/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/041221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, December 21, 2004, Vol. 8, No. 281 Headlines 127 RESTAURANT: Wants to Sell Assets to MARC for $780,000 AIRTRAN HOLDINGS: S&P Affirms 'B-' Corporate Credit Rating ANALYTICAL SURVEYS: Elects E. Gistaro & L. Jones as Board Members ASSET SECURITIZATION: Fitch Junks $33.516 Million Debt Rating ATA AIRLINES: Asks Court to Compel GE Engine to Release 3 Engines BALLY TOTAL: Names Eric Langshur to Board of Directors BICO INC: Bankruptcy Court Formally Closes Chapter 11 Petition BUFFALO MOLDED: U.S. Trustee Picks 11-Member Creditors Committee BUFFALO MOLDED: Leech Tishman Approved as Committee Counsel CALDWELL/VSR INC: Case Summary & 20 Largest Unsecured Creditors COGECO CABLE: S&P Affirms 'BB+' Corporate Credit Rating COLONIAL ADVISORY: Fitch Keeps Class B & C Debt Ratings at Low-C CONGOLEUM: Inks Pact Increasing Congress DIP Loan to $7 Million CONGRESS STREET: Case Summary & 18 Largest Unsecured Creditors COOPER COS.: Fiscal Year Revenue Up 19% to $490.2 Million CORNERSTONE PROPANE: Successfully Emerges from Chapter 11 CREDIT SUISSE: Fitch's $8-Mil Mortgage Cert. Rating Tumbles to 'D' CWMBS INC: Fitch Junks Ratings on Two Mortgage Certificate Classes DEAN FOODS: Moody's Affirms Ba1 Sr. Implied & Long-Term Ratings DI GIORGIO: S&P Lowers Corporate Credit Rating to 'B' from 'B+' EMERALD INVESTMENT: Fitch Junks $20.9 Mil. Pref. Shares Rating ENERGY PARTNERS: Moody's Puts B2 Rating on Sr. Unsecured Notes EXODUS COMMS: Malpractice Claims Against E&Y Go To Arbitration FLEMING COS: Trust Wants to Make Initial Stock Distribution GALEY & LORD: Court Converts Chapter 11 Case to Chapter 7 HOME INTERIORS: Moody's Cuts Sr. Issuer Rating to Caa1 from B3 INSIGHT COMMS: Moody's Places Caa2 Rating on Sr. Unsecured Notes INTERPOOL INC: Moody's Reviews Ratings for Possible Upgrade KMART CORP: Key Documents Regarding Sears Roebuck Merger Deal KNOWLEDGE LEARNING: Moody's Puts B2 Rating on Credit Facility L.J.R. MEYERS: Case Summary & 26 Largest Unsecured Creditors LIONEL CORP: Judge Lifland Okays $60 Million DIP Financing MARINER HEALTHCARE: Moody's Holds 'B' Ratings After Acquisition MIRANT: Court Approves Avista Purchase of Coyote Springs Stations MAGNETITE ASSET: Fitch Puts Low-B Ratings on Classes D & E MORTGAGE CAPITAL: $3.8 Mil. Mortgage Cert. Rating Tumbles to 'D' MURRAY INC: Briggs & Stratton Board OKs $150 Million Acquisition NETWORK INSTALLATION: Former Pac Tel CEO Joins Advisory Board PCA INTERNATIONAL: S&P Junks Unsec. Debt Rating to CCC+ from B- PERRY ELLIS: S&P Affirms 'B+' Corporate Credit Rating POSSIBLE DREAMS: Court Approves Security Capital Settlement Pact PUTNAM CBO: Fitch Keeps Junk Rating on $75.8 Million Senior Notes RELIANCE GROUP: Liquidator Wants Court Nod on Lloyd's Commutation ROBERDS, INC.: Has Until April 13 to File a Chapter 11 Plan ROCHESTER HOUSING: S&P Cuts $4.2M Bond Rating to 'B+' from 'BB' SALOMON BROTHERS: S&P Hacks Class F-DS Certificate Rating to 'B' SAN LUIS: Section 341(a) Meeting Slated for January 20 SAN LUIS: Hires Bennington Johnson & Rubner Padjen for Legal Work SENIOR LIVING: Zurich Settles "Partner" Claims for $47.5 Million SEROLOGICALS CORP: S&P Affirms Low-B Ratings & Positive Outlook SOLUTIA INC: St. Clair County Wants to Collect Ad Valorem Taxes ST. LOUIS: Moody's Affirms B3 Rating on Senior Revenue Bonds THE BRICKMAN GROUP: S&P Affirms Low-B Rating & Stable Outlook THE MIIX GROUP: Files for Chapter 11 Protection in Delaware THE MIIX GROUP INC: Case Summary & 31 Largest Unsecured Creditors THERMADYNE HOLDINGS: David Dyckman Replaces James Tate as CFO THINK AGAIN: Files for Chapter 11 Protection in E.D. Tennessee TODD MCFARLANE: Case Summary & 18 Largest Unsecured Creditors TRICO MARINE: Nasdaq Delists Common Stock from Trading UAL CORP: Court Permits Panel to Intervene in Adversary Proceeding UNITED HOSPITAL: Look for Bankruptcy Schedules on Feb. 1 UNITED HOSPITAL: Wants to Hire Stroock & Stroock as Bankr. Counsel US AIRWAYS: Retiree Committee Retains Alvarez as Advisors WELLS FARGO: Fitch Assigns Low-B Ratings on Classes B-4 & B-5 WELLS FARGO: Fitch Puts Low-B Ratings on Two Private Classes WESCO DISTRIBUTION: S&P Raises Corp. Debt Rating to BB- from B+ WINDHAM MILLS: Case Summary & 20 Largest Unsecured Creditors YUKOS OIL: Will Seek Damages Against Parties Participating in Sale YUKOS OIL: Says It'll Pursue All Options Available After Auction YUKOS OIL: Wants to Maintain Existing Bank Accounts YUKOS OIL: Wants Investment & Deposit Guidelines Waived * Alvarez & Marsal Welcomes John D. Schissler as Director * King & Spalding Elects Three Partners to Policy Committee * Large Companies with Insolvent Balance Sheets ********* 127 RESTAURANT: Wants to Sell Assets to MARC for $780,000 --------------------------------------------------------- 127 Restaurant Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to sell substantially all of their assets to MARC of New York, LLC, for $780,000 subject to better and higher offers. The Debtors are convinced that a sale of their assets will to maximize the value of their estates. The Debtors are also assured that MARC intends to continue the operation of Le Madri Restaurant securing jobs for many of its employees. Headquartered in New York, New York, 127 Restaurant Corp., operates a restaurant. The Company along with its debtor- affiliates filed for chapter 11 protection on Aug. 27, 2003 (Bankr. S.D.N.Y. Case No. 03-15359). Joshua Joseph Angel, Esq., at Angel & Frankel, PC., represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $2,710,160 in total assets and $12,906,360 in total debts. AIRTRAN HOLDINGS: S&P Affirms 'B-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on AirTran Holdings Inc. to stable from negative. At the same time, the 'B-' corporate credit rating was affirmed. The outlook revision follows AirTran Airways Inc.'s unsuccessful $90 million bid for certain of bankrupt ATA Airlines Inc.'s assets. "Standard & Poor's had prior concerns regarding ATA's planned growth strategy at Chicago's Midway Airport and the potential negative effect on its liquidity if it were to have acquired the leasehold on ATA's 14 gates there," said Standard & Poor's credit analyst Betsy Snyder. "With Southwest Airlines Company being chosen as the winning bidder, that concern no longer exists." The ratings on AirTran Holdings Inc. reflect the company's modest competitive position within the U.S. airline industry, and a relatively weak, although somewhat improved, financial profile over the past two years. Its major operating subsidiary is AirTran Airways Inc., which operates primarily at its hub at Atlanta. However, Atlanta is also Delta Air Lines Inc.'s major hub and Delta has competed aggressively against AirTran there. Since 1999, AirTran has been upgrading its fleet, adding new Boeing 717 aircraft, which has aided its operating costs and reduced the average age of its fleet to around three years from 25. In addition, the company began to take delivery of Boeing 737-700's in June 2004, allowing it to fly more long-haul routes and helping it maintain its already relatively low unit operating costs in the mid-8-cent range. Through the first half of 2004, AirTran had been one of only a few U.S. airlines to have achieved profitability since 2002. Its low costs enabled it to attain profitability even in a weak industry pricing environment, in which the larger airlines were forced to match the fares offered by the low fare airlines, including AirTran. However, in the third quarter of 2004, the company reported a loss of $9.8 million, due in large part to the negative effect of four hurricanes in Florida, which accounts for approximately 50% of its business. AirTran's earnings will likely continue to be negatively affected over the next few quarters by the ongoing weak fare environment and high fuel prices. Despite improved earnings through the first half of 2004, AirTran's credit ratios are still relatively weak, due to substantial operating leases used to finance most aircraft deliveries. The ongoing weakness in earnings is not expected to affect its credit ratios materially. However, any significant improvement will be constrained by a growing operating lease burden as the company continues to add to its fleet. Although AirTran's earnings are expected to remain under pressure over the intermediate term, the effect on its credit ratios is anticipated to be modest. Its financial profile will continue to be aided by modest debt maturities and fairly good liquidity for its rating. ANALYTICAL SURVEYS: Elects E. Gistaro & L. Jones as Board Members ----------------------------------------------------------------- Analytical Surveys, Inc.'s (Nasdaq: ANLT) Board of Directors elected Edward P. Gistaro and Lori Jones as members of the board. The Company disclosed that Mr. Christopher Dean and Mr. Christopher Illick resigned from the Board, effective Dec. 15, 2004. The Company also disclosed that its independent auditors, Pannell Kerr Forster of Texas, P.C., issued a going concern qualification on ASI's financial statements for the fiscal year ended Sept. 30, 2004, based on the Company's significant operating losses reported in fiscal 2004 and prior years, as well as a lack of external financing. Mr. Gistaro is chairman and retired CEO of Docucon, Inc., a now- privately held document-imaging company. He also held various management positions at Datapoint Corporation, including CEO, CFO, president and chief operating officer. While at Datapoint, which was a Fortune 500 company, Mr. Gistaro negotiated and executed more than $200 million in acquisition and financing transactions. He brings valuable operating, financial and M&A expertise to the Company. Mr. Gistaro is an independent outside director and will serve on the audit committee. Ms. Jones is ASI's CFO and joins the board as an inside director. She joined the Company in January 2003 and has more than 15 years of financial management experience with both private and public companies. The board also appointed Stanley Rosenberg of Loeffler Tuggey Pauerstein Rosenthal LLP as special advisor to the board. Mr. Rosenberg has been an attorney in San Antonio since 1955, and has advised major corporations on a broad range of real estate and corporate matters. He has represented clients on various phases of real estate developments, including land acquisition, platting, subdividing, financing and sales. Mr. Rosenberg has assisted with initial public offerings for various companies and advised on the sales of multimillion-dollar businesses. Mr. Dean and Mr. Illick, the departing directors, have served on the Company's board since 2002 when Tonga Partners, L.P., exercised its right to appoint a majority of the board. Tonga relinquished its right to appoint directors after it converted a $1.7 million senior secured convertible promissory note on November 10, 2004, and sold its holdings in ASI common stock. About the Company Analytical Surveys Inc. provides technology-enabled solutions and expert services for geospatial data management, including data capture and conversion, planning, implementation, distribution strategies and maintenance services. Through its affiliates, ASI has played a leading role in the geospatial industry for more than 40 years. The Company is dedicated to providing utilities and government with responsive, proactive solutions that maximize the value of information and technology assets. ASI is headquartered in San Antonio, Texas and maintains operations in Waukesha, Wisconsin. For more information, visit http://www.anlt.com/ ASSET SECURITIZATION: Fitch Junks $33.516 Million Debt Rating ------------------------------------------------------------- Fitch Ratings downgrades the ratings of two classes of notes issued by Diversified Asset Securitization Holdings I, L.P. (DASH I). These rating actions are effective immediately: -- $148,508,069 class A-1 notes downgraded to 'A-' from 'AA+'; -- $30,655,335 class A-2 notes downgraded to 'A-' from 'AA+'; -- $33,516,296 class B notes remain at 'C'. The ratings of the class A-1 and class A-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. DASH I is a collateralized debt obligation -- CDO -- managed by Asset Allocation & Management, LLC, which closed Dec. 18, 1999. Currently, DASH I is composed of: * 45.3% residential mortgage-backed securities -- RMBS, * 26.3% asset-backed securities -- ABS, * 25.1% commercial mortgage-backed securities -- CMBS, and * 3.3% CDOs. Due to the occurrence of an event of default under DASH I's governing documents, the portfolio manager is limited to sales of defaulted or credit impaired securities. Since the last rating action in December 2003, the transaction has experienced additional collateral deterioration. The class A overcollateralization -- OC -- ratio and class B OC ratio have decreased from 110.3% and 97.5% on Nov. 30, 2003, to 104.1% and 90.5% as of Oct. 31, 2004. The portfolio contains two defaulted securities totaling $7.9 million (4%). Additionally, the portfolio contains a large number of assets whereby default is probable although not classified as defaulted securities. These assets have exposure to troubled sectors such as manufactured housing, aircraft leases and mutual fund fees. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at http://www.fitchratings.com/ For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, also available on the Fitch Ratings web site. ATA AIRLINES: Asks Court to Compel GE Engine to Release 3 Engines ----------------------------------------------------------------- Chicago Express Airlines, Inc., and GE Engine Services, Inc., are parties to an Engine Care Maintenance Plan Agreement, dated as of January 2000. The ECMP Agreement is a "Power By The Hour" contract. Under these types of contracts, a maintenance provider provides scheduled maintenance service on specified engines and is paid in regular payments under the contract based on hourly rates assessed on the number of hours the specified engines are "flown." In other words, the owner prepays its maintenance costs at no additional charges. As of the Petition Date, Chicago Express owes $1.8 million to GE Engine for these maintenance services. Under the ECMP Agreement, GE Engine also provides repair services to engines that are damaged. Termed as "non-qualifying ECMP shop visits," separate pricing schedule -- essentially being hourly labor and materials charges -- are assessed and invoiced for these services. Terry E. Hall, Esq., at Baker Daniels, in Indianapolis, Indiana, relates that an engine with Serial No. 785252 was delivered to GE Engine prepetition for repair as a non-qualifying shop visit due to ice ingestion that damaged the engine. This type of internal engine damage due to external ingested material is termed a "FOD" for "foreign object damage." GE Engine indicated that the Engine is repaired and ready to be released. GE Engine provided Chicago Express with an invoice dated October 27, 2004, for the FOD repair for $182,782. Ms. Hall informs the Court that the FOD event is an insured event deductible by $50,000. The applicable insurance carrier did not dispute the claim for the FOD Invoice. Chicago Express was prepared to pay the FOD Invoice. However, GE Engine refused to release the Engine, even after Chicago Express' communication that it would pay the FOD Invoice. On November 23, 2004, GE Engine provided Chicago Express with a second invoice on the FOD event for the Engine amounting to $708,849. Ms. Hall asserts that the Engine was not due for any scheduled maintenance. Chicago Express also disputes that the Second Invoice represents the amount due under the ECMP Agreement for the FOD repair to the Engine. Thus, the Engine should be released upon Chicago Express' payment of the FOD Invoice. Ms. Hall reports that GE Engine is also holding two other engines with Serial Nos. 785532 and 785178. According to Ms. Hall, GE Engine refuses to release either Engine and has informed Chicago Express that, in essence, the Debtor must pay the prepetition debt owed before the Engines will be released. GE Engine appears to be demanding additional hourly payments for scheduled work that is payable under the ECMP Agreement in violation of the ECMP Agreement, Ms. Hall says. Chicago Express has continued to pay the Power Hour Payments postpetition and continues to perform under the ECMP Agreement. Ms. Hall argues that Chicago Express must have access to the Engines to replace other engines that are coming due for scheduled maintenance. If the Engines are not released, Chicago Express may need to cancel flights and ground aircraft. Thus, ATA Airlines and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of Indiana to compel GE Engine to release the three Engines in its possession to Chicago Express immediately. