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/raid1/www/Hosts/bankrupt/TCR_Public/070620.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 20, 2007, Vol. 11, No. 144 Headlines ABITIBI-CONSOLIDATED: Sets July 26 Special Meeting on Bowater Deal ABITIBI-CONSOLIDATED: S&P Lowers Credit Rating to B from B+ AMERICREDIT CORP: Moody's Rates $200 Million Senior Notes at Ba3 AMWINS GROUP: Completes Acquisition of American Equity ASARCO LLC: Creditors File Claims' Protective Designation Notices ASARCO LLC: Parties File Briefs on California Gulch Sites ASARCO LLC: Wants to Expand Scope of Alvarez & Marsal's Employment BABAJANI & MAMA: Case Summary & 18 Largest Unsecured Creditors BEST MANUFACTURING: Chap. 7 Trustee Hires Becker Meisel as Counsel BEST MANUFACTURING: Chapter 7 Trustee Hires Weiser as Accountant BICENT POWER: Moody's Rates $480 Million 1st-Lien Loan at (P)Ba3 BICENT POWER: S&P Rates New $480 Million Loans at BB- BIOPURE CORP: Posts $6.2 Million Net Loss in Qtr. Ended April 30 BLUE RIDGE: Rank Group Deal Prompts S&P's Positive CreditWatch BOMBARDIER RECREATIONAL: S&P Rates $1.15 Billion Loan at B+ BOWATER INC: To Discuss Abitibi Merger on July 26 Annual Meeting BOWATER INC: Weak Earnings Prompt S&P to Cut Credit Rating to B BUFFALO COAL: Section 341(a) Creditor's Meeting Set for July 18 CALPINE CORP: Names Gary Germeroth as VP & Chief Risk Officer CARDSYSTEMS SOLUTIONS: Files 2nd Amended Disclosure Statement CATALYST PAPER: Cost Pressures Cues S&P to Revise Outlook to Neg. CBRL GROUP: Completes 500,000 Share Repurchase Plan CBRL GROUP: Moody's Affirms Ratings & Revises Outlook to Negative COINMACH SERVICE: Babcock & Brown Deal Cues S&P's Negative Watch DAIMLERCHRYSLER AG: Unit Launches Cash Tender Offer DAYTON SUPERIOR: Good Performance Prompts S&P's Positive Watch DEEP FIELD: March 31 Balance Sheet Upside-Down by $10.3 Million DOLLAR THRIFTY: Completes $600MM Credit Facilities' Refinancing EDUCATE INC: Moody's Puts Corporate Credit Rating at B1 FORD MOTOR: No Results on Cerberus Talks for Premier Brands Sale FORD MOTOR: Distressed Supply Base Cues Missed Targets FOUNDATION COAL: SVPs Assume New Management Restructuring Roles FRIENDLY ICE: Freeze Operations Deal Cues S&P to Retain Watch GENESCO INC: Inks $1.5 Billion Merger Agreement with Finish Line GENESCO INC: Finish Line Bid Cues S&P to Hold Developing Watch GEORGIA-PACIFIC: Debt Levels Cue S&P to Revise Outlook to Stable HOSPITALITY PROPERTIES: Declares Lightstone in Lease Default ICONIX BRAND: S&P Rates $250 Million Senior Notes at B- INTERTAPE POLYMER: Plan of Arrangement Gets Advisory Firms' Votes INTERTAPE POLYMER: Plan of Arrangement Gets Snub by 6789536 Canada INVERNESS MEDICAL: Moody's Rates $1.05 Billion Loan at B1 ITC DELTACOM: March 31 Balance Sheet Upside-Down by $107.8 Million ITC DELTACOM: H Partners Questions Recapitalization Plan JEAN COUTU: Debt Repayment Prompts S&P to Withdraw Ratings LAZARD GROUP: Moody's Rates $500 Million Senior Note at Ba1 LJVH HOLDINGS: S&P Rates Planned $300 MIllion Facility at BB- LONE STAR: U.S. Steel Completes $2.1 Billion Buyout LONE STAR: U.S. Steel Buyout Completion Cues S&P to Lift Rating MAGNUM COAL: S&P Rates $350 Million Senior Secured Notes at B- MAIDENFORM BRANDS: Completes Existing Credit Facility Refinancing MAJESCO ENT: Posts $1.3 Million Net Loss in Quarter Ended April 30 MORRIS PUBLISHING: Low 1Q Results Cue S&P to Cut Rating to BB- MYRNA SEGUNDO: Case Summary & Eight Largest Unsecured Creditors NAVISTAR INT'L: Operating Unit Inks $200 Million Credit Facility NEW EAST HOSPITALITY: Case Summary & 16 Largest Unsec. Creditors NEW WORD: Voluntary Chapter 11 Case Summary NTELOS HOLDINGS: Strong Performance Cues S&P to Lift Ratings NOVELIS INC: Change of Control Offer Expiration Date Extended NY WESTCHESTER: Court OKs Deloitte as Panel's Financial Advisor OMNICARE INC: Poor Performance Prompts S&P to Downgrade Ratings PAETEC HOLDING: Plans to Offer $300 Million of Senior Notes PAETEC HOLDING: Wants to Amend Sr. Facility to Decrease Interest PENN NATIONAL: S&P Cuts Rating to BB- and Places Negative Watch PHOENIX FOOTWEAR: Selling Royal Robbins for $40 Million in Cash PINNOAK RESOURCES: Cleveland-Cliffs Deal Cues S&P's Positive Watch PLIANT CORP: Plans to Reduce Debt through Senior Notes Refinancing POLYPORE INT'L: Commences Tender Offer for 10-1/2% Senior Notes QUANTUM CORP: S&P Affirms B Rating and Says Outlook is Positive RJO HOLDINGS: High Financial Leverage Cues S&P's B Credit Rating ROCK-TENN CO: Improved Operating Results Cue S&P's Positive Watch ROCKAWAY BEDDING: Sleepy's and Hudson to Buy Remaining Assets SAK DEVELOPMENT: Case Summary & Five Largest Unsecured Creditors SCOTT SMITH: Case Summary & Seven Largest Unsecured Creditors SEA CONTAINERS: Regulator Issues Financial Support Direction SERVICEMASTER CO: S&P Junks Rating on $1.15 Billion Senior Notes SIERRA PACIFIC: Two Units Commence Separate Tender Offers SINCLAIR BROADCAST: Board Declares Class A & B Stock Cash Dividend SMITHFIELD FOODS: S&P Holds BB+ Rating and Removes Negative Watch SOURCE INTERLINK: S&P Junks Rating on $465 Million Senior Notes SPRINGS WINDOWS: Term Loan Increase Cues Moody's to Cut Ratings SS&C TECHNOLOGIES: Good Debt Leverage Cues S&P to Revise Outlook STULL INDUSTRIES: Voluntary Chapter 11 Case Summary SUPERCLICK INC: April 30 Balance Sheet Upside-down by $2.3 Million TELCORDIA TECHNOLOGIES: S&P Rates Proposed $555 Million Notes at B THERMAL NORTH: S&P Puts BB- Rating on Positive CreditWatch TRIATEK INC: Case Summary & 20 Largest Unsecured Creditors TRUMP ENTERTAINMENT: CEO James Perry to Retire Effective July 1 UAL CORP: Expects 2.75%-3.25% Rise in 2nd Qtr. Passenger Revenue VANGUARD SPORTS: Case Summary & 19 Largest Unsecured Creditors VERIFONE INC: S&P Revises Outlook to Stable from Negative VIASYSTEMS CORP: Deleveraging Prompts S&P to Upgrade Ratings WENDY'S INT'L: Committee Exploring Possible Sale of Company WINSTON PRESTON: Case Summary & 13 Largest Unsecured Creditors YAZAN'S SERVICE: Case Summary & 14 Largest Unsecured Creditors * Upcoming Meetings, Conferences and Seminars ********* ABITIBI-CONSOLIDATED: Sets July 26 Special Meeting on Bowater Deal ------------------------------------------------------------------ Abitibi-Consolidated Inc. and Bowater Incorporated will hold a meeting of its shareholders on July 26, 2007, in order for shareholders to vote on the companies' proposed combination. The Quebec Superior Court has granted an interim order approving the holding of the special meeting of Abitibi-Consolidated shareholders. The special meeting of Abitibi-Consolidated shareholders will be held at the Windsor, Salon Windsor, 1170 Peel Street, Montreal, Quebec, at 10:00 a.m., Eastern Time on July 26, 2007. Shareholders of record at the close of business on June 20, 2007, will be entitled to receive notice of and vote at the Abitibi- Consolidated meeting. The annual meeting of Bowater stockholders will be held in the Peachtree Auditorium of the Bank of America Plaza, 600 Peachtree Street N.E., Atlanta, Georgia, at 10:00 a.m., Eastern Time on July 26, 2007. Stockholders of record at the close of business on June 8, 2007, will be entitled to receive notice of and vote at the Bowater meeting. In connection with the proposed combination of Abitibi- Consolidated and Bowater, Bowater Canada Inc., an exchangeable share Canadian public subsidiary of Bowater, will also hold a special meeting of its shareholders in order to approve certain amendments to Bowater Canada's articles required to facilitate and implement the combination. The special meeting of Bowater Canada shareholders will be held on July 25, 2007, at Fairmont The Queen Elizabeth Hotel, Salon St-Laurent, 900 Boulevard Rene-Levesque West, Montreal, Quebec, at 9:30 a.m., Eastern Time. Shareholders of record at the close of business on June 20, 2007, will be entitled to receive notice of and vote at the Bowater Canada meeting. For Abitibi-Consolidated, the combination requires the affirmative vote of not less than two-thirds of the votes cast at the Abitibi- Consolidated special meeting by holders of Abitibi-Consolidated common shares present or represented by proxy at the special meeting. For Bowater, the combination requires the affirmative vote of a majority of the total voting power of all outstanding shares of Bowater common stock and Bowater special voting stock, representing Bowater Canada exchangeable shares, entitled to vote at the Bowater meeting, voting together as a single class. The combined company, which will be called AbitibiBowater Inc., will be the third largest publicly traded paper and forest products company in North America and the eight largest in the world. 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. It will also be among the world's largest recyclers of newspapers and magazines. 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. Headquartered in Montreal, Quebec, Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/-- supplies newsprint and commercial printing papers and produces 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: S&P Lowers Credit Rating to B from B+ ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including the long-term corporate credit rating to 'B' from 'B+', on Abitibi-Consolidated Inc. The outlook is negative. "North American newsprint demand, a key driver of Abitibi's profitability and cash flow, has declined faster than expected," said Standard & Poor's credit analyst Donald Marleau. "Consequently, producer attempts to balance supply and demand have been frustrated," Mr. Marleau added. On top of that, Abitibi faces severe margin pressure because the Canadian dollar has appreciated. The ratings reflect the company's high debt leverage; exposure to the declining North American newsprint market, and the volatile commodity groundwood papers and lumber markets; and weak profitability. These risks are partially offset by the company's leading market share position in newsprint and groundwood papers. The ratings only reflect Abitibi's stand-alone credit quality, and do not factor in the outcome of its proposed merger with Bowater Inc., which still faces significant regulatory and shareholder scrutiny. The outlook is negative. North American newsprint demand continues to decline, and good industry supply discipline has not translated into significantly higher prices, while volume declines, higher cost inputs, and the strong Canadian dollar continue to pressure Abitibi's operating margins. The company's debt level is high and, notwithstanding some debt reduction initiatives (like the monetization of its Ontario hydroelectric assets and the potential timberlands sale), S&P might lower the ratings on Abitibi again unless its profitability and cash flow improve. This improvement depends heavily on stronger newsprint or commercial paper fundamentals and alleviating cost pressures. To maintain the ratings, the company must improve its operating income and free cash flow, which would contribute to a sustainable reduction in leverage. Competition authorities and shareholders are still reviewing the proposed merger with Bowater, and the effect this merger will have on the ratings on the companies is unclear. The all-equity transaction will result in a stronger competitive position and an improved cost profile for the combined entity, but these strengths are overshadowed by the steady decline in demand for its core newsprint products and heavy debt burdens. AMERICREDIT CORP: Moody's Rates $200 Million Senior Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service issued a rating of Ba3 to AmeriCredit Corp.'s $200 million issue of senior unsecured notes. The rating outlook is stable. The one notch differential between the rating of the notes and the Corporate Family Rating (Ba2) reflects the dominant role of secured and securitized debt in AmeriCredit's funding structure. On June 1, 2007 Moody's upgraded AmeriCredit's Corporate Family Rating to Ba2 from Ba3, reflecting AmeriCredit's sustained improvement in financial performance and adherence to a disciplined growth strategy. Based in Fort Worth, Texas, AmeriCredit Corp. [NYSE: ACF] -- http://www.americredit.com/-- is a leading independent automobile finance company that provides financing solutions indirectly through auto dealers and directly to consumers in the U.S. and Canada. AmeriCredit has over one million customers and approximately $15 billion in managed auto receivables. AMWINS GROUP: Completes Acquisition of American Equity ------------------------------------------------------ AmWINS Group Inc. has acquired The American Equity Underwriters, Inc., a national provider of insurance programs for maritime employers with a special expertise in United States Longshore and Harbor Workers Compensation insurance. In connection with the acquisition, AmWINS entered into a new $432.5 million credit facility arranged by Wachovia Securities and Madison Capital. Proceeds of the new facility were used to complete the AEU acquisition, refinance AmWINS' existing credit facilities and to fund a $100 million dividend to AmWINS existing shareholders, comprised primarily of AmWINS employees and Parthenon Capital, a San Francisco and Boston-based private equity firm. The new credit facility will provide AmWINS with additional capacity and flexibility to fund new strategic acquisitions. "This is a significant acquisition," M. Steven DeCarlo, AmWINS' CEO, said. AEU is one of the underwriters of USL&H coverage in the country, and their expertise will help continue to diversify the company's broad product offering and capabilities for its customers. Headquartered in Mobile, Alabama, The American Equity Underwriters Inc. -- http://www.amequity.com-- is one of the underwriters of USL&H in the country. The company is licensed in all states and serves as the program managers for Bermuda-based American Longshore Mutual Association Ltd. AEU has over 50 employees in its three locations: Mobile, AL; New Orleans, LA; and Houston, Texas. Headquartered in Charlotte, North Carolina, AmWINS Group Inc. -- http://www.amwins.com/-- is a wholesale distributor of specialty insurance products dedicated to serving retail agents throughout the United States by providing property and casualty, group life and health, and program administration services. The company operates through more than 35 offices across the United States and handles premium placements in excess of $2.8 billion dollars annually. * * * As reported in the Troubled Company Reporter on May 17, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on AmWINS Group to 'B-' from 'B' as a result of the company's proposed $435 million refinancing. At the same time, Standard & Poor's lowered its senior secured debt rating to 'B-' from 'B' on AmWINS's first-lien term loan and its subordinated debt rating to 'CCC' from 'CCC+' on the company's second-lien term loan. Standard & Poor's also assigned its 'B-' senior secured debt rating to AmWINS's proposed $335 million senior credit facility, which consists of a six-year $285 million first-lien term loan and a five-year $50 million revolving credit line, and assigned its 'CCC' subordinated debt rating to the company's proposed seven- year $100 million second-lien term loan. The outlook on all ratings is stable. ASARCO LLC: Creditors File Claims' Protective Designation Notices ----------------------------------------------------------------- Six creditors, including the U.S. Government, filed notices with The U.S. Bankruptcy Court for the Southern District of Texas regarding the protective designation of their environmental claims against ASARCO LLC and its debtor-affiliates. 1. U.S. Government The U.S. Government notifies the Court that it is a secured creditor in the Lake County Community Health Program Trust related to California Gulch Operating Unit 9 and the Asarco Environmental Trust. The Government adds that it may have administrative claims relating to ongoing, or the threat in the future of, releases of contaminants from property owned by ASARCO in East Helena, Montana; in El Paso, Texas; and in Taylor Springs, Illinois. The Government also notifies the Court that it has filed a lien under the Comprehensive Environmental Response, Compensation and Liability Act with respect to the East Helena site. To the extent that the East Helena property is sold and proceeds are available, the Government asserts it is a secured creditor as to those proceeds. 2. Gold Fields, et al. Gold Fields Mining, LLP, Blue Tee Corp., and The Doe Run Resources Corporation, doing business as The Doe Run Company and DR Land Holdings, LLC, assert potential secured, administrative or priority status for their prepetition claims at unowned portions of the California Gulch Sites to the extent, if any: -- there were releases of or from owned property onto unowned property which commenced prepetition and continued; -- under applicable law the claims would be entitled to administrative or priority status; -- claimants are subrogated to the administrative or priority status of any other party; and -- the claims are secured, including but not limited to, by monies held in trust, insurance proceeds, rights of setoff or recoupment. In a separate filing, ASARCO, the U.S. Government and Blue Tee stipulate to further extend the time the deadline for Blue Tee to file expert reports and disclosures as to future costs related to the Taylor Springs, Illinois Site, until June 22, 2007. 3. Union Pacific Union Pacific Railroad Company notifies the Court that it has asserted a secured claim arising from a right of setoff and an administrative priority claim relating to clean-up of hazardous materials at the Omaha Lead Site. The Omaha Lead Site is an unowned site. 4. New Mexico The state of New Mexico identifies Deming Mill and Tailings; Dona Ana Metals Survey; Blackhawk Mine; Stephenson Bennett Mine; and Magdalena Mine as having the potential to have administrative priority claims against ASARCO. 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). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Parties File Briefs on California Gulch Sites --------------------------------------------------------- Three parties-in-interest filed briefs with the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas regarding the ownership of real property and the estimation of claims relating to the Government Gulch Sites. 1. ASARCO LLC ASARCO LLC and its debtor-affiliates assert that all of the California Gulch properties are owned by a joint venture between ASARCO and Resurrection Mining Company. ASARCO and Resurrection agreed to dissolve the Joint Venture in 2005 but it remains in the winding-up process, Tony M. Davis, Esq., at Baker Botts, LLP, in Houston, Texas, tells the Court. Until the winding-up process is completed, the California Gulch property will remain property of the Joint Venture rather than the separate property of either Resurrection or ASARCO, Mr. Davis maintains. Accordingly, ASARCO asks Judge Schmidt to find that the Joint Venture property, including the Yak Tunnel water treatment facility, is not property of ASARCO's estate. ASARCO also asks the Court to find that any liabilities of the Joint Venture based on ownership of the Joint Venture property are not liabilities of the ASARCO estate and that any claims against ASARCO for any deficiency or any additional contribution to the Joint Venture must be subordinated to the claims of ASARCO's creditors. 2. Newmont Parties Resurrection and Newmont Mining Corporation contend that many of the environmental claims related to the California Gulch Site are not the proper subject of an estimation proceeding under Section 502(c) of the Bankruptcy Code. The Newmont Parties point out that their claims for past costs are already liquidated and therefore do not require estimation. In addition, certain claims of the Newmont Parties and the U.S. Government relating to the operation and maintenance of the Yak water treatment facilities are entitled to administrative priority, Matthew S. Okin, Esq., at Okin & Adams, LLP, in Houston, Texas, contends, thereby making estimation of those claims unnecessary. Mr. Okin emphasizes that the U.S. Government's future right to enforce the existing administrative orders relating to the Yak Tunnel is not a "claim" as defined in Section 101(5) and therefore cannot be estimated by the Court. Accordingly, the Newmont Parties ask the Court to refrain from estimating the Claims relating to California Gulch, particularly the Newmont Parties' claims for past-costs and claims related to the operation and maintenance of the facilities at the Yak Tunnel. 3. U.S. Government The U.S. Government insists that the Court should not estimate ASARCO's obligations concerning the California Gulch Site unless necessary to evaluate the feasibility of a plan of reorganization. The U.S. Government relates that there are continuing releases and threatened releases from the California Gulch Site. The cost of responding to the release or the threatened release into and from the Yak Tunnel are entitled to administrative priority and must be addressed in any plan of reorganization, Jerel L. Ellington, Esq., in Denver, Colorado, asserts. Filing of Expert Reports Asarco Incorporated also seeks leave from the Court to introduce expert reports, submit expert witnesses and testimony, and conduct cross-examinations at the estimation proceeding for the Band 1 El Paso Site as to past response costs and the Dona Ana County Metals Sites. However, the U.S. Government argues that Asarco Inc. has not demonstrated that the Debtors are unwilling or unable to fulfill their responsibility or that Asarco Inc. has any unique interest separate from that of the Debtors. Thus, the Government asks the Court to deny Asarco Inc.'s motion for leave to file expert reports in the environmental estimation proceedings. The Debtors know the sites far better than Asarco Inc., the Government maintains. "The Debtors are represented by a capable counsel that has filed specific objections and lengthy expert reports." The Government argues that Asarco Inc.'s submission of its expert reports, witnesses and cross-examinations would only disrupt the estimation proceedings and would require a wholesale revision of the case management order. If allowed, Asarco Inc.'s participation in the estimation proceedings should be narrowly defined to those for which it has a particular interest, divergent from the Debtors, the Government contends. In a separate filing, the Government asserts that Union Pacific's expert reports are thinly disguised as objections to the Government's claims. Thus, the Government asks the Court to exclude the expert reports submitted by Union Pacific in the estimation proceedings for the Omaha Lead Superfund Site. Parties Stipulate on East Helena Site-related Matters The Environmental Protection Agency of Region 8 expects to issue a final Record of Decision for the remediation of the East Helena, Montana Superfund Site on or before September 30, 2007. The ROD will identify the remedial action that the federal government has selected for the East Helena Site and will describe, among other things, what level of lead contamination will require remedial response and the approach that will be required regarding contaminated undeveloped properties. As the ROD will identify the remedial action that the federal government has selected for the East Helena Site, the issuance of the ROD will have a material impact on the analysis and estimation of the federal and state governments' future cost claims at the Site and settlement negotiations regarding those claims. ASARCO, the U.S. Government and the state of Montana agree that issuance of an ROD in late September makes it impractical and inefficient to exchange expert reports regarding the federal and state governments' claims at the East Helena Site before late September and makes it extremely difficult to meaningfully prepare for a hearing in late September or early October. The parties further agree that it is impractical and inefficient to exchange expert reports regarding Montana's claim for natural resource damages until after a reasonable amount of time after Montana provides sufficient specific information regarding the NRD claims. Accordingly, in a Court-approved stipulation, the parties agree to amend the case management order for the claims relating to the East Helena Site that initial expert reports and designation of documents as to response cost claims must be filed 10 days after issuance of the ROD but not later than October 10, 2007. The remaining schedule as to the response cost claims is: October 1 to November 2, 2007 -- Discovery Period and expert depositions October 26, 2007 -- Rebuttal Experts September 10, 2007 -- Agreement for structure of mediation November 2, 2007 -- Exchange of Witness Exhibit Lists -- Pre-trial briefs, Motions and Objections November 6, 2007 -- Response Briefs -- Deadline for Submission of Written Testimony November 9, 2007 -- Pre-Trial Conference November 12, 2007 -- Hearing As to Montana's NRD Claim, the parties set this schedule: July 11, 2007 -- Montana's Production of NRD Information August 3, 2007 -- Initial Expert Reports -- Designation of Documents To be determined -- Discovery Period and expert depositions To be determined -- Rebuttal Experts September 10, 2007 -- Agreement for structure of Mediation November 2, 2007 -- Exchange of Witness/Exhibit Lists -- Pre-trial briefs, Motions and Objections November 6, 2007 -- Response Briefs -- Deadline for Submission of Written Testimony November 9, 2007 -- Pre-Trial Conference November 16, 2007 -- Hearing * * * Judge Schmidt authorizes Atlantic Richfield Company, ARCO Environmental Remediation, LLC, and BP America, Inc., to file amended proofs of claim to describe with greater particularity the Debtors' liability to the BP Claimants at the Sweetwater/Ozark Mine. 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). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASARCO LLC: Wants to Expand Scope of Alvarez & Marsal's Employment ------------------------------------------------------------------ ASARCO LLC and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Southern District of Texas to expand Alvarez & Marsal North America, LLC's employment, for an interim period not to exceed six months, to include ordinary accounting functions. Alvarez & Marsal will provide supervision and assistance to ASARCO with respect to: (a) closing ASARCO's books on a monthly basis and continuing to improve relevant processes; (b) coordinating and providing information to the audits in completing the 2005 and 2006 external audits; (c) assisting in the preparation of the monthly operating reports and related financial statements and analysis; and (d) identifying, prioritizing and completing other accounting initiatives that arise from time to time to improve daily transaction processing, controls and reporting. ASARCO expects that the Accounting Services will be necessary for a period of three months, from June 1, 2007, to Aug. 31, 2007, or within the sole direction of ASARCO's management and Board of Directors, will be extended for up to an additional three-month period, if needed. ASARCO notes that the three-month period in which it requires' Alvarez & Marsal's Accounting Services might be reduced if permanent employees to perform those roles are employed and trained in a shorter period of time. ASARCO will pay Alvarez & Marsal a flat fee of $125,000 per month for the firm's contemplated Accounting Services, plus expenses to be billed at cost. 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). The Debtors' exclusive period to file a plan expires on Aug. 9, 2007. (ASARCO Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) BABAJANI & MAMA: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Babajani & Mama, L.L.C. dba Red Roof Inn/Queensbury 931 State Route 9 Queensbury, NY 12804 Bankruptcy Case No.: 07-11712 Type of Business: The Debtor owns and operates a Red Roof Inn in Queensbury, New York. See http://www.redroof.com/ Chapter 11 Petition Date: June 18, 2007 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Richard L. Weisz, Esq. Hodgson Russ, L.L.P. 677 Broadway Albany, NY 12207 Tel: (518) 465-2333 Total Assets: $5,184,101 Total Debts: $4,336,798 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mavis Latif $550,000 24 Twickwood Lane Queensbury, NY 12804 Bank of America $328,455 860 P.O. Box 535310 Atlanta, GA 30353-5310 All Phase Electric $180,000 860 State Route 9N Ticonderoga, NY 12883 Bank of America $38,414 Wilmington, DE Gould's Landscaping $22,000 Guest Supply $21,587 Borgos & Del Signore, attorney's fees $19,507 P.C. Goodman Company $15,972 Mannington G.E. Credit Card $14,932 Marlin Leasing (Gauch) $10,014 Mountain Telecom $8,135 A.D.T. Security Service, $8,000 Inc. CitiFinancial Credit Card $7,834 Resnick's $7,939 National Grid $7,641 T.K. Flaherty Associates $7,000 Couse & Sons $6,237 Time Warner Cable $5,000 BEST MANUFACTURING: Chap. 7 Trustee Hires Becker Meisel as Counsel ------------------------------------------------------------------ Stacey L. Meisel, Esq., the Chapter 7 Trustee appointed in Best Manufacturing Group LLC and its debtor-affiliates' liquidation proceedings, obtained permission from the U.S. Bankruptcy Court for District of New Jersey to employ Becker Meisel LLC as her counsel. As reported in the Troubled Company Reporter on May 30, 2007, Becker Meisel is expected to: a) provide legal assistance in reviewing liens, claims, matters involving the use and sale of property, investigation into assets and liabilities of the Debtors; and b) assist the Trustee in the administration of the estate's assets. Ms. Meisel, a partner at Becker Meisel LLC, tells the court of the firm's professional hourly rates: Designation Hourly Rate ----------- ----------- Partners $250 - $450 Associates $160 - $250 Paralegals and law clerks $75 - $125 Ms. Meisel assured the Court that the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Ms. Meisel can be reached at: Becker Meisel LLC No. 354 Eisenhower Parkway, Livingston, NJ 07039 Tel: (973) 422-1100 Headquartered in Jersey City, New Jersey, Best Manufacturing Group LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture and distribute textiles, career apparel and other products for the hospitality, healthcare and textile rental industries with satellite operations located across the United States, Canada, Mexico and Asia. The company and four of its subsidiaries filed for chapter 11 protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415). The case was converted to Chapter 7 on May 3, 2007. Stacey L. Meisel was appointed as Chapter 7 Trustee on May 4, 2007. