Preston Gates Ellis in Washington, D.C. Mr. Pelto specializes in intellectual property and patent litigation, representing domestic and international clients in intellectual property litigation, counseling and procurement. Specifically, he has experience with technological developments in the fields of molecular biology, pharmaceuticals, bioinformatics, pharmaceutical small molecules, diagnostics, chemi-informatics and software, medical products and devices, including surgical devices, medical product manufacturing processes and fluid handling devices and related methodologies. "Don's arrival marks another significant step in expanding our IP practice, which continues to be the fastest growing group in the firm," said Guy Halgren, chairman of the firm. "The team's life sciences knowledge and experience dovetail with our current West Coast biotech clients and matters." "I look forward to growing the firm's IP practice nationwide and specifically in the D.C. office," Mr. Pelto said. "Sheppard Mullin is a top-notch national firm with an excellent reputation. I am thrilled to be joining with members of my former team, as well as to be working with the great lawyers here and across the firm's offices." "We are excited to have Don and his team join us," said Ed Schiff, managing partner of the firm's Washington, D.C. office. "His specialization is an excellent fit for the D.C. office, in light of the region's prominence as a life sciences hub, and complements our growth in the pharmaceutical regulatory practice area." "Don's group is an excellent addition to the firm's IP practice, which now includes over fifty attorneys firm wide," commented Gary Clark, chair of the firm's Intellectual Property practice group. "They bring an incredible collective background in both IP litigation and the life science industry." Mr. Pelto has experience in the preparation and prosecution of patent applications and licensing and technology transfers. His litigation experience includes interferences, Section 337 actions, District Court infringement actions and Federal Circuit appeals. He has written opinions on freedom to operate, non-infringement and invalidity. Additionally, Mr. Pelto has successfully asserted and defended against patent infringement claims, both in the U.S. District Courts and the United States International Trade Commission. He has also represented clients in appeals before the United States Court of Appeals for the Federal Circuit. Before entering law school, Mr. Pelto was a research biologist with the National Institutes of Health, National Institutes on Aging where he performed original research in conjunction with the Laboratory of Neurosciences and the Laboratory of Cardiovascular Sciences. Mr. Pelto earned a J.D. from University of Baltimore School of Law in 1985 and a B.S. from University of Maryland in 1982. About Sheppard, Mullin, Richter & Hampton Founded in 1927, Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with 490 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate and Securities; Entertainment, Media and Communications; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. *Lisa H. Lipman Joins Cohen Grigsby's Florida Office as Associate ----------------------------------------------------------------- Lisa H. Lipman has recently joined Cohen & Grigsby P.C. Lisa Hofbauer Lipman joins the firm's Naples, Florida office as an associate in the Estates and Trusts Group. She focuses her practice in the areas of estate planning, estate administration, and the representation of fiduciaries in matters involving estates, trusts and private foundations. She received her J.D. from Boston College Law School in 2005, M.S. from Northwestern University in 1995 and her B.A. from Union College in 1993. She is admitted to practice in Florida, Massachusetts and South Carolina. Prior to joining Cohen & Grigsby, Ms. Lipman was an associate at the Boston office of Choate, Hall & Stewart LLP. She resides in Naples. Cohen & Grigsby offers legal services to private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging companies. It has experience in bankruptcy, business, tax, employee benefits, estates, trusts, immigration, intellectual property, international business, litigation, labor and employment, and real estate. The firm is headquartered in Pittsburgh, Pennsylvania and has offices in Bonita Springs, Florida and Naples, Florida. For more information, please visit http://www.cohenlaw.com/ * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Accorda Therapeut. ACOR (8) 40 5 AFC Enterprises AFCE (40) 157 4 Affymax Inc. AFFY (114) 61 53 Alaska Comm Sys ALSK (25) 566 26 Alliance Imaging AIQ (18) 674 30 AMR Corp. AMR (514) 30,128 (1,202) Armstrong World AWI (1,197) 4,721 1,132 Atherogenics Inc. AGIX (136) 197 146 Bare Essentials BARE (620) 139 42 Bearingpoint Inc. BE (46) 1,972 229 Blount International BLT (107) 441 121 CableVision System CVC (5,400) 9,777 (400) Carrols Restaurant TAST (104) 497 (25) Centennial Comm CYCL (1,092) 1,422 112 Charter Comm-a CHTR (5,632) 15,198 (999) Choice Hotels CHH (78) 286 (48) Cincinnati Bell CBB (679) 1,889 55 Claymont Stell H PLTE (30) 177 112 Clorox Co. CLX (55) 3,539 (20) Compass Minerals CMP (74) 671 145 Corel Corp. CRE (22) 113 11 Crown Media HL CRWN (449) 917 190 Dayton Superior DSUP (171) 281 63 Delphi Corp DPHIQ (7,756) 17,514 2,250 Deluxe Corp DLX (66) 1,267 (462) Denny's Corporation DENN (231) 454 (73) Domino's Pizza DPZ (592) 360 (20) Double-Take Soft DBTK (54) 19 (2) Echostar Comm DISH (365) 9,352 1,696 Emeritus Corp. ESC (115) 713 (34) Empire Resorts I NYNY (25) 61 (2) Encysive Pharm ENCY (88) 69 33 Gencorp Inc. GY (96) 1,021 (4) Graftech International GTI (157) 875 253 Guidance Software GUID (2) 22 (1) Hansen Medical I HNSN (32) 38 33 HealthSouth Corp. HLS (1,339) 3,310 (314) I2 Technologies ITWO (46) 208 1 ICO Global C-New ICOG (60) 657 (380) ICOS Corp ICOS (18) 285 112 IMAX Corp IMAX (33) 243 84 Immersion Corp IMMR (22) 47 31 Immunomedics Inc IMMU (21) 50 21 Incyte Corp INCY (66) 465 295 Indevus Pharma IDEV (124) 92 55 Inergy Holdings NRGP (19) 1,647 (12) Investools Inc. IEDU (64) 120 (79) IPG Photonics IPGP (31) 115 24 J Crew Group Inc. JCG (55) 414 128 Kaiser Aluminum KALU (3,105) 1,598 123 Koppers Holdings KOP (86) 637 148 Life Sciences LSR (25) 205 23 Ligand Pharm LGND (239) 232 (162) Lodgenet Entertainment LNET (62) 269 18 McMoran Exploration MMR (18) 431 (27) Navisite Inc. NAVI (4) 100 (9) New River Pharma NRPH (65) 170 135 Nexstar Broadc-A NXST (78) 679 27 Northwest Airlines NWACQ (7,718) 13,498 659 NPS Pharm Inc. NPSP (182) 237 150 Obagi Medical OMPI (51) 50 12 ON Semiconductor ONNN (1) 1,417 316 Qwest Communication Q (2,576) 21,114 (1,569) Radnet Inc. RDNT (74) 127 (1) Riviera Holdings RIV (29) 222 10 Rural Cellular RCCC (540) 1,410 164 Rural/Metro Corp. RURL (89) 305 51 Savvis Inc. SVVS (142) 442 16 Sealy Corp. ZZ (188) 933 89 Sepracor Inc. SEPR (33) 1,352 424 St. John Knits Inc. SJKI (52) 213 80 Sun-Times Media SVN (322) 905 (383) Town Sports Inte. CLUB (25) 417 (55) Unisys Corp. UIS (97) 4,064 264 Weight Watchers WTW (103) 935 (72) Worldspace Inc. WRSP (1,574) 604 140 WR Grace & Co. GRA (504) 3,620 920 ********* 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, Cecil R. Villacampa, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Melvin C. Tabao, 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 ***