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) BALLY TOTAL: Names Eric Langshur to Board of Directors ------------------------------------------------------ Bally Total Fitness Holding Corporation (NYSE:BFT), North America's leader in health and fitness products and services, has appointed Eric Langshur to the Company's Board of Directors, effective immediately. "Eric is an excellent addition to the Company's Board of Directors," said Paul Toback, chairman, CEO and president, Bally Total Fitness. "He has an exceptional background in business and finance along with a particular expertise in corporate turnarounds. I look forward to taking advantage of his knowledge and experience, and working closely with him as we move forward with Bally's turnaround." Eric Langshur is the founder and CEO of TLContact, Inc., a privately held company that delivers innovative patient communications and education services to the healthcare industry. Prior to starting TLContact in 2000, he served as President of Bombardier Aerospace, CAS, where he lead commercial aerospace service operations for a world leader in the design and manufacture of innovative aviation products and services for the business, regional and amphibious aircraft markets. Before Bombardier, Mr. Langshur spent 13 years with United Technologies Corporation, where he held a variety of senior management and turnaround positions at Hamilton Sundstrand, Pratt & Whitney and UTC's corporate office. Mr. Langshur holds an MBA from Columbia University and a BSc from the University of New Brunswick in Finance and Information Systems. About Bally Total Fitness Bally Total Fitness -- http://www.ballyfitness.com/ -- is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and approximately 440 facilities located in 29 states, Mexico, Canada, China, Korea and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Dec. 13, 2004, Standard & Poor's Ratings Services raised its corporate credit rating on fitness club operator Bally Total Fitness Holding Corporation to 'B-' from 'CCC+' and removed it from CreditWatch, where it was placed on Aug. 17, 2004. The actions were based on the company obtaining a limited waiver from a majority of noteholders, to avoid possible default. The outlook is now developing. The company's total debt outstanding at Sept. 30, 2004, was $747.7 million. "The ratings reflect Bally's high financial risk from substantial club expansion, a heavy debt and operating lease burden, and minimal positive discretionary cash flow," said Standard & Poor's credit analyst Andy Liu. "These factors are only partially offset by the company's geographic diversity and large club base." BICO INC: Bankruptcy Court Formally Closes Chapter 11 Petition -------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Pennsylvania entered an order formally closing BICO, Inc.'s (Pink Sheets: BIKO) chapter 11 petition on Dec. 7, 2004. As reported in the Troubled Company Reporter on Nov. 09, 2004, BICO has completed the merger with cXc Services, Inc. The Plan of Merger is in accordance with BICO's Chapter 11 Reorganization Plan, which has been approved by the U.S. Bankruptcy Court for the Western District of Pennsylvania and consented to by the Securities and Exchange Commission as well as the Pennsylvania Department of Revenue. BICO, the new company, will be both a distributor of Internet appliances and an advertising and content publisher, delivering content and other fee-based services, including ISP, telephone services, video conferencing and e-commerce fulfillment directly to its appliances. BICO is the exclusive North American distributor of Amstrad's em@iler web phones. Amstrad is a British company that has been in the consumer electronics business since 1972 manufacturing PC's, audio equipment, and television "set top" boxes as well as telephones. BICO's corporate offices are headquartered in Dove Canyon, California. For further information contact: John D. Hannesson, Esq. Executive Vice President Tel. No. : 949 509-9858 Fax: 949 509-9867 E-Mail: info@cxcservices.com Bico, Inc., formerly known as Biocontrol Technology, Inc., manufactures laboratory sized ore crushers. The Company filed for Chapter 11 protection on March 18, 2003 (Bankr. W.D. Pa. Case No.: 03-23239). Steven T. Shreve, Esq., at Shreve & Pail represents the Debtor in its restructuring efforts. The Bankruptcy Court confirmed the Debtor's Chapter 11 Reorganization Plan on Oct. 15, 2004. BUFFALO MOLDED: U.S. Trustee Picks 11-Member Creditors Committee ---------------------------------------------------------------- The United States Trustee for Region 3 appointed eleven creditors to serve on the Official Committee of Unsecured Creditors in Buffalo Molded Plastics, Inc.'s chapter 11 case: 1. PPG Industries, Inc. Attn: Bridget Quinlan One PPG Place, Pittsburgh, Pennsylvania 15272 Phone: 412-434-2786, Fax: 412-434-4491 2. Basell USA, Inc. Attn: Scott Salerni, Esq. 912 Appleton Road, Elkton, Maryland 21921 Phone: 410-996-1238, Fax: 410-996-2104 3. Light Fabrications, Inc. Attn: Brian Grant 40 Hytec Circle, Rochester, New York 14606 Phone: 585-426-5330, Fax: 585-426-5239 4. Washington Penn Plastics Co., Inc. Attn: Robert Stough P.O. Box 236, 2080 N. Main St., Washington, Pennsylvania 15301 Tel. 724-228-1260, Fax: 724-223-9300 5. Infinity Resources, Inc. Attn: Charles W. Farrell 119 W. 9th Street, Erie, Pennsylvania 16501 Phone: 814-453-6571, Fax: 814-453-4711 6. Jamestown Plastics, Inc. Attn: Jeffrey J. Baker, Esq. P.O. Box 9, Brocton, New York 14716 Tel. (716) 792-4144 Fax (716) 792-4154 7. Circle Business Services 120 Attn: Paul L. Sacksteder W. Second St., Suite 1010, Dayton, Ohio 45402 Phone: 937-224-1452, Fax: 937-224-5523 8. Siegel-Robert, Inc. Attn: Maryann Merritt 12837 Flushing Meadows, St. Louis, Missouri 63131 Phone: 314-256-4558, Fax: 314-544-8480 9. H. Muehlstein & Co., Inc. Attn: Kenneth J. Ruszkowski 800 Connecticut Avenue, Norwalk, Connecticut 06854 Phone: 203-855-6126, Fax: 203-855-6144 10. Crawford County Properties, Inc. Attn: Mark E. Turner 18257 Industrial Drive, Meadville, Pennsylvania 16335 Phone: 814-337-8100, Fax: 814-333-9508 11. Tri-Dim Filter Corporation Attn: Patti Greene 741 McClurg Road, Youngstown, Ohio 44512 Phone: 330-758-8151, Fax: 330-758-7682 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Andover, Ohio, Buffalo Molded Plastics, Inc., dba Andover Industries, -- http://www.andoverplastics.com/-- is engaged in the molding industry. The Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr. W.D. Pa. Case No. 04-12782). David Bruce Salzman, Esq., at Campbell & Levine, LLC, represents the Company. When the Debtor filed for chapter 11 protection, it estimated assets and debts in the $10 million to $50 million range. BUFFALO MOLDED: Leech Tishman Approved as Committee Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania gave the Official Committee of Unsecured Creditors of Buffalo Molded Plastics, Inc., permission to employ Leech Tishman Fuscaldo & Lampl, LLC as its counsel. Leech Tishman will: a) provide the Committee with legal advice with respect to its duties and powers in the Debtor's chapter 11 case; b) assist the Committee in its investigation of: (i) the acts, conduct, assets, liabilities, and financial condition of the Debtor, (ii) the operation of the Debtor's business, and (iii) the desirability of the continuation of the Debtor's business, and any other matters relevant to the formulation of a plan of reorganization; c) review the Debtor's proposed Disclosure Statement and Plan of Reorganization and participate with the Debtor in the formulation or modification of the proposed Plan; and d) perform other legal services as maybe required by the Committee and in the interest of the creditors. David W. Lampl, Esq., a Member at Leech Tishman, is the lead attorney for the Committee. Mr. Lampl reports the Leech Tishman's professionals bill: Designation Hourly Rate ----------- ----------- Partners $195 - 354 Associates 135 - 230 Paralegals/Law Clerks 65 - 120 Leech Tishman assures the Court that it does not represent any interest adverse to the Debtor or its estate. Headquartered in Andover, Ohio, Buffalo Molded Plastics, Inc., dba Andover Industries, -- http://www.andoverplastics.com/-- is engaged in the molding industry. The Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr. W.D. Pa. Case No. 04-12782). David Bruce Salzman, Esq., at Campbell & Levine, LLC, represents the Company. When the Debtor filed for chapter 11 protection, it estimated assets and debts in the $10 million to $50 million range. CALDWELL/VSR INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Caldwell/VSR, Inc. dba CVI 7264 Hanover Green Drive Mechanicsville, Virginia 23111 Bankruptcy Case No.: 04-41560 Chapter 11 Petition Date: December 15, 2004 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Neil E. McCullagh, Esq. Cantor Arkema, P.C. P.O. Box 561 Richmond, VA 23218 Tel: 804-644-1400 Total Assets: $7,367,512 Total Debts: $22,682,205 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Summit Forest Products Trade debt $3,249,211 3822 Vista Blanca San Clemente, CA 92672 Tieling Excellent Timber Co. Trade debt $3,067,898 88 Xinggong Street Tieling, Liaoning China 11200 Capital South Partners Fund Second lien on $2,127,975 I, L.P. substantially all c/o Christopher S. Nesbit assets 201 N. Tryon Street P.O. Box 31247 Charlotte, NC 28202 Waterside Capital Corp. Trade debt $1,289,811 c/o Frank J. Santoro, Esq. Marcus Santoro & Kozak, PC 1435 Crossways Blvd., Ste. 300 Chesapeake, VA 23320 Valspar Industries, Inc. Trade debt $1,194,226 P.O. Box 771841 Chicago, IL 60677 Maze Moulding Trade debt $889,705 1252 West Rodger Road Tucson, AZ 85705 Win Harvest International, Trade debt $729,976 Ltd. 803 Portland Comm. Bldg. Mongkok, Kowloon, HK P&M Cedar Products, Inc. Trade debt $536,516 c/o Watkin Law Corporation 16600 Sherman Way, Ste. 200 Lake Balboa, CA 91406 City National Bank Loans $278,176 P.O. Drawer 1100 Weslaco, TX 78599 Western Silver, Ltd. Trade debt $160,490 Armando Barrera, Jr. Personal Property $152,181 Taxes ANP Dimensional Lumber Trade debt $141,596 Solvents & Chemicals, Inc. Trade debt $118,518 CPL Retail Energy Trade debt $88,364 Economic Development Corp. Trade debt $79,314 Hunter Douglas Wood Products Trade debt $60,493 Packaging Services Trade debt $57,001 First Insurance Funding Corp Trade debt $55,163 C&S Safety Supply Trade debt $41,919 IFCO Systems NA, Inc. Trade debt $32,092 COGECO CABLE: S&P Affirms 'BB+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings including its 'BB+' long-term corporate credit rating on Montreal, Quebec- based Cogeco Cable, Inc. At the same time, Standard & Poor's assigned its '1' recovery ratings on the company's senior secured credit facility and other senior secured first priority debt. The '1' recovery rating reflects expectations of full recovery of principal in a default scenario. The outlook is stable. The ratings on Cogeco Cable reflect the company's below average, but improving financial risk profile, given the company's aggressive leverage, and the company's average business position as Canada's fourth-largest cable company. Cogeco Cable's controlling parent, Cogeco, Inc., has no material effect on the ratings. Cogeco Cable's business risk profile has remained stable in the face of competition from direct-to-home satellite TV providers Star Choice Communications, Inc., and Bell ExpressVu Ltd. After several years of basic subscriber losses to the DTH providers, Cogeco has performed much better in the past two years. "Despite pressures on the basic subscriber side, Cogeco has a consistent track record of positive revenue and EBITDA growth," said Standard & Poor's credit analyst Joe Morin. Revenues and reported operating income increased by 7.6% and 15.6%, respectively, in fiscal 2004 to reach C$526 million and C$203 million. Standard & Poor's expects continued marginal improvements in the company's financial risk profile in 2005, as the company is currently generating positive free cash flow and is expected to apply a portion of that to debt reduction. The potential for increased video competition and Cogeco's planned entry into the telephony market, could put pressure on pricing, operating margins, and cash flows in the medium term. Competition for video services could also increase in the medium term as VDSL (video over digital subscriber line) technology makes it more feasible for telecom operators to offer video to its HSI customers. In addition, Cogeco Cable is planning to launch voice over Internet protocol -- VoIP, which would allow the company to offer fixed-line phone services to complement its TV and HSI offerings. The company has not yet fully developed its VoIP plan: Standard & Poor's will comment on this strategy further once finalized and announced by the company. The outlook is stable. Standard & Poor's expects that Cogeco Cable will be able to maintain a competitive position against DTH satellite service providers, and offset any basic subscriber erosion through continued growth in digital TV and HSI subscribers. The ratings and outlook also assume that no material amount of debt will be added at the parent level, and that Cogeco and its media assets will continue to be credit neutral. COLONIAL ADVISORY: Fitch Keeps Class B & C Debt Ratings at Low-C ---------------------------------------------------------------- Fitch Ratings has upgraded the rating on one class of notes issued by Colonial Advisory Services CBO I, Ltd., a collateralized bond obligation -- CBO -- backed by high yield bonds. The ratings on the other two classes of notes remain unchanged. This class has been upgraded: -- $80,656,407 class A notes upgraded to 'AA' from 'AA-'; These classes remain unchanged: -- $70,673,530 class B notes remain at 'CC'; -- $91,087,976 class C notes remain at 'C'. According to its Nov. 19, 2004, trustee report, the Colonial CBO portfolio collateral includes a par amount of $10.6 million of defaulted assets, representing 8.7% of aggregate collateral principal balance. The class B and total overcollateralization -- OC -- tests are failing at 88.5% and 60.8%, versus their triggers of 118% and 107%, respectively. The class A OC test is passing at 158.7%, versus a trigger of 140%. The upgrade of the class A notes reflects the continued paydown of that class and the continued improvement in the class A OC test. In addition, Fitch has reviewed the results of cash flow model runs, incorporating several different default and interest rate stress scenarios. Also, Fitch discussed with Colonial Management Associates, Inc., the investment advisor, their expectations and opinions of the portfolio. Deal information and historical data on Colonial Advisory Services CBO I, Ltd., is available on the Fitch Ratings web site at http://www.fitchratings.com/ CONGOLEUM: Inks Pact Increasing Congress DIP Loan to $7 Million --------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey gave Congoleum Corporation permission to amend its debtor-in- possession financing facility with Congress Financial Corporation. The amended DIP Financing arrangement: (i) increases the current budget from $5 million to $7 million; (ii) extends the term of the existing debtor-in-possession financing facility from Dec. 31, 2004, to June 30, 2005; (iii) places new limitation on capital expenditures; and (iv) provides a new minimum EBITDA covenant. A fee of $150,000 is payable to Congress in connection with the execution of the amendment. The existing DIP financing facility provides a one-year revolving credit facility with borrowings up to $30 million. Interest is based on 0.75% above the prime rate. The facility contains certain covenants, including the maintenance of a minimum tangible net worth and restrictions on the incurrence of additional debt. Borrowings under this facility are collateralized by inventory and receivables. The amendment does not affect these terms of the existing financing facility. The Company anticipates that its DIP financing facility will be replaced with a revolving credit facility on substantially similar terms upon confirmation of its plan of reorganization. While the Company expects the existing facility as amended will provide it with sufficient liquidity, there can be no assurances that the Company will continue to be in compliance with the required covenants, that the Company will be able to obtain a similar or sufficient facility upon exit from bankruptcy, or that the DIP facility will be renewed beyond its expiration on June 30, 2005. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoluem.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524). Domenic Pacitti, Esq., at Saul Ewing, LLP, represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. As reported in the Troubled Company Reporter yesterday, the Court approved the disclosure statement and voting procedures for Congoleum Corp.'s amended plan of reorganization. At Sept. 30, 2004, Congoleum Corp.'s balance sheet showed a $23,148,000 stockholders' deficit, compared to a $25,777,000 deficit at Dec. 31, 2003. CONGRESS STREET: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Congress Street Nights, Inc. aka Curtain Club 2800 Main Street Dallas, Texas 75226 Bankruptcy Case No.: 04-83619 Type of Business: The Company provides venue, production & facilities for live local & regional music. The main room and the lounge are available for private parties and special events. See http://www.curtainclub.com/ Chapter 11 Petition Date: December 17, 2004 Court: Northern District of Texas (Dallas) Debtor's Counsel: Jeffrey R. Fine, Esq. Hughes and Luce, LLP 1717 Main Street, Suite 2800 Dallas, Texas 75201 Tel: (214) 939-5567 Fax: (214) 939-5849 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ronald & Sandra Hyden Value of Security: $1,650,000 c/o Gregg Schellhammer $350,000 1008 West Pioneer Parkway Arlington, Texas 76013 David Childs Taxes $11,865 Tax Assessor Collector PO Box 620088 Dallas, Texas 75262-0088 State Comptroller TABC Tax $10,645 Austin, Texas 78774-0100 Delay Lighting $6,000 State Comptroller Sales Tax $3,281 Internal Revenue Service $3,063 TXU Electric $2,151 Dallas Observer $1,500 Alliance Premium $1,488 Weaver & Tidwell, LLP $1,392 Roger Albright $1,008 City of Dallas $725 City of Dallas Beer/Liquor License $460 SBC $369 Comcast $166 Texas Workforce Commission $127 City of Dallas Utilities & Services $79 TXU Gas $39 COOPER COS.: Fiscal Year Revenue Up 19% to $490.2 Million --------------------------------------------------------- The Cooper Companies, Inc. (NYSE:COO) reported results for its fourth quarter and fiscal year ended Oct. 31, 2004, and restated earlier earnings per share to reflect new accounting principles generally accepted in the United States which amend the methodology of calculating diluted earnings per share for contingently convertible senior debentures. Fourth Quarter and Fiscal 2004 Results -- Fourth quarter revenue $130.8 million, 16% above fourth quarter 2003, 12% in constant currency. Fiscal 2004 revenue $490.2 million, 19% above fiscal 2003, 14% in constant currency. -- Giving effect to the new methodology for convertibles and an adjustment to the Effective Tax Rate (ETR), fourth quarter EPS 79 cents, up 30%, and fiscal year 2004 EPS $2.59, up 24%. -- Before the effect of the new methodology for convertibles and the ETR adjustment, fourth quarter 2004 EPS 72 cents, up 13%, and fiscal year 2004 EPS $2.61, up 23%. -- Cash flow (income before taxes, depreciation and amortization) per share 96 cents, up 10% from 87 cents in fourth quarter 2003; fiscal 2004 up 13% to $3.50 from $3.10 in fiscal 2003. -- Operating cash flow $35.2 million for the quarter; $101.2 million for fiscal 2004 versus $80 million for fiscal 2003. Accounting Change During the fiscal fourth quarter, the Company elected to adopt EITF 04-8 and as a result has included the dilutive effect of its contingently convertible senior debentures in its diluted earnings per share calculation from the time of issuance of the notes, in accordance with the if-converted methodology under SFAS No. 128. The effect of this election was to decrease EPS for the fourth quarter by 4 cents. Lower Effective Tax Rate Cooper's effective tax rate (ETR) for fiscal 2004 (provision for taxes divided by income before taxes) is 17.5% down from the 21% reported in its third quarter results. GAAP requires the projected fiscal year ETR to be used when reporting year-to-date results for interim periods. The ETR was revised downward in the fourth quarter to adjust for increased profit and reinvestment of earnings from the continuing growth of CooperVision business outside the United States and the release of certain tax reserves no longer required. The effect of the lower fiscal year ETR was to reduce the ETR for the fourth quarter to 8% and to increase EPS by 11 cents. Cooper expects that the ETR for fiscal 2005 will be 21%. Restated and Pro Forma Diluted Earnings Per Share As described above, the Company has restated diluted earnings per share, starting in the third quarter of fiscal 2003 through the third quarter of fiscal 2004 for the effects of the accounting change for convertibles. In addition, diluted earnings per share for the fourth quarter of fiscal 2004 has been affected by the lower ETR. 2004 Performance Commenting on the year's results, Chief Executive Officer A. Thomas Bender said, "The Cooper Companies had another solid year, continuing the consistent performance it has delivered since 1995. Compared to 2003, revenue grew 19%, operating income grew 23%, earnings per share were up 24% and cash flow per share increased 13%. Our five-year compounded annual growth in revenue is 24%, in operating income 25%, in earnings per share 28% and in cash flow per share 20%. "According to independent sales audit data, CooperVision (CVI), our contact lens business, improved its market position in all of the major markets where it competes. We estimate that our worldwide soft contact lens market share exceeds 10%, up from 6% three years ago. In the United States, the world's largest market, CVI is now the nation's third largest contact lens manufacturer, with about 13% of the market. Year to date, our U.S. business grew 12% compared to estimated 2004 market growth of 8%. "CooperSurgical (CSI), our women's health care business, continued to execute successfully its strategy of consolidating the market through acquisition, completing two transactions during the fiscal year that strengthened its presence in the incontinence sector." Fourth Quarter and Fiscal 2004 Revenue and Expense Summary Cooper's quarterly revenue of $130.8 million was 16% above last year's fourth quarter, 12% in constant currency. For the fiscal year, revenue grew 19%, 14% in constant currency. Gross margin for the quarter was 64%, versus 66% in last year's fourth quarter as lower margin sales to distributors outside the U.S. and a weaker U.S. dollar offset improvements in manufacturing efficiency. For the fiscal year, gross margin was 64%, the same as last year. Selling, general and administrative expenses grew 13%, 10% in constant currency, and decreased to 38% of revenue from 39% in last year's fourth quarter. SG&A spending for the fiscal year was 39% of sales compared to 40% in 2003. Fourth quarter 2004 research and development expense was $1.9 million, up 22% over the fourth quarter of 2003, supporting previously announced plans to develop both new and improved contact lens products and development efforts for new incontinence products at CooperSurgical. Operating income grew 12% and the quarter's operating margin was 25% of revenue versus 26% in last year's fourth quarter. Total operating expenses were 40% of revenue, down from 41% in last year's fourth quarter. For the fiscal year, operating income rose 23% with an operating margin of 24% versus 23% in 2003. Currency fluctuations did not materially impact operating income in the quarter. Because CVI manufactures the majority of its lenses in the United Kingdom with costs denominated in pounds sterling, the unfavorable currency translation of manufacturing and operating costs tends to offset the currency gains on overseas revenue. Income before taxes in the quarter grew 13% and increased 24% for the fiscal year. ETR for fiscal 2004 was 17.5% compared to 24% for fiscal 2003 reflecting a favorable mix of profits outside the United States and the release of certain tax reserves no longer required. Interest expense fell 13% versus last year's fourth quarter, reflecting a general decrease in interest rates and reduced debt levels due to strong operating cash flow. Reflecting the accounting change for convertibles, the number of shares used to compute diluted earnings per share grew to 36.9 million in the fourth quarter, up 4% and to 36.6 million for the fiscal year, up 10%. Balance Sheet and Cash Flow Highlights: -- At the end of the fourth fiscal quarter, Cooper's days sales outstanding (DSO's) decreased to 65 days from 67 days a year ago. Given continued strong growth expectations outside the United States where DSO's are higher, Cooper expects future DSO's in the mid to upper 60's to low 70's. -- Inventory months on hand was 6.9 months at the end of the quarter compared to 7.0 months a year ago, in line with Company expectations. -- Capital expenditures were about $10 million in the quarter and $41 million for the year, primarily to expand CVI's manufacturing capacity and continue the rollout of new information systems in selected locations, including several outside the United States. -- Depreciation and amortization was $4.1 million for the quarter, $15.7 million for the year. CooperVision CVI fourth quarter revenue was $103.8 million, up 14%, about 10% in constant currency, and $388.7 million for the fiscal year, up 18%, 12% in constant currency. "In our fourth quarter," said Bender, "CVI significantly outpaced both the market and the results reported for the third calendar quarter by our four direct competitors. Our specialty lens franchise -- toric, cosmetic, and multifocal lenses and lenses to alleviate dry eye symptoms -- continues to gain momentum, while our value-added monthly disposable spherical products continue to capture market share from two-week commodity disposable spherical lenses." CVI's operating margin in the fourth quarter was 28% versus 29% in last year's fourth quarter and 27% for fiscal 2004, the same as in fiscal 2003. Proposed Acquisition of Ocular Sciences, Inc. In July, Cooper and Ocular Sciences, Inc. (Nasdaq:OCLR) announced that they had signed a definitive agreement for Cooper to acquire Ocular in a merger in which Ocular stockholders will be entitled to receive 0.3879 of a share of Cooper common stock and $22.00 in cash, without interest, for each share of Ocular common stock they own. At closing, expected in the first quarter of Cooper's 2005 fiscal year, which began on November 1, 2004, Cooper will pay approximately $600 million in cash and issue approximately 10.7 million shares of its common stock to Ocular Sciences stockholders and option holders. Completion of the transaction, which has been approved by each company's stockholders, remains subject to expiration of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act and customary closing conditions. Information In connection with Cooper's proposed merger with Ocular Sciences, Cooper has filed with the SEC a registration statement on Form S- 4, containing a joint proxy statement/prospectus and other relevant materials. The definitive joint proxy statement/prospectus has been mailed to the stockholders of Cooper and Ocular Sciences. Investors and security holders of Cooper and Ocular Sciences are urged to read the joint proxy statement/prospectus as well as other documents to be filed with the SEC in connection with the acquisition or incorporated by reference in the joint proxy statement/prospectus, because they contain important information about Cooper, Ocular and the proposed merger. Investors can obtain these documents free of charge at the SEC web site http://www.sec.gov/ Also, investors and security holders may obtain free copies of the documents filed with the SEC by Cooper by contacting: Investor Relations The Cooper Companies, Inc. 21062 Bake Parkway, Suite 200 Lake Forest, Calif. 92630 Tel. No. 949-597-4700 E-mail: ir@coopercos.com Investors and security holders may obtain free copies of the documents filed with the SEC by Ocular Sciences by contacting: EVC Group, Inc. 90 Montgomery Street Suite 1001 San Francisco, Calif. 94165 Tel. No. 415-896-6820 E-mail: ocularir@evcgroup.com CooperSurgical CSI revenue grew 22% in the quarter to $27 million and 23% for the fiscal year to $101.5 million. Organic growth in the fourth quarter and fiscal year was 4%. CSI's operating margin in the fourth quarter was 21%, down from 25% in last year's fourth quarter, and 21% for the fiscal year, down from 22% the previous year, reflecting the previously announced planned increase in sales and marketing expenditures designed to stimulate future organic growth. CooperSurgical Acquisitions in 2004 In December 2003, CSI announced the purchase from privately held SURx, Inc., of the assets and associated worldwide license rights for the Laparoscopic (LP) and Transvaginal (TV) product lines of its Radio Frequency (RF) Bladder Neck Suspension technology, which uses radio frequency based thermal energy instead of implants to restore continence. RF Bladder Neck Suspension is a minimally invasive procedure used to treat genuine stress incontinence (GSI). Using low power, bipolar RF energy, the procedure shrinks tissue in the pelvic floor to lift the urethra and bladder neck to a more normal anatomical position. This procedure can be performed using either a laparoscopic or a transvaginal approach. The SURx System consists of a small, lightweight 15 watt SURx Radio Frequency Generator that delivers RF energy to a single-use handheld applicator for each surgical approach. In February, Cooper acquired Milex Products, Inc., a manufacturer and marketer of obstetric and gynecologic products and customized print services. Milex is a leading supplier of pessaries-products used to medically manage female urinary incontinence and pelvic support conditions-and also supplies cancer screening products, including endometrial and endocervical sampling devices and a breast biopsy needle for fine needle aspiration. Milex also publishes patient education materials that discuss prenatal and pregnancy issues, breast health, menopause and osteoporosis. CVI Business Details Worldwide Contact Lens Market Revenue reported for the first nine months of 2004 by the five leading contact lens manufacturers that represent more than 95% of the global market indicates that the worldwide market grew about 13%, or 9% in constant currency. Cooper estimates that the worldwide market for soft contact lenses is $3.9 billion annually. Fourth Quarter and Year-To-Date Contact Lens Revenue: -- Worldwide CVI revenue grew 14% in the fourth quarter, 10% in constant currency, and was 18% ahead for the year, 12% in constant currency. -- Revenue for specialty lenses -- toric lenses, cosmetic lenses, multifocal lenses and lenses to alleviate dry eye symptoms -- grew 18% in the fourth quarter, 23% for the year, and now accounts for over 62% of CVI's worldwide business and 70% of its revenue in the United States. -- Sales of toric lenses, which correct astigmatism, increased 14% in the quarter, 22% for the year and now represent about 40% of CVI's revenue. Sales of disposable torics grew 30% in the quarter and 45% for the year, and now represent 72% of CVI's total toric sales. -- CVI's disposable spherical lens business grew 16% in the fourth quarter and 20% for the fiscal year reflecting the ongoing transition worldwide from commodity two-week spheres to monthly disposable spheres that offer unique patient benefits such as CVI's Proclear brand for patients with dry eye