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Debtors. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, and Brian L. Baker, Esq., and Stephen B. Ravin, Esq., at Ravin Greenberg PC, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEST MANUFACTURING: Chapter 7 Trustee Hires Weiser as Accountant ---------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey gave Miss Stacey L. Meisel, the Chapter 7 Trustee appointed in Best Manufacturing Group LLC and its debtor-affiliates' liquidation proceedings, authority to employ Weiser LLP as her accountant. The Trustee tells the Court that it selected the firm because of the its considerable accounting experience and knowledge in the area of insolvency accounting. As accountant for the trustee, the firm is expected to perform general accounting functions relating to the books and records of the Debtor, including but not limited to, investigation of possible preferences, fraudulent conveyances, preparation of tax returns and assisting the Chapter 7 Trustee and her counsel as may be appropriate. The Trustee discloses the firm's professionals hourly billing rates: Professional Hourly Rate ------------ ----------- Partners/Directors $312 - $475 Senior Managers $264 - $312 Managers $204 - $264 Seniors $168 - $204 Assistants $108 - $132 Paraprofessionals $72 - $132 In addition, Weiser will also receive reimbursement for reasonable out-of-pocket expenses in connection with its services. James Horgan, a partner at Weiser LLP CPA's, tells the Court that the firm and its professionals does not hold or represent any interest adverse to the Debtor or its estate and is a "disinterested" person as that term is defined under Section 101(14) of the Bankruptcy Code Mr. Horgan can be reached at: James Horgan Certified Public Accountant Weiser LLP 399 Thornall Street Edison, New Jersey 08837 Tel: (732) 549-2800 Fax: (732) 549-2898 http://www.mrweiser.com/ Headquartered in Jersey City, New Jersey, Best Manufacturing Group LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture and distribute textiles, career apparel and other products for the hospitality, healthcare and textile rental industries with satellite operations located across the United States, Canada, Mexico and Asia. The company and four of its subsidiaries filed for chapter 11 protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415). The case was converted to Chapter 7 on May 3, 2007. Stacey L. Meisel was appointed as Chapter 7 Trustee on May 4, 2007. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Debtors. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, and Brian L. Baker, Esq., and Stephen B. Ravin, Esq., at Ravin Greenberg PC, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BICENT POWER: Moody's Rates $480 Million 1st-Lien Loan at (P)Ba3 ---------------------------------------------------------------- Moody's Investors Service has assigned a provisional rating of (P)Ba3 to Bicent Power LLC's $480 million first lien credit facilities and a provisional rating of (P)B1 to Bicent's $130 million 7.5-year second lien term loan. The first lien credit facilities include a $330 million 7-year term loan, a $30 million 5-year revolver, and a $120 million 5- year letter of credit facility. The ratings carry a stable outlook. Proceeds of the term loans will be used along with $180 million in equity to finance the acquisition of Centennial Power Inc. and Colorado Energy Management LLC from MDU Resources Group Inc. CPI is a portfolio of six electric power generating facilities with an aggregate capacity of 603 MW consisting of a 120 MW coal unit located in Montana, a 67 MW wind project in California, three gas-fired combustion turbines in Colorado and one in California, and a 50% interest in a CT in Georgia. CEM is a provider of power plant EPC, refurbishment, and O&M services to CPI and other customers since the mid-1980s. The facilities are secured by a first and second priority lien respectively on all of the company's assets including the facilities and collateral accounts, rights to all revenues and distributions, its interests in the project agreements, and 100% of its capital stock. These provisional ratings are based upon Moody's current understanding of the proposed terms and conditions of the transactions and are subject to our receipt and review of final documentation. The ratings reflect the highly contracted nature of the company's cash flows during the term of the loans, which provides stability and predictability to its projected financial operations. This is offset by refinancing risk associated with the high degree of expected leverage at loan maturity notwithstanding the 100% cash sweep, coupled with the expiration of the most significant contract shortly thereafter, which could expose takeout lenders to substantial merchant risk. The rating considers these credit strengths: - Stable and predictable cash flows generated under long-term unit contingent fixed price power purchase and tolling agreements and hedges expected to account for over 90% of the portfolio's EBITDA on average and to provide average contracted debt service coverage of 1.33x through the term of the credit facilities. - All five current power purchase and tolling agreement counterparties are investment grade, with a weighted average rating of A2. - Operational and geographic diversity provided by six plants operating within four distinct markets. - Fuel and dispatch curve diversity. - Tolling agreements at gas-fired facilities help mitigate fuel price risk. - Minimal project level debt. - Strong project finance structural protections, including: * A 100% cash sweep for both the 1st and 2nd term loans; * A six month debt service reserve provided by a letter of credit for both the 1st and 2nd lien term loans; * $20 million cash-funded operating reserve; * Independently-administered waterfall of accounts; * Mandatory pre-payment of debt from all proceeds of debt issuances as well as asset sales (with limited exceptions). - Sound historical operating performance of most facilities supported by commercially proven technology. - Experienced management and operating teams. Moody's has also identified these credit risk and weaknesses: - High leverage reflected in modest financial metrics. - Refinancing risk -- 60% of initial par amount remains outstanding and consolidated FFO/Debt is less than 10% at maturity of term loans, one year after which the power purchase agreement for the most significant asset expires, reducing the level of contracted EBITDA to 23%. - Additional super holdco PIK debt, which accretes to $127 million by its 2015 maturity, could increase refinancing risk for the opco term loans. - Portfolio diversification notwithstanding, there remains some resource concentration, with the Hardin project contributing 40% of project EBITDA. Hardin has a very limited operating history. Furthermore, its significant reliance on used and refurbished equipment could result in unforeseen operating and maintenance challenges resulting in cost increases going forward. - Expiration of coal supply and transportation agreement for the Hardin during 2010 and Mountainview LTSA in 2013 could result in operating and maintenance cost increases. - Basis risk under 2011 to 2015 energy hedge with Barclays for Hardin between Mid-C index and Northwestern System. Bicent Power LLC is an independent power generation company headquartered in Easton, Maryland. It is owned by Beowulf Energy LLC and Natural Gas Partners. BICENT POWER: S&P Rates New $480 Million Loans at BB- ----------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BB-' rating to Bicent Power LLC's $330 million first-lien senior secured term loan B due 2014, as well as the $120 million secured LOC facility and $30 million secured revolving credit agreement, which both expire in 2012. At the same time, Standard & Poor's assigned its preliminary 'B-' rating to the company's $130 million second-lien senior secured term loan C due 2014. The outlook is stable. The recovery rating is a '2' on the first-lien term loan, indicating the expectation for substantial (70% to 90%) recovery of principal if a payment default occurs, and a '6' on the second- lien term loan, indicating the expectation for negligible (0% to 10%) recovery. The preliminary ratings are subject to review of final documentation. The outlook is stable. Bicent Power is a special-purpose, bankruptcy-remote operating company formed to acquire independent power producer Centennial Power Inc. and power plant operations and construction firm, Colorado Energy Management LLC. Both targets are indirectly wholly-owned subsidiaries of MDU Resources Group Inc. The preliminary rating assumes that Bicent Power meets S&P's criteria for special-purpose entities, including the provision of an independent director and a nonconsolidation opinion. Centennial Power Inc. owns a power generation portfolio consisting of one coal facility (120 MW), one wind project (67 MW), one combined-cycle unit (138 MW), and three gas-fired projects (278 MW) distributed among five sites in Montana, California, Colorado, and Georgia. The high degree of contracted cash flows over the medium term supports a stable outlook. The rating or outlook could be lowered if the terms of the extended or new long-term power sales agreements are weak or of a materially shorter duration than expected. Operating performance difficulties at one or more assets could also pressure the ratings if operating cash flows are materially impaired, although such difficulties are not anticipated. BIOPURE CORP: Posts $6.2 Million Net Loss in Qtr. Ended April 30 ---------------------------------------------------------------- Biopure Corporation reported a net loss of $6.2 million for the second quarter ended April 30, 2007, compared with a net loss of $7.1 million for the corresponding period in 2006. Total revenues for the second quarter of 2007 were $619,000, including $500,000 from sales of the company's veterinary product Oxyglobin(R) and $113,000 from past congressional appropriations administered by the U.S. Army. The Army payments reimburse Biopure for certain trauma development expenses for Hemopure(R). Total revenues for the same period in 2006 were $411,000, including $327,000 from Oxyglobin sales and $81,000 from Army payments. Oxyglobin revenues increased during the second fiscal quarter of 2007 compared to 2006 due to higher unit sales and a higher average selling price. Cost of revenues was $2.8 million for the second quarter of fiscal 2007, compared to $3.3 million for the same period in 2006. Cost of revenues includes costs of both Oxyglobin and Hemopure. During the second fiscal quarter of 2006 the company recorded a $721,000 write-down of inventory for which there is no comparable expense in 2007. Research and development expenses were $1.9 million for the second quarters of fiscal 2007 and 2006. Salary expenses and spending on preclinical studies increased during the second quarter of fiscal 2007 compared to the same period in 2006, offset by decreases in outside services expenses. Sales and marketing expenses increased to $366,000 for the second quarter of fiscal 2007, from $155,000 for the same period in 2006. The increase is due to expenses related to a U.K. medical advisory board meeting for Hemopure. General and administrative expenses were $2.0 million for the second quarter of fiscal 2007 compared to $2.3 million for the corresponding period in 2006, due mostly to lower insurance premiums and consulting expenses. At April 30, 2007, Biopure had $11.5 million in cash on hand. At April 30, 2007, the company's consolidated balance sheet showed $36,910,000 in total assets, $4,345,000 in total liabilities, and $32,565,000 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended April 30, 2007, are available for free at http://researcharchives.com/t/s?2109 Going Concern Doubt Ernst & Young, in Boston, Massachusetts, expressed substantial doubt about Biopure Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Oct. 31, 2006, and 2005, The auditing firm pointed to the company's recurring losses from operations and lack of sufficient funds to sustain its operations through the end of fiscal 2007. About Biopure Corporation Biopure Corporation (NasdaqCM: BPUR) -- http://www.biopure.com/-- develops, manufactures and markets pharmaceuticals, called oxygen therapeutics, that are intravenously administered to deliver oxygen to the body's tissues. Hemopure(R) is approved for sale in South Africa for the treatment of surgical patients who are acutely anemic. Biopure has applied in the United Kingdom for regulatory approval of a proposed orthopedic surgical anemia indication. The company is developing Hemopure for a potential indication in cardiovascular ischemia, in addition to supporting the U.S. Navy's government- funded efforts to develop a potential out-of-hospital trauma indication. Biopure's veterinary product Oxyglobin(R) is indicated for the treatment of anemia in dogs. BLUE RIDGE: Rank Group Deal Prompts S&P's Positive CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Blue Ridge Paper Products Inc., including the 'B-' corporate credit rating, on CreditWatch with positive implications. "The CreditWatch listing followed the company's announcement that it will be acquired by New Zealand-based The Rank Group (unrated), for about $338 million," said Standard & Poor's credit analyst Andy Sookram. Blue Ridge had debt of about $235 million at March 31, 2007. While the transaction has received the required approval of the holders of a majority of the common stock of Blue Ridge Paper, it is still subject to regulatory approval. "Although we do not have sufficient information about the transaction financing at this time, we believe a sale of the company to The Rank Group could be positive for credit quality," Mr. Sookram said. In addition, Blue Ridge's credit measures over the past two quarters have improved meaningfully, reflecting higher prices and volumes. As a result, debt to EBITDA improved to 5.5x at March 31, 2007, from 11.5x at Sept. 30, 2006. Standard & Poor's will resolve the CreditWatch when transaction details are available. BOMBARDIER RECREATIONAL: S&P Rates $1.15 Billion Loan at B+ ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating, with a recovery rating of '3', to Bombardier Recreational Products Inc.'s proposed $1.15 billion term loan B facility, indicating the expectation of a meaningful recovery of principal (50%-70%) in a payment default scenario. The bank loan rating is based on preliminary terms and conditions and is subject to review once S&P receives full documentation. Proceeds from the new facility will be used to pay a substantial special distribution to shareholders and refinance the company's existing debt. At the same time, Standard & Poor's affirmed its ratings on recreational products manufacturer BRP, including the 'B+' long- term corporate credit rating on the company. The outlook is negative. "The affirmation follows BRP's decision to raise additional debt to pay shareholders a substantial dividend later this year, which will result in a weakening of the company's financial risk profile and credit protection measures," said Standard & Poor's credit analyst Lori Harris. Pro forma for the transaction, adjusted debt to EBITDA will be about 4x based on projected EBITDA for fiscal 2008 (ending Jan. 31). The ratings on BRP reflect the company's high debt leverage, volatile demand for its core products, seasonal operating profits, and intense competition. These factors are partially offset by the company's solid market position, brand equity, well- established dealer network, and the stable margins and revenues of the parts and accessories component of the business. The negative outlook reflects the company's highly leveraged financial risk profile, including BRP's weak financial flexibility to handle unforeseen events such as an economic downturn, poor weather conditions, or unfavorable foreign exchange conditions, given its heavy debt load. S&P could lower the ratings if the company does not improve credit metrics on a sustainable basis in the medium term. On the other hand, S&P could revise the outlook to stable if the company reduces leverage and demonstrates a sustained improvement in margins. BOWATER INC: To Discuss Abitibi Merger on July 26 Annual Meeting ---------------------------------------------------------------- Abitibi-Consolidated Inc. and Bowater Incorporated will hold a meeting of its shareholders on July 26, 2007, in order for shareholders to vote on the companies' proposed combination. The Quebec Superior Court has granted an interim order approving the holding of the special meeting of Abitibi-Consolidated shareholders. The special meeting of Abitibi-Consolidated shareholders will be held at the Windsor, Salon Windsor, 1170 Peel Street in Montreal, Quebec, at 10:00 a.m., Eastern Time on July 26, 2007. Shareholders of record at the close of business on June 20, 2007, will be entitled to receive notice of and vote at the Abitibi- Consolidated meeting. The annual meeting of Bowater stockholders will be held in the Peachtree Auditorium of the Bank of America Plaza, 600 Peachtree Street Northeast in Atlanta, Georgia, at 10:00 a.m., Eastern Time on July 26, 2007. Stockholders of record at the close of business on June 8, 2007, will be entitled to receive notice of and vote at the Bowater meeting. In connection with the proposed combination of Abitibi- Consolidated and Bowater, Bowater Canada Inc., an exchangeable share Canadian public subsidiary of Bowater, will also hold a special meeting of its shareholders in order to approve certain amendments to Bowater Canada's articles required to facilitate and implement the combination. The special meeting of Bowater Canada shareholders will be held on July 25, 2007, at Fairmont The Queen Elizabeth Hotel, Salon St-Laurent, 900 Boulevard Rene-Levesque West, Montreal, Quebec, at 9:30 a.m., Eastern Time. Shareholders of record at the close of business on June 20, 2007, will be entitled to receive notice of and vote at the Bowater Canada meeting. For Abitibi-Consolidated, the combination requires the affirmative vote of not less than two-thirds of the votes cast at the Abitibi- Consolidated special meeting by holders of Abitibi-Consolidated common shares present or represented by proxy at the special meeting. For Bowater, the combination requires the affirmative vote of a majority of the total voting power of all outstanding shares of Bowater common stock and Bowater special voting stock, representing Bowater Canada exchangeable shares, entitled to vote at the Bowater meeting, voting together as a single class. The combined company, which will be called AbitibiBowater Inc., will be the third largest publicly traded paper and forest products company in North America and the eight largest in the world. 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. It will also be among the world's largest recyclers of newspapers and magazines. About Abitibi-Consolidated Inc. Headquartered in Montreal, Quebec, Abitibi-Consolidated Inc. (NYSE: ABY, TSX: A) -- http://www.abitibiconsolidated.com/-- supplies newsprint and commercial printing papers and produces 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. 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. BOWATER INC: Weak Earnings Prompt S&P to Cut Credit Rating to B --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Greenville, South Carolina-based Bowater Inc., including its corporate credit rating, to 'B' from 'B+'. The outlook is negative. "The downgrade reflects our expectations for continued weak earnings and cash flow stemming from difficult newsprint market conditions, the rapid rise of the Canadian dollar, and ongoing operating losses for lumber," said Standard & Poor's credit analyst Pamela Rice. Standard & Poor's had previously expected Bowater's credit measures to improve modestly in 2007 as the company used asset- sale proceeds to reduce debt and reduced costs to offset lower prices. However, industry supply discipline in North America has not kept pace with demand declines, so prices remain under pressure. This rating action reflects the company's stand-alone credit quality and does not factor in the uncertain outcome of its proposed merger with Abitibi-Consolidated Inc., which still faces significant regulatory and shareholder scrutiny. "We could lower the ratings if the company is unable to strengthen its earnings and cash flow with cost improvement efforts or if market conditions worsen," Ms. Rice said. "We could revise the outlook to stable if Bowater is able to reduce debt beyond expectations and market conditions stabilize." Regulatory authorities and shareholders are still reviewing the proposed merger with Abitibi, and the effect on the companies' ratings is unclear. The all-equity transaction will result in a stronger competitive position and an improved cost profile for the combined entity, but the steady decline in demand for its core newsprint products and heavy debt burdens overshadow these strengths. BUFFALO COAL: Section 341(a) Creditor's Meeting Set for July 18 --------------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of the creditors of Buffalo Coal Company, Inc. and its debtor-affiliate, United Energy Coal Inc. on July 18, 2007, at 10:00 a.m., at the U.S. Bankruptcy Court for the North District of West Virginia located at 324 West Main Street-Edel Building, Clarksburg, West Virginia 26301. This is the first meeting of the Debtors' creditors following a conversion of their chapter 11 bankruptcy case to a chapter 7 liquidation proceeding, as granted by the Court on June 13, 2007. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Buffalo Coal Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is engaged in coal mining and processing services. The company filed for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.V. Case No. 06-00366). David A Hoyer, Esq., at Hoyer, Hoyer & Smith, PLLC, represents the Debtor in its restructuring efforts. Thorp Reed and Armstrong, LLP, represents Buffalo Coal's Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $119,323,183 and total debts of $105,887,321. Barton Mining Company Inc., Buffalo Coal's affiliate originally filed under chapter 7 on July 24, 2006, and was converted to a case under chapter 11 on Aug. 8, 2006 (Bankr. N.D. W.V. Case No. 06-00625). James R. Christie, Esq., at Clarksburg, West Virginia, represents Barton Mining. CALPINE CORP: Names Gary Germeroth as VP & Chief Risk Officer ------------------------------------------------------------- Calpine Corporation disclosed that Gary Germeroth has been named to lead Calpine's Risk Management function as the new Executive Vice President and Chief Risk Officer. In this role, Mr. Germeroth is responsible for maintaining oversight of Calpine's risk management framework and assuring that the complex risks of the company are communicated and comprehended throughout the organization. Calpine Chief Executive Officer Robert P. May stated, "We are pleased to have Gary join the management team as we build the new Calpine. He will ensure that Calpine's risk limits are appropriate for the nature and complexity of our business by overseeing four key Risk Management functions, including Market, Credit, Business and Operational Risk Management." Mr. Germeroth brings to Calpine more than 26 years of experience in energy strategy and risk management, having directed a variety of commercial strategy, enterprise risk management and corporate restructuring projects for multiple companies. He has led efforts related to corporate governance, portfolio risk evaluation, operational risk management, strategic options analysis, management of portfolio capital requirements, organizational and business process design, transaction settlement and financial accounting. He has most recently worked for PA Consulting Group and its predecessor firm, Hagler Bailly Risk Advisors, since 1999. Prior to joining PA in 1999, Mr. Germeroth held a variety of controllership, risk control and treasury positions at various entities in his energy career. He holds a bachelor of science degree in finance from the University of Denver. About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 51 Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). Calpine Corp. has until June 20, 2007, to file a plan, and until Aug. 20, 2007, to solicit acceptances of that plan. CARDSYSTEMS SOLUTIONS: Files 2nd Amended Disclosure Statement ------------------------------------------------------------- Cardsystems Solutions Inc. filed with the U.S. Bankruptcy Court for the District of Arizona a Second Amended Disclosure Statement explaining its Second Amended Chapter 11 Plan of Reorganization. The Debtor reminds the Court that on May 22, 2005, it discovered that some cardholder data had been exported to an unfamiliar server on the internet. The Debtor immediately alerted Merrick Bank, and the bank notified VISA and MasterCard about the intrusion. The Debtor explained to the Court that an unauthorized party placed a script that exports information on its platform through internet-facing application used by the Debtor's customers to access information. Overview of the Plan The Debtor's Plan proposes to liquidate the claims of all individuals and entities damaged by the Debtor's security incident, including: a. all claims of Merrick and other banking institutions entitled to contractual damages and indemnity; b. all issuing and acquiring banks suffered fraud loss and other damages; c. all other individual suffered damage from the Debtor's security incident; and d. all card associations, including, VISA, MasterCard, AMEX, Diners and Discover. The Plan will be funded by the Debtor's cash on hand; cash in various escrow accounts; additional capital; collection of receivables; recovery on litigation claims; recovery from insurance policies; recovery of avoidable transfers; and proceeds from the sale of the Debtor's assets. Treatment of Claims Under the Plan, Administrative Expenses, Priority Wage, Priority Tax and General Unsecured claims will be paid on a pro rata basis, as funds are available. Infusion Claims will be paid in full plus interest at 10% per annum. Equity Interest holders, if any, will also be paid on a pro rata basis, according to the holders contractual priority. Claims of Merrick Bank In the event the bank agrees in favor of the Debtor's Plan, its claims will be treated in this manner: i. Merrick's Proof of Claim 177, amounting $14,786,049, will be allowed. ii. Merrick's unliquidated claim assigned 176 will be disallowed. iii. In satisfaction of claim 177, Merrick's recovery will be limited to $14,750. Funding for the payment of the first $10 million will be: a. $5.1 million -- Merrick will retain the principal amount of $5.1 million and any accrued interest thereon made by the Debtor to Merrick in connection with the December 2005 Letter Agreement between Merrick and the Debtor. b. $1,216,195 -- Merrick shall retain the principal amount of $1,216,195 and any accrued interest thereon released to Merrick from the deposit escrow account at JPMorgan Chase that was established and funded pursuant to the terms of the Letter Agreement. c. $3,683,805 -- Merrick will receive upon the Effective Date of the Plan the principal amount of $3,683,805 without any accrued interest from the escrowed monies on deposit with Chase. iv. Funding for the payment of the remaining principal amount without interest of $4.75 million will be: a. Merrick shall have first priority on the first $4.75 million distributed by the Claims Trustee from the net proceeds of claims filed by the Trust against the Debtor's insurance policies. b. In the event Merrick does not receive the full $4.75 million from the Claims Trust within three years after the Effective Date, Merrick will be entitled to receive any shortfall -- up to $3.5 million -- from contributions made by the Debtor's equity security holders, or from the proceeds of the Estate's PayByTouch stock. The $3.5 million or any smaller remaining balance due Merrick after distribution from the Claims Trust, would be due on the earlier of the third anniversary of Plan confirmation or as the time as any of the Estate's interest in the Solidus stock is monetized. v. The Debtor will use its best efforts to eliminate or mitigate the liability of Merrick, VISA or MasterCard from the Parke litigation claims. This will be done through the Debtor's Plan and claims litigation, and will estimate for voting purposes the Parke claims. The Plan will further provide for a channeling injunction such that all claims against the Debtor, Merrick, VISA and MasterCard would be directed to the fund established by the Plan for the satisfaction of claims. Any party, including Merrick, who wishes to be protected by channeling injunction will be required to make a contribution to the Fund in an amount to be determined appropriate by the United States Bankruptcy Court in consideration for the protections afforded by the channeling injunction. If no "Fund" is created and non channeling injunction is ordered by the Bankruptcy Court, then any liability to the Parke claimants of Merrick, VISA or MasterCard to the Parke claimants will be borne solely by those parties, which will have no further indemnification rights against the Estate or its assets, except for $100,000 in the event Merrick is held liable to the Parke plaintiffs in any forum. In such instance, the Debtor's Estate would indemnify Merrick for damages up to $100,000. vi. All claims of the estate against VISA and MasterCard will be assigned to Merrick upon the confirmation of the Plan. vii. To the extent that there is a shortfall in the amount paid to Merrick up to $14.75 million, and after payments from the Claims Trust and the proceeds of the Estate's PayByTouch stock, Merrick will share, on a pro rata basis with other recoveries made by the Claims Trust from liquidation of other Estate assets or proceeds from avoidance litigation or settlements. viii. The action brought in Maryland by Merrick against the Debtor will be dismissed with prejudice, each side to bear its own fees, costs and expenses. In the event that Merrick does not agrees to the Debtor's Plan, its claim will be treated in this manner: i. The Debtor will object to the Merrick claims. Merrick will be required to establish the allowed amount of its claim. ii. The Estate will retain all avoidance claims against Merrick Bank. iii. To the extent Merrick is determined to have a secured claim, its collateral will be abandoned to it on the later of: the Effective Date of the Plan, or the date on which there is a final order allowing Merrick's secured claim. iv. Any allowed unsecured claims of Merrick will be treated as a general unsecured claim. v. The Debtor will retain all of its claims against VISA and MasterCard. Headquartered in Sonoita, Arizona, Cardsystems Solutions, Inc. -- http://www.cardsystems.com/-- was acquired by Pay By Touch Payment Solutions, LLC -- http://www.paybytouch.com/-- a biometric authentication, loyalty, membership, payment and other electronic transaction solutions provider. The Company filed for bankruptcy protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515). Frederick J. Petersen, Esq., Michael McGrath, Esq., and Lowell Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for bankruptcy protection, it disclosed assets amounting to $13,087,515 and debts totaling $23,860,343. CATALYST PAPER: Cost Pressures Cues S&P to Revise Outlook to Neg. ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Vancouver, British Columbia-based Catalyst Paper Corp. to negative from stable. The ratings, including the 'B+' long-term corporate credit rating on the company, remain unchanged. "The outlook revision stems from our expectation that Catalyst's profitability and cash flow will decline through 2007 because of weak industry conditions and cost pressures," said Standard & Poor's credit analyst Donald Marleau. "After improving its credit metrics in 2005 and 2006, the company's profitability should be weak in 2007 because of the compounding effects of lower paper prices, higher fiber costs, a stronger Canadian dollar, and non- recurring restructuring charges," Mr. Marleau added. The ratings reflect Catalyst's high debt leverage and exposure to the declining North American newsprint market and the cyclical specialty papers and pulp business. These risks are partially offset by its strong market position in newsprint and specialty groundwood papers along the west coast of North America and its improving productivity. The outlook is negative. The ratings on Catalyst might be lowered if it is unable to reverse the profitability decline brought about by weaker prices for newsprint, pressure on fiber costs, and a continued strong Canadian dollar. Furthermore, the company faces some near-term operating risk as it reduces its workforce, while a possible strike by logging and sawmill workers in coastal British Columbia could hurt Catalyst by reducing wood chip availability and further increasing fiber costs. To return to a stable outlook, Catalyst must demonstrate sustained improvement in operating profit and cash flow generation, in addition to reducing leverage. CBRL GROUP: Completes 500,000 Share Repurchase Plan --------------------------------------------------- CBRL Group Inc. repurchased 178,919 of the 276,123 shares initially issued upon conversion as a part of a 500,000 share Rule 10b5-1 repurchase plan and completed that 500,000 share repurchase on June 15, 2007. The 500,000 shares that CBRL Group completely repurchased on June 15 included 321,800 shares that remain of the company's initial repurchase plan for 821,800 shares, of which 500,000 shares were repurchased on June 8, 2007. Holders of the company's convertible notes with about $421 million principal amount out of an aggregate of about $422 million principal amount outstanding had elected to convert those notes rather than have them redeemed. The conversion resulted in the issuance of 276,123 shares of the company's stock on June 5, 2007, and an additional 119,652 shares this week based upon ten-day averaging periods that ended June 15, 2007. The company has in place another 10b5-1 plan effective June 18, 2007, and continue until all shares issued as a result of the conversion of the notes have been purchased. That plan, which is subject to price, market, volume and timing constraints specified in the plan, covers an aggregate of 216,856 shares, including the 119,652 issued this week and the 97,204 shares that remain from the initial 276,123 issued pursuant to the conversions. The company expects that this 216,856 share repurchase will be completed this week. Upon completion of that share repurchase plan, the company expects to have about 23.6 million shares issued and outstanding. The note redemption and the various related share repurchases are being funded through cash on hand and a draw under the company's existing credit facility. A 10b5-1 plan allows the company to repurchase shares at times when it would ordinarily not be in the market because of the Company's trading policies or the possession of material non- public information. About CBRL Group Based in Lebanon, Tennessee, CBRL Group, Inc. (NASDAQ: CBRL) -- http://www.cbrlgroup.com/-- presently operates 559 Cracker Barrel Old Country Store(R) restaurants and gift shops located in 41 states. CBRL GROUP: Moody's Affirms Ratings & Revises Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service revised the ratings outlook of CBRL Group, Inc. to negative from stable. In addition, Moody's affirmed the company's Ba2 corporate family rating and Ba2 senior secured rating (LGD3, 36%). The outlook change to negative from stable reflects the continued softness in CBRL's operating performance and what Moody's views as the adoption of an increasingly aggressive financial policy towards shareholder focused initiatives such as share repurchases. Additionally, the actual application of proceeds from the divestiture of Logan's Roadhouse, Inc., somewhat deviated from Moody's previous expectations as the majority of the $385 million of net proceeds were applied to share repurchases versus debt repayment. As a result, credit metrics are weaker than levels Moody's had stipulated in April 2006 as conditions for revising the outlook to negative. "Notwithstanding Cracker Barrel's strong brand recognition and loyal customer base in the casual dining segment, the company's operating results continued to suffer from declines in guest traffic as consumers made fewer trips due to in part high gasoline prices," the rating agency said. "Margin pressures from food- related commodity inflation and labor costs have further dampened cash flow generation. Moody's expects that CBRL's operating performance and credit metrics will remain weak over the next twelve to eighteen months." Moody's previous rating action on CBRL was in April 2006, when Moody's downgraded CBRL's corporate family rating to Ba2 from Ba1, citing significant weakening of credit metrics and a considerable shift in operating strategy resulting from the company's proposed $800 million debt-financed share repurchase initiative and planned monetization of Logan's Roadhouse, Inc. The Ba2 corporate family rating incorporates CBRL's strong brand recognition, particularly with travelers, significant real estate ownership, and steady cash flow generation which is aided by modest capital expenditure requirements and moderate expansion plans. Factors constraining the ratings are: 1) the challenges in restoring same store sales growth and margin improvement at the Cracker Barrel Old Country Store (Cracker Barrel) concept in the mature and highly competitive family dining category; 2) weak credit metrics with Debt/EBITDA at 4.6x and free cash flow to debt of 3%(incorporating Moody's analytical adjustments); and 3) an increasingly aggressive financial policy with regard to shareholder focused initiatives. The ratings for the senior secured credit facilities reflect both the overall probability of default of the company, to which Moody's has assigned a PDR of Ba2, and a loss given default of LGD3. The borrowing under the credit facility will be the only debt outstanding after the LYONS Notes were fully redeemed in June 2007. The Ba2 rating of the credit facilities also reflects the security of the stock pledge of all domestic subsidiaries in addition to full guarantees of the same entities. These ratings/assessments were affected by this action: * Corporate Family Rating affirmed at Ba2; * Rating outlook changed to negative from stable; * Probability-of-default rating affirmed at Ba2; * $725 million senior secured term loan A due 2013 affirmed at Ba2 (LGD-3, 36%); * $200 million senior secured delayed-draw term loan due 2013 affirmed at Ba2 (LGD-3, 36%); * $250 million senior secured revolving credit facility due 2011 affirmed at Ba2 (LGD-3, 36%) Based in Lebanon, Tennessee, CBRL Group, Inc. (NASDAQ: CBRL) -- http://www.cbrlgroup.com/-- presently operates 559 Cracker Barrel Old Country Store(R) restaurants and gift shops located in 41 states. COINMACH SERVICE: Babcock & Brown Deal Cues S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit rating, on Coinmach Service Corp. and its operating subsidiary Coinmach Corp. on CreditWatch with negative implications. Plainview, New York-based CSC had total debt outstanding of about $657 million at March 31, 2007. The CreditWatch listing follows the announcement that CSC has agreed to be acquired by Babcock & Brown Ltd., together with a group of financiers, for $13.55 per share in cash including the assumption of debt for a total transaction value of about $1.3 billion. "The rating action reflects our expectation that leverage for CSC will increase after effecting the acquisition even though financing details have yet to be disclosed," said Standard & Poor's credit analyst Jean Stout. To resolve the CreditWatch listing, Standard & Poor's will meet with management to discuss financial policies and operating strategies, and evaluate the ultimate financing and terms of this going-private transaction. DAIMLERCHRYSLER AG: Unit Launches Cash Tender Offer --------------------------------------------------- DaimlerChrysler AG's subsidiary, DaimlerChrysler Company LLC has commenced a cash tender offer to purchase any and all of the outstanding Auburn Hills 12.375% Trust Guaranteed Exchangeable Certificates due 2020 and any and all of the debentures due 2020 to be issued by the company on June 21, 2007, the date on which all Certificates outstanding will be exchanged for an equal principal amount of Debentures issued by the company. There is currently a $225 million principal amount of the Certificates outstanding. The tender offer will expire at 5:00 p.m., New York City Time, on July 13, 2007, unless extended. The tender offer and consent solicitation were made in connection with the Contribution Agreement entered into on May 14, 2007 between DaimlerChrysler AG, DaimlerChrysler North America Finance Corporation, DaimlerChrysler Holding Corporation and an affiliate of Cerberus Capital Management L.P. In conjunction with the tender offer, the company is soliciting consents from the holders of the Debentures to eliminate substantially all restrictive covenants and certain other related provisions in the indenture governing the Debentures. The Proposed Amendments can be adopted with the consent of not less than 66-2/3% in the aggregate principal amount of the outstanding Debentures. The tender offer and consent solicitation were made pursuant to an offer to purchase and consent solicitation statement dated June 15, 2007, and related consent and letter of transmittal. As described in more detail in the Offer to Purchase, the total purchase price for each $1,000 principal amount of Certificates or, alternatively, for each $1,000 principal amount of Debentures issued in connection with the exchange of such holder's Certificate, validly tendered and accepted for purchase by the company will be calculated on July 11, 2007, based upon a fixed spread of 20 basis points over the 4.50% Treasury due May 15, 2017. The foregoing purchase price for the Certificates and Debentures includes a consent payment equal to $35 per $1,000 principal amount of Certificates tendered. Holders must validly tender their Certificates and Debentures on or before 5:00 p.m., New York City Time, on June 28, 2007, unless extended to be eligible to receive the applicable total purchase price, which includes the applicable consent payment. Holders who validly tender their Certificates and Debentures after the Consent Payment Deadline but before the Expiration Date will only be eligible to receive an amount equal to the total purchase price minus the consent payment. Additionally, holders whose Certificates and Debentures are purchased pursuant to the tender offers will receive any accrued but unpaid interest up to, but not including, the payment date for Certificates and Debentures purchased pursuant to the tender offer. A Holder of a Certificate that tenders Certificates in the tender offers shall automatically be deemed to have tendered the Debenture into which such Certificates will be exchanged on the Exchange Date. Holders may not deliver a consent in the consent solicitation without tendering the related Certificates or Debentures in the tender offer and may not revoke such consents without withdrawing the previously tendered Certificates or Debentures. Certificates and Debentures may not be withdrawn, nor may Consents be revoked, after the Consent Payment Deadline. Holders who validly tender their Certificates and Debentures in the tender offer shall be deemed to have delivered their consents to the Proposed Amendments by such tender with respect to the entire principal amount of Certificates and Debentures tendered in the tender offer by such holder. Consummation of the tender offer and consent solicitation, and payment of the tender offer consideration and consent payment, are subject to the satisfaction or waiver of various conditions, as described in the Offer to Purchase, including the delivery of the requisite consents to the Proposed Amendments. The company has reserved the right to amend, extend, terminate, or waive any conditions to the tender offer and consent solicitation at anytime. J.P. Morgan Securities Inc. is the sole Dealer Manager and Solicitation Agent for the tender offer and consent solicitation and may be contacted at (866) 834-4666 (toll free) or (212) 834-4077 (collect). Global Bondholder Services Corporation is the Information Agent and the Depositary for the tender offer and the consent solicitation and can be contacted at (866) 488- 1500 (toll free) or (212) 430-3774 (collect). About DaimlerChrysler AG Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA: DCX) -- 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 company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. 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. DAYTON SUPERIOR: Good Performance Prompts S&P's Positive Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Dayton Superior Corp., including its 'B-' corporate credit rating, on CreditWatch with positive implications. The company had total debt, fully adjusted for operating leases, of $363 million at March 31, 2007. "The CreditWatch listing reflects significant improvements in both the company's operating performance and credit measures over the past several quarters," said Standard & Poor's credit analyst Sean McWhorter. "These improvements are due to the combination of aggressive cost controls, meaningful debt reduction as a result of Dayton Superior's December 2006 IPO, and improvement in operating income. In addition, we expect good demand in the company's end markets to provide an operating environment whereby credit measures, specifically debt to EBITDA, will likely improve from the current level, which was still a somewhat aggressive 5.6x at March 31, 2007." In resolving the CreditWatch listing, S&P will evaluate the company's prospects for sustaining its recent operating improvements. S&P will also consider the company's financial and operating strategies, its financial policies, and our outlook for market conditions. DEEP FIELD: March 31 Balance Sheet Upside-Down by $10.3 Million --------------------------------------------------------------- Deep Field Technologies Inc. reported a net loss of $4,891,318 on net revenues of $595,270 for the first quarter ended March 31, 2007, compared with a net loss of $815,790 on net revenues of $421,325 for the same period ended March 31, 2006. The increase in net revenues was primarily due to increase of cash collections on repair services through the expansion of facilities and market penetration, in accordance with management's plan. Gross loss for the three (3) months ended March 31, 2007, was $118,775 compared with a gross loss of $99,324 for the same period in 2006, an increase of $19,451 or 20%. The increase was due to revenues being recognized upon collection while the cost of revenues was recorded as incurred. At March 31, 2007, the company's consolidated balance sheet showed $4,475,924 in total assets and $14,783,300 in total liabilities, resulting in a $10,307,376 total stockholders' deficit. The company's consolidated financial statements for the quarter ended March 31, 2007, also showed strained liquidity with $1,970,584 in total current assets available to pay $14,783,300 in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2108 Going Concern Doubt Stonefield Josephson Inc., in Hong Kong, expressed substantial doubt about Deep Field Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operations, and net working capital deficit. About Deep Field Headquartered in Fort Myers, Florida, Deep Field Technologies Inc. (OTC BB: DPFD.OB) through its 95% subsidiary, Beijing Sino-US Beijing Jinche Yingang Auto Technological Services Ltd. ("AutoMart"), a cooperative joint venture organized under the laws of The People's Republic of China, focuses on automobile after- sales services, including maintenance and repairs, insurance, parts sales, interior furnishings, care products, tires, and windshields in the People's Republic of China. DOLLAR THRIFTY: Completes $600MM Credit Facilities' Refinancing --------------------------------------------------------------- Dollar Thrifty Automotive Group Inc. closed on $600 million in new Senior Secured Credit Facilities to refinance its existing $300 million Revolving Credit Facility, pay related fees and expenses, reduce vehicle debt, and use for general corporate purposes. The new Senior Secured Credit Facilities include a $350 million Revolving Credit Facility and a $250 million Term Loan B. The $350 million Revolving Credit Facility expires in June 2013 and will be used to provide working capital borrowings and letters of credit. The company uses letters of credit to support insurance programs, asset backed vehicle financing programs and airport concession and lease agreements. The $250 million Term Loan, which will be funded immediately, expires in June 2014 and will be used to repay asset backed debt, thereby providing additional enhancement to the vehicle financing facility. The issuance of the Term Loan will allow the company greater flexibility to finance vehicle purchases from non- investment grade manufacturers and non-program vehicles. The financial impact on 2007 earnings of entering into the new Senior Secured Credit Facilities is estimated to be $0.11 per diluted share based on the higher interest costs of the new debt relative to the asset backed debt repaid, expensing unamortized deferred financing fees from the retired revolver and certain other fees. The financial impact of the new Senior Secured Credit Facilities was not included in the company's 2007 non-GAAP earnings per diluted share guidance range of $2.50 to $2.90 provided on April 26, 2007. Deutsche Bank Securities Inc. and The Bank of Nova Scotia arranged a syndicate of lenders for the new Senior Secured Credit Facilities. About Dollar Thrifty Automotive Group Headquartered in Tulsa, Oklahoma, Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) -- http://www.dtag.com/-- is a car rental service company which operates in United States and Canadian airport markets. * * * As reported in the Troubled Company Reporter on May 25, 2007, Moody's Investors Service assigned a B1 Corporate Family Rating to Dollar Thrifty Automotive Group Inc. and a B1 rating to the company's $600 million secured bank credit facility which includes a $350 million revolving credit facility and a $250 million term loan. The outlook is stable. EDUCATE INC: Moody's Puts Corporate Credit Rating at B1 ------------------------------------------------------- Moody's Investors Service assigned definitive Ba3 and B3 ratings respectively to the proposed first and second lien senior secured credit facilities of Educate, Inc. Concurrently, Moody's assigned a B1 Corporate Family Rating to Educate. On April 16, 2007, Moody's had assigned (P)Ba2 and (P)B3 ratings respectively to the proposed first and second lien senior secured credit facilities. The downgrade of the first lien facilities reflects the increase in the first lien term loan and corresponding reduction in the second lien term loan since the original proposed transaction and Moody's expectations of higher loss-given-default for the first lien facilities under the final capital structure. The $200 million first lien term loan due 2012, along with the $75 million second lien term loan due 2013 and about $240 million of sponsor equity were used to purchase the equity of the company, refinance existing debt and pay fees and expenses associated the transaction. The merger transaction received shareholder approval on June 12, 2007 and closed on June 14. The sponsors included members of management, Sterling Capital Partners and Citigroup Private Equity. Concurrently with the acquisition, the company- owned learning centers, products, Progressus and online businesses were separately sold to the sponsors. The company-owned learning centers were sold in exchange for a $50 million unsecured note. The ratings are supported by the divestiture of the company-owned centers, the financial incentives inherent in a franchise model and the resulting focus and inherent stability in Educate's retained businesses. The ratings are further supported by good interest coverage for the rating category. The ratings also reflect the geographical diversity and stability of the company's franchise revenues, strong market share, brand value, as well as high operating margins and low maintenance capital expenditures. On the Catapult Learning side, the company benefits from long-term contractual relationships with school districts and individual schools and the potential for further growth as public and non- public schools continue to outsource certain activities. The ratings are constrained by the company's relatively high initial leverage, the company's relatively small size, and the competitiveness of the pre-kindergarten through 12th-grade tutoring business, both from corporate providers and individual teachers, which places constraints on pricing and system-wide revenues. The Ba3-ratings on the first lien credit facilities, which consist of a $15 million revolver and $200 million first lien term loan B reflect Moody's expectation of loss-given-default greater or equal to 30% but less than 50%. The borrower is Educate, Inc. and the facilities are guaranteed by the parent and all material domestic subsidiaries. The B3-rating on the $75 million second lien term loan reflects Moody's expectation of loss-given-default greater or equal to 70% but less than 90%. As for the first lien facilities, the borrower is Educate Services, Inc., with parent and domestic subsidiary guarantees. Moody's took these rating actions: Educate, Inc.: * Assigned B1 Corporate Family Rating. * Assigned B1 Probability of Default Rating; * Assigned Ba3 (LGD3, 32%) to $15 million senior secured revolving credit facility due 2012; * Assigned Ba3 (LGD3, 32%) to $200 million first lien term loan B due 2013; * Assigned B3 (LGD5, 83%) to $75 million second lien term loan due 2014. The outlook for the ratings is stable. Moody's also withdrew the existing ratings of Educate, Inc. and related instrument ratings of Educate Operating Company, LLC following the repayment of the debt on June 14, 2007, as: * The B1 rated Corporate Family Rating; * The B1 Probability of Default Rating; * The Ba3 (LGD2, 24%) $30 million senior secured revolving credit facility due 2009; * The Ba3 (LGD2, 24%) $159 million senior secured term loan B due 2012. Headquartered in Baltimore, Maryland, Educate, Inc. (NASDAQ: EEEE) -- http://www.educate-inc.com/-- is a leading pre-K-12 education company delivering supplemental education services and products to students and their families. Sylvan Learning, North America's best-known and most trusted tutoring brand, operates the largest network of tutoring centers, providing supplemental, remedial and enrichment instruction. Catapult Learning, its school partnership business unit, is a leading provider of educational services to public and non-public schools. Its Educate Products business delivers educational products including the highly regarded Hooked on Phonics early reading, math and study skills programs. In its 25-year history, Educate has provided trusted, personalized instruction to millions of students improving their academic achievement and helping them experience the joy of learning. FORD MOTOR: No Results on Cerberus Talks for Premier Brands Sale ---------------------------------------------------------------- Talks between Ford Motor Company and Cerberus Capital Management on the sale of Ford's Jaguar and Land Rover brands, were inconclusive, Stephen Power of The Wall Street Journal reports citing unnamed sources. However, Ford is expecting the sale of its brands to take at least a month, citing the sale of Aston Martin, which took six months to sell, Mr. Powers writes. As reported in the Troubled Company Reporter on June 13, 2007, Ford employed help from investment banks including Goldman Sachs, HSBC and Morgan Stanley to explore the sale of its two British luxury brands. The brands, Jaguar and Land Rover, lost $12.6 billion last year, instigating Ford to initiate a strategy referred to as "Project Swift" within Ford, which is how Ford wants the sale to be. The two are part of Ford's Premier Automotive Group, including Volvo, which, as previously reported was rumored to be on possible sale. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. * * * 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. 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'. 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: Distressed Supply Base Cues Missed Targets ------------------------------------------------------ Ford Motor Co. missed its material cost-cutting target through May by 5%, blaming "distress in the supply base," The Wall Street Journal said on its Web site Monday, citing an internal report. According to WSJ, to bring costs in line with its forecast in coming months, the auto maker said it plans to negotiate price reductions with suppliers. In addition, the source says Ford continues to miss its retail market-share goals. Specifically, in May, the company's retail share, excluding fleet sales, was 10%, down 0.7 point from forecast due mainly to weakness in truck sales. Earlier, Ford and Meridian Automotive Systems signed a memorandum of understanding, outlining a framework for the sale of Automotive Components Holdings' lighting business and its Sandusky, Ohio plant. With the MOU, ACH has sold one plant and signed MOUs related to eight additional plants during the past six months. The primary product produced at the ACH Sandusky Plant is automotive lighting, including front, rear and signal lights. These products are found on a number of Ford vehicles from the Focus to the Expedition, and about 60 percent of Ford's North American vehicle production. "This announcement represents more progress with our Way Forward plan," Mark Fields, Ford's president of The Americas, said. "The successful approach Ford is taking with our component operations -- including selling or idling our ACH facilities -- will help us achieve our commitment to reduce overall operating costs by $5 billion by the end of 2008." Other ACH businesses in negotiations for final agreement and sale include glass, fascias and fuel tanks, climate control systems, propshafts, and power transfer units. The ACH fuel rail business and its El Jarudo subsidiary were sold at the end of the first quarter. Automotive Components Holdings is a temporary company managed by Ford, which was established in October 2005 with former Visteon component operations. ACH's mission is to ensure the flow of quality components and systems while preparing the ACH automotive component operations for sale or idling. Today, the $4 billion company and its 12 plants are supported by about 12,000 full-time employees, mostly leased from Visteon or Ford. The sale is contingent upon reaching a new and competitive agreement with the United Auto Workers. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. * * * 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. 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'. 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. FOUNDATION COAL: SVPs Assume New Management Restructuring Roles --------------------------------------------------------------- Foundation Coal Holdings Inc. disclosed that two of the company's senior vice presidents have been appointed to positions of increased responsibility. Under the new management restructuring, Kurt D. Kost will take on the role of executive vice president and Jim J. Bryja will assume the position of senior vice president, operations. In his new role, Mr. Kost will assume on an interim basis, oversight responsibility for the Planning and Engineering Group and will continue with duties involved in materials management, general equipment management and process improvement. Additionally, he will work closely with James F. Roberts, Foundation's chairman and chief executive officer on strategic planning initiatives and become more involved with investor related activities. Since December 2005, Mr. Kost has held the position of senior vice president, western operations and process management. He has been with Foundation Coal and affiliated companies since 1980. During his tenure with the company, he has implemented a number of continuous improvement initiatives to increase production, identify and advance cost savings, and increase supply chain efficiencies. In recent years, he has overseen Foundation Coal's Powder River Basin operations as they have increased production while maintaining an outstanding safety record. "Throughout his career, Kurt has gained the operational and organizational experience necessary to be effective in this new leadership position," Jim Roberts, chairman and CEO, said. "He has done an outstanding job leading continuous improvement initiatives and I look forward to working closely with to ensure Foundation's success." The restructuring will transition Mr. Bryja from a prior four-year post, directing eastern operations to executive oversight of Foundation's 13 affiliated mining operations located in Northern Appalachia, Central Appalachia, and Powder River Basin. As senior vice president, operations, he will direct the management of underground and surface mining production. Mr. Bryja has 25 years of experience in the coal industry and has served in various management positions within Foundation. "For nearly a decade, Jim has met each new operational responsibility with enthusiasm, even through challenging times," Jim Roberts noted. "He is an accomplished professional and has successfully led the integration of new and complex processes and technologies, including the installation of the widest longwall panels in the United States." About Foundation Coal Based in Linthicum Heights, Maryland, Foundation Coal Holdings, Inc. (NYSE:FCL) -- http://www.foundationcoal.com/-- through its affiliates is a major U.S. coal producer with 13 coal mines and related facilities in Pennsylvania, West Virginia, and Wyoming. Through its subsidiaries, Foundation Coal employs approximately 3,000 people and produces approximately 72 million tons annually, largely for utilities generating electricity. * * * As reported in the Troubled Company Reporter on Feb. 20, 2007, Standard & Poor's Rating Services revised its outlook on Foundation Coal Corp. to stable from positive. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating and 'B' senior unsecured debt rating on the company. FRIENDLY ICE: Freeze Operations Deal Cues S&P to Retain Watch ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including the 'B-' corporate credit rating, on Wilbraham- Massachusetts-based Friendly Ice Cream Corp. remain on CreditWatch with developing implications following the company's announcement that it has entered into a definitive agreement to be acquired by Freeze Operations Holding Corp., an affiliate of Sun Capital Partners Inc. in an all-cash transaction for $15.50 per share (or about $337 million). S&P believes that the transaction, if completed, will likely result in improved liquidity even though leverage would probably increase as well. If the transaction closes, S&P would likely affirm the current ratings, based on the change in liquidity. Standard & Poor's will continue to monitor developments in Friendly's sale as details of the transaction become available. GENESCO INC: Inks $1.5 Billion Merger Agreement with Finish Line ---------------------------------------------------------------- The Boards of Directors of The Finish Line, Inc. and Genesco Inc. have unanimously approved a definitive merger agreement under which The Finish Line will acquire all of the outstanding common shares of Genesco for $54.50 per share in cash. The total transaction value is approximately $1.5 billion. The offer price represents a premium of 37.7% over Genesco's three-month average undisturbed stock price ended March 9, 2007. The transaction is expected to be completed in Fall 2007. The Finish Line expects the transaction to be accretive to its net income, before consideration of incremental amortization resulting from the transaction, in the first full year after closing. The transaction enhances The Finish Line's position as a leading footwear and apparel retailer. With Genesco, The Finish Line will have strong market positions across multiple footwear and apparel categories, including athletic, sport casual, lifestyle, brown shoe and headwear. The combined company's portfolio of retail concepts will include Finish Line, Man Alive and Paiva as well as Journeys, Journeys Kids, Shi by Journeys, Underground Station, Jarman, Johnston & Murphy, Hat World, Lids, Hat Shack, Hat Zone, Head Quarters, Cap Connection and Lids Kids. In addition, the combined company's licensed and wholesale footwear and apparel business will include Johnston & Murphy and licensed brands. "This is a compelling strategic transaction that affords exciting opportunities to our shareholders, business partners and employees," Alan H. Cohen, Chief Executive Officer of The Finish Line, said. "With Genesco, we will enhance our strength in athletics and gain an immediate presence in new and growing retail categories to further diversify our business and deepen our vendor relationships. We believe the increased scale achieved through our combination will better enable us to drive strong returns in this competitive retail environment. "We have great admiration for the Genesco team and their proven record of identifying and capitalizing on new consumer trends. Their long-term success in operating under different retail banners and their industry-leading merchandising strategies will strongly complement our own initiatives," Mr. Cohen continued. "The Finish Line and Genesco share a heritage of superior service, dedication to employees and a culture of creativity. Through this combination, we ensure that these characteristics that have long distinguished our companies will continue. We welcome Genesco's management and employees to The Finish Line and are confident that they will be an important part of the combined company's success." "Following a review of our strategic alternatives, we believe that this combination is in the best interests of our shareholders," Genesco's Chief Executive Officer, Hal N. Pennington said. "We have long admired The Finish Line's entrepreneurial spirit, and believe that together we will be able to leverage the combined companies' scale and talents. In addition, Genesco and The Finish Line share similar philosophies that promote a strong team culture and the spirit of creativity. These value systems, which have long distinguished our companies, will continue to define the next chapter of our history together." Benefits of the Transaction * Increased Scale On a pro forma basis, the combined company had revenues of approximately $2.8 billion, based on the twelve months trailing as of May 31, 2007. In addition, The Finish Line will have expanded platforms for future growth with 2,870 retail stores throughout the United States, Canada and Puerto Rico. * New Growth Opportunities Already a leader in athletic footwear and apparel with its Finish Line stores, the transaction adds growing retail concepts to The Finish Line's portfolio. These include Journeys, which offers the most trend-relevant footwear and accessories for young adults, Hat World, the leading mall- based retailer of the latest team and fashion headwear, and Johnston and Murphy, the premier lifestyle brand for men. The Finish Line will also gain a presence in the growing branded and licensed wholesale business, as well as the recently launched concepts of Shi by Journeys and Lids Kids. * Broad Portfolio of Retail Businesses As a result of the combined company's multiple retail concepts and more extensive product offerings across footwear and apparel categories, The Finish Line will be able to satisfy a wider spectrum of consumers and their needs. * Cost Savings and Operational Efficiencies The transaction is expected to generate approximately $15 million to $20 million in annual cost savings beginning in the first full year of operations, including integration costs, from shared administrative services, increased scale in purchasing, marketing and advertising, and sourcing and logistics efficiencies. This transaction is about growth, and The Finish Line does not expect significant changes to the workforce. Financing The Finish Line expects the transaction to be funded through a combination of approximately $11 million in cash on hand and up to $1.6 billion in financing pursuant to a commitment provided by UBS Securities LLC, consisting of a Revolving Credit Facility, a Senior Secured Term Loan and a Senior Bridge Facility. Following the transaction, The Finish Line believes its strong cash flow from operations will allow it to reduce its net debt and fully fund its growth initiatives. Headquarters Upon the close of the transaction, Genesco will become a subsidiary of The Finish Line. The Company will be headquartered in Indianapolis, Indiana and will maintain Genesco's operations in Nashville, Tennessee. Approvals and Time to Close The transaction is subject to approval by Genesco shareholders and the satisfaction of customary closing conditions and regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction is expected to close in Fall 2007 and is not subject to any financing conditions. Advisors UBS Securities LLC served as financial advisor to the Board of Directors of The Finish Line in connection with the transaction. Peter J. Solomon Company also provided financial advisory services to the Finish Line Board, and Gibson, Dunn & Crutcher LLP is legal counsel. Goldman, Sachs & Co. served as financial advisor to Genesco, and Bass, Berry & Sims PLC is legal counsel. About Finish Line The Finish Line, Inc. (Nasdaq: FINL) - http://www.finishline.com/ -- is a mall-based specialty retailer operating under the Finish Line, Man Alive and Paiva brand names. The company currently operates 694 Finish Line stores in 47 states and online, 93 Man Alive stores in 19 states, and 15 Paiva stores in 10 states and online. About Genesco Inc. Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO) -- http://www.genesco.com/-- is a specialty retailer of footwear, headwear and accessories in more than 1,900 retail stores in the U.S. and Canada, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head Quarters and Cap Connection, and on Internet websites http://www.journeys.com/, http://www.journeyskidz.com/,http://www.undergroundstation.com/, http://www.johnstonmurphy.com/,http://www.lids.com/, http://www.hatworld.com/and http://www.lidscyo.com/. The company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services said that its ratings on specialty footwear and headwear retailer Nashville, Tennessee- based Genesco Inc. remain on CreditWatch with developing implications, following the announcement this morning that it has rejected Foot Locker Inc.'s (BB+/Watch Neg/--) conditional bid to acquire Genesco for approximately $1.3 billion ($51.00 per share) in cash. GENESCO INC: Finish Line Bid Cues S&P to Hold Developing Watch -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including the 'BB-' corporate credit rating on Genesco Inc. remain on CreditWatch with developing implications following the announcement that the company has accepted a bid from The Finish Line Inc. for approximately $1.53 billion ($54.50 per share) in cash. Standard & Poor's expects the convertible subordinated notes to be converted as they are currently deep in-the-money with an exercise price of $22.12 per share. The transaction is expected to close in fall 2007, and S&P would withdraw the rating at that time. Should the transaction not be completed, S&P would evaluate the Nashville, Tennessee-based specialty footwear and headwear retailer as it explores strategic alternatives. S&P will continue to monitor the ratings as additional information becomes available. GEORGIA-PACIFIC: Debt Levels Cue S&P to Revise Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on forest products producer Georgia-Pacific LLC to stable from positive. All ratings, including the company's 'BB-' corporate credit rating, were affirmed. "The outlook revision reflects our assessment that despite the company performing in line with our previous expectations, a higher rating is not likely to occur within our outlook time horizon," said Standard & Poor's credit analyst Pamela Rice. "Previously, a higher rating was primarily predicated on the prospects for significant debt reduction through asset-sale proceeds, which has not materialized. As a result, GP's leverage remains in-line with the current rating." GP had debt, including debt-like obligations, of $16.9 billion at March 31, 2007. Atlanta, Georgia-based GP business mix is attractive because it includes consumer products (principally paper towels, bathroom tissue, and disposable tableware), paper, packaging, and building products manufacturing. "We believe that prospects for earnings over the next year are mixed, with favorable conditions in tissue, paper, and packaging, offset by weak lumber, panel, and gypsum wallboard pricing attributable to the downturn in the housing market," Ms. Rice said. "The ratings have factored in the potential for meaningful profit enhancement over the intermediate term through various manufacturing-efficiency and cost-reduction initiatives. However, we believe the benefit of the cost savings could be partially offset by continuing pressure from fiber, energy, transportation, and resin costs." HOSPITALITY PROPERTIES: Declares Lightstone in Lease Default ------------------------------------------------------------ Hospitality Properties Trust reported that it has sent a notice of default and lease termination to Lightstone Group with respect to 18 Homestead Village hotels. In February 1999 the company purchased 18 Homestead Village hotels and leased them to a subsidiary of Homestead Village Incorporated for an initial term ending Dec. 31, 2015. At that time, Homestead was a publicly owned company with a substantial net worth, the tenant provided HPT a lease security deposit of $15.96 million and Homestead guaranteed the lease obligations to HPT. In 2001 an entity affiliated with Blackstone Group acquired Homestead; thereafter Homestead's net worth declined and Blackstone secured Homestead's guaranty obligations to HPT with a bank letter of credit for an additional $15.96 million. HPT's decision to declare a lease default and termination is based upon the facts that a Lightstone Group affiliate acquired control of the Homestead tenant on June 11, 2007, without first obtaining HPT's consent and without providing HPT with timely evidence by which HPT might reasonably determine that the tenant has a sufficient net worth, as required by the Lease. The 18 hotels which are the subject of this lease have 2,399 rooms and are located in five states. The historical minimum rent payable to HPT under this lease is $1.33 million/month. In addition, HPT receives percentage rent under this lease based upon increases in gross revenues at the leased hotels; in 2006, this percentage rent was approximately $509,000. The rent payment due June 1, 2007, while Blackstone continued to own Homestead, was timely paid; and HPT continues to hold a security deposit equal to $15.96 million and a bank letter of credit to secure the lease guaranty for an additional $15.96 million. About Hospitality Properties Hospitality Properties Trust (NYSE: HPT) -- http://www.hptreit.com/-- is a real estate investment trust, which owns 310 hotels and 186 travel centers located throughout the United States, Ontario, Canada and Puerto Rico. The company does not operate hotels or travel centers. Instead, all of its properties are operated by unaffiliated hospitality management companies as part of 12 combination management or lease agreements. * * * As reported in the Troubled Company Reporter on Feb. 20, 2007, Standard & Poor's Ratings Services assigned its 'BB+' rating to Hospitality Properties' $300 million series C cumulative redeemable perpetual preferred share issue. Net of fees and expenses, HPT expects proceeds of $290 million to be used to partially fund the company's January 2007 purchase of TravelCenters of America Inc. ICONIX BRAND: S&P Rates $250 Million Senior Notes at B- ------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on apparel brand manager and licensor Iconix Brand Group Inc. to negative. "The outlook revision reflects the company's more aggressive financial policy," said Standard & Poor's credit analyst Susan Ding. At the same time, Standard & Poor's assigned its 'B-' debt rating to Iconix's proposed $250 million convertible senior subordinated notes due 2012. The notes are being offered pursuant to Rule 144A with registration rights under the Securities Act of 1933. Proceeds from the note issuance will be used for general corporate purposes, to invest in and acquire new brands, and for fees and expenses related to this transaction. The rating is based on preliminary terms and subject to review upon receipt of final documentation. Also, Standard & Poor's affirmed its existing ratings on Iconix, including the 'B+' corporate credit rating. Total debt outstanding at March 31, 2007, was $346 million. Pro forma for the transaction, S&P estimates total debt to be about $571 million. The ratings on New York-based Iconix reflect its participation in the highly competitive and volatile fashion apparel industry, a high degree of licensing contract renewal risk (a substantial portion of contracts were acquired within the last 12 months), an aggressive acquisition strategy, and ownership of some brands that require revitalization. The ratings also incorporate the lack of track record under Iconix's relatively new brand management. Partially offsetting these factors is the diversity and strong recognition of the brands, and the company's strong royalty streams. INTERTAPE POLYMER: Plan of Arrangement Gets Advisory Firms' Votes ----------------------------------------------------------------- Intertape Polymer Group Inc. disclosed that both Institutional Shareholder Services Canada Corp. and Glass Lewis & Co., independent proxy advisory services firms, have each issued reports recommending that the company's shareholders vote in favor of the proposed plan of arrangement involving the company and an indirect wholly-owned subsidiary of Littlejohn Fund III L.P., pursuant to which all of the outstanding common shares of the company will be acquired at a price of $4.76 per share in cash. The company's notice of Annual and Special Meeting was mailed to shareholders of record as of May 25, 2007. The Annual and Special Meeting of shareholders will be held at 4:00 PM, Montreal time, on June 26, 2007, at the Hotel Omni Mount Royal, Montreal, Quebec. Shareholders voting by proxies should ensure that the completed forms of proxy are received at the office of the company's Canadian transfer agent, CIBC Mellon Trust Company, 2001 University Street, 16th Floor, Montreal, Quebec, Canada, H3A 2A6, by 4:00 p.m., Montreal time, on June 21, 2007. This will ensure that proxies are recognized at the Meeting. Shareholders who have questions about the information contained in the circular or require assistance in completing the proxy should contact Georgeson at its North America toll free number of 1-866- 717-7668. Headquartered in Quebec, Canada, Intertape Polymer Group (TSX: ITP) (NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the company employs about 2450 employees with operations in 18 locations, including 13 manufacturing facilities in North America, one in Europe and in Mexico. * * * Intertape Polymer Group, Inc. carries Standard & Poor's Ratings' 'B-' corporate credit and senior secured ratings. In addition, the company also carries Standard & Poor's 'CCC' senior subordinated rating. INTERTAPE POLYMER: Plan of Arrangement Gets Snub by 6789536 Canada ------------------------------------------------------------------ Intertape Polymer Group Inc. reported that 6789536 Canada Inc. has filed a dissident proxy circular in connection with the company's annual and special meeting of shareholders, which will be held on June 26, 2007. 6789536 Canada Inc. solicited proxies to vote against Intertape Polymer's Plan of Arrangement and for the election of six alternate nominees to the board of directors at the shareholders' meeting. The six alternate nominees for election as directors of Intertape Polymer Group Inc. are Eric E. Baker, president of Altacap Investors Inc., Allan Cohen, managing director, First Analysis Corp., George J. Bunze, vice-chairman, Kruger Inc., Stephane Lebrun, Investment Analyst, Letko, Brosseau & Associates Inc., Torsten A. Schermer, president, MESC Corporation, and Melbourne F. Yull, former chief executive officer of Intertape Polymer. 6789536 Canada Inc. is opposed to the Plan of Arrangement primarily because it undervalues Intertape Polymer and is opportunistic for the purchaser. Among the measures that the six nominees intend to take, if elected to the board of directors of Intertape Polymer, are: a) the immediate appointment of Melbourne Yull as executive chairman of Intertape Polymer, for a period of three to six months; b) the selection and appointment of a new chief executive officer of Intertape Polymer within 90 to 180 days, a review of the financing needs of Intertape Polymer and the options open to it; and c) if necessary, raising capital for Intertape Polymer. 6789536 Canada Inc. was recently incorporated for purposes of this proxy solicitation. The executive officers of 6789536 Canada Inc. are Eric E. Baker and Christopher J. Winn of Altacap Investors Inc. About Intertape Polymer Group Headquartered in Quebec, Canada, Intertape Polymer Group (TSX: ITP) (NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the company employs about 2450 employees with operations in 18 locations, including 13 manufacturing facilities in North America, one in Europe and in Mexico. * * * Intertape Polymer Group, Inc. carries Standard & Poor's Ratings' 'B-' corporate credit and senior secured ratings. In addition, the company also carries Standard & Poor's 'CCC' senior subordinated rating. INVERNESS MEDICAL: Moody's Rates $1.05 Billion Loan at B1 --------------------------------------------------------- Moody's Investors Service assigned B1 ratings to Inverness Medical Innovations, Inc. $150 million senior secured revolver due 2013 and $900 million senior secured term loan due 2014. Additionally, Moody's assigned a Caa1 rating to Inverness Medical's $250 million second lien term loan due 2015. Concurrently, Moody's confirmed the B2 corporate family rating, B2 probability of default rating and Caa1 rating on the existing $150 million Senior Subordinated Notes due 2012. This rating action concludes the review initiated on April 26, 2007 when Inverness Medical announced that it had entered into an initial definitive agreement to acquire Biosite Incorporated for approximately $90 per share. Subsequent to the initial agreement, Inverness Medical increased its offer for Biosite to $92.50 per share on May 17, 2007. The conclusion of the review anticipates that Inverness Medical will successfully complete the tender offer for Biosite. The rating outlook is revised to stable. Proceeds from both the first lien and second lien credit facilities along with proceeds from a recent issuance of Convertible Subordinated Notes and cash will be used to finance the pending merger with Biosite, refinance existing indebtedness and to pay related transaction fees and expenses. The transaction is expected to be completed in July 2007. Recently, Inverness Medical entered into a definitive merger agreement with Cholestech Corporation, a provider of diagnostic equipment for the monitoring of heart disease and inflammatory disorders. Under the agreement, Inverness Medical will acquire Cholestech in a stock for stock merger at a fixed exchange ratio of 0.43642 shares of Inverness Medical common stock. The merger is conditioned upon approval by Cholestech's shareholders as well as the satisfaction of regulatory and other customary conditions. The transaction is expected to be completed in the third quarter of 2007. Inverness Medical's B2 ratings reflect the application of Moody's Global Medical Device rating methodology. Using an average of the 12 factors specified in the methodology, Inverness Medical's "methodology-implied" rating is approximately "B1" based on pro forma financial data through March 31, 2007. Very favorable scores on concentration by top customer segment are offset by reliance on acquisitions, share buybacks and dividends, free cash flow to adjusted debt, and adjusted debt to EBITDA. Moody's does not anticipate that the company will engage in share buybacks or initiate a dividend over the intermediate term. The B2 Corporate Family Rating considers the highly leveraged position, acquisitive nature of the company and integration risk associated with two concurrent material acquisitions. Pro forma for the increased debt resulting from the new credit facility, the company's adjusted debt to EBITDA was above 5.5 times for the twelve months ended March 31, 2007. Moody's expects that the company's adjusted debt to EBITDA will improve over the next 18 months resulting from increased operating performance and voluntary repayments of the term loan, which would compare favorably to the B2 rating category. Over the past three years, the company has embarked on seven acquisitions with total cash consideration in excess of $350 million. Sidney Matti, Analyst at Moody's, stated that, "The company has successfully integrated several acquisitions over the past few years, but the integration of two major acquisitions within six months could distract management's focus over the intermediate term." The stable ratings outlook anticipates an improvement in the company's operating performance driven by an increase in the diagnostic tools market and cost synergies realized from the acquisition of Biosite and Cholestech. The outlook also reflects the belief that the company will not increase its debt materially over the near term. These ratings were assigned: -- B1 (LGD3/34%) rating on a $150 million Senior Secured Revolver due 2013; -- B1 (LGD3/34%) rating on a $900 million Senior Secured Term Loan due 2014; and -- Caa1 (LGD5/82%) rating on a $250 million Second Lien Term Loan due 2015. These ratings were confirmed: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; and -- Caa1 (LGD5/82%) rating on $150 million Senior Subordinated Notes due 2012. Once the existing senior subordinated notes have been redeemed, Moody's will withdraw the rating on those notes. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations, Inc. (AMEX:IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. ITC DELTACOM: March 31 Balance Sheet Upside-Down by $107.8 Million ------------------------------------------------------------------ ITC DeltaCom Inc. reported that at March 31, 2007, its balance sheet showed total stockholders' deficit of $107.8 million, from total assets of $420.7 million and total liabilities of $528.5 million. The company's March 31 balance sheet also showed strained liquidity with total current assets of $130.4 million and total current liabilities of $112 million. Total operating revenues increased $1.9 million, or 1.6%, to $121.8 million for the three months ended March 31, 2007, from $119.9 million for the three months ended March 31, 2006. The company recorded a net loss of $15.3 million for the quarter ended March 31, 2007, as compared with a net loss of $14.9 million for the quarter ended March 31, 2006. Liquidity and Capital Resources During the 2007 and 2006 quarters, the company funded its operating and capital requirements and other cash needs through cash from operations and cash on hand. As of March 31, 2007, the company held $60.7 million in cash and cash equivalents. Cash provided by operating activities was $6.4 million in the 2007 quarter and cash used in operating activities were $699,000 in the 2006 quarter. Changes in working capital were $1.3 million in the 2007 quarter and $4.5 million in the 2006 quarter. The decrease in working capital in the 2007 quarter resulted primarily from an increase of $1.8 million in prepaid expenses, a reduction of $645,000 in trade accounts payable, and a reduction of $1.3 million in accrued liabilities, which were offset by a reduction of $1.3 million in inventory, a reduction of $381,000 in accounts receivable and an increase of $747,000 in unearned revenue. A full-text copy of the company's first quarter report is available for free at http://ResearchArchives.com/t/s?210a About ITC DeltaCom ITC DeltaCom Inc. in Hunstville, Alabama (OTC BB: ITCD) -- http://www.itcdeltacom.com-- provides integrated communications services in the southeastern United States. The company delivers a comprehensive suite of high-quality voice and data telecommunications services, including local exchange, long distance, high-speed or broadband data communications, and Internet connectivity, and sells customer premise equipment to the company's end-user customers. ITC DELTACOM: H Partners Questions Recapitalization Plan -------------------------------------------------------- ITC DeltaCom Inc.'s board of directors were issued a letter by H Partners Capital LLC in which it questions ITC DeltaCom's rationale for a recapitalization plan it disclosed on June 11, 2007. H Partners believes that the recapitalization plan disenfranchises minority shareholders and allows insiders and other parties to profit at their expense. In the letter, H Partners demands that the ITC board immediately cease and desist any further action to pursue or consummate the recapitalization, contending that the board failed in its fiduciary duties and is allowing ITC to unfairly gift equity value to controlling shareholders Welsh Carson and Tennenbaum Capital Partners, as well as the underwriter of the transaction, Credit Suisse. H Partners also notes that the company has not provided any reasonable explanation for the recapitalization plan other than a supposed need to "make our balance sheet more transparent." H Partners disclosed in a Schedule 13D filed with the Securities and Exchange Commission that it beneficially owns about 6.4% of ITC Deltacom, or about 1.2 million shares. Rehan Jaffer of H Partners, said, "ITC's refinancing efforts are unfair to minority shareholders by providing certain insiders stock sales at severely discounted prices. We believe that the recapitalization is unwarranted, not based on market terms, and extremely prejudicial towards minority shareholders. H Partners strongly opposes this recapitalization and will exercise our legal rights against the Board, Welsh Carson and all other parties participating in it if action is not taken to cease the program immediately." Refinancing Plan On June 11, 2007, ITC DeltaCom said it received commitments for debt and equity financing intended to deleverage its balance sheet, simplify its capital structure, and enhance its liquidity profile. The committed refinancing includes commitments from: (i) affiliates of Credit Suisse to provide $240 million of first lien credit facilities and to purchase $29 million of common stock; (ii) from investment funds associated with Tennenbaum Capital Partners LLC, a current lender, to provide a $75 million second lien credit facility and to exchange $25 million of third lien debt and all preferred shares and warrants held by them for common stock; and (iii) from investment funds associated with Welsh, Carson, Anderson & Stowe, the company's majority shareholder and a current lender, to purchase $21 million of common stock and to exchange $23.5 million of third lien debt and all preferred shares and warrants held by them for common stock. In addition, the company said that it intends to exchange common stock for its other closely held outstanding series of preferred shares. The net effect of the transactions will be to completely refinance the company's outstanding debt and eliminate three series of preferred stock and related warrants, leaving the company with $305 million of first and second lien funded debt, a $10 million undrawn revolver, about 81 million shares of common stock outstanding on a fully diluted basis, and cash on hand of about $50 million. The transactions were approved by a committee of independent directors with the assistance of independent legal and investment advisors because of the participation of Welsh Carson and Tennenbaum. The completion of each of these financing transactions is conditioned on the completion of the others as well as other customary financing conditions. Subject to the satisfaction of these conditions, the company currently expects it will close the transactions early in the third quarter of 2007. Miller Buckfire & Co., LLC acted as the company's financial advisor on this transaction. "When consummated, the transactions will significantly reduce the company's outstanding debt, lower our cost of capital, position the company to seek re-listing on the NASDAQ, and make our balance sheet more transparent by eliminating the confusing overhang of convertible preferred shares and warrants," said Randall E. Curran, ITC DeltaCom's chief executive officer. "We are particularly gratified that our long term investors were willing to invest additional capital and convert their debt and preferred equity positions to common equity." About H Partners H Partners Capital LLC is an independent investment management firm based in New York. About ITC DeltaCom ITC DeltaCom Inc. in Hunstville, Alabama (OTC BB: ITCD) -- http://www.itcdeltacom.com-- provides integrated communications services in the southeastern United States. The company delivers a comprehensive suite of high-quality voice and data telecommunications services, including local exchange, long distance, high-speed or broadband data communications, and Internet connectivity, and sells customer premise equipment to the company's end-user customers. At March 31, 2007, the company's balance sheet showed total stockholders' deficit of $107.8 million, from total assets of $420.7 million and total liabilities of $528.5 million. JEAN COUTU: Debt Repayment Prompts S&P to Withdraw Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'B+' long-term corporate credit rating, on Montreal, Quebec- based Jean Coutu Group (PJC) Inc., following the repayment of its debt. The repayments follow the company's sale of its Brooks and Eckerd stores and distribution centers to Rite Aid Corp. (B/Stable/--) for approximately $4 billion. LAZARD GROUP: Moody's Rates $500 Million Senior Note at Ba1 ----------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the ten year $500 million senior note issued by Lazard Group LLC. The proceeds of the issue will be used for general corporate purposes including financing potential acquisitions. Moody's also affirmed Lazard's Ba1 rating on its outstanding rated senior unsecured debt. Lazard's positive outlook, which was assigned March 19, 2007, was also affirmed. The rating agency said that prospects for a future upgrade will depend most importantly on the financial policy of the firm. "As Lazard's businesses are naturally low in capital intensity," said Moody's Senior Vice President Peter Nerby, "the amount of leverage the firm maintains is primarily a management decision". Moody's will evaluate Lazard's financial policy for financing acquisitions and its tolerance for leverage, particularly relating to cash flow leverage measures such as Debt/EBITDA and interest coverage. Achieving and maintaining a Debt/EBITDA ratio of 2.5x remains an important milestone for considering an upgrade. This rating was assigned to the senior note issuance of Lazard Group LLC: * $500 million Senior Notes due June 2017 -- Ba1 Lazard Group LLC is a holding company that owns the advisory and money management operations of Lazard. The public parent of Lazard Group LLC, Lazard Ltd, reported $78 million in operating income in 1Q07. LJVH HOLDINGS: S&P Rates Planned $300 MIllion Facility at BB- ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to British Columbia-based LJVH Holdings Inc., which is the parent company of operating entity Van Houtte Inc., a Quebec-based manufacturer and distributor of gourmet coffee. At the same time, Standard & Poor's assigned its 'BB-' senior secured bank loan rating, with a recovery rating of '1', to the company's planned $300 million first-lien bank facility. The '1' recovery rating indicates an expectation of very high (90%-100%) recovery of principal in the event of a payment default. S&P also assigned a 'CCC+' senior secured bank loan rating, with a recovery rating of '6', to LJVH Holdings' planned $125 million second-lien bank facility. The '6' recovery rating indicates an expectation of negligible (0%-10%) recovery of principal in the event of a payment default. The outlook is stable. The corporate credit rating assignment follows Standard & Poor's analysis of Greenwich, Connecticut-based private equity sponsor Littlejohn & Co. LLC's proposed acquisition of Van Houtte in a going-private transaction. Proceeds from the bank facilities will help fund the Van Houtte purchase. The sponsor and certain co- investors, including Fonds de Solidarite des Travailleurs du Quebec, will contribute about CDN$200 million of preferred stock toward the purchase. "The ratings on LJVH Holdings reflect its highly leveraged financial risk profile, narrow product portfolio, susceptibility to coffee bean price fluctuations, and relatively small presence in the highly competitive U.S. coffee market," said Standard & Poor's credit analyst Lori Harris. "These factors are partially offset by Van Houtte's solid brand equity, operating margin, and market position in gourmet coffee distribution in Canada," Ms. Harris added. Van Houtte distributes gourmet coffee across Canada and the U.S. through retail stores and coffee services (the latter supplies coffee to business offices and other public places). The outlook is stable and we expect LJVH Holdings' operating performance to remain stable in the medium term, driven by its good market position in gourmet coffee sales in both retail and coffee services. S&P could revise the outlook to positive if the company demonstrates a financial policy consistent with a higher rating and reduces its debt leverage materially through sustainable earnings growth and debt reduction. S&P would consider revising the outlook to negative if the company's financial performance or liquidity weakened and it was unable to reduce leverage as planned. LONE STAR: U.S. Steel Completes $2.1 Billion Buyout --------------------------------------------------- United States Steel Corporation disclosed that it has completed the acquisition of Lone Star Technologies Inc. The aggregate purchase price is approximately $2.1 billion, which U. S. Steel financed through a combination of cash on hand and financing under its existing receivables program, new bank facilities and a portion of the proceeds of its recent offering of $1.1 billion in senior unsecured notes. "This acquisition expands the company's tubular product offerings, its production capacity and its geographic footprint," John P. Surma, U. S. Steel chairman and CEO said. "The company welcomes Lone Star's employees, customers and communities to the U. S. Steel family." U. S. Steel plans to combine the operations of Lone Star with U. S. Steel's Tubular Division under the leadership of Joseph Alvarado, who served as president and chief operating officer of Lone Star. Mr. Alvarado has been named vice president-tubular operations of U. S. Steel. Lone Star shareholders will receive $67.50 in cash for each issued and outstanding share of Lone Star. U. S. Steel has appointed Mellon Investor Services LLC as paying agent for this transaction. Lone Star shareholders of record will be receiving a letter of transmittal and other instructions from Mellon and should submit their share certificates in accordance with the instructions. Lone Star shareholders who hold their stock through a broker, bank or other nominee should contact their broker, bank or other nominee concerning receipt of payment for their shares. About United States Steel Corporation United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. An integrated steelmaker uses iron ore and coke as primary raw materials for steel production, and U. S. Steel has annual raw steel production capability of 19.4 million tons in the United States and 7.4 million tons in Central Europe. The company manufactures a wide range of value-added steel products for the automotive, appliance, container, industrial machinery, construction and oil and gas industries. U.S. Steel's integrated steel facilities include Gary Works in Gary, Ind.; Great Lakes Works in Ecorse and River Rouge, Mich.; Mon Valley Works, which includes the Edgar Thomson Plant and the Irvin Plant near Pittsburgh, Pa., and the Fairless Plant near Philadelphia, Pa.; Granite City Works in Granite City, Ill.; Fairfield Works in Fairfield, Ala.; U. S. Steel Kosice in the Slovak Republic; and U.S. Steel Serbia. U.S. Steel also operates finishing facilities at the Midwest Plant in Portage, Ind., East Chicago Tin in Indiana, and Lorain Tubular Operations in Lorain, Ohio, and is involved in several steel finishing joint ventures. U.S. Steel produces coke at Clairton Works near Pittsburgh and at Gary Works and Granite City Works. The company operates two iron ore mines through its Minnesota Ore Operations on the Mesabi Iron Range in northern Minnesota, one in Mt. Iron and one in Keewatin. In addition, U. S. Steel is involved in transportation services (railroad and barge operations) and real estate operations. About Lone Star Technologies Lone Star Technologies, Inc. (NYSE: LSS) is a $1.4 billion holding company whose principal operating subsidiaries manufacture and market oilfield casing, tubing and line pipe, specialty tubing products, including finned tubes used in a variety of heat recovery applications, and flat rolled steel and other tubular products and services. LONE STAR: U.S. Steel Buyout Completion Cues S&P to Lift Rating --------------------------------------------------------------- Standard & Poor's Rating Service raised its corporate credit rating on Lone Star Technologies Inc. to 'BB+' from 'BB-' following the successful completion of the company's acquisition by United States Steel Corp. (BB+/Stable/--) to acquire Lone Star in a transaction valued at $2.1 billion. In addition, all Lone Star ratings were removed from CreditWatch, where they were placed with positive implications on March 29, 2007. The outlook is stable. "With the acquisition successfully completed, we plan to withdraw our ratings on Lone Star," said Standard & Poor's credit analyst Thomas Watters. MAGNUM COAL: S&P Rates $350 Million Senior Secured Notes at B- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to coal producer Magnum Coal Co. of Beaver, West Virginia. The outlook is stable. At the same time, Standard & Poor's assigned its 'B-' senior secured rating and its '4' recovery rating to Magnum Coal's proposed $350 million senior secured notes due 2014, based on preliminary terms and conditions. Net proceeds from the offering, along with full availability under a $50 million revolving credit facility (not rated) and a $50 million pre-funded synthetic letter of credit, will be used to refinance $198.5 million of outstanding borrowings under the existing $200 million Term Loan B facility; $20 million of borrowings under the existing revolving credit facility; and $50 million of borrowings outstanding under an existing synthetic letter of credit. The proceeds will also be used to pre-fund an additional $25 million letter of credit Magnum expects to need by year end. The remaining proceeds will fund future capital expenditures and pay fees and expenses. "We expect coal markets to remain favorable in the intermediate term, but we could revise the outlook to negative if Magnum does not permanently resolve the difficulties at its key Panther mine or if there are further operating disruptions," said Standard & Poor's credit analyst Thomas Watters. "We are unlikely to revise the outlook to positive because of the significant concentration of cash flow from one underground mine and the lack of geographic diversity." Magnum produced and sold about 18 million tons of coal in 2006. The proposed $350 million senior secured notes are rated 'B-'(the same as the corporate credit rating) with a recovery rating of '4', indicating an average (30% to 50%) expectation for full recovery of principal in the event of a payment default. MAIDENFORM BRANDS: Completes Existing Credit Facility Refinancing ----------------------------------------------------------------- Maidenform Brands Inc. completed the refinancing of its existing credit facility with a new $150 million credit facility, reflecting a reduction of total debt outstanding of $10 million since the end of the first quarter of 2007. The new credit facility includes a 7-year term loan of $100 million and 5-year revolving line of credit of $50 million. Interest rates are determined on a pricing grid based on Maidenform's total debt to EBITDA ratio. Borrowings under this new facility can be either at prime rate or at LIBOR plus a premium. The initial LIBOR rate will include a premium of 1.25% with further reductions available upon the achievement of certain financial ratios. "The company is pleased with the terms of its new credit facility, which reflects the lending community's confidence in Maidenform's strengthening financial performance, well as in strategic growth and cost management plans going forward," Dorvin Lively, executive vice president and chief financial officer of Maidenform, stated. "In addition to expanding the maturity dates of the company's revolver and Term Loan and providing flexibility for expanding the credit facility, this new facility will reduce its annual interest expense." Caisse de depot et placement du Quebec is the sole lead arranger and Bank of America, N.A. is a joint lender and administrative agent for the new credit facility. About Maidenform Brands Maidenform Brands Inc. is an intimate apparel company with a portfolio of established and well-known brands, top-selling products and an iconic heritage. Maidenform designs, sources and markets an extensive range of intimate apparel products, including bras, panties and shapewear. During the company's 85-year history, Maidenform has built strong equity for its brands and established a solid growth platform through a combination of innovative, first-to-market designs and creative advertising campaigns focused on increasing brand awareness with generations of women. Maidenform sells its products under some of the most recognized brands in the intimate apparel industry, including Maidenform(R), Flexees(R), Lilyette(R), Sweet Nothings(R), Rendezvous(R), Subtract(R), Bodymates(R) and Self Expressions(R). Maidenform products are currently distributed in approximately 55 countries and territories. * * * As reported in the Troubled Company Reporter on Jan. 16, 2007, Standard & Poor's Ratings Services revised its rating outlook on Bayonne, New Jersey-based intimate apparel designer and marketer Maidenform Brands Inc. to positive from stable. Ratings on the company, including the 'B+' corporate credit rating, were affirmed. MAJESCO ENT: Posts $1.3 Million Net Loss in Quarter Ended April 30 ------------------------------------------------------------------ Majesco Entertainment Company financial results for its second quarter and six months ended April 30, 2007. Net revenue was $14.6 million for the second quarter ended April 30, 2007, compared to net revenue of $11.2 million for the second quarter ended April 30, 2006. Net loss was $1.3 million, compared to second quarter 2006 net income of $839,000. Net revenue was comprised 84% from new releases and 16% from catalog. About 62% of net revenue was from sales of games for console systems including 55% contributed from the Wii. About 37% of net sales was from games for handheld systems including 33% contributed from games developed for the DS. Gross margin increased to 42%, compared to 31%. Including the aforementioned litigation charges, to the operating loss was $868,000. This compares to second quarter 2006 operating income of $1.4 million. Half-Year 2007 Results Net revenue was $29.1 million, compared to $32.8 million. Net loss was $2.3 million, compared to a net loss of $1.7 million. Net revenue was comprised 65% from new releases and 23% from catalog. Thirty-seven percent of net revenue was from sales of games for console systems including 27% generated by sales of games for the Wii. Forty-nine percent of net revenue was from games for handheld systems including 42% generated by games for the DS. Operating loss was $1.1 million, compared to an operating loss of $761,000. Balance Sheet Data and Liquidity As of April 30, 2007, the company's balance sheet showed total assets of $13 million, total liabilities of $12.6 million, resulting in a total stockholders' equity of $443,000. The company had strained liquidity as of April 30, 2007, with total current assets of $12.3 million and total current liabilities of $12.6 million. At April 30, 2007, the company had cash and cash equivalents of $4.2 million. A full-text copy of the company's second quarter 2007 report is available for free at http://ResearchArchives.com/t/s?2106 Jesse Sutton, Majesco's interim chief executive officer, said, "We have met our goals for the quarter and delivered solid financial results by executing our strategy to further penetrate the mass market, strengthen our international distribution, leverage licensing and development relationships, improve gross margins, and continue to reduce costs. In addition, we have made progress related to our class action law suit and reached a tentative understanding on settlement terms. We look forward to putting this situation behind us and we believe that the settlement, if consummated, will have no effect on the company's ongoing operations." Sutton continued saying, "During the quarter, we launched our first two games for the Nintendo Wii(TM) as well as three DS(TM) titles, which drove net revenue growth of 30 percent compared to last year. Also, we signed a new agreement with Eidos Interactive to distribute a number of Majesco titles to the PAL territories. This partnership, which will commence in the third quarter, aligns our international distribution network with our mass market strategy." Outlook The company reaffirms its 2007 fiscal net revenue guidance and continues to expect its 2007 net revenue to decline about 10% to 15%, compared to fiscal 2006 net revenue of $66.7 million. In addition, the company expects 65% to 70% of its net revenue to be generated from its new releases, 20% to 25% from its catalog sales and the balance from its other digital entertainment products. About Majesco Entertainment Headquartered in Edison, NJ, Majesco Entertainment Co. (NASDAQ: COOL) -- http://www.majescoentertainment.com/-- provides digital entertainment products and content, with a focus on publishing video games for leading portable systems and the Wii(TM) console. Current product line highlights include Cooking Mama for the Nintendo DS(TM), Bust-A-Move Bash! for the Wii(TM) console and JAWS(TM) Unleashed, as well as digital entertainment products like Strawberry Shortcake(TM) Dance Dance Revolution(R). * * * As reported in the Troubled Company Reporter on Feb. 7, 2007, Goldstein Golub Kessler LLP in New York expressed substantial doubt about Majesco Entertainment Co.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Oct. 31, 2006, and 2005. The auditing firm pointed to the company's net losses. MORRIS PUBLISHING: Low 1Q Results Cue S&P to Cut Rating to BB- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Morris Publishing Group LLC to 'BB-' from 'BB' and its subordinated debt rating to 'B' from 'B+'. At the same time, Standard & Poor's affirmed its rating on the company's secured debt at 'BB+' (two notches higher than the corporate credit rating); the recovery rating on this debt remains unchanged at '1', indicating the expectation for very high (90%- 100%) recovery in the event of a payment default. The corporate credit rating and issue level ratings were removed from CreditWatch, where they were placed with negative implications May 10, 2007. The outlook is negative. "The downgrade follows our review of Morris Publishing's lower- than-expected first-quarter operating results at a time when the company's financial profile was already weak for the rating," explained Standard & Poor's credit analyst Peggy Hebard. Revenues and EBITDA in the first quarter ended March 31, 2007 declined 5.4% and 30.7%, respectively. A big portion of this decline resulted from weakness at the company's Jacksonville, Florida newspaper, which represents approximately one-third of total revenues. During the first quarter, the Jacksonville newspaper's classified advertising revenues were down 22.7%, with large declines in real estate and employment run of print. With weakness in Jacksonville expected to continue into the second and third quarters of fiscal 2007, S&P believes that the company's financial profile will remain weak even for the 'BB-' rating over the near term. The rating on Morris Publishing is based on the consolidated credit quality of Morris Communications Co. LLC and its restricted subsidiaries, which guarantee Morris Publishing's senior secured credit facilities. Morris Publishing accounts for the majority of Morris Communications' revenues and cash flow. In addition to Morris Publishing, other restricted subsidiaries are involved in outdoor advertising and radio broadcasting, as well as magazine, book, and specialty publishing. The 'BB-' rating reflects Morris' significant consolidated debt levels, moderate-size cash flow base, and a concentration of revenues and cash flow at its largest newspaper in Jacksonville. In addition, the company continues to face some challenging business conditions, including an uneven newspaper revenue environment. These factors are tempered by strong and geographically diverse newspaper market positions, as well as some business diversity provided by the non-newspaper units, particularly outdoor advertising. Newspaper operations, which include 27 daily newspapers, are located primarily in small and midsize communities located in Florida, Georgia, Texas, Kansas, Nebraska, Oklahoma, Michigan, Missouri, Alaska, Arkansas, South Dakota, Tennessee, and South Carolina, where there is generally no meaningful competition from other newspapers. MYRNA SEGUNDO: Case Summary & Eight Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Myrna Acenas Segundo 341 Molokai Akau Street Kahului, HI 96732 Bankruptcy Case No.: 07-00616 Chapter 11 Petition Date: June 14, 2007 Court: District of Hawaii (Honolulu) Judge: Robert J. Faris Debtor's Counsel: Ramon J. Ferrer, Esq. 135 South Wakea Avenue, Suite 212 Kahului, HI 96732 Tel: (808) 877-3682 Fax: (808) 871-9557 Total Assets: $4,117,350 Total Debts: $3,400,000 Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutshce Bank National first mortgage $585,000 Trust Co. property c/o Washington Mutual Bank 9451 Corbin Avenue Northridge, CA 91324 Bayview Loan Servicing, first mortgage $570,000 L.L.C. property 4425 Ponce Road Coral Gables, FL 33146 G.R.P. Loan, L.L.C. first mortgage $570,000 445 Hamilton Avenue, property 8th Floor White Plains, NY 10601 Ronald H.B. and second mortgage $400,000 Connie Kim property c/o Joy Yanagida, Esq. 33 Maluhia Drive, Suite 201 Wailuku, HI 96793 Ocwen Federal Bank, second mortgage $142,000 F.S.B. Washington Mutual Bank second mortgage $72,500 property NAVISTAR INT'L: Operating Unit Inks $200 Million Credit Facility ---------------------------------------------------------------- Navistar International Corporation disclosed that International Truck & Engine Corporation, its principal operating subsidiary, signed a definitive loan agreement relating to a five-year senior inventory secured, asset-based revolving credit facility in an aggregate principal amount of $200 million. The facility is secured by domestic manufacturing plant and service parts inventory well as used truck inventory. The facility was arranged by Credit Suisse, Bank of America, N.A. and JPMorgan Chase Bank, N.A. Credit Suisse is the lead arranger and Bank of America is the collateral agent. The new loan facility matures in June 2012. All borrowings under the new loan facility will accrue interest at a rate equal to a base rate or an adjusted LIBOR rate plus a spread. The spread, which will be based on an availability-based measure, ranges from 125 basis points to 175 basis points for LIBOR borrowings. The initial LIBOR spread is 150 basis points. Borrowings under the facility are available for general corporate purposes. Based in Warrenville, Illinois, Navistar International Corp. (NYSE:NAV) -- http://www.nav-international.com/-- is the parent company of Navistar Financial Corp. and International Truck and Engine Corp. The company produces International brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV market. The company also provides truck and diesel engine parts and service sold under the International brand. A wholly owned subsidiary offers financing services. * * * As reported in the Troubled Company Reporter on May 8, 2007, Fitch Ratings retained Navistar International Corp.'s BB- Issuer Default Rating and BB- senior unsecured bank facility rating under Rating Watch Negative. NEW EAST HOSPITALITY: Case Summary & 16 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: New East Hospitality, L.L.C. 59 Beachwood Avenue Edison, NJ 08837 Bankruptcy Case No.: 07-18549 Chapter 11 Petition Date: June 18, 2007 Court: District of New Jersey (Trenton) Debtor's Counsel: Justin M. Gillman, Esq. 770 Amboy Avenue Edison, NJ 08837 Tel: (732) 661-1664 Fax: (732) 661-1707 Estimated Assets: Less than 10,000 Estimated Debts: $1 Million to $100 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Crown Bank $1,458,011 c/o New East Hospitality, L.L.C., et als. 202 Carnegie Center CN 5226 Princeton, NJ 08543-5226 East Orange Tax Collector $400,000 44 City Hall Plaza East Orange, NJ 07019 Bureau of Housing $148,167 Inspection 101 South Broad Street Trenton, NJ 08625 Verndale Avent $127,388 State of New Jersey $43,600 Division of Codes and Standards State of New Jersey $34,083 New Jersey Division of $22,938 Taxation State of New Jersey $13,300 Department of Community Affairs, Division of Fire Safety New York Elevator $6,081 Home Depot Credit Services $5,738 Hardy Martin $5,174 Bank of America $3,594 Pius C. Ike $1,395 East Orange Water Commission $912 Annie James $653 Colony Insurance Company $540 NEW WORD: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: New Word of Faith Church Corp. 926 Hearst Street Berkeley, CA 94710 Bankruptcy Case No.: 07-41865 Chapter 11 Petition Date: June 18, 2007 Court: Northern District of California (Oakland) Debtor's Counsel: Fayedine Coulter, Esq. 1 Kaiser Plaza, Suite 601 Oakland, CA 94612 Tel: (510) 839-2245 Estimated Assets: Unstated Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. NTELOS HOLDINGS: Strong Performance Cues S&P to Lift Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on Waynesboro, Virginia-based NTELOS Holdings Corp. and its operating subsidiary, NTELOS Inc., including the corporate credit ratings, which were raised to 'BB-' from 'B' . The outlook is stable. "The two-notch upgrade recognizes the company's strong operating performance over the last year and its more moderate financial policy," said Standard & Poor's credit analyst Susan Madison. NTELOS is an integrated communication services provider serving 383,000 wireless subscribers and 92,000 access lines in parts of western Virginia and West Virginia. Debt outstanding at March 31, 2007, totaled about $619 million. Over the last year, NTELOS has experienced healthy growth in all segments of its business, with the performance of the wireless unit, (which accounts for 75% of revenues and 65% of EBITDA), being particularly strong. Annual growth in wireless revenues and EBITDA of 18% and 25%, respectively, for the quarter ended March 31, 2007, has been driven by expansion of the retail subscriber base, (which grew 11% annually), and higher average revenue per subscriber of $55.48. Wireless performance has also been bolstered by growth in NTELOS' wholesale wireless business because of increasing minutes of use resulting from the company's strategic partnership agreement with Sprint Nextel Corp. In addition to being a significant component of roaming revenues, the agreement enables NTELOS to access Sprint Nextel's nationwide network at a favorable rates, making it more economical to offer national wireless plans to its retail base. Overbuilding restrictions throughout the life of the contract also protect this revenue stream. NTELOS' wireline business, which consists of two rural local exchange carriers serving about 45,000 access lines and a competitive local exchange carrier business, has been a stable source of cash flow. NTELOS, like all wireline carriers, will eventually face competition from cable telephony. However, the rural nature and tertiary characteristics of the company's service territory provide some insulation from competition in the near term. Annual access-line losses to date have been in the 2%-3% area, (below the losses of most of its rural wireline peers), primarily because of a reduction in Centrex lines, wireless substitution, and the loss of second lines. NOVELIS INC: Change of Control Offer Expiration Date Extended ------------------------------------------------------------- Novelis Inc. reported that its tender offer relating to its $1.4 billion principal amount of 7-1/4% Senior Notes due 2015 and the solicitation of consents to the proposed amendments to the indenture governing the senior notes expired on at 8:00 a.m., on June 15, 2007. The tender offer and consent solicitation was conditioned upon, receipt of consents to the proposed amendments from holders of a majority of the outstanding senior notes. As of the expiration, $10,717,000 aggregate principal amount of senior notes and related consents had been validly tendered pursuant to the tender offer. Accordingly, as of the expiration of the tender offer, the condition had not been satisfied and Novelis will not accept any tendered notes for payment. All senior notes tendered pursuant to the tender offer will be returned promptly to the holders, and the indenture governing the senior notes will not be amended. Novelis also disclosed the extension of the expiration date of its change of control offer to 5:00 p.m., New York City time, on June 27, 2007. The original change of control offer expiration date was 8:00 a.m., New York City time, on June 15, 2007. As of the original change of control offer expiration date, $60,000 aggregate principal amount of senior notes had been validly tendered pursuant to the change of control offer. All senior notes validly tendered pursuant to the change of control offer prior to the extended expiration date will be entitled to receive the offer consideration of $1,010 per $1,000 principal amount of senior notes. Other than as set forth herein, the change of control offer as described in the Offer to Purchase and Consent Solicitation Statement dated May 16, 2007, remains unchanged. UBS Investment Bank and ABN AMRO Incorporated are acting as dealer managers in connection with the change of control offer. Questions about the change of control offer may be directed to the Liability Management Group of UBS Investment Bank at (888) 722- 9555 ext. 4210 (toll free) or (203) 719-4210 (collect) and to Robert Silverschotz at ABN AMRO Incorporated at (212) 409- 6862. Requests for documentation should be directed to Global Bondholder Services Corporation, the information agent in connection with the change of control offer, at (212) 430-3774 or (866) 807-2200 (toll free). The depositary for the change of control offer is The Bank of New York Trust Company N.A. About Novelis Inc. Based in Atlanta, Georgia, Novelis Inc., (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- is the global provider of aluminum rolled products and aluminum can recycling. The company operates in 11 countries and has approximately 12,900 employees. Novelis has the capability to provide its customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America and South America. 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. * * * As reported in the Troubled Company Reporter on June 6, 2007, Standard & Poor's Ratings Services affirmed all of its ratings on Novelis Inc., including the 'BB-' long-term corporate credit rating, and removed the ratings from CreditWatch with developing implications, where they were placed Feb. 12, 2007. The outlook is negative. NY WESTCHESTER: Court OKs Deloitte as Panel's Financial Advisor -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of New York Westchester Square Medical Center's bankruptcy cases, permission to retain Deloitte Financial Advisory Services LLP, as its financial advisor. The firm is expected to: a. assist and advise the Committee in its analysis of the current financial position of the Debtor. b. assist and advise the Committee in its analysis of the Debtor's business plans, cash flow projections, restructuring programs, selling and general administrative structure and other reports or analyses prepared by the Debtor or its professionals in order to assist the Committee in its assessment of the business viability of the Debtor, the reasonableness of the Debtor's projections and underlying assumptions and the impact of market conditions on forecasted result of the Debtor. c. assist and advise the Committee in its analysis of proposed transactions, and other matters for which the Debtor may seek Bankruptcy Court approval including, but not limited to, use of cash collateral, assumption/rejection of leases and other executory contract, management compensation and retention and severance plans; d. assist and advise the committee in its analysis of the Debtor's internally prepared financial statements and related documentation, in order to evaluate performance of the Debtor as compared to the Debtor's projected results; e. assist and advise the Committee and its counsel in the development, evaluation and documentation of any plan(s) of reorganization or strategic transaction(s), including developing, structuring and negotiating the terms and conditions of potential plan(s) and strategic transaction(s); f. assist and render expert testimony on behalf of the Committee; g. assist and advise the Committee in its analysis of the Debtor's hypothetical liquidation analyses under various scenarios; h. assist the Committee with respect to obtaining other services, including but not limited to, tax services, valuation assistance, corporate finance advice, compensation and benefits consulting, or other specialized services as may be requested by the committee and agreed to by the firm or its representative affiliates which provide the services and which may require separated written engagement letters; i. attend and advise at meetings and court hearings with the Committee and its counsel and representative of the Debtor; and j. provide other services, as requested by the Committee and agree by the firm in writing. The Debtor tells the Court that the firm agreed to charge $295 per hour for all professional services and $150 per hour for paraprofessional services. Daniel S. Polsky, a director of the firm, assures the Court that he does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Polsky can be reached at: Daniel S. Polsky Deliotte Financial Advisory Services LLP Two World Financial Center New York, NY 10281-1414 Tel: (212) 436-2000 Fax: (212) 436-5000 http://www.deloitte.com/ Based in Bronx, New York, New York Westchester Square Medical Center -- http://www.nywsmc.org/-- is a not-for-profit, community acute care hospital and certified stroke center that has served a working class population in the Bronx community since 1929. Its primary facility, located at 2475 St. Raymond Avenue, Bronx, New York 10461, houses 205 beds and provides acute adult medical and surgical care, emergency medicine and ambulatory services. NYWSMC is a membership corporation whose members are selected by the New York-Presbyterian Healthcare System, Inc. The company filed for chapter 11 protection on Dec. 19, 2006 (Bankr. S.D.N.Y. Case No. 06-13050). Burton S. Weston, Esq., at Garfunkel, Wild & Travis, P.C., represents the Debtor. Louis A. Scarcella, Esq., and Robert C. Yan, Esq., at Farrell Fritz PC, represent the Official Committee Of Unsecured Creditors. The Debtor's schedules showed total assets of $49,283,477 and total debts of $35,502,088. The Debtor's exclusive period wherein it can file a plan of reorganization ends on Aug. 16, 2007. OMNICARE INC: Poor Performance Prompts S&P to Downgrade Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Omnicare Inc. The corporate credit rating was lowered to 'BB+' from 'BBB-'. The outlook is negative. The subordinated debt and senior unsecured ratings were lowered to 'BB-' from 'BB+', and the preferred stock rating on the company's convertible debentures was lowered to 'B+' from 'BB', reflecting Omnicare's sub-investment grade status. The senior unsecured and subordinated debt are rated the same (two notches below the corporate credit rating) given the relative weakness of the subsidiary guaranteeing the senior unsecured debt. "The downgrades reflect Omnicare's performance in 2006 and its expected performance in 2007," explained Standard & Poor's credit analyst Jesse Juliano. "The company has performed well below the expectations we set at the time of our initial ratings in December 2005." The company's EBITDA and cash flow have been weak relative to expectations, and therefore debt reduction has been below what was anticipated. The downgrade also reflects our belief that Omnicare will continue to operate with a sub-investment grade financial risk profile for the near term. The ratings on Covington, Kentucky-based Omnicare Inc. continue to reflect the company's leading position as a provider of pharmacy services to nursing homes and other long-term care providers, its still-solid liquidity, and its ability to produce positive free cash flow despite numerous operating hurdles over the past five quarters. These benefits are partially offset by the company's narrow business focus, which exposes it to industry specific risks, such as the potential for future reimbursement pressure. In addition, Omnicare experienced a number of major setbacks since its acquisition of NeighborCare Inc. and the implementation of Medicare Part D, and its financial profile remains weak for the current rating. PAETEC HOLDING: Plans to Offer $300 Million of Senior Notes ----------------------------------------------------------- PAETEC Holding Corp. plans to offer $300 million aggregate principal amount of senior notes due 2015 in a private offering to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933 and outside the United States in reliance on Regulation S under the Securities Act. The net proceeds from the offering will be used to repay term loans outstanding under PAETEC's existing credit facility. The offering is expected to be completed during the week of June 25, 2007, subject to market conditions. The senior notes will not be registered under the Securities Act of 1933 or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. About Paetec Holding Headquartered in Fairport, NY, PAETEC Holding Corp. (NASDAQ GS: PAET), fka US LEC Corp., -- http://www.paetec.com/-- is a full service provider of Internet protocol (IP), data and voice solutions to medium-sized and large businesses and enterprise organizations throughout 16 eastern states and the District of Columbia. The company provides a range of voice and high-speed data network services on a retail basis to its end-user business and institutional customers. In addition, PAETEC offers a range of voice and high-speed data carrier services to other telecommunications companies. Its service offerings include core voice and data services, application services, network integration services and managed services. On February 28, 2007, PAETEC Corp. completed its combination with US LEC Corp. PAETEC Holding Corp. is a wholly owned subsidiary of PAETEC Corp. formed by PAETEC Corp. to complete the merger. As a result of the merger, PAETEC Corp. and US LEC Corp. became wholly owned subsidiaries of PAETEC Holding. * * * In January 2007, Standard & Poor's Ratings Services' affirmed the company's ratings, including the 'B' corporate credit rating. The outlook on the ratings is stable. PAETEC HOLDING: Wants to Amend Sr. Facility to Decrease Interest ---------------------------------------------------------------- PAETEC Holding Corp. plans to seek amendments to its existing $850 million senior secured credit facilities to decrease the applicable interest rate margins and effect certain changes to covenants. Consents are expected to be due from existing lenders during the week of June 25, 2007, with closing and effectiveness after the July 4 holiday. In connection with the amendments, PAETEC expects to repay $300 million in principal amount of term loans outstanding under the credit facility with the proceeds from a concurrent capital markets transaction. The transactions are not expected to change PAETEC's total indebtedness. About Paetec Holding Headquartered in Fairport, NY, PAETEC Holding Corp. (NASDAQ GS: PAET), fka US LEC Corp., -- http://www.paetec.com/-- is a full service provider of Internet protocol (IP), data and voice solutions to medium-sized and large businesses and enterprise organizations throughout 16 eastern states and the District of Columbia. The Company provides a range of voice and high-speed data network services on a retail basis to its end-user business and institutional customers. In addition, PAETEC offers a range of voice and high-speed data carrier services to other telecommunications companies. Its service offerings include core voice and data services, application services, network integration services and managed services. On February 28, 2007, PAETEC Corp. completed its combination with US LEC Corp. PAETEC Holding Corp. is a wholly owned subsidiary of PAETEC Corp. formed by PAETEC Corp. to complete the merger. As a result of the merger, PAETEC Corp. and US LEC Corp. became wholly owned subsidiaries of PAETEC Holding. * * * In January 2007, Standard & Poor's Ratings Services' affirmed the company's ratings, including the 'B' corporate credit rating. The outlook on the ratings is stable. PENN NATIONAL: S&P Cuts Rating to BB- and Places Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Penn National Gaming Inc. to 'BB-' from 'BB' and placed the rating on CreditWatch with negative implications. The lower corporate credit rating and CreditWatch listing follow the company's announcement that it has entered into a definitive agreement to be acquired by certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners LP in an all-cash transaction valued at approximately $8.9 billion, including the planned repayment of approximately $2.8 billion of Penn National's outstanding debt. The issue ratings on Penn National's individual debt instruments were not lowered, but were placed on CreditWatch with negative implications in conjunction with the corporate credit rating. The absence of a rating downgrade of the issue ratings reflects the planned repayment of the company's outstanding debt, and the CreditWatch listing reflects the potential for lower issue ratings in the event the proposed transaction and refinancing do not occur. "In the event the proposed transaction closes, we would expect pro forma debt leverage to no longer be consistent with the prior corporate credit rating even though a pro forma capital structure has not yet been disclosed," said Standard & Poor's credit analyst Craig Parmelee. "In addition, the rating could be lowered further into the 'B' category once more definitive financing plans are disclosed and we have the opportunity to assess the pro forma capital structure. In the event this proposed transaction or any alternative proposals are not consummated, the more aggressive financial policy demonstrated by management with today's announcement still warrants the lower corporate credit rating." Under the terms of the agreement, Penn National shareholders will receive $67.00 in cash per share, which represents a premium of approximately 31% over Penn National's closing share price on June 14, 2007. In addition, the merger agreement permits Penn National to solicit superior proposals from other parties for a 45-day period. The transaction is subject to the satisfaction of certain customary conditions, including shareholder and regulatory approvals, and is currently expected to close in approximately 12- 16 months. The agreement does not contain a financing condition and, if not consummated by June 15, 2008, the per share purchase price increases by $0.0149 per day. In resolving the CreditWatch listing, we will assess the company's future operating and financial objectives in light of the proposed transaction. PHOENIX FOOTWEAR: Selling Royal Robbins for $40 Million in Cash --------------------------------------------------------------- Phoenix Footwear Group Inc. has signed a definitive agreement to sell its Royal Robbins division and related business assets to Kellwood Company, a marketer of apparel and consumer soft goods. Under the terms of the agreement, upon consummation of the transaction Kellwood will pay approximately $40 million in cash, subject to a working capital adjustment. Phoenix Footwear expects to report a net pre-tax gain of approximately $23 million on the sale including transaction costs. Phoenix Footwear acquired Royal Robbins on Oct. 31, 2003, for a total of $11.7 million. Phoenix Footwear was advised by KSA Capital Advisors, Inc. on the transaction. "Royal Robbins is an outstanding brand with strong revenues and a very loyal following, and the company is pleased with a three-fold return it expects to achieve on this asset in just over a three- year period," Jim Riedman, chairman of Phoenix Footwear Group, Inc., said. "This transaction represents a significant step in the company's plan to position the company to further enhance shareholder value. It provides a source of capital that will allow the company to further pursue its growth strategy of focusing on the strengthening of its remaining brands and paying down the majority of its long-term debt." The boards of directors for both companies have unanimously approved the transaction, which is expected to close within the next 30 days, subject to customary closing conditions. Phoenix intends to file these agreements and as exhibits to its Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2007. Founded in 1968 by outdoor enthusiasts, Royal and Liz Robbins, Royal Robbins is known for comfortable, rugged clothing and classic styles. Royal Robbins' Go Everywhere(R) line of technical clothing gear, featuring lightweight, wrinkle-resistant supplex nylon, is particularly popular among hikers, kayakers and other outdoor enthusiasts. About Phoenix Footwear Headquartered in Carlsbad, California, Phoenix Footwear Group Inc. (AMEX: PXG) -- http://www.phoenixfootwear.com/-- designs, develops and markets a diversified selection of a men's and women's dress and casual footwear, belts, personal items, outdoor sportswear and travel apparel and design, manufacture and market military specification and commercial combat and uniform boots. The company's moderate-to-premium priced brands include Royal Robbins(R) apparel, the Tommy Bahama(R), Trotters(R), SoftWalk(R), H.S. Trask(R) and Altama(R) footwear lines, and Chambers Belts(R). The company's operations are comprised of four reportable segments, footwear and apparel, premium footwear, military boot business, and accessories. Going Concern Doubt Grant Thornton LLP raised substantial doubt about Phoenix Footwear Group Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. Grant Thornton cited the company's net loss of $20.4 million for the year ended Dec. 30, 2006, and the company's deficit in working capital of $9.5 million at Dec. 30, 2006. The auditing firm also added that the company did not meet the financial covenants under its credit agreement as of Dec. 30, 2006, and as of March 31, 2007. PINNOAK RESOURCES: Cleveland-Cliffs Deal Cues S&P's Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating and other ratings on PinnOak Resources LLC on CreditWatch with positive implications. The rating action followed the announcement that the company has signed a definitive agreement to be acquired by Cleveland-Cliffs, Inc. (unrated) in a transaction valued at about $600 million in cash and existing debt. The transaction is expected to close within 60 days subject to regulatory approvals. Cannonsburg, Pennsylvania-based PinnOak operates three mines that produced around 4 million tons of high-quality metallurgical coal in 2006. Cleveland, Ohio-based Cleveland-Cliffs, which had $1.9 billion in revenues in 2006, is the largest producer of iron ore pellets in North America and operates six iron ore mines in the U.S. and Eastern Canada. It also has iron ore mining interests in Australia and Brazil and coal-mining interests in Australia. PLIANT CORP: Plans to Reduce Debt through Senior Notes Refinancing ------------------------------------------------------------------ Pliant Corporation has reached a definitive agreement to reduce its debt by over $30 million by refinancing its 13% Senior Subordinated Notes due 2010. The 2010 Notes, carried on Pliant's books at over $55 million, will be redeemed for $20 million, plus accrued interest, on July 16, 2007. "This refinancing is another positive step along the path of Pliant lowering its debt and improving its credit statistics," Steve Auburn, Pliant's general counsel and director of investor relations said. "The company is pleased with this improvement." Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. The Debtors emerged from chapter 11 protection on July 19, 2006 * * * In October 2006, subsequent to its emergence from Chapter 11 of the Bankruptcy Code, Moody's Investors Service assigned these ratings to Pliant: $288 million senior secured 1st lien 11.85% PIK notes due June 15, 2009, B2; $7.5 million senior secured 1st lien 11.35% notes due June 15, 2009, B2; $250 million senior secured 2nd lien 11.125% notes due Sept. 1, 2009, Caa1; Corporate Family Rating, B3; Probability of Default Rating, B3; and Speculative Grade Liquidity Rating, SGL-3. Moody's also put a stable outlook on the ratings. POLYPORE INT'L: Commences Tender Offer for 10-1/2% Senior Notes --------------------------------------------------------------- Polypore International Inc. has commenced a tender offer to purchase for cash any and all of its outstanding 10-1/2% Senior Discount Notes due 2012, pursuant to an Offer to Purchase statement dated June 15, 2007, for a price equal to $978.80 per $1,000 principal amount at maturity of the notes, which includes $948.80 as the tender offer consideration and $30 as a consent payment. The Notes were initially issued in October 2004 in an aggregate principal amount at maturity of $300 million, and the accreted value of the discount notes at March 31, 2007, was approximately $257.3 million. In connection with the Tender Offer, the company is soliciting consents to certain proposed amendments to the indenture governing the Notes that are subject to the Tender Offer to eliminate substantially all of the covenants and certain events of default and related provisions contained in the indenture. The Consent Solicitation will expire at 5:00 p.m., New York City time, on June 28, 2007, unless extended. On the terms and subject to the conditions of the Consent Solicitation, if the company receives the requisite consents and the supplemental indenture that contains the amendments is executed, the company will pay, promptly following the Consent Deadline and the satisfaction of the other conditions contained in the Consent Solicitation, to each Holder who has validly delivered a valid consent on or prior to the Consent Deadline, $30 for each $1,000 in principal amount at maturity of Notes. With respect to the Tender Offer, holders of Notes validly tendered on or prior to the Consent Deadline, if such notes are accepted for purchase, will receive the tender offer consideration plus the Consent Payment. The tender offer is scheduled to expire at 5:00 p.m, New York City time on July 13, 2007, unless extended or earlier terminated. Payment for Notes validly tendered on or prior to the Consent Deadline and accepted for purchase will be made promptly after the Consent Deadline. Holders of Notes who validly tender after the Consent Deadline but prior to the Expiration Time, if such notes are accepted for purchase, will receive the Total Consideration less the Consent Payment. Payment for Notes validly tendered after the Consent Deadline and on or prior to the Expiration Time and accepted for purchase will be made promptly after the Expiration Time. The Tender Offer is subject to the satisfaction or waiver of certain other conditions as set forth in the Offer to Purchase governing the Tender Offer. It is a condition to the consummation of the Tender Offer that the holders of at least a majority in accreted value of the Notes outstanding voting as a single class consent to the amendments to the indenture governing the Notes. Additionally, the Tender Offer is subject to consummation of the company's anticipated initial public offering. The company intends to use the net proceeds from its initial public offering to purchase the Notes that are tendered in connection with the Tender Offer. The complete terms and conditions of the Tender Offer and the Consent Solicitation are set forth in the Offer to Purchase that is being sent to holders of the Notes. Copies of each Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the Tender Offers, Global Bondholder Services Corporation, at (212) 430-3774 and (866) 807- 2200 (toll-free). J.P. Morgan Securities Inc. is the Dealer Manager and Solicitation Agent for the Tender Offer and Consent Solicitation. Questions regarding the Tender Offer and the Consent Solicitation may be directed to J.P. Morgan Securities Inc. at (212) 270-1477 (call collect). About Polypore International Headquartered in Charlotte, North Carolina, Polypore International Inc., is develops, manufactures and markets specialized polymer- based membranes used in separation and filtration processes. The company is managed under two business segments. The energy storage segment, which currently represents approximately two- thirds of total revenues, produces separators for lead-acid and lithium batteries. The separations media segment, which currently represents approximately one-third of total revenues, produces membranes used in various healthcare and industrial applications. * * * As reported in the Troubled Company Reporter on May 11, 2007, Moody's Investors Service assigned Ba3 ratings to Polypore Inc.'s new senior secured bank credit facilities. In a related action, Moody's affirmed the B3 Corporate Family and Probability of Default Ratings of Polypore's ultimate parent, Polypore International, Inc., and affirmed the ratings of Polypore Inc.'s senior subordinated notes at Caa1. The outlook is changed to positive. QUANTUM CORP: S&P Affirms B Rating and Says Outlook is Positive --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on San Jose, California-based Quantum Corp. At the same time, Standard & Poor's revised its outlook on Quantum to positive from stable. Standard & Poor's also assigned its 'B+' bank loan rating and '2' recovery rating to the company's proposed $450 million senior secured bank facility, reflecting S&P's expectation for substantial (70%-90%) recovery of principal by creditors in the event of a payment default. The proposed bank facility will consist of a $50 million revolving credit facility, due 2012, and a $400 million term loan, due 2014. "The revision of the outlook to positive reflects initial progress in integrating ADIC combined with our expectation for continued improvement to operating margins over the next several quarters," said Standard & Poor's credit analyst Ben Bubeck. Pro forma operating lease adjusted leverage, based on two full quarters of performance since the acquisition of ADIC, and adjusted for restructuring charges, is estimated to be slightly below 5x. Proceeds from the proposed bank facility, along with approximately $30 million of cash from the balance sheet, will be used to refinance Quantum's existing bank debt, including fees and a prepayment premium. The ratings on Quantum reflect a limited track record following last year's acquisition of ADIC, mixed tape industry fundamentals, a competitive marketplace, and high debt leverage. These factors partly are offset by S&P's expectation for incremental improvements to profitability and cash flow generation, Quantum's strong product portfolio, and adequate liquidity. Quantum is a leading vendor of data backup, recovery, and archive solutions. Last year's nearly $800 million acquisition of ADIC bolstered Quantum's product offering, in addition to providing greater scale and capacity to reach end customers directly. Pro forma for the proposed debt financing, Quantum had approximately $630 million of operating lease-adjusted debt as of March 2007. RJO HOLDINGS: High Financial Leverage Cues S&P's B Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term counterparty credit rating to RJO Holdings Corp. The outlook is stable. Standard & Poor's also rated RJO's $50 million revolving credit facility 'BB-' with a recovery rating of '1', indicating the expectation of very high recovery (90%-100%) in the event of payment default. S&P rated RJO's senior secured $385 million first-lien facility 'B' with a recovery rating of '4' (average recovery--30%-50%); and rated its senior secured $150 million second-lien facility 'CCC+' with a recovery rating of '6', indicating the expectation of negligible recovery (0%-10%). "The ratings on RJO reflect its high financial leverage, low interest coverage, negative tangible equity, and dependence on market volumes. Partially offsetting these weaknesses are the company's well-established franchise in the rapidly growing futures market, highly variable cost structure, and agency business model," said Standard & Poor's credit analyst Robert Hansen. The debt ratings reflect a proposed transaction under which Spectrum and Technology Crossover Ventures (will become majority shareholders. The O'Brien family, which is currently the sole shareholder of R.J. O'Brien & Associates, will retain an ownership interest in RJO. As a result of this transaction the company will carry a substantial debt burden, and S&P expects interest coverage to remain very weak for at least the next two years. However, S&P expects interest coverage to improve modestly due, in part, to expected market growth and modest operating margin expansion. Liquidity should be very limited initially, but sufficient, with very modest cash balances and minimal excess regulatory net capital at RJO's regulated brokerage subsidiary. Although the agency nature of RJO's business model reduces earnings volatility, S&P remains concerned by the company's revenue concentration among introducing brokers. The company's well-established competitive position and strong risk controls have allowed it to generate relatively consistent and stable operating cash flows, despite the company's dependence on market volumes. However, S&P believes that meeting debt service obligations depends on the company continuing its recent strong operating performance and maintaining tight expense controls. The stable outlook reflects our opinion that RJO will meet its projected debt service obligations and amortize its debt facilities as required. If the company fails to achieve S&P's expected financial performance or equity sponsors extract capital, either in the form of a dividend or a stock buyback, the ratings could be lowered. RJO Holdings Corp. is the parent company of R.J. O'Brien & Associates, the world's leading specialty broker of futures and options, with leading market shares at the relevant exchanges. ROCK-TENN CO: Improved Operating Results Cue S&P's Positive Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Rock-Tenn Co. including the 'BB' corporate credit rating, on CreditWatch with positive implications. The company had total debt of $853 million at March 31, 2007. "The CreditWatch listing reflects meaningful improvements in the company's operating results and credit measures over the past several quarters," said Standard & Poor's credit analyst Andy Sookram. In particular, Rock-Tenn continues to show good operating results, with EBITDA increasing to $222 million for the three quarters ended March 31, 2007, from $147 million for the comparable period of 2006year-earlier quarter. The increase was due to the acquisition of Gulf States Paper Corp., which resulted in synergies and greater vertical integration and better leveraging of Rock-Tenn's fixed costs in a favorable pricing environment. Combined with a meaningful and more rapid reduction in debt, debt to EBITDA improved to 3.1x at March 31, 2007, from around 5.1x a year earlier. "In resolving the CreditWatch listing, we will evaluate the company's prospects for sustaining its recent operating improvements," Mr. Sookram said. "We will also consider the company's financial and operating strategies, financial policies, and our outlook for market conditions." ROCKAWAY BEDDING: Sleepy's and Hudson to Buy Remaining Assets ------------------------------------------------------------- Rockaway Bedding Inc. and its debtor-affiliates received an offer from Sleepy's LLC and Hudson Capital Partners LLC for the purchase of their remaining inventory, main warehouse, and not less than 138 leases, Bill Rochelle of Bloomberg News reports. According to Bloomberg, Sleepy's and Hudson will buy the assets for $12 million and that they will have the right to conduct going-out-of-business sales at the 73 locations where the inventory has not already been liquidated. The Debtors expect a July 2, 2007 competing bid deadline and a July 6, 2007 auction. Headquartered in Randolph, New Jersey, Rockaway Bedding Inc. -- http://www.rockawaybedding.com/-- manufactures and markets beds, mattresses and futons. The company and six of its affiliates filed for Chapter 11 protection on April 9, 2007 (Bankr. D. N.J. Case Nos. 07-14890 through 07-14898). David H. Stein, Esq., and Michael F. Hahn, Esq., at Duane Morris LLP represent the Debtors in their restructuring efforts. Lawyers at Fox Rothschild LLP represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, Rockaway Bedding disclosed total assets of $18,949,785 and total debts of $20,190,990. Rockaway's six debtor-affiliates disclosed zero assets and $3,431,357 in total liabilities. The Debtors' exclusive period to file a chapter 11 plan of reorganization expires on Aug. 7, 2007. SAK DEVELOPMENT: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: SAK Development, Inc. 3280 Charles Boulevard, Suite A Greenville, NC 27858 Bankruptcy Case No.: 07-02215 Type of Business: The Debtor's affiliate, American Constructors of North Carolina, Inc., filed for Chapter 11 protection on June 6, 2007 (Bankr. E.D. N.C. Case No. 07-02083). Chapter 11 Petition Date: June 18, 2007 Court: Eastern District of North Carolina (Wilson) Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Box 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hanover Design Services $35,001 1123 Floral Parkway Wilmington, NC 28403 Whirlpool Corporation $31,118 c/o Eric Biesecker, Esq. P.O. Box 3463 Greensboro, NC 27402 Millenia Bank $25,000 1310 West Arlington Boulevard Greenville, NC 27834 Garris Evans Lumber Co. $21,757 Southern Environmental $3,149 SCOTT SMITH: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Scott A. Smith Tracey L. Smith 2275 Park Place Road Slatington, PA 18080 Bankruptcy Case No.: 07-20981 Chapter 11 Petition Date: June 13, 2007 Court: Eastern District of Pennsylvania (Reading) Judge: Richard E. Fehling Debtor's Counsel: Michael J. McCrystal, Esq. 2355 Old Post Road, Suite 4 Coplay, PA 18037 Tel: (610) 262-7873 Total Assets: $1,649,900 Total Debts: $2,498,414 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Service Electric Cable trade debts $1,000,000 TV c/o Harry Newman, Esq. 3897 Alder Place, Suite 180C Bethlehem, PA 18017 Internal Revenue Service trade debt $75,000 Attention: Special Procedures Branch P.O. Box 12051 Philadelphia, PA 19105-2051 H.S.B.C. Bank Nevada, N.A. personal debts $20,000 1111 Town Center Drive Las Vegas, NV 89193 Commonwealth of trade debts $12,000 Pennsylvania Credit Card Services personal debt $7,839 Owen M. Bastian, Inc. personal debt $5,880 G.F. Pension Corp. trade debts $4,045 SEA CONTAINERS: Regulator Issues Financial Support Direction ------------------------------------------------------------ The Determinations Panel of the Pensions Regulator (London) has published notices of its decision that a Financial Support Direction will be issued on Sea Containers Ltd. and its debtor- affiliates, under Section 43 of the Pensions Act 2004 in respect of the Sea Containers 1983 and 1990 Pension Scheme. The hearing took place in London on June 12 and 13, 2007, to consider warning notices issued by the Regulator in October 2006 and April 2007 in respect of the two Pension Schemes. The issue of the FSD, which requires the company to put in place financial support for its pension schemes, will not take place before 28 days after the date of the Determination Notices. Reasons for the Determination Notices were reserved and will be issued on June 25, 2007. The company expects that any restructuring plan of reorganization proposed under the Chapter 11 bankruptcy protection process would be subject to the Pensions Regulator's Clearance procedure, but the company is nevertheless disappointed in the outcome of the hearing. The company will give its full comments once the Panel has given its reasons and will consider once it has received them whether an appeal is appropriate. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers Ltd. disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' exclusive period to file a chapter 11 plan of reorganization expires on June 12, 2007. SERVICEMASTER CO: S&P Junks Rating on $1.15 Billion Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to The ServiceMaster Co.'s proposed $1.15 billion of senior toggle notes due 2015. ServiceMaster's other ratings, including its 'B' corporate credit rating, have been affirmed. The outlook is negative. "The senior unsecured notes are rated 'CCC+' (two notches below the corporate credit rating) because of the amount of secured debt in the capital structure," said Standard & Poor's credit analyst Jean Stout. The ratings on Downers Grove, Illinois-based ServiceMaster reflect its very highly leveraged financial profile following its pending acquisition by an investment group led by Clayton, Dubilier & Rice Inc. for about $5.6 billion, which will result in pro forma total debt to EBITDA (including our standard adjustments) exceeding 9x at closing and significant cash flow requirements to fund interest. Ratings support is provided by ServiceMaster's good business positions in its fragmented and competitive end markets, which have translated into good cash flow generation from a fairly diverse portfolio of services, despite some exposure to weather conditions in two of three of its key businesses. The acquisition is expected to be financed with a $2.65 billion term loan, $1.15 billion of senior unsecured toggle notes, and $1.4 billion in sponsor equity. The ratings on the company's existing debt (to be repaid as part of this financing) will be withdrawn upon closing of the transaction, with the exception of approximately $353 million of existing senior notes due in 2018, 2027, and 2038, which will remain outstanding. SIERRA PACIFIC: Two Units Commence Separate Tender Offers --------------------------------------------------------- Sierra Pacific Resources reported that its two wholly-owned subsidiaries, Sierra Pacific Power Company and Nevada Power Company, each has commenced a tender offer for the entire principal amount outstanding of certain series of their respective General and Refunding Mortgage securities. These are: Nevada Power: Fixed Spread Security Maturity Reference (in basis CUSIP No. Description Date Security points) --------- ----------- -------- --------- --------- 641423 BF4 9% General Aug. 15, 4.125% U.S. 50 and Refunding 2003 Treasury 641423 BE7 Mortgage Notes, Note due Series G, due Aug. 15, 2008 2013 Sierra Pacific Power: Fixed Spread Security Maturity Reference (in basis CUSIP No. Description Date Security points) --------- ----------- -------- --------- --------- 8% General June 1, 4.875% U.S. 50 826418 AY1 and Refunding 2008 Treasury Mortgage Bonds, Note due Series A, due May 31, 2008 2008 Nevada Power's Tender Offer Under the terms of Nevada Power's tender offer, Nevada Power has offered to purchase any and all of the outstanding $227.5 million aggregate principal amount of its 9% General and Refunding Mortgage Notes, Series G, due 2013, at a purchase price equal to: a) the present value on the date Nevada Power accepts and pays for the Notes of $1,045.00 per $1,000 principal amount of the Notes, the redemption price payable for the Notes on Aug. 15, 2008, the first date on which the Notes are redeemable at a fixed redemption price and all scheduled interest payments on the Notes from the Nevada Settlement Date up to and including the Earliest Redemption Date, calculated based on the assumption that the Notes will be redeemed in full on the Earliest Redemption Date, discounted on the basis of a yield to the Earliest Redemption Date equal to the sum of: 1) the yield to maturity on the 4.125% U.S. Treasury Note due Aug. 15, 2008, based on the bid side price for such Reference Security as of 2 p.m., New York City time, Thursday, June 21, 2007, plus 2) 50 basis points, minus b) accrued and unpaid interest to, but not including, the Nevada Settlement Date, being rounded to the nearest cent per $1,000 principal amount of the Notes. Notes accepted for purchase will also receive accrued and unpaid interest to, but excluding, the Nevada Settlement Date. The offer will expire at 9 a.m., New York City time, on Friday, June 22, 2007, unless the offer is extended or earlier terminated by Nevada Power. Payment for tendered Notes, plus accrued interest, will be paid for in same-day funds on the Nevada Settlement Date, which is expected to be on or about June 28, 2007. The terms and conditions of the offer are set forth in an Offer to Purchase and a Letter of Transmittal, dated June 15, 2007. In the Offer to Purchase, Nevada Power states that it will either use established private credit facilities or the proceeds from the sale of new securities to pay the purchase price for the Notes purchased pursuant to the offer. Sierra Pacific Power's Tender Offer Under the terms of Sierra Pacific Power's tender offer, Sierra Pacific Power has offered to purchase any and all of the outstanding $320 million aggregate principal amount of its 8% General and Refunding Mortgage Bonds, Series A, due 2008, at a purchase price equal to: (1) the present value on the date Sierra Pacific accepts and pays for the Bonds of $1,000 principal amount of such Bonds, the principal amount due on June 1, 2008, the maturity date for the Bonds and all scheduled interest payments on the Bonds from the Sierra Settlement Date up to and including the Maturity Date, discounted on the basis of a yield to the Maturity Date equal to the sum of: (a) the yield to maturity on the 4.875% U.S. Treasury Note due May 31, 2008, based on the bid side price for such Reference Security as of 2 p.m., New York City time, on Thursday, June 21, 2007, plus (b) 50 basis points, minus (2) accrued and unpaid interest to, but not including, the Sierra Settlement Date, being rounded to the nearest cent per $1,000 principal amount of the Bonds. Bonds accepted for purchase will also receive accrued and unpaid interest to, but excluding, the Sierra Settlement Date. The offer will expire at 9 a.m., New York City time, on Friday, June 22, 2007, unless the offer is extended or earlier terminated by Sierra Pacific. Payment for tendered Bonds will be paid for in same-day funds on the Sierra Settlement Date, which is expected to be on or about June 28, 2007. The terms and conditions of the offer are set forth in an Offer to Purchase and a Letter of Transmittal, dated June 15, 2007. In the Offer to Purchase, Sierra Pacific Power states that it will either use previously established private credit facilities or the proceeds from the sale of new securities to pay the purchase price for the Bonds purchased pursuant to the offer. The companies have retained Credit Suisse and Goldman, Sachs & Co. to serve as Dealer Managers for each of the tender offers and Morrow & Co. Inc. to serve as the Information Agent. Requests for documents may be directed to: Morrow & Co., Inc. Tel: (800) 607-0088 (toll-free) or (203) 658-9400 Questions regarding the tender offers may be directed to: Credit Suisse Tel: (800) 820-1653 (toll-free) or (212) 325-4008 (collect) -- or -- Goldman, Sachs & Co. Tel: (800) 828-3182 (toll-free) or (212) 902-9077 (collect). About Nevada Power Company Nevada Power Company is a regulated public utility engaged in the distribution, transmission, generation, purchase and sale of electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas, including Nellis Air Force Base and the Department of Energy's Nevada Test Site in Nye County. Nevada Power provides electricity to approximately 807,000 residential and business customers. About Sierra Pacific Power Sierra Pacific Power Company is the principal utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power also distributes natural gas in the Reno-Sparks area of northern Nevada. Sierra Pacific Power provides electricity to approximately 361,000 residential and business customers and natural gas to approximately 140,000 residential and business customers. About Sierra Pacific Resources Headquartered in Las Vegas, Nevada, Sierra Pacific Resources (NYSE: SRP) -- http://www.sierrapacificresources.com/-- is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. * * * Moody's Investors Services rated Sierra Pacific Resources' long term corporate family rating at 'Ba2' and probability of default at 'Ba3'. Standard and Poor's assigned a 'BB-' rating on the company's long term foreign and local issuer credit. The outlook is stable. Fitch assigned 'BB-' rating on the company's long term issuer default. SINCLAIR BROADCAST: Board Declares Class A & B Stock Cash Dividend ------------------------------------------------------------------ Sinclair Broadcast Group Inc. board of directors has declared a quarterly cash dividend of $0.15 per share on the company's Class A and Class B common stock. The dividends are payable on July 13, 2007, to the holders of record at the close of business on June 29, 2007. The common stock will trade ex-dividend on June 27, 2007. Headquartered in Baltimore, Maryland, Sinclair Broadcast Group Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is one of the diversified television broadcasting companies, that owns and operates, programs or provides sales services to 61 television stations in 38 markets. Sinclair's television group includes FOX, WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately 23.0% of all U.S. television households. * * * As reported in the Troubled Company Reporter on May 8, 2007, Standard & Poor's Ratings Services assigned a 'B' rating to the $300 million convertible senior notes due 2027 proposed by Sinclair Broadcast Group Inc. (BB-/Negative/--). At the same time, S&P lowered the senior unsecured rating on company's shelf registration to 'B' from 'B+', based on the structural subordination of senior unsecured debt to priority obligations at the operating company, Sinclair Television Group Inc. SMITHFIELD FOODS: S&P Holds BB+ Rating and Removes Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB+' corporate credit rating and other ratings on Smithfield Foods, Inc. are affirmed and removed from CreditWatch with negative implications, where they were placed on Aug. 10, 2006, following the announcement that Groupe Smithfield S.L., the company's 50/50 joint venture with Oaktree Capital Management LLC, was temporarily operating under an unsecured credit facility guaranteed by the company. Although this facility was subsequently replaced by standalone, nonrecourse permanent financing, the ratings remained on CreditWatch following Smithfield's September 2006 announcement of its planned acquisition of Premium Standard Foods Inc. (unrated) for $810 million, which closed in May 2007. The outlook is negative. About $1.6 billion of rated debt of the Smithfield, Virginia-based company is affected. "At the same time, Standard & Poor's assigned its preliminary 'BB' senior unsecured debt rating and preliminary 'BB-' subordinated debt ratings to Smithfield's Rule 415 shelf registration of debt securities (senior debt securities and subordinated debt securities)," said Standard & Poor's credit analyst Jayne Ross. The ratings affirmation recognizes that Smithfield's pork processing operations should be entering a period of improving profitability. However, credit metrics are extremely weak for the rating and S&P's expectation is that the company will be focused on improving its financial profile to be more appropriate for the current rating over the intermediate term. Following a series of acquisitions and investments over the past year that has increased debt levels by more than $600 million, there is no room in the rating for further debt-financed acquisitions. S&P's ratings on Smithfield Foods reflect the highly competitive, commodity-based, cyclical nature of the swine industry; the high fixed costs of pork processing operations; and the company's acquisitiveness. These factors are mitigated by the company's position as the leading producer, processor, and marketer of fresh and processed pork in the U.S.; its position as a leading beef processor; an experienced management team; and a track record of successfully integrating acquisitions. SOURCE INTERLINK: S&P Junks Rating on $465 Million Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating and stable outlook to Source Interlink Cos. Inc. At the same time, S&P assigned a 'BB-' rating (two notches above the corporate credit rating), with a recovery rating of '1', to the company's $300 million asset-based revolving credit facility due 2013, indicating our expectation of very high (90%-100%) recovery in the event of a payment default. S&P also assigned a 'B+' rating (one notch above the corporate credit rating), with a recovery rating of '2', to Source Interlink's $880 million term loan B due 2014, indicating S&P's expectation of substantial (70%-90%) recovery of principal in the event of a payment default. Standard & Poor's also assigned its 'CCC+' ratings to Source Interlink's $465 million senior subordinated notes due 2017. Bonita Springs, Florida-based Source Interlink, a leading distributor of magazines, CDs, and DVDs, had pro forma total debt of $1.39 billion on April 30, 2007. The company will use proceeds to finance the $1.2 billion acquisition of PRIMEDIA Inc.'s specialty magazine business at a 12x trailing EBITDA multiple and to refinance Source Interlink's existing credit facilities. "The ratings reflect high financial risk resulting from the entirely debt-financed acquisition of PRIMEDIA's Enthusiast Media division and the challenges inherent in managing fast growth," said Standard & Poor's credit analyst Hal F. Diamond. However, Source Interlink has a good track record of integrating acquisitions, having completed three major transactions in the past two and a half years, which more than tripled its revenue base while achieving planned synergies. The acquisition vertically integrates PRIMEDIA's magazine titles with Source Interlink's magazine distribution operations. Source Interlink's management has no prior publishing expertise, and the annual EBITDA to be acquired is slightly greater than the company's. It remains acquisition oriented and is seeking to purchase additional publishing properties as opportunities arise. SPRINGS WINDOWS: Term Loan Increase Cues Moody's to Cut Ratings --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of the senior secured credit facilities of Springs Window Fashions, LLC to B1 from Ba3 following a proposed increase in the term loan B due 2012 by $75 million to $311 million. The downgrade reflects the increase in Moody's expectation of loss-given-default to LGD 3 from LGD 2 as a result of the higher proportion of secured bank debt in the company's liability structure. Concurrently Moody's affirmed the company's B1 Corporate Family Rating. The outlook remains stable. Proceeds from the $75 million add-on term loan will be used to pay a $50 million dividend to shareholders, repay existing borrowings under the $100 million revolving credit facility and to pay fees and expenses relating to the transaction. The incremental debt will amortize ratably with the existing facility at 1% per year. Covenants under the amended credit facility will be reset, and include a maximum total leverage ratio of 5.0 times with step- downs, a minimum interest coverage ratio of 2.25 times with step- ups, and limitations on capital expenditures. The ratings are supported by Springs Window Fashion's consistent historical revenue and EBITDA growth which Moody's expects will continue despite the continuing slowdown in residential construction. The ratings also benefit from the company's size and market position, geographical diversity of end-users, strong market share and the value of its brands. The company's competitive strengths included its breadth of products spanning the hard window coverings niche, and long running relationships with key customers. The company also has a strong market position in the profitable custom and style side segments. The ratings are constrained by high leverage and Moody's expectation of negative adjusted free cash flow to debt ratio for fiscal 2007 as a result of legacy cash outflows relating to the former textile operations of the parent, Spring's Industries, Inc. Moody's expects that adjusted free cash flow to debt will revert to positive single digit levels after 2007. The ratings are constrained by substantial client concentration, the presence of larger competitors in the industry, and the potential for a slowdown in renovation/remodeling activity. Moody's took these actions: * Affirmed the B1 Corporate Family Rating; * Affirmed the B2 Probability of Default Rating; * Downgraded the $100 million senior secured revolver due 2010 to B1 (LGD3, 34%) from Ba3 (LGD 2, 29%); * Downgraded the $311 million senior secured term loan B due 2012 to B1 (LGD3, 34%) from Ba3 (LGD 2, 29%); The ratings outlook is stable. The transaction is expected to be completed in July 2007. The ratings are contingent upon the receipt of executed documentation in form and substance acceptable to Moody's. Springs Window Fashions, LLC, headquartered in Middleton, Wisconsin, is a wholly owned subsidiary of Springs Industries, Inc. Springs Window Fashions is one of the leading manufacturers and designers of a broad selection of window coverings under the brand names of Bali, Graber and Nanik. The company has manufacturing facilities in Reynosa and Tijuana in Mexico for custom products and sources more commoditized products from China. Product lines include hard and soft window blinds, roller shades, drapery hardware, shutters, solar shades, and window accessory products. Springs Window Fashions is privately held and had revenues of about $563 million for the twelve months ended March 31, 2007. SS&C TECHNOLOGIES: Good Debt Leverage Cues S&P to Revise Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Windsor, Connecticut-based SS&C Technologies Inc. to positive from negative, due to positive operating trends and improving debt leverage. Ratings on the company, including the 'B' corporate credit rating, were affirmed. "The ratings reflect the company's high leverage, acquisitive growth strategies, and dependence on financial services IT spending, partially offset by its recurring revenue base and good profitability and cash flow," said Standard & Poor's credit rating analyst David Tsui. SS&C Technologies provides software and outsourcing services to the financial services industry, focusing on portfolio management and trading systems. SS&C is a niche player in the fragmented financial services IT industry, serving more than 4,000 clients in a U.S.-based market of nearly 40,000. Still, the revenue base is diverse and retention rates are high, providing some offset. The company's retention rates are greater than 90% because of frequent product enrichment and high switching costs. The top 10 clients generate less than 20% of the total sales, with the largest account representing about 4%. Recurring revenues, which include maintenance and outsourcing revenues and represent about 80% of the total, provide good revenue visibility. Revenues for the quarter ended March 2007 were $56 million, up 15% from $48 million in the same period a year ago. The company generated about $4 million, or 50% of revenue growth, organically, or from business and products that it owned for at least 12 months. SS&C has maintained margins at higher levels than its peer group, with an EBITDA margin in the mid-to-high 30% area. STULL INDUSTRIES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Stull Industries, Inc. 1315 West Flint Street Lake Elsinore, CA 92530 Bankruptcy Case No.: 07-13409 Type of Business: The Debtor manufactures custom-made stock grilles for trucks and vans. See http://www.stullindustries.com/ Chapter 11 Petition Date: June 18, 2007 Court: Central District Of California (Riverside) Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe, LLP 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. SUPERCLICK INC: April 30 Balance Sheet Upside-down by $2.3 Million ------------------------------------------------------------------ Superclick Inc.'s consolidated balance sheet at April 30, 2007, showed $2,031,190 in total assets and $4,395,803 in total liabilities, resulting in a $2,364,613 total stockholders' deficit. The company's consolidated balance sheet at April 30, 2007, also showed strained liquidity with $1,808,404 in total current assets available to pay $4,373,019 in total current liabilities. Superclick Inc. reported net income after cumulative effect adjustment for the second quarter of $54,001, compared to a net loss of $480,709 for the three months ended April 30, 2006. The cumulative effect adjustment for the three months ended April 30, 2007, was $73,700. During the quarter ended April 30, 2007, the company detected an error in the credit rate used to determine the 2004 and 2005 Provincial Research and Development (R&D) Tax Credit refund. The error was a result of the use of the 100% Canadian owned rate versus that of a foreign owned rate, which are higher and thus the amount of the eligible refund was overstated. Superclick Inc. reported net revenues of $1,237,649 for the second quarter ended April 30, 2007, compared to $907,809 in revenue for the second quarter of 2006. The increase of $329,840 in revenue, or 36.3%, for the second quarter on a year-over-year basis, was attributable to improving installation revenue and the strengthening of support contracts. In particular, the company improved revenue performance in customer support revenues for the second quarter on a year-over-year basis by 64.7%. Gross profit for the second quarter ended April 30, 2007, was $688,554, or 55.6% compared with the $431,322, or 47.5% reported for the second quarter ended April 30, 2006. Selling, general and administrative (SG&A) expenses for the three months ended April 30, 2007, and 2006, were $435,703, or 35.2% and $492,846 or 54.3% respectively. Superclick ended the quarter with $650,553 in cash and $932,378 in accounts receivable. Sandro Natale, chief executive officer, commented that "we continue to be pleased with the progress we are making on many levels. From an operational standpoint, we have substantially streamlined our operations and are now committed to investing into core areas that will enable us to further scale revenue on a more profitable basis. On the technology front, we continue to demonstrate the depth of our SIMS platform and MAMA application and believe that we are truly differentiated in terms of our ability to provide customers with management transparency and performance over their networks. In terms of our development for the future, we are excited about the prospects we see developing for our Media Distribution System (MDS) application and hope to begin announcing successes here over the quarters to come. Our approach of developing services and products focused on resolving customer needs first and foremost is yielding strong results and this will continue to be our catalyst for growth moving forward." Full-text copies of the company's consolidated financial statements for the quarter ended April 30, 2007, are available for free at http://researcharchives.com/t/s?2107 Going Concern Doubt As reported in the Troubled Company Reported on Feb. 6, 2007, Bedinger & Company, in Concord, California, expressed substantial doubt about Superclick Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Oct. 31, 2006. The auditing firm pointed to the company's recurring losses from operations. About Superclick Inc. Superclick Inc. (OTC BB: SPCK.OB) -- http://www.superclick.com/-- through its wholly owned, Montreal-based subsidiary Superclick Networks Inc., develops, manufactures, markets and supports the Superclick Internet Management System, Monitoring and Management Application and Media Distribution System in worldwide hospitality, conference center and event, multi-tenant unit and university markets. Current clients include MTU residences and Candlewood Suites, Crowne Plaza, Fairmont Hotels, Four Points by Sheraton, InterContinental Hotels Group PLC, Hilton, Holiday Inn, Holiday Inn Express, Hampton Inn, Marriott, Novotel, Radisson, Sheraton, Westin and Wyndham hotels in Canada, the Caribbean and the United States. TELCORDIA TECHNOLOGIES: S&P Rates Proposed $555 Million Notes at B ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and 'CCC+' subordinated rating on Piscataway, New Jersey-based Telcordia Technologies Inc. The outlook is negative. In addition, a 'BB-' bank loan rating was assigned to Telcordia Technologies' proposed $100 million, five-year senior secured first-priority revolving credit facility. A recovery rating of '1' also was assigned to the loan, reflecting expectations for very high recovery (90%-100%) principal for secured lenders in a payment default or bankruptcy scenario. A 'B' bank loan rating was assigned to its proposed $555 million, five-year floating rate senior secured notes. A recovery rating of '3' was assigned to the loan, reflecting expectations for meaningful recovery of(50%-70%) principal for secured lenders in a payment default or bankruptcy scenario. The ratings on Telcordia Technologies reflect its vulnerable business profile, with a narrow and mature addressed market and significant customer concentration. The ratings also factor in weakness in revenue, EBITDA, and liquidity, which is expected to continue over the near term. S&P also expects a moderate increase in financial leverage, which is high, with limited prospects for debt payment in the near term coming from free cash flow. The ratings are, on the other hand, supported by a leading position in providing products and services for regional Bell operating companies and global carriers. Telcordia faces a number of challenges across several business units. These include a currently weaker-than-historical telecom industry spending environment, as well as consolidation within the RBOCs--a key client base for Telcordia. Also, the company's focus on growth markets has yet to achieve the scale needed for profitability, and its core business is subject to ongoing pricing pressures. THERMAL NORTH: S&P Puts BB- Rating on Positive CreditWatch ---------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Thermal North America Inc. on CreditWatch with positive implications. The rating action follows the announcement that Veolia Energy, a wholly owned subsidiary of France-based Veolia Environnement S.A. (BBB+/Stable/A-2), will acquire Thermal North America for an amount based on an enterprise value of $778 million. The deal is expected to close in late 2007 or early 2008 following regulatory approvals. Thermal North America is the largest district heating and cooling portfolio of companies in the U.S. "The CreditWatch positive placement reflects the likelihood that Veolia will retire Thermal North America's debt once the transaction is complete, given Veolia's tendency to centrally finance its acquisitions," said Standard & Poor's credit analyst Justin Martin. The ratings on Veolia are underpinned by its leading positions worldwide in water utility and waste management activities and its strong European presence in energy services. Its experience and balance sheet are likely to lead to improved performance for Thermal North America's operating units. TRIATEK INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Triatek, Inc. dba Triatek World Labs, Inc. dba Triatek International dba Triatek Lighting, Inc. c/o Ragsdale, Beals, Seigler, Patterson & Gray LLP 229 Peachtree St., Northeast, Suite 2400 Atlanta, GA 30303 Tel: (404) 588-0500 Bankruptcy Case No.: 07-69507 Type of Business: The Debtor manufactures a complete line of building control products that seamlessly integrate with most building automation systems on the market. See http://www.triatek.com/ Chapter 11 Petition Date: June 18, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Herbert C. Broadfoot, II, Esq. Ragsdale, Beals, Seigler, Patterson & Gray LLP 2400 International Tower 229 Peachtree Street, Northeast Atlanta, GA 30303 Tel: (404) 588-0500 Fax: (404) 523-6714 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Air Precision Devices $459,075 212 South Milwaukee Avenue Suite E Wheeling, IL 60090 Shur-Ju Hwang Revolving Credit $300,000 462 Villa Drive Advance Lilburn, GA 30047 National Environmental Product Open Account $58,036 400 Le Beau Boulevard St. Laurent Quebec Canada H4N1R6 Arrow Open Account $39,281 United Healthcare Benefit Mall Open Account $33,359 Metalspun Products Co., Inc. Open Account $30,160 Spun Metals, Inc. Open Account $29,495 AFC Worldwide Express Open Account $27,373 Southern Spring & Stamping Inc. Open Account $26,470 Cheryl Laniewicz $26,342 Team Air Express Open Account $22,449 Richard L. Stoneburner Open Account $22,353 Overnite Transportation Co. Open Account $21,475 Konica Minolta Open Account $20,358 Business Solutions Alps Open Account $14,507 Beyond Components LLC Open Account $13,651 Van Westrum Corp. Open Account $12,921 Engineered Specialty Products Open Account $12,833 MD Hodges Enterprises Inc. Lease $11,965 Stevens Air Transport Inc. Open Account $11,316 TRUMP ENTERTAINMENT: CEO James Perry to Retire Effective July 1 --------------------------------------------------------------- Trump Entertainment Resorts Inc. disclosed in a press statement that James B. Perry, the company's President, Chief Executive Officer and a member of its Board of Directors, has notified the Board of Directors of his retirement from those positions, effective July 1, 2007, fulfilling his desire to return to his family in California. During his tenure, Mr. Perry oversaw a wide variety of physical, technological, operational and cultural improvements across the company designed to improve the customer experience and position each property for improved results. The company also disclosed that Mark Juliano, who currently holds the position of Chief Operating Officer, will become Interim Chief Executive Officer upon Mr. Perry's retirement. Retirement Linked to Sale The Wall Street Journal relates that Mr. Perry will retire amid negotiations to sell the casino operator. According to WSJ, the news comes as former gambling executive and regulator Dennis Gomes and JEMB Realty Corp. received exclusive negotiating rights to buy Trump Entertainment. Trump, WSJ says, hired Merrill Lynch & Co. in mid-March to explore strategic options for the company. Citing The Star-Ledger, in Newark, New Jersey, WSJ says Mr. Perry was fired amid controversy on the narrowing the list of potential bidders. The newspaper was also cited by WSJ as saying that Mr. Perry was the lone dissenter in a board vote to enter negotiations with Mr. Gomes. Analysts interviewed by WSJ say the departure could signal that Trump is moving closer to announcing a formal bid. About Trump Entertainment Based in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., now known as Trump Entertainment Resorts Inc. (Nasdaq: TRMP) -- http://www.trumpcasinos.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The company and its debtor-affiliates filed for Chapter 11 bankruptcy protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005. The Plan took effect on May 20, 2005. * * * As reported in the Troubled Company Reporter on March 13, 2007, Standard & Poor's Ratings Services placed its ratings for Trump Entertainment Resorts Holdings L.P., including the 'B' corporate credit rating, on CreditWatch with developing implications. UAL CORP: Expects 2.75%-3.25% Rise in 2nd Qtr. Passenger Revenue ---------------------------------------------------------------- UAL Corporation, United Airlines' holding company, provided an update related to its financial and operational outlook for the second quarter of 2007. Unit Costs The company estimates that mainline operating cost per available seat mile excluding fuel, severance and special items will be flat to up 0.5% for the second quarter of 2007 from the same period in 2006. Revenue Update Second quarter mainline passenger unit revenue is expected to increase between 2.75% and 3.25% year-over-year. Second quarter consolidated PRASM is expected to increase between 2.0% and 3.0% year-over-year. Yields continue to be strong internationally, but under pressure domestically as industry capacity grows and domestic industry revenue slows. The company estimates that cargo, mail and other revenue will be between $420 million and $440 million for the quarter, including UAFC sales of approximately $15 million. Liquidity The company expects to end the quarter with an unrestricted cash and short-term investments balance of between $4.1 billion and $4.2 billion and $0.9 billion of restricted cash. Non-Operating Income / Expense The company estimates that below-the-line non-operating expense will be between $70 million to $80 million for the quarter. Fuel The company expects mainline jet fuel price per gallon to average $2.10 for the quarter, including taxes and the impact of hedges with a total estimated mainline fuel consumption of 579 million gallons. As of June 15, 2007, the company had hedged 21 percent of forecasted fuel consumption for the third quarter of 2007, predominantly through heating oil three-way collars with upside protection on a weighted average basis beginning from $1.93 per gallon and capped at $2.13 per gallon. Payment obligations on a weighted average basis begin if heating oil drops below $1.81 per gallon. Additionally, as of the same date, the company had hedged 15% of forecasted fuel consumption for the fourth quarter of 2007 through heating oil three-way collars with upside protection on a weighted average basis beginning from $2.03 per gallon and capped at $2.22 per gallon. Payment obligations on a weighted average basis begin if heating oil drops below $1.85 per gallon. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. At Dec. 31, 2006, the company's balance sheet showed total assets of $25,369,000,000 and total liabilities of $23,221,000,000. * * * As reported in the Troubled Company Reporter on May 3, 2007, Fitch Ratings has affirmed the Issuer Default Ratings of UAL Corp. and its principal operating subsidiary United Airlines Inc. at B-. VANGUARD SPORTS: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Vanguard Sports, LLC dba April's Sports dba MVP fka April's Treasures 10910 Southlake Court, Suite D Richmond, VA 23236 Bankruptcy Case No.: 07-32206 Type of Business: The Debtor retails sports products from top manufacturers through Internet-based ordering. See http://www.vanguardss.com/ Chapter 11 Petition Date: June 18, 2007 Court: Eastern District of Virginia (Richmond) Debtor's Counsel: Lynn L. Tavenner, Esq. Tavenner & Beran, P.L.C. 20 North Eighth Street, 2nd Floor Richmond, VA 23219 Tel: (804) 783-8300 Fax: (804) 783-0178 Total Assets: $815,118 Total Debts: $1,715,802 Debtor's List of its 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ April's Treasure/Joe Nguyen $212,810 9010 Reigate Road Richmond, VA 23236 New Era Cap Co. $69,496 P.O. Box 054 Buffalo, NY 14240 Onfield Apparel LLC $28,794 21505 Network Place Chicago, IL 60673-1215 Potomac Mills Operating Co. LLC $28,521 Chesapeake Mall LLC $25,769 Vorando Realty Trust $19,397 North Park Association L.P. $18,135 IDB Factors c/o Akademiks $11,690 GMAC Commercial Co #168805 $8,619 Macerich Partnership L.P. $8,214 Advanta Bank Corp. $5,109 Southpark Mall Association $2,923 The Hartford $1,532 Morton G. Thalhimer $1,515 JLG International $1,334 Northern Virginia Electric $899 Manifest Funding $655 NCI Fire and Security $566 Cavalier Business Communication $382 VERIFONE INC: S&P Revises Outlook to Stable from Negative --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on San Jose, California-based VeriFone Inc. to stable from negative, following continued positive operating trends and the successful integration of Lipman Electronic Engineering. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. "The ratings reflect the company's moderate debt leverage and acquisitive growth strategies," said Standard & Poor's credit analyst David Tsui. These factors are offset partially by VeriFone's leading position in the niche market for electronic payment solutions and its diversified customer and market bases. VeriFone designs, markets, and services system solutions that enable secure electronic payments. Organic revenue growth has accelerated over the past two years as a result of management's focus on increasing penetration of electronic payments in international markets. Organic revenue growth also has benefited from the replacement of existing solutions to accommodate newer payment application and an overall market shift from paper-based transactions to electronic transactions at the point of sale. Revenues for the quarter ended April 2007 were $217 million, up from $142 million in the same quarter of 2006. Profitability improved after the November 2006 Lipman acquisition, with EBITDA margins in the mid-20% area, up from 20% in the fiscal year ended October 2006. This resulted primarily from a higher proportion of wireless sales, which typically carries a higher margin than landline sales and was slightly offset by a higher proportion of revenues generated overseas, which typically carries a lower margin than domestic revenues. The acquisition of Lipman Electronic Engineering appears to have been integrated smoothly and to have solidified VeriFone's leading market position, particularly in international markets. VIASYSTEMS CORP: Deleveraging Prompts S&P to Upgrade Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on St. Louis, Missouri-based Viasystems Inc. to 'B+' from 'B', and its subordinated debt rating to 'B-' from 'CCC+', based on deleveraging from the proceeds of the sale of the company's wire harness division and stable earnings from the remaining PCB business. The outlook is stable. "The ratings reflect its highly fragmented and competitive printed circuit board manufacturing market, volatile end markets, and modest free cash flow," said Standard & Poor's credit analyst Lucy Patricola. These partly are offset by the company's low-cost manufacturing locations and its leading OEM customer base across a number of end markets. Viasystems manufactures PCBs, and, to a lesser extent, is an electronics manufacturing services provider. Trailing 12-month sales were $723 million as of March 31, 2007. $200 million of rated debt is outstanding. Viasystems competes in the highly competitive PCB sector by providing complex, multi-layered boards in low cost geographies. Still, the majority of Asian-based demand is for lower technology boards. Despite some end market diversity, 28% of its revenues are derived from the telecommunications sector, exposing the company to cyclicality and volatility in that industry. The company has invested in high technology equipment to maintain its competitive edge as a low cost supplier of complex boards, exceeding free cash flow in 2006. EBITDA margins are higher than EMS peers at about 10%, and have improved sharply from the 2005 level of about 5%. WENDY'S INT'L: Committee Exploring Possible Sale of Company ----------------------------------------------------------- Wendy's International Inc. disclosed Monday that the Special Committee of its Board of Directors, which is reviewing the company's strategic options, has decided to explore a possible sale of the company. The company however did not provide a specific timetable for the process. "The Special Committee has determined that the exploration of a sale is the appropriate next step in the investigation of value-creating alternatives for our stakeholders," said James V. Pickett, Chairman of the Board and the Special Committee. "While a sale remains only one of the alternatives under consideration, we believe it merits more thorough examination." "Our goal is to move forward expeditiously and to minimize disruption to the company and its operations," said Mr. Pickett. "We want management and our operators to focus on executing Wendy's business plan to grow sales and margins." JP Morgan, as lead advisor, and Lehman Brothers Inc., as co-advisor, will conduct the sale exploration process in conjunction with the Special Committee. The Special Committee is also evaluating a possible securitization financing. Such a securitization could be used by a potential buyer or in a recapitalization of the company. Lehman Brothers, as lead structuring advisor, and JP Morgan, as co-structuring advisor, are leading the evaluation on behalf of the Special Committee. Wendy's says there is no assurance that the steps announced will result in any changes to the company's current plans, or that any transaction will be consummated. A sale transaction would require approval by the full Board of Directors and shareholders. In addition, the steps announced do not preclude the possibility of the company pursuing other strategic alternatives in the future. The company plans to report developments regarding the Special Committee's actions only as circumstances warrant. Revised Outlook for 2007 Wendy's said it is revising its 2007 outlook for earnings before interest taxes depreciation and amortization and earnings per share from continuing operations. The company's revised range for EBITDA is $295-315 million, compared to previous guidance of $330-340 million. The revised range is a 33-42% increase over 2006 adjusted EBITDA from continuing operations of $221 million. The company's revised range for EPS is $1.09-1.23 per share, compared to the company's previous guidance of $1.26-1.32 issued on March 20. The primary reasons for the revised outlook are lower-than- planned same-store sales and higher-than-expected commodity costs. Same-store sales were up 3.8% at U.S. company restaurants in the 2007 first quarter and are up 0.7% in the 2007 second quarter through June 15. The revised earnings outlook excludes expenses related to the Board's Special Committee activities, up to $60 million in pension settlement costs that the company noted in February (some of these costs are expected to occur in 2007), and any potential restructuring charges. "Our strategy to revitalize the Wendy's(R) brand, improve our bond with customers and generate sustainable same-stores growth is producing positive results," said Chief Executive Officer and President Kerrii Anderson. "We've delivered 12 consecutive months of positive same-store sales through May, but the last two months have been challenging as we've aggressively adjusted pricing to bring Wendy's more in line with the market. We believe our new market-based pricing approach is the right long-term strategy to generate more positive store operating margins, but it has pressured transactions in the short-term. Our employees and operators are producing improved results, but certain external factors have changed and are impacting results. "Our goal is to keep everyone in the system focused on executing our strategic plan to drive profitable sales and expanded margins at every restaurant," Anderson said. "Our brand strategy and new advertising will clearly tell consumers about Wendy's superior quality and great-tasting products. We have been emphasizing our "fresh, never frozen beef" in our newest ads. At the same time, we are focused on operational improvements across the system and we expect to meet our store labor savings and G&A goals." Earnings Outlook and Guidance The company said that in view of the strategic review process now under way, it is suspending its previous earnings guidance for 2008 and 2009. Management does not plan to provide additional details on its earnings guidance or to update it. About Wendy's Headquartered in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the Americas, Asia, the Pacific Rim, Europe and the Middle East. * * * As reported in the Troubled Company Reporter on April 30, 2007, Standard & Poor's Ratings Services placed its ratings for Dublin, Ohio-based Wendy's International Inc., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. Moody's Investors Service placed all ratings of Wendy's International, Inc. on review for possible downgrade, including: Corporate family rating of Ba2; Senior unsecured notes rated Ba2; Senior unsecured shelf registration rated (P)Ba2; Subordinated shelf registration rated (P)Ba3; and Preferred stock shelf registration rated (P)B1. WINSTON PRESTON: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Winston Meredith Preston 1936 Oregon Road Salvisa, KY 40372-9641 Bankruptcy Case No.: 07-51145 Chapter 11 Petition Date: June 14, 2007 Court: Eastern District of Kentucky (Lexington) Judge: Mary Kris Preston Debtor's Counsel: Laura Day DelCotto, Esq. Wise DelCotto, P.L.L.C. 200 North Upper Street, Lexington, KY 40507 Tel: (859) 231-5800 Fax: (859) 281-1179 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Floyd Van Cook promissory notes $246,631 3611 Gentry Lane Danville, KY 40422 Farm Credit Services farming equipment $116,359 101 Citation Drive loan; value of Danville, KY 40423 security: $4,500 Community Trust Bank loan $150,000 462 West Main Street Danville, KY 40422 State Bank & Trust farming equipment $113,333 Chase credit cards (3) $64,539 P.B.K. Bank-05 2004 Silverado; $28,193 value of security: $16,535 Fifth Third Bank 2002 Land Rover; $19,528 value of security: $13,555 Home Depot personal guaranty $16,172 Fifth Third Bank car loan $7,807 Chase Auto Finance car loan $6,321 Fidelity $ Deposit Co. of unknown Maryland St. Paul Travelers Bond bonding company unknown and personal guaranty Zurich bonding company unknown and personal guaranty YAZAN'S SERVICE: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Yazan's Service Plaza, Inc. 9240 Conant Street Hamtramck, MI 48212 Bankruptcy Case No.: 07-51820 Type of Business: The Debtor operates a gas station. Chapter 11 Petition Date: June 18, 2007 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Daniel V. Smith, Esq. Schafer and Weiner, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million Debtor's List of its 14 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Peoples State Bank 9240 Conant $452,800 1800 East 12 Mile Road Hamtramck, MI 48212 P.O. Box 71485 Madison Heights, MI 48071 Haila & Huda M. Musleh Business Loan $350,000 3827 Miller Street Hamtramck, MI 48212 Ahmed A. Musleh Business Loan $100,000 P.O. Box 12501 Hamtramck, MI 48212 Barrick Enterprises Real Estate $80,897 Top of the Hill Lawn Sprinklers $13,500 Lawn Sprinkling All American Equipment $9,300 Restaurant Supply Constellation New Energy Gas Bill $6,363 Sam's Club Returned Check $3,161 DTE Electric Bill $3,102 Jeff Ashton Insurance Insurance $1,643 Cavalier Business Comm. Telephone Company $639 Bullseye Telecom Corp. Telephone Service $619 Republic Waste Services Rubbish Pick-up $261 Lorillard Tobacco Company Lawsuit Unknown * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION 7th Annual TMA Toronto Golf Social Board of Trade Country Club, Woodbridge, Ontario Contact: 416-867-2300 or http://www.turnaround.org/ June 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION Valuing Distressed and Troubled Companies Denver Athletic Club, Denver, Colorado Contact: http://www.turnaround.org/ June 21, 2007 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION Corporate Reorganization Conference (2nd Annual IWIRC Woman of the Year Award) Chicago, Illinois Contact: http://www.iwirc.org/ June 21, 2007 NEW YORK SOCIETY OF SECURITY ANALYSTS Career Chat: Emerging Careers in Distressed Securities New York, New York Contact: http://www.nyssa.org/ June 21-22, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Tenth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel - Chicago Contact: 800-726-2524; 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http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; 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http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers-the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Today's Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ ********* 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, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena Jusay, 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 ***