symptoms. CVI Geographic Revenue Highlights -- Revenue in the United States, about half of CVI's business, grew 6% in the quarter and 12% for the year. -- Revenue outside the United States grew 23% in the quarter and was 24% ahead for the year. -- European revenue, 36% of CVI's revenue in the quarter, grew 24% in the quarter and 25% for the year. -- Asia-Pacific revenue grew 27% year over year to $21.6 million, 6% of CVI's business. CVI New Products During 2004, CVI's line of multifocal lenses for the correction of presbyopia was expanded to include Proclear Multifocal, and the UltraVue 2000 Multifocal, UltraVue 2000 Multifocal Toric and UltraVue 2000 Multifocal Options. Coupled with CVI's existing multifocal product, Frequency 55 Multifocal, these new offerings provide an almost limitless range of power and base curve options for presbyopic patients. Operating Cash Flow Primarily due to strong operating results, improved days sales outstanding, and U.S. federal tax savings resulting from net operating loss carryforwards, Cooper's fourth quarter operating cash flow was $35.2 million and $101.2 million for fiscal 2004. Excluding $41 million in capital expenditures during 2004, "free cash flow" was $60 million. About the Company The Cooper Companies, headquartered in Pleasanton, California, manufactures and markets soft contact lenses worldwide. The company also manufactures diagnostic products, surgical instruments, and accessories for women's healthcare. For the twelve months ended July 31, 2004, the company generated approximately $470 million of revenues. * * * As reported in the Troubled Company Reporter on Oct. 18, 2004, Moody's Investors Service assigned Ba3 ratings to the proposed credit facilities of The Cooper Companies, Inc. Moody's also assigned a Ba3 senior implied rating, a B1 senior unsecured issuer rating, and an SGL-2 speculative grade liquidity rating to the company. The outlook for the ratings is stable. This is the first time Moody's has rated Cooper. New Ratings: * $275 Million 5 Year Senior Secured Revolving Credit Facility, rated Ba3 * $325 Million 5 Year Senior Secured Term Loan A, rated Ba3 * $150 Million 7 Year Senior Secured Term Loan B, rated Ba3 * Senior Implied Rating, rated Ba3 * Senior Unsecured Issuer Rating, rated B1 * Speculative Grade Liquidity Rating, rated SGL-2 The outlook for the ratings is stable. The ratings reflect: (i) the company's high leverage, integration risks associated with the Ocular Sciences, Inc. acquisition, and (ii) the company's aggressive growth strategy and continued interest in acquisitions. CORNERSTONE PROPANE: Successfully Emerges from Chapter 11 --------------------------------------------------------- Cornerstone Propane Partners, L.P., has completed the necessary steps to implement its Joint Plan of Reorganization, which was confirmed by the Bankruptcy Court on Nov. 8, 2004. After only seven months, Cornerstone has successfully emerged from its voluntary Chapter 11 proceeding as a financially stable company. Bill Corbin, who assumed the position of Chief Executive Officer of Cornerstone upon emergence, said "We officially completed our Chapter 11 restructuring and we emerge with a greatly de-leveraged balance sheet and significant cash resources that will allow the Company to provide better service to our existing customers and strengthen our business relationships." Under the terms of the Plan, Cornerstone's long-term debt will be reduced from $601 million to $131 million. Also, the Company has completed a new bank facility which provides up to $50 million to be used to fund the Company's operations now that the Plan has become effective. The new financing, and the restructured balance sheet, will allow Cornerstone to aggressively compete in the propane industry. "We appreciate the strong support of the Creditors' Committee and our lenders for the Plan of Reorganization. Because they have been cooperative and constructive partners throughout the reorganization process, we confirmed our Chapter 11 Plan of Reorganization in seven months, which is a considerable achievement. This result is a testament to the outstanding effort put forth by our restructuring consultants, Everett & Solsvig, our employees, our creditors, and our suppliers. We are particularly grateful for the support, patience, and loyalty of our customers. All of these groups contributed greatly to reaching our goal of completing this process without disruption to our customers during the winter heating season," Mr. Corbin added. Details regarding the case can be obtained at http://www.nysb.uscourts.gov/or http://www.kccllc.net/cornerstone/ Headquartered in New York, New York, Cornerstone Propane Partners, L.P. -- http://www.cornerstonepropane.com/-- is the nation's sixth largest retail propane marketer, serving more than 440,000 retail propane customers in over 30 states. The Company filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13856) on June 3, 2004. Matthew Allen Cantor, Esq., at Kirkland & Ellis LLP, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $582,455,000 in assets and $692,470,000 in liabilities. The Court approved the Debtors' Disclosure Statement explaining its Joint Plan of Reorganization on Aug. 10, 2004. CREDIT SUISSE: Fitch's $8-Mil Mortgage Cert. Rating Tumbles to 'D' ------------------------------------------------------------------ Credit Suisse First Boston -- CSFB -- Mortgage Securities Corporation's mortgage pass-through certificates, series 1997-C1 are downgraded by Fitch Ratings: -- $8 million class J to 'D' from 'C'. In addition, these classes are affirmed by Fitch: -- $451.6 million class A-1C 'AAA'; -- $45.3 million class A-2 'AAA'; -- Interest-only class A-X 'AAA'; -- $94.9 million class B 'AAA'; -- $67.8 million class C 'AA+'; -- $61 million class D to 'A-'; -- $64.4 million class F 'BB'; -- $13.6 million class G 'BB-'; -- $27.1 million class H 'B-'; -- $17 million class I 'CCC'; The $33.9 million class E is not rated by Fitch. The downgrade to class J is the result of the realized losses in the amount of $5.2 million following the liquidation of the Airlines Parking loan which had been secured by an 8,400 space parking lot in Romulus, Michigan. Fitch does not expect the principal loss to be recovered and therefore class J has been downgraded to 'D'. CWMBS INC: Fitch Junks Ratings on Two Mortgage Certificate Classes ------------------------------------------------------------------ Fitch Ratings has affirmed four and downgraded one class from the following CWMBS (Countrywide Home Loans), Inc., residential mortgage-backed securitizations: CWMBS, mortgage pass-through certificates, series 1999-13 (Alt 1999-2): -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'BBB'; -- Class B3 downgraded to 'C' from 'CCC'; -- Class B4 remains at 'C.' The affirmations reflect credit enhancement consistent with future loss expectations and affect $52,233,612 of outstanding certificates. The negative rating action is the result of a $540,773 loss that was incurred within the last two remittance periods (October 2004 and November 2004), which resulted in the depletion of class B-4's balance, leaving no credit enhancement to class B-3. The downgrade affects $1,775,560 of outstanding certificates. Fitch will continue to closely monitor this deal. DEAN FOODS: Moody's Affirms Ba1 Sr. Implied & Long-Term Ratings --------------------------------------------------------------- Moody's downgraded Dean Foods' Speculative Grade Liquidity rating to SGL-2 from SGL-1, while affirming Dean's Ba1 senior implied and other long term ratings and stable outlook. The SGL rating downgrade reflects the increase in debt levels resulting from share repurchases and lower than expected cash flow from operations. Still, Dean Foods' SGL-2 rating reflects a good liquidity profile, and its senior implied rating remains solidly positioned at Ba1. Dean's scale, market position and geographical reach underpin its ability to generate predictable and durable cash flows at relatively consistent levels. Moody's expects internal cash flow generation to more than cover capital spending and debt maturities over the next twelve months. The June 15, 2005 maturity of a $100 million Dean Holding Company note, however, may require some interim reliance on external funding. Revolver availability and covenant cushions have decreased due to increased debt levels and lower than expected earnings, but remain adequate, particularly given the reliability of Dean's cash flow generation. The company has some flexibility, if needed, to sell regional assets or brands without impairing the value of its remaining businesses, though its assets are largely encumbered. Dean's SGL rating could be raised again if free cash flow is applied to debt pay-down and earnings improve, enhancing covenant cushions and increasing revolver availability. Dean's August 2004 amendment to its credit facilities was supportive to liquidity. The amendment increased the revolver commitment to $1.5 billion, reduced pricing, eliminated most scheduled amortization over the next two years, and postponed a step-down in the leverage covenant. The revolver matures in 2009. Availability was $621 million at September 30, 2004. Covenant cushions are adequate. Dean also has a $500 million accounts receivable facility, which had $471 million outstanding at September 30, 2004. For purposes of the SGL rating, Moody's does not treat the receivables facility as a long term committed source of liquidity because it is backed by a liquidity line that matures within the next twelve months. Therefore, outstandings under this facility are treated as a potential call on revolver availability in determining the SGL rating. Moody's believes the dairy industry will undergo further consolidation and Dean will continue to engage in acquisition activity. Dean also is expected to continue to invest heavily in growing its value-added branded businesses and may choose to complete additional share repurchases. The SGL-2 rating could be pressured if Dean were to rely materially on external funding for these activities, particularly if additional covenant cushion and revolver availability are not built beforehand. Dean Foods Company, with headquarters in Dallas, Texas, had $9.2 billion of revenues in FY03. The company's senior implied rating is Ba1 with a stable outlook. DI GIORGIO: S&P Lowers Corporate Credit Rating to 'B' from 'B+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings for Di Giorgio Corporation and removed them from CreditWatch, where they were placed with negative implications on Nov. 9, 2004. The corporate credit rating was lowered to 'B' from 'B+'. The outlook is stable. "The downgrade reflects Di Giorgio's weaker credit measures due to slower-than-anticipated progress in attracting new customers to replace the loss of its client, The Great Atlantic & Pacific Tea Co. Inc. -- A&P, late last year," explained Standard & Poor's credit analyst Stella Kapur. At the end of its third quarter ended Sept. 25, 2004, Di Giorgio had $164 million of debt ($222 million when adjusted for leases) on its balance sheet. Its credit measures had weakened considerably since 2003; lease-adjusted debt to EBITDA was 5.4x, or a full turn higher, and trailing-12-month EBITDA to interest expense was 2.0x. Di Giorgio has been focusing on replacing the loss of its contract with A&P. While the company has made some progress in adding new customers and expanding its geographic presence in the New England and greater Philadelphia areas, as well as in the Caribbean, substantial growth would still be needed to improve credit measures to historical levels. In addition, many of the company's current customers are feeling the effects of a more competitive supermarket industry environment. Current ratings do not factor in any material debt- financed acquisition activity or further sizable debt-financed dividends. The ratings reflect the company's heavy debt burden, its participation in the highly competitive food wholesale and distribution industry, and the expectation that credit measures will remain consistent with current ratings for the next several years. Although Carteret, New Jersey-based Di Giorgio has a somewhat protected niche market position in the New York metropolitan area, its customer base is concentrated. Excluding A&P, which it lost in October 2003, the company's five largest customers accounted for 42% of last-12-month net sales as of Sept. 25, 2004. This customer concentration, combined with heavy dependence on a single market, exposes the company to potential revenue loss if a key customer leaves or if there is an economic downturn in the region. EMERALD INVESTMENT: Fitch Junks $20.9 Mil. Pref. Shares Rating -------------------------------------------------------------- Fitch Ratings affirms the ratings of five classes of notes and downgrades the rating of one class of notes issued by Emerald Investment Grade CBO II, Limited/Corp., which closed Feb. 15, 2000. These rating actions are effective immediately: -- $379,505,631 class I senior notes affirmed at 'AAA'; -- $5,500,000 class IIA senior notes affirmed at 'AA-'; -- $45,500,000 class IIB senior notes affirmed at 'AA-'; -- $8,000,000 class IIIA mezzanine notes affirmed at 'BB-'; -- $18,000,000 class IIIB mezzanine notes affirmed at 'BB-'; -- $20,920,000 preferred shares downgraded to 'CC' from 'CCC-'. Emerald CBO II is a collateralized bond obligation -- CBO -- managed by American General Investment Management, LP. The collateral of Emerald CBO II is composed of investment grade and high yield corporate bonds and emerging markets corporate and sovereign debt. Payments are made semi-annually in February and August and the reinvestment period ends in February 2005. According to the Nov. 22, 2004, trustee report, the portfolio includes $24.33 million (5.36%) assets rated 'CCC+' or below. The senior par value test is currently passing at 112.1%, with a trigger of 107%. The mezzanine par value test is passing at 105.7% with a trigger of 105.4%. The senior interest coverage test is failing at 102.1%, with a trigger of 104%. The mezzanine interest coverage test is failing at 96%, with a trigger of 102%. The rating of the class I, class II and class III notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The rating of the preferred shares addresses the ultimate repayment of the initial principal amount upon the legal final maturity date and the ultimate receipt of payments resulting in a yield of 5%. Fitch will continue to monitor Emerald CBO II closely to ensure accurate ratings. Deal information and historical data on Emerald CBO II is available on the Fitch Ratings web site at http://www.fitchratings.com/ ENERGY PARTNERS: Moody's Puts B2 Rating on Sr. Unsecured Notes -------------------------------------------------------------- Moody's affirmed Energy Partners, Ltd.'s. -- EPL -- B2 senior implied and B2 senior unsecured note ratings but moved the rating outlook to negative from stable. Though EPL's $150 million acquisition announced today will be funded by up to $90 million in balance sheet cash, the precautionary outlook change reflects EPL's operating and unit cost profiles, pro-forma leverage, and high cost and execution risk of the acquisition. We do estimate that 2005 up-cycle pre-capital spending cash flow will be strong, though sustaining capital spending is rising, and that up to $90 million of undrawn capacity may be available under a potential $150 million secured bank revolver currently under negotiation. The properties include 9 mmboe of proven reserves, consisting of 5 mmboe of PD reserves and 4 mmboe of PUD reserves. The PD reserves include 2.5 mmboe of PDNP reserves. The properties currently produce 2,833 boe per day of production. EPL is paying a high $16.67/boe of proven reserves ($19.40/boe fully-loaded for PUD development costs), and $53,000/boe per unit of current daily production. Though the acquisition provides the beginnings of long-desired diversification, and adds important drilling locations, we would be concerned if the increased pro-forma leverage on short-lived pro-forma 2003 proven developed -- PD -- reserves were to coincide with: (a) unfavorable year-end 2004 PD reserve bookings; (b) disproportionately low sequential quarter production gains; (c) weakened 2004 capital productivity; and (d) escalated 2004 reserved replacement costs. EPL has a short PD reserve life, remains quite small and undiversified, and generated only modest sequential quarter 2004 production gains in spite of capital spending in the range of $160 million to $170 million. Today's onshore acquisition may become a vital production and reserve diversification away from EPL's total reserve replacement reliance on a Gulf of Mexico -- GOM -- drilling program. The GOM inherently generates very short-lived reserves and is incurring escalating reserve replacement costs, though at currently strong up-cycle cash-on-cash returns. However, until the acquisition proves up, it incurs high front-end costs and risk to capital, relative to EPL's quite small risk-bearing and cash generating base and its funded total PD reserve base. To reach competitive acquisition economics, the acquisitions requires high drilling success on the high component of proven undeveloped -- PUD -- probable, and possible reserves, as well as recompletion success on the proportionately large component of proven developed non-producing -- PDNP -- reserve. An important part of the high impact drilling will be to deep horizons. The properties consist of shallow and deep onshore plays still being assessed for degree of continuity with widely explored and developed shallower geologic horizons under the GOM as well as with deep geologic horizons under the GOM where the sector is low on the learning curve. The acquisition is unlikely to improve EPL's short 4 year PD reserve life. The high unit cost of the acquisition is partially due to high up- cycle cash flows and asset market prices but, more importantly, is due to the high reliance on future drilling success on PUD, probable, and possible properties. Moody's does not allocate portions of acquisition costs to unevaluated properties and allocates future development costs to PUD reserves. Still, EPL continues to generate substantial up-cycle cash flow and liquidity before sustaining and growth capital spending. On the other hand, cash flow cover of reserve placement costs, escalating from already high unit cost levels, is less robust and sensitive to cyclical moderation of natural gas prices should that occur. Furthermore, given escalated pro-forma leverage ($5.35/boe) on funded lower risk pro-forma 2003 PD reserves, short PD reserve life, already high unit full-cycle costs, and escalating reserve replacement costs, we will assess organic production trends, reserve replacement costs, unit full-cycle costs, pro-forma year- end 2004 debt and PD reserves, and pro-forma 2004 proven reserve future development and plugging and abandonment costs. Year-end 2004 results will prove useful updates in that regard. We will assess: (i) sequential fourth quarter 2004 and first quarter 2005 production trends and (ii) 2004 FAS 69 and 10-K data, and (iii) year-end third party reserve engineering. We expect reduced capital productivity and escalated drillbit and all-sources reserve replacement costs. Moody's estimates EPL's 2003 and pro-forma 2003 all-sources reserve replacement costs to now be in the range of $14.70/boe, which would move unit full-cycle costs up to a very high $26.35/boe. This may escalate further depending on EPL's 2004 drillbit finding and development costs. Energy Partners, Ltd. is headquartered in New Orleans, Louisiana. The company is has been focused on the shallow waters of the Gulf of Mexico, acquiring drilling acreage and mature properties to exploit traditional shallow to mid-depth drilling horizons. The company also pursues higher risk, higher impact deep geologic horizons under shallow Gulf waters. EXODUS COMMS: Malpractice Claims Against E&Y Go To Arbitration -------------------------------------------------------------- The Honorable Peter J. Walsh of the U.S. Bankruptcy Court says that malpractice, breach of contract and other state law claims claims asserted by EXDS, INC. (f/k/a Exodus Communications, Inc.) against Ernst & Young LLP were not washed away when Exodus' chapter 11 plan was confirmed and those claims must be arbitrated rather than litigated. E&Y argued that because Exodus did not list any claims against the accounting firm in its Schedules of Assets and Liabilities, the debtor was barred from pursuing them post-confirmation under principles of res judicata and judicial estoppel. Judge Walsh found that it was appropriate to consider that issue, but the answer is the claims survived confirmation. The appropriate forum for resolving those claims, however, is an arbitration proceeding rather than an adversary proceeding in the Bankruptcy Court. EXDS and E&Y dispute certain actions taken by the parties during EXDS's prepetition business operations. In the spring of 2000, EXDS hired Devcon Construction, Inc., to build and equip several buildings as internet data centers. In connection with the construction of these data centers, EXDS retained E&Y to perform project management oversight. E&Y was obligated to review and verify all Devcon bills submitted to EXDS. Shortly after the Plan was confirmed, EXDS hired Navigant Consulting, Inc., "to audit the billing practices of [certain] construction contracting firms." According to the Navigant audit, Devcon allegedly improperly billed EXDS for over $32,000,000. As a result, EXDS filed an adversary complaint against Devcon and filed a separate adversary complaint against E&Y (Bankr. D. Del. Adv. Pro. No. 03-56183). The EXDS complaint against E&Y includes six causes of action. Claims I-V essentially allege malpractice. Specifically, they allege negligence, negligent misrepresentation, breach of contract, breach of fiduciary duty, and unjust enrichment. Pursuant to Sec. 548(a)(1), Claim VI seeks avoidance of an alleged fraudulent transfer. Exodus Communications filed for chapter 11 protection (Bankr. D. Del. Case No. 01-10539) on September 26, 2001, and the Debtors' Second Amended Joint Plan of Reorganization was confirmed on June 5, 2002. The company's liquidating plan provided for a change of the company's name to EXDS, Inc. FLEMING COS: Trust Wants to Make Initial Stock Distribution ----------------------------------------------------------- The Post Confirmation Trust created pursuant to the confirmed plan of reorganization of Fleming Companies, Inc., and its subsidiaries asked the United States Bankruptcy Court for the District of Delaware for permission to allow the PCT to make an initial distribution of Core-Mark common stock. Core-Mark is the reorganized group of wholesale distribution subsidiaries that emerged from Chapter 11 on Aug. 23, 2004. The Plan provides for all of Core-Mark's common stock held in trust (except for the shares reserved for Core-Mark's management and for certain warrants issued under the Plan) to be distributed to the holders of the general unsecured claims. The Plan also requires that an appropriate reserve be established for remaining general unsecured claims that are not yet allowed or in dispute. The reserve for remaining claims disputed or not yet allowed has been substantially reduced since Core-Mark's emergence from Chapter 11. At this time, the allowed claims subject to stock distribution total $1.7 billion. The PCT diligently continues to pursue reconciling the general unsecured claims and, as a result, is able to provide only a preliminary estimate for the reserve required for claims that are disputed or not yet allowed. While the aggregate amount of the general unsecured claims that will be ultimately allowed in these cases is unknown at this time, the PCT wants to make this initial distribution of the stock based on a reserve estimate of the total unsecured claims pool of about $3.29 billion. As described in detail in the Court pleadings, the PCT believes this number is conservative and has asked for Bankruptcy Court approval of the proposed distribution based upon the PCT's analysis. The PCT currently believes the allowed aggregate amount of general unsecured claims entitled to stock distribution will be significantly lower, but due to the fact that the claims review and reconciliation process is not yet complete, and not all of claims have been reviewed, the final aggregate amount of general unsecured claims cannot be precisely determined at this time. Additional stock will be distributed to the holders of allowed claims through subsequent periodic distributions. Based on the $3.29B estimate, the holders of currently allowed general unsecured claims will receive 51.9% of the aggregate distributable stock, while 48.1% of the aggregate distributable stock will be retained in the reserve until distributed at a later date. Also, as provided for in the Plan, holders of subordinated debt (Class 6B Claims) will receive warrants in Core-Mark stock in accordance with the terms of the Plan. The PCT is working towards issuing those warrants in conjunction with the initial stock distribution. A copy of the motion and the accompanying exhibits is available on-line at http://www.bmcgroup.com/(go to "Clients" and click on "Fleming"). The PCT has also set up a hotline to answer the questions of parties in interest: the hotline number is 972-535- 7149. Headquartered in Lewisville, Texas, Fleming Companies, Inc. -- http://www.fleming.com/-- is the largest multi-tier distributor of consumer package goods in the United States. The Company filed for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No. 03-10945). Judge Walrath confirmed Fleming's Third Amended Plan on July 26, 2004, under which Core-Mark Holding Company, Inc., emerged as a rehabilitated company owned by Fleming's unsecured creditors on August 23, 2004. Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,220,500,000 in assets and $3,547,900,000 in liabilities. The Debtors emerged from Chapter 11 on Aug. 23, 2004 and is now known as Core-Mark Holding Company, Inc. GALEY & LORD: Court Converts Chapter 11 Case to Chapter 7 --------------------------------------------------------- The Honorable Mary Grace Diehl of the U.S. Bankruptcy Court for the Northern District of Georgia entered an order on Nov. 29, 2004, approving a motion by Galey & Lord, Inc., and its debtor- affiliates to convert their Chapter 11 bankruptcy cases to Chapter 7 pursuant to Section 1112(a) of the Bankruptcy Code. Judge Diehl found conversion appropriate because: a) the Debtors have terminated all their employees in connection with the sale of substantially all their assets to Patriarch Partners, LLC, which closed on November 9, 2004; b) it would be more beneficial and efficient for all the Debtors' creditors and other parties-in-interest; and c) the Debtors have consulted with their remaining secured lenders and major parties-in-interest and obtained their support for the conversion. The Court also approved the U.S. Trustee's appointment of S. Gregory Hayes as the Interim Chapter 7 Trustee for the Debtors' estates. Headquartered in Atlanta, Georgia, Galey & Lord, Inc., a leading global manufacturer of textiles for sportswear, including denim, cotton casuals and corduroy, and its debtor-affiliates filed for chapter 11 protection on August 19, 2004 (Bankr. N.D. Ga. Case No. 04-43098). Jason H. Watson, Esq., and John C. Weitnauer, Esq., at Alston & Bird LLP, and Joel H. Levitin, Esq., at Dechert LLP, represent the Debtors. When the Debtor filed for chapter 11 protection, it listed $533,576,000 in total assets and $438,035,000 in total debts. HOME INTERIORS: Moody's Cuts Sr. Issuer Rating to Caa1 from B3 -------------------------------------------------------------- Moody's Investors Service lowered the long-term debt ratings of Home Interiors and Gifts, Inc. -- HIG -- by one notch (senior implied rating to B3) and assigned a negative outlook. The ratings downgrade reflects Moody's expectation that HIG's sales and earnings will remain under pressure through the current holiday season and into 2005, due to challenging macroeconomic and industry trends. As such, the company's credit profile, with constrained financial flexibility and limited debt repayment capacity, is no longer consistent with a B2 senior implied rating. This action concludes the review Moody's initiated in October 2004. Despite an amendment to its bank agreement that allows the company to avoid violation of its financial covenants in the fourth quarter of 2004, Moody's believes that the company must stabilize the significant profit declines of the past year to avoid future covenant violations over the next twelve-to-eighteen months. Ratings affected: -- Senior implied, downgraded to B3 from B2; -- $50 million 5-year senior secured revolving credit facility due 3/31/09, downgraded to B3 from B2; -- $315 million 7-year senior secured term loan facility due 3/31/11, downgraded to B3 from B2; -- $149.1 million 10.125% senior subordinated notes due 6/1/08, downgraded to Caa2 from Caa1; -- Senior unsecured issuer rating, downgraded to Caa1 from B3. HIG's new long-term rating levels and negative outlook are prompted by the deterioration in its cash flow profile and debt protection measures. HIG experienced strong declines in its sales and EBITDA year-to-date. Total net sales declined 8.5% and adjusted EBITDA declined 21.9% in the first nine months of 2004 as compared to the prior year's period. A key driver for the company's direct sales business, average order size, was also down during the nine month period by 12.4% to $453 from $517. Margins also declined materially in the LTM period as compared to prior fiscal years. The most recent quarter ended September 30 was particularly weak when measured by sales declines of 15.7% and a decline in average order size of 17.5%. Although the company was able to control costs and grow EBITDA during the quarter, Moody's notes that the company faced somewhat easy year-over-year comparisons and may need to spend more going forward to reverse sales trends. As such, Moody's remains concerned that EBITDA could resume declines in the current and coming quarters. Moody's believes that poor performance year-to-date has been exacerbated by cautious consumer spending due to consumers having less discretionary income (lowered by rising gasoline prices for example), which also makes it more difficult to find consumers willing to attend or host parties, negative weather impact due to the four hurricanes, and the growing consultant base, which leads to less productive displayers with lower average order sizes. For the LTM period ended September 30, 2004, Moody's estimates: (a) HIG's debt-to-adjusted EBITDA ratio at approximately 5.3x, (b) adjusted EBITDA less capex to interest at approximately 2.7x, and (c) funds from operations less capex to debt at approximately 7.4%, which Moody's believes are likely to deteriorate in coming periods. In December, HIG obtained amendments to its covenants that will allow it to avoid almost certain violation of its leverage and interest coverage financial covenants in the fourth quarter of 2004. However, the two key covenants will tighten until they return to the original levels in the first quarter of 2006. HIG will pay increased pricing on the facilities, which will further pressure cash flow available to service debt. Unless HIG is able to stabilize its earnings, potential covenant violations may return again as a key issue beginning in the fourth quarter of 2005. Additional rating downgrades could be taken over the coming months: (a) if HIG is unable to halt the erosion of its business, including a decline in sales and/or profitability that takes EBITDA materially below 90% of run-rate levels; (b) if cash flow turns significantly negative and borrowing under the revolver is necessary to meet the minimum required term loan amortization payments; or (c) if the cushion provided by the reset covenants dissipates leading to likely violations. Although a ratings upgrade over the next year is highly unlikely in the absence of a material operational improvement and/or deleveraging capital transaction, the ratings outlook could be stabilized if the company's new product, business segmentation, and cost control initiatives offset competitive and macroeconomic challenges and enable the maintenance profit and cash flows near current levels. The ratings are supported by the company's greater than forty years of experience in the home decor and direct selling businesses. Moody's recognizes that HIG is continuing to grow its consultant base and had approximately 98,900 active consultants as of September 30, 2004. HIG maintained product distribution fulfillment rates of 99% as of September 30, which are important in driving consultant satisfaction. Importantly, the company had full availability under its $50 million revolver except for outstanding letters of credit and is expected to remain modestly cash flow positive for FY04 despite severe earnings pressures. Furthermore, the company successfully negotiated a bank agreement amendment, which extended needed borrowing access as the company works to restore its credit metrics. Home Interiors and Gifts, Inc., based in Dallas, Texas is a fully integrated manufacturer and distributor of home decorative accessories. The company sells its products primarily to independent sales representatives who resell the products at in- home presentations or shows. Sales for the twelve-month period ended September 30, 2004 were approximately $581 million. INSIGHT COMMS: Moody's Places Caa2 Rating on Sr. Unsecured Notes ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook for the debt of Insight Communications Company, Inc. -- Insight -- and its subsidiaries, including 50%-owned Insight Midwest LP -- Midwest -- and its wholly-owned subsidiary Insight Midwest Holdings, LLC -- Midwest Holdings-- to stable from negative. Moody's also raised the company's speculative grade liquidity rating to SGL-2 from SGL-3 and affirmed all other ratings. The outlook change broadly reflects a reduced probability of default based on expectations for the recently evident improvements in subscriber trends and free cash flow generating ability to continue, notwithstanding acknowledged expense growth in future periods. As a result, the prospect of a requisite ratings downgrade is deemed less likely. The liquidity rating upgrade similarly reflects evidence of improving cash flow trends and Moody's expectation for their continuation. Moody's now characterizes Insight's liquidity over the forward 12 months to December 31, 2005 as "good." Moody's ratings for Insight and its subsidiaries are: -- Insight Communications Company, Inc. * $350 million (remaining face amount) of 12-1/4% Senior Unsecured Discount Notes due 2011 -- Caa2 (affirmed) * Senior Unsecured Issuer Rating -- Caa2 (affirmed) * Senior Implied Rating -- B1 (affirmed) * Speculative Grade Liquidity Rating -- SGL-2 (upgraded from SGL-3) * Rating Outlook (all ratings) - Stable (changed from Negative) -- Insight Midwest, L.P. * $630 million (including add-on) of 10-1/2% Senior Unsecured Notes due 2010 -- B2 (affirmed) * $385 million of 9-3/4% Senior Unsecured Notes due 2009 -- B2 (affirmed) -- Insight Midwest Holdings, LLC * $425 (original amount) million Senior Secured Revolver due 2009 -- Ba3 (affirmed) * $425 (original amount) million Senior Secured Term Loan A due 2009 -- Ba3 (affirmed) * $1.125 (original amount) billion Senior Secured Term Loan B due 2009 -- Ba3 (affirmed) Insight's ratings continue to reflect: (i) the company's high financial leverage, approximating times debt-to-EBITDA, and modest debt service and fixed charge coverage levels; (ii) growing costs and business risk as direct broadcast satellite -- DBS -- operators and regional Bell operating companies -- RBOCs -- accelerate their encroachment into both traditional and ancillary business lines; and (iii) structural complexity related to its corporate organization, including uncertainty about the long-term outlook for the company's strategic partnership and joint ownership with Comcast. However, the ratings garner support from: (i) the technologically advanced state of Insight's cable plant; (ii) its large and well-clustered assets; (iii) the benefits to be afforded by the roll out of new services; and (iv) a good liquidity profile. The stable outlook reflects: (i) increased comfort with the company's liquidity profile and ability to remain in compliance with the tightening leverage covenants within its bank credit facility; (ii) evidence of improved operational performance and expectations for the positive trends to continue; and (iii) debt reduction, also expected to continue. Leverage closer to 6 times and trending toward 5 times within a year would help mitigate uncertainty over the Comcast partnership and potentially drive upward ratings momentum. A credit facility refinancing incorporating reduced interest costs and a lighter amortization schedule allowing more flexibility for growth investments would also lend support to a positive rating outlook and/or higher ratings. Conversely, a reversal of recent favorable operating trends or the inability to execute a telephony strategy could pressure the ratings down, as would a return to leverage above 7 times. The free cash flow improvement has resulted primarily from EBITDA growth, which accelerated to more than 10% on a year-over-year basis in the first three quarters of 2004, compared to approximately 7% in the comparable prior year period when operational under-performance had been cited, in conjunction with moderate declines in capital spending. Insight turned free cash flow positive on a trailing twelve month basis at the beginning of 2004, and free cash flow (after working capital, cash interest, and capital expenditures) reached approximately $58 million on a trailing twelve month basis through September 30, 2004. Moody's does not believe Insight has sacrificed future growth through reduced investment, as the company's plant capacity has historically been ahead of its peer group. After some initial incremental fixed capital spending to accommodate more widescale telephony and digital service deployments, Moody's anticipates more of a shift to variable, revenue-based expenditures. Moody's believes Insight's current capital structure forces it to rely primarily on continued EBITDA growth to boost flexibility for increased capital expenditures as it develops its telephony strategy, because fairly significant term loan amortization consumes much of the company's current and projected free cash flow. Required payments increase to $83.5 million in 2005 from $62.5 million in 2004. Moody's acknowledges that these payments reduce leverage, thus enhancing the company's covenanted availability to draw under its revolving credit facility, and, to a lesser extent, reduce cash interest expense, but since this debt reduction is not discretionary, it could impede future growth prospects if Insight's recent operational progress reverses. Absence of investment in a telephony strategy would likely be viewed negatively given Moody's view of this offering's growing strategic importance in a converged environment and intensifying competition from RBOC and DBS offerings. Uncertainty over the future of the Comcast partnership, particularly as the earliest potential termination date which is December 31, 2005 approaches, somewhat constrains upward rating momentum. Moody's ratings do not handicap the likelihood of the dissolution of the joint venture; such a dissolution would presumably necessitate refinancing of existing debt. As a standalone company, Insight would likely experience margin erosion, potentially of a fairly material magnitude, due to the loss of the current advantages of scale conveyed by the partnership, in Moody's view. Insight Communications is a domestic cable television operator with ownership interests in entities serving approximately 1.3 million subscribers located in Ohio, Indiana, Kentucky and Illinois. The company maintains its headquarters in Manhattan. INTERPOOL INC: Moody's Reviews Ratings for Possible Upgrade ----------------------------------------------------------- Moody's placed the ratings of Interpool, Inc., under review for possible upgrade, citing the company's improved liquidity, measures it has taken to strengthen internal control processes, and its progress in filing delinquent financial statements with the SEC. Noting the pace at which Interpool's credit profile has improved, Moody's indicated that its review could result in a several notch increase in Interpool's ratings in the near-term, with the possibility that a subsequent ratings review could result in a further upgrade - pending the company achieving several milestones. Moody's stated that it appears that Interpool has made substantial progress in addressing the issues that Moody's has previously highlighted as rating drivers. During its review, Moody's will further analyze: (a) Interpool's operating results and financial outlook, including its pending third quarter 2004 financial statements, (b) the impact of recent debt refinancing on the firm's liquidity profile, including a more detailed review of the terms and conditions of Interpool's financing arrangements to determine the implications for the ratings of its various classes of rated obligations, and (c) the progress Interpool has made in strengthening its internal control infrastructure. Any potential subsequent review of Interpool's ratings would focus on: (a) the company's ability to file its 2004 Form 10-K in a timely manner, (b) Interpool's operating results and its outlook as reflected in such Form10-K, and (c) the firm's success in meeting the milestones for implementing systems improvements, as outlined in its financing arrangements. These milestones, in Moody's view, require a relatively aggressive pace of execution. Moody's current ratings are: -- Interpool, Inc.: * Senior implied at Caa2 * 7.2% senior unsecured notes due 2007 at Caa3 * 7.35% senior unsecured notes due 2007 at Caa3 -- Interpool Capital Trust: * Guaranteed Preferred Stock at Ca Interpool, Inc., based in Princeton, N.J., is a lessor of marine containers and chassis. At June 30, 2004, the company reported total assets of $2.3 billion. KMART CORP: Key Documents Regarding Sears Roebuck Merger Deal ------------------------------------------------------------- As previously reported, on November 16, 2004, Kmart Holding Corporation and Sears, Roebuck and Co. entered into an Agreement and Plan of Merger. A full-text copy of the Agreement and Plan of Merger is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013880/y68961k1exv2w1.txt Concurrently, and in connection with the Merger Agreement: (i) ESL Partners, L.P., ESL Investors, L.L.C., ESL Institutional Partners, L.P., ESL Investment Management, L.L.C., CRK Partners, LLC and CRK Partners II, L.P. entered into a Support Agreement and Irrevocable Proxy with Kmart and Sears, and (ii) Kmart and Sears entered into an employment agreement with Alan J. Lacy, the current Chairman and Chief Executive Officer of Sears. Support Agreement Pursuant to the Support Agreement and subject to certain conditions, the ESL Companies agreed: (i) to vote their shares of common stock of Kmart: (a) in favor of the Kmart Merger at the stockholders meeting to be called to consider the Kmart Merger, and (b) against any other transaction; and (ii) to vote their common shares of Sears: (a) in favor of the Sears Merger at the stockholders meeting to be called to consider the Sears Merger, and (b) against any other transaction. The requirement of the ESL Companies to vote their shares of Kmart common stock is subject to limitations if the Kmart board of directors changes its recommendation with respect to the Kmart Merger, in which case only a number of shares equal to one-third of outstanding shares of Kmart common stock would be required to be so voted, with the remaining shares being required to be voted pro rata with all other shares of Kmart common stock not beneficially owned by the ESL Companies. The ESL Companies also agreed not to transfer or otherwise dispose of any of their shares of Kmart common stock or Sears common stock. The ESL Companies beneficially own approximately 53% of the outstanding shares of Kmart common stock -- including the beneficial ownership of certain shares of Kmart common stock underlying certain convertible notes and options beneficially owned by the ESL Companies -- and beneficially own approximately 15% of the outstanding Sears common shares. The ESL Companies have also agreed to irrevocably elect to receive Holdings common stock in the Sears Merger. The ESL Companies are controlled, directly or indirectly, by ESL Investments, Inc., which in turn is controlled by Edward S. Lampert. Mr. Lampert is the Chairman of Kmart. A full-text copy of the Support Agreement and Irrevocable Proxy is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013880/y68961k1exv99w1.txt Employment Agreement The Employment Agreement provides that it will be assumed by Holdings as soon as practicable following its formation, but no later than completion of the Mergers. The Employment Agreement provides for a term of employment commencing upon completion of the Mergers and ending on the fifth anniversary thereof. If the Mergers are completed, the Employment Agreement will supersede the Executive Non-Disclosure and Non-Solicitation of Employees Agreement and the Executive Severance/Non-Compete Agreement, which Mr. Lacy executed with Sears as of November 26, 2001. During the term, Mr. Lacy will serve as Chief Executive Officer and Vice Chairman of Holdings and a member of its board of directors. During the term, Mr. Lacy will receive an annual base salary of no less than $1,500,000 and a target bonus of 150% of his annual base salary and will be eligible for, and receive benefits under, employee benefit and perquisite arrangements no less favorable than those generally applicable or made available to senior executives of Holdings. Upon completion of the Mergers, Mr. Lacy will be granted 75,000 shares of restricted stock of Holdings, which will vest in full on June 30, 2006, subject to Mr. Lacy's continued employment with Holdings through that date. In addition, upon completion of the Mergers, Mr. Lacy will be granted a stock option to purchase 200,000 shares of Holdings common stock with a per share exercise price equal to the fair market value of Holdings common stock on the date of grant. The stock option will vest with respect to one-quarter of the shares subject to the stock option on each of the first four anniversaries of completion of the Mergers, subject to Mr. Lacy's continued employment with Holdings through each applicable vesting date. If Mr. Lacy's employment is terminated by Holdings without cause or Mr. Lacy resigns with good reason, Mr. Lacy will be entitled, subject to execution of a release in favor of Holdings, to receive severance benefits, including: -- A pro rata bonus based on the performance of Holdings for the year in which the termination occurs; -- Two times the sum of Mr. Lacy's then current annual base salary and target bonus; -- Two additional years of age and service credit under all welfare benefit plans, programs, agreements and arrangements of Holdings; -- Accelerated vesting of equity-based awards and three years to exercise any vested options; and -- Continued welfare benefits for two years. For purposes of the agreement, "good reason" means: (i) the assignment to Mr. Lacy of duties inconsistent with, or any diminution of, the position, authority, duties or responsibilities called for by the Employment Agreement, (ii) the failure to pay Mr. Lacy his compensation under the Employment Agreement, (iii) Holdings' relocation of Mr. Lacy's place of employment, (iv) the failure of Sears or Kmart to require the assumption of the Employment Agreement by Holdings or the failure of Holdings to require the assumption of the Employment Agreement by a successor, or (v) the failure to elect or reelect Mr. Lacy to Holdings' board of directors. In addition, "good reason" means any termination by Mr. Lacy during the 30-day period immediately following June 30, 2006. If Mr. Lacy's employment is terminated due to his death or disability, Mr. Lacy or his estate will be entitled to receive a pro-rata bonus for the year of termination, accelerated vesting of equity-based awards and three years to exercise vested options and continued welfare benefits for two years. Under the Employment Agreement, Mr. Lacy is restricted from revealing confidential information of Holdings and, for one year following Mr. Lacy's termination of employment during the term for any reason, Mr. Lacy may not solicit for employment any employees of Holdings and may not compete with Holdings. In the event that any payments to Mr. Lacy are subject to an excise tax under Section 4999 of the Internal Revenue Code, Mr. Lacy will be entitled to an additional gross-up payment so that he remains in the same after-tax position he would have been in had the excise tax not been imposed. A full-text copy of the Employment Agreement among Sears, Roebuck and Co., Kmart Holding Corporation, and Alan J. Lacy is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013880/y68961k1exv10w1.txt Form 425 Filings Kmart Holding Corporation filed five Form 425s with the Securities and Exchange Commission from November 17 to 29, 2004. The filings contain statements about the benefits of the business combination transaction involving Kmart Holding Corporation and Sears, Roebuck and Co., including future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts. The statements are based on the current beliefs and expectations of Kmart's and Sears' management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. A full-text copy of Kmart's November 17, 2004, filing containing a Merger Fact Sheet is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013819/y68961ae425.htm A full-text copy of Kmart's November 18, 2004, filing containing a letter to all Kmart Associates from Aylwin Lewis, President of Sears Holdings and CEO of Sears Retail, is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013820/y68961e425.htm A full-text copy of the November 18, 2004, Conference Call transcript is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304013829/y68947je425.htm A full-text copy of Kmart's November 22, 2004, filing containing a Merger Overview is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304014004/e68961e425.htm A full-text copy of Kmart's November 29, 2004, filing containing an interview by NY Magazine writer James J. Cramer with billionaire financier Eddie Lampert is available for free at: http://sec.gov/Archives/edgar/data/1229206/000095012304014179/y68961be425.htm Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- is the nation's second largest discount retailer and the third largest merchandise retailer. Kmart Corporation currently operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. (Kmart Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., 215/945-7000) KNOWLEDGE LEARNING: Moody's Puts B2 Rating on Credit Facility ------------------------------------------------------------- Moody's Investors Service placed the ratings of Knowledge Learning Corporation -- KLC -- and Kindercare Learning Centers, Inc. -- Kindercare -- under review for possible downgrade. At the same time, Moody's assigned a rating of B2 to KLC's proposed 7-year, $640 million guaranteed senior secured credit facility. The review for possible downgrade was prompted by the negative implications of the proposed financing structure for the anticipated purchase of Kindercare by KLC for $550 million in cash and the assumption of debt for a total of approximately $1.1 billion. The review will focus on: (a) the cash based leverage of the combined company; (b) the impact to earnings and cash flow of the large cash transition costs expected in 2005; (c) Moody's expectation of the cash generative power of the new entity and its ability to reduce debt via operating cash flow; (d) as well as the asset protection afforded to the different classes of debt. The review will also incorporate Moody's opinion regarding: (a) the new entity's ability to significantly improve operating margins, cash from operations and leverage by 2006; (b) the expected ability to improve occupancy rates at the centers in the face of historical declines; and (d) the ability of the management to extract sufficient cash from the real estate portfolio in a distress scenario to cover all classes of debt. The existing $179 million issue of 9.5% senior subordinated notes due 2009 of Kindercare contains change in control provisions which will require the refinancing of this debt. The review will be concluded soon after the prospectus for the proposed new senior subordinated debt issue is available. The B2 rating on the proposed credit facility reflects its subordination to the $300 million ($295 million current balance) CMBS facility which in a distress scenario has prior claim on the cash flow and on the assets of the mortgaged real estate. The proposed credit facility will consist of * a 5-year, $100 million revolving credit and * a 7-year, minimally amortizing $540 million term loan. The borrower will be KLC. The borrowings will be guaranteed by the direct operating subsidiaries of KLC as well as by its parent, Knowledge Schools, Inc., which is a holding company for the KLC asset. The facility will be secured by first priority perfected liens on substantially all tangible and intangible property, excluding the 475 Kindercare centers pledged to the $300 million CMBS facility. The latter facility has a prior claim over the bank facility on cash generated from the pledged centers as well as on the proceeds from the disposition of pledged assets. The ratings under review include: -- KLC: * Senior Implied rating of Ba3; * $260 million senior secured credit facility due 2010, rated Ba3; * Issuer Rating of B1; -- Kindercare: * Senior Implied rating of B1; * $125 million senior secured credit facility due 2008, rated Ba3; * $179 million issue of 9.5% senior subordinated notes due 2009 rated B3; * Issuer Rating of B2 Assigned rating: -- KLC * $640 million guaranteed senior secured credit facility due 2012, rated B2. Knowledge Learning Corporation, headquartered in Golden, Colorado is a leading provider of childcare services. It operates 801 centers in 33 states through its three business segments: Early Childhood Education, School Partnerships, and Distance Learning. The company acquired Aramark Educational Resources, in May of 2003. Combined pro forma revenue for fiscal year 2003 was $612 million. Kindercare Learning Centers, headquartered in Portland, Oregon is a leading provider of early childcare services with 1225 centers across 39 states. The company operates community centers and employer sponsored centers under the Kindercare and Mulberry brand names. Total revenue for the last twelve months ending September 2004 was approximately $867 million. L.J.R. MEYERS: Case Summary & 26 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: L.J.R. Meyers Enterprises, Inc. 45 Broad Avenue Binghamton, New York 13904 Tel: (607) 724-5015 Bankruptcy Case No.: 04-68820 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- W.C. Properties of Sidney, Inc. 04-68822 Chapter 11 Petition Date: December 17, 2004 Court: Northern District of New York (Utica) Judge: Chief Judge Stephen D. Gerling Debtor's Counsel: Jeffrey A. Dove, Esq. Menter, Rudin & Trivelpiece, P.C. 500 South Salina Street, Suite 500 Syracuse, New York 13202 Tel: (315) 474-7541 Total Assets Total Debts ------------ ----------- L.J.R. Meyers Enterprises, Inc. $0 $736,380 W.C. Properties of Sidney, Inc. $0 $1,567,400 L.J.R. Meyers Enterprises, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Burger King Corporation $227,128 Attn: W. Barry Blum, SVP 5505 Blue Lagoon Drive Miami, Florida 33126 New York State Taxation & Finance $98,543 Attn: John Dora 44 Hawley Street Binghamton, New York 13901 W.C. Properties of Sidney, Inc. $79,627 45 Broad Avenue Binghamton, New York 13904 First Corporation $68,644 21146 Network Place Chicago, Illinois 60673-1211 Maines Paper & Food $66,697 New York State Taxation & Finance $29,536 Great America Leasing $21,845 New York State Taxation & Finance $16,497 Internal Revenue Service $14,228 Davidson Fox & Company, LLP $14,072 Pennsylvania Department of Revenue $11,511 G.E. Capital $10,655 Pennsylvania Department of Revenue $10,340 New York State Electric & Gas $9,173 George Weston Bakeries $8,240 American Express $7,239 Internal Revenue Service $6,946 Coughlin & Gerhart, LLP $5,591 Pennsylvania Department of Revenue $5,196 Pennsylvania Department of Revenue $5,013 W.C. Properties of Sidney, Inc.'s 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Delaware County $44,794 111 Main Street, PO Box 431 Delhi, New York 13753 Village of Sidney $24,508 21 Liberty Street Sidney, New York 13838 Athens Township $9,325 R.D. #1, PO Box 315 Riverside Drive Athens, Pennsylvania 18810 Advanta $2,292 Davidson Fox & Company $2,255 City of Binghamton $1,594 LIONEL CORP: Judge Lifland Okays $60 Million DIP Financing ---------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York put his stamp of approval on Lionel LLC's motion to enter into postpetition credit agreements with Guggenheim Corporate Funding LLC and Congress Financial Corp. As reported in the Troubled Company Reporter on Dec. 16, 2004, Guggenheim and Congress agreed to provide Lionel an aggregate amount of approximately $60 million of new credit. The Debtors will use $30 million of the three-year DIP Facility to transform Guggenheim's prepetition $30 million term loan into a postpetition obligation. Lionel will gain access to $25 million of fresh credit on a revolving basis and will obtain a new $4.2 million term loan. Headquartered in Chesterfield, Michigan, Lionel LLC -- http://www.lionel.com/-- is a marketer of model train products, including steam and die engines, rolling stock, operating and non- operating accessories, track, transformers and electronic control devices. The Company filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case No. 04-17324). Abbey Walsh Ehrlich, Esq., at O'Melveny & Myers, LLP, represents the Debtors on their restructuring efforts. When the Company filed for protection from its creditors, it listed more than $10 million in assets and debts. MARINER HEALTHCARE: Moody's Holds 'B' Ratings After Acquisition --------------------------------------------------------------- Moody's Investors Service confirmed the existing ratings of Mariner Healthcare, Inc. -- Mariner Healthcare -- following the completion of National Senior Care, Inc.'s -- National Senior Care -- acquisition of Mariner Healthcare. Mariner Healthcare's outstanding senior secured credit facilities and senior subordinated notes were repaid in full and retired. This rating action concludes Moody's review initiated on July 9, 2004. At that time, Moody's placed the ratings of Mariner Healthcare on review for possible downgrade following the announcement of National Senior Care's intention to acquire Mariner Healthcare. The following ratings confirmed: * $85 million senior secured revolving credit facility due 2007, rated Ba3 * $135 million senior secured term loan due 2009, rated Ba3 * B1 senior implied rating * B2 senior unsecured issuer rating * $175 million 8.25% senior subordinated notes due 2013, rated B3 Mariner Healthcare, headquartered in Atlanta, Georgia, owns or operates 252 skilled nursing and two assisted living facilities as well as twelve long-term acute care hospitals representing approximately 32,000 beds across the country. MIRANT: Court Approves Avista Purchase of Coyote Springs Stations ----------------------------------------------------------------- The U.S. Bankruptcy Court has approved the sale of half of the Coyote Springs 2 generating station to Avista Corp. (NYSE: AVA) from Mirant (OTC Pink Sheets: MIRKQ). If the Federal Energy Regulatory Commission and other agencies approve the sale, Avista will own the entire facility. The purchase price is $62.5 million, subject to adjustment. If approved, the transaction will give Avista an additional 140 megawatts of generating capacity to serve its customers' future energy needs. Because Mirant and certain of its affiliates are currently in bankruptcy, the agreement was subject to approval of the U.S. Bankruptcy Court. The transaction could be completed in the first quarter of 2005 if the remaining regulatory approvals are successful. Coyote Springs 2 is located near Boardman, Oregon. The 280- megawatt, natural gas powered, combined cycle combustion turbine began commercial operation in July 2003. Mirant purchased a half interest in the plant from Avista during construction in 2001. Avista Corp. -- http://www.avistacorp.com/-- is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is a company operating division that provides service to 325,000 electric and 300,000 natural gas customers in four western states. Avista's non-regulated subsidiaries include Avista Advantage and Avista Energy. Avista Corp.'s stock is traded under the ticker symbol "AVA." Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. MAGNETITE ASSET: Fitch Puts Low-B Ratings on Classes D & E ---------------------------------------------------------- Fitch Ratings affirms six classes of Magnetite Asset Investors L.L.C. (Magnetite). These rating actions are effective immediately: -- $400,000,000 senior secured revolving credit facility 'AA+'; -- $55,000,000 class A first priority senior secured notes 'AA+'; -- $50,000,000 class B second priority senior secured notes 'A+'; -- $75,000,000 class C senior subordinated secured notes 'BBB+'; -- $30,000,000 class D subordinated secured notes 'BB+'; -- $25,000,000 class E junior subordinated secured notes 'B+'. Magnetite is a market value collateralized debt obligation -- CDO -- that closed on Dec. 29, 1998. The fund is managed by BlackRock Financial Management, Inc., a subsidiary of BlackRock Inc. (together with its subsidiaries 'BlackRock') a New York-based investment manager with $323 billion in assets under management across various investment strategies. At inception, the investment manager targeted an asset mix of 25% high yield loans, 50% high yield bonds, and 25% mezzanine investments, private equity and distressed debt, collectively referred to as 'mezzanine and special situation assets.' As of the Nov. 4, 2004, valuation date, the portfolio consisted of 33% bank loans, 55% high yield bonds, 6% equity, 4% percent mezzanine investments, and the remaining balance in cash and other eligible investments. Kelso & Company, a private equity specialist, advises Magnetite on the mezzanine and special situation portion of the portfolio. BlackRock does not foresee additional investments in this asset category for Magnetite and is opportunistically working to reduce its current positions. Magnetite continues to perform as evidenced by the fund's growing overcollateralization -- OC -- cushion. The discounted collateral covering the revolving facility and class A first priority notes has increased from 135.9% at the Oct. 16, 2003, valuation date to 137.8% at the Nov. 4, 2004 valuation date. The growth in the cushion extends to the subordinate OC tests over the same time period. The discounted collateral covering the class B, C, D and E notes has increased from 128.1%, 118.1%, 114.8% and 112.8% at the Oct. 16, 2003, valuation date to 131.2%, 121.6%, 118.4%, and 116.3%, respectively, at the November 4, 2004, valuation date. The improvement in OC can be attributed to improved credit markets, as well as sound investment decisions and continued risk analysis by the portfolio manager. As a result of this analysis, Fitch has determined that the ratings assigned to the credit facility and notes still reflect the current risk to noteholders. Additional deal information and historical data are available on the Fitch Ratings web site at http://www.fitchratings.com/ For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, available on Fitch Ratings web site. MORTGAGE CAPITAL: $3.8 Mil. Mortgage Cert. Rating Tumbles to 'D' ---------------------------------------------------------------- Fitch Ratings downgrades Mortgage Capital Funding, Inc.'s multifamily/commercial mortgage pass-through certificates, series 1997-MC1: -- $3.8 million class J to 'D' from 'C'. In addition, Fitch affirms the following certificates: -- $126.6 million class A-3 'AAA'; -- Interest-only class X 'AAA'; -- $39.5 million class B 'AAA'; -- $36.2 million class C 'AAA'; -- $32.9 million class D 'A+'; -- $39.5 million class F 'BB'; -- $6.6 million class G 'BB-'; -- $13.2 million class H 'CCC'; The $13.2 million class E is not rated by Fitch. The downgrade to class J is the result of the realized losses in the amount of $6.1 million following the liquidation of two loans: * a 274-room airport hotel property located in Cheektowaga, New York; and * a retail center in Manchester, Tennessee. Fitch does not expect the principal loss to be recovered and therefore class J has been downgraded to 'D'. MURRAY INC: Briggs & Stratton Board OKs $150 Million Acquisition ---------------------------------------------------------------- Briggs & Stratton Corporation's Board of Directors approved the Company's offer in United States Bankruptcy Court to buy certain assets of Murray, Inc., for $150 million. Under the terms of the offer, the Briggs would acquire substantially all of the assets of Murray, with the exception of real estate located in the United States. The offer also is for the common stock of Hayter, Ltd., a lawn and garden equipment manufacturer located in the United Kingdom. The transaction is contingent upon negotiation and execution of mutually acceptable purchase agreements, satisfactory completion of due diligence, a bankruptcy auction process, and bankruptcy court and regulatory approvals. On Oct. 18, 2004, the Company disclosed that it was establishing a $10 million reserve on a trade receivable from Murray of approximately $40 million because of developments affecting Murray. On Nov. 30, 2004, the Company indicated that its receivable likely was further impaired, but was unable to quantify the amount of the impairment. Based on the current status of its negotiations with Murray and its bankruptcy proceedings, it now believe its receivable is likely fully impaired. Consequently, Briggs will recognize an additional pretax loss of approximately $30 million in the second quarter of fiscal 2005. This will result in an after-tax charge of approximately $19 million or $.37 per share in the second quarter of fiscal 2005. Headquartered in Brentwood, Tennessee, Murray, Inc. -- http://www.murray.com/-- manufactures lawn tractors, mowers, snowthrowers, chipper shredders, and karts. The Company filed for chapter 11 protection on Nov. 8, 2004 (Bankr. M.D. Tenn. Case No. 04-13611). Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in total debts and assets. NETWORK INSTALLATION: Former Pac Tel CEO Joins Advisory Board ------------------------------------------------------------- Network Installation Corp. (OTC Bulletin Board: NWKI), disclosed that former Pac Tel Cellular CEO Jeffrey Hultman has joined the Company's Advisory Board. Network Installation CEO Michael Cummings stated, "We are extremely excited about having an individual with Jeff's stature on our team. His accomplishments in wireless communications speak for themselves and Network Installation can only benefit from his experiences and insight. He will be a valuable asset to the Company as we progress forward." Jeff Hultman commented, "I'm delighted to join the Network Installation Advisory Board. The Company has a strong team of successful professionals who have demonstrated success in a large market segment. The wireless communications and telecom industries are collectively poised for another period of rapid growth and require the services provided by Network Installation. I look forward to assisting the Company in the expansion of their business to meet those demands. I believe my experience in building wireless systems will be of great assistance to the Company." From 1987 to 1991, Jeff Hultman served as CEO of Pac Tel Cellular where he managed Pac Tel cellular properties in the United States and oversaw operations and business development which included over 2,500 employees in Atlanta, Detroit, Los Angeles, Oakland, Sacramento and San Francisco. During his tenure as CEO, revenues increased from $100 million to over $1.0 billion in three years. He directed Pac Tel's successful efforts to win the West Germany and United Kingdom PCS licenses over a dozen other applicants on the strength of a superior business plan and detailed technical system design for both countries. In 1991 Mr. Hultman became CEO of Dial Page, Inc., a wireless provider throughout the Southeast, offering paging and digital mobile telephone services. While at Dial Page, he expanded the paging operations throughout seven states by multiple acquisitions and internal growth and achieved a cumulative growth rate in paging of 20% per year, increasing pagers in service from 148,000 to 360,000. He managed over 450 employees and achieved revenues of over $75 million with 38% margins and average revenue per pager of $21, approximately double the industry. Ultimately, Mr. Hultman converted a series of limited partnerships into a corporation and took Dial Page public leading four successful public offerings which raised over $50 million in public and private equity sales, $650 million through public sale and private placement of high yield debt. In August 1995, he successfully negotiated the sale of the paging business to MobileMedia Communication, Inc., and a merger of subsidiary Dial Call with Nextel Communications, Inc. in February 1996. Combined value of these two transactions was in excess of $1 billion. Mr. Hultman attained his Bachelor of Science Degree in Agricultural Economics in 1961 and Master of Science Degree, in Business Management in 1962, at the University of California, Davis. He currently serves a director on the board of several organizations including Comarco Inc., an Irvine, CA-based wireless performance engineering company. About the Company Network Installation Corp. provides communications solutions to the Fortune 1000, Government Agencies, Municipalities, K-12 and Universities and Multiple Property Owners. These solutions include the design, installation and deployment of data, voice and video networks as well as wireless networks including Wi-Fi and Wi-Max applications and integrated telecommunications solutions including Voice over Internet Protocol applications. At Sept. 30, 2004, Network Installation's balance sheet showed a $213,146 equity deficit. PCA INTERNATIONAL: S&P Junks Unsec. Debt Rating to CCC+ from B- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on PCA International LLC to 'B-' from 'B'. The senior unsecured debt rating on the company was lowered to 'CCC+' from 'B-'. The outlook is negative. "The downgrade is based on concerns over weaker-than-expected sales and operating trends," explained Standard & Poor's credit analyst Kristi Broderick. "Same-store sales were negative for both the second (9.7%) and third quarter (10.3%) of 2004, and the average revenue per customer has fallen over the course of the year due to an unfavorable shift in product mix. Also, 22% of PCA's studios are located in the Southeast U.S., and they experienced material declines in customer traffic due to hurricanes. Ratings on this North Carolina-based company reflect its profitability pressures, limited liquidity, high leverage, the significant seasonality of its business, and its relatively small cash flow base." The $1.3 billion domestic preschool portrait industry is highly competitive and fragmented. The market is composed of several large competitors that operate within large host retailers, including: -- CPI (Sears), -- Olan Mills (K-mart), -- Lifetouch (Target and J.C. Penney), and -- numerous smaller entities. PCA, with about a 25% market share, depends on its contractual license agreement with Wal-Mart Stores Inc. for about 95% of its revenues. Any change in this agreement could have a significant negative impact on the company's business. PERRY ELLIS: S&P Affirms 'B+' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on apparel company Perry Ellis International Inc. -- PERY -- to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the Miami, Florida-based company, including its 'B+' corporate credit rating. Total debt outstanding at Oct. 31, 2004, was about $222 million. The outlook revision follows the company's announcement that it has entered into an agreement to acquire selected domestic assets of Tropical Sportswear International Corp (TSI), as well as the outstanding capital stock of its U.K. subsidiary, for about $85 million. TSI (D/--/--) announced on December 16 it had filed for voluntary Chapter 11 bankruptcy protection). The asset purchase agreement is subject to the consent of TSI's creditors, and requires regulatory and Bankruptcy Court approval. The transaction is expected to close sometime in February 2005. PERY intends to fund the purchase with additional borrowings under its secured bank facility. "Although this transaction is expected to provide PERY scale in the men's bottoms category, we are concerned with the additional debt because PERY is already highly leveraged," said Standard & Poor's credit analyst Susan Ding. Furthermore, TSI's private label business is a lower-margined operation, and the company had operational issues during 2003 and 2004, which negatively affected its vendor relationships and margins. Standard & Poor's expects that PERY will be challenged to maintain its operating margins in the near term. The outlook revision also incorporates Standard & Poor's review of PERY's financial performance and operating results. Although its swimwear division is a relatively small portion of the total business, operational issues in that division have dragged down earnings and margins in the recent quarter ended October 2004, and has caused the company to revise its earnings projections for 2004 and 2005 downwards. POSSIBLE DREAMS: Court Approves Security Capital Settlement Pact ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Massachusetts, Eastern Division, approved a Settlement Agreement, dated as of October 29, 2004, by and between Craig R. Jalbert, in his capacity as Liquidating Trustee of Possible Dreams, Ltd., and Security Capital Corporation (AMEX:SCC). In October 2003, Possible Dreams, an indirect 75%-owned subsidiary of Security Capital, filed for bankruptcy protection under Chapter 11 of Title 11 of the United States Code. Security has filed proofs of claim in the proceeding, but was also the subject of claims pursued on behalf of Possible Dreams by the Trustee. All claims among the parties were resolved in the Settlement Agreement, which provided for a net payment by Security to Possible Dreams of $422,879.99. Security Capital has also agreed to pay an outstanding severance claim of an employee of Possible Dreams. The Company has established a reserve of $97,500 for such severance claim. As a result of this settlement, Security will record a pre-tax gain of $1,516,000 in the fourth quarter from the reversal of amounts previously provided for in the financial statements relating to the Possible Dreams bankruptcy proceedings in excess of the settlement payment. Security Capital does not expect any other material charges or expenditures arising from the Possible Dreams liquidation. The Company ceased to include the operating results of Possible Dreams in its consolidated financial statements in October 2003 when Possible Dreams filed for bankruptcy protection. The Company's two reportable segments are employer cost containment and health services, and educational services. The employer cost containment and health services segment consists of WC Holdings, Inc., which provides services to employers and their employees primarily relating to industrial health and safety, industrial medical care, workers' compensation insurance and the direct and indirect costs associated therewith. The educational segment consists of Primrose Holdings, Inc., which is engaged in the franchising of educational child care centers, with related activities in real estate consulting and site selection services in the Southeast and Southwest. The Company's discontinued operations consist of Pumpkin Masters Holdings, Inc., and Possible Dreams. Security Capital sold all of Pumpkin's assets in October 2004. Security Capital Corporation operates three other subsidiaries in three distinct business segments. The Company participates in the management of its subsidiaries while encouraging operating autonomy and preservation of entrepreneurial environments. The three business segments of SCC are employer cost containment and health services, educational services, and seasonal products. Possible Dreams is a portion of the Company's seasonal products segment. PUTNAM CBO: Fitch Keeps Junk Rating on $75.8 Million Senior Notes ----------------------------------------------------------------- Fitch Ratings affirms the rating of one class of notes issued by Putnam CBO II, Limited/Corp., which closed Nov. 5, 1997. These rating actions are effective immediately: -- $70,112,090 senior notes affirmed at 'BBB+'. -- $75,782,166 second priority notes remains at 'C'. Putnam CBO II is a collateralized bond obligation -- CBO -- managed by Putnam Advisory Company LLC. The collateral of Putnam CBO II is composed of high yield corporate bonds and emerging markets corporate and sovereign debt. Payments are made semi- annually in May and November and the reinvestment period ended in November 2002. According to the Nov. 1, 2004, trustee report, the portfolio includes $6.11 million (5.09%) in defaulted assets. The deal also contains $29.79 million (22.31%) assets rated 'CCC+' or below, excluding defaults. The senior par value test is currently passing at 145.4%, with a trigger of 130%. The second priority par value test is failing at 83.44% with a trigger of 106.5%. The senior interest coverage test is currently passing at 163.92%, with a trigger of 139%. The second priority interest coverage test is failing at 89.74%, with a trigger of 112.75%. The rating of the senior notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The rating of the second priority notes addresses the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Fitch will continue to monitor Putnam CBO II closely to ensure accurate ratings. Deal information and historical data on Putnam CBO II is available on the Fitch Ratings web site at http://www.fitchratings.com/ RELIANCE GROUP: Liquidator Wants Court Nod on Lloyd's Commutation ----------------------------------------------------------------- M. Diane Koken, Insurance Commissioner of Pennsylvania and Liquidator of Reliance Insurance Company, asks Judge Colins in the Commonwealth Court to approve the Commutation and Release Agreement between RIC and certain Underwriters at Lloyd's of London. Mechanical Breakdown Protection, Inc., markets and administers vehicle service contracts. In the event of a breakdown, MBPI pays for the cost of covered repairs to its customers' vehicles. MPBI sold vehicle service contracts through automobile dealerships, which acted as MBPI's sales agents. From 1991 through 1999, RIC issued Contractual Liability Agreements to MBPI. The Contractual Liability Agreements protected either the automobile dealerships for their liability under the vehicle service contracts, or the automobile purchasers directly. Pursuant to RIC's Vehicle Service Contract Program Administration Agreement with MBPI, all administrative and claims handling functions were handled by MBPI. As a result, MBPI should know the identity and location of all automobile dealers and owners that purchased vehicle service contracts. On April 19, 1994, RIC entered reinsured 100% of its obligations under the MBPI Agreements with the Lloyd's Underwriters, pursuant to certain Motor Vehicle Extended Warranty Reinsurance Agreements. MBPI is neither a party nor a beneficiary to the Reinsurance Agreements. Deborah F. Cohen, Esq., at Pepper Hamilton, in Philadelphia, Pennsylvania, explains that as a result of RIC's liquidation, the MBPI Agreements were terminated on November 2, 2001, and RIC's liability was extinguished. With this transaction came the concomitant termination of the Lloyd's Underwriter's liability under the MBPI Agreements. To finalize the matter, the Lloyd's Underwriters entered a Commutation Agreement that commuted all obligations under the Reinsurance Agreements to RIC for a $11,696,473 Commutation Amount. The Lloyd's Underwriters currently owe RIC $16,663,301. On the other hand, RIC owes the Lloyd's Underwriters $4,966,831. Therefore, the Commutation Amount is the result of a mutual set- off. The Lloyd's Underwriters will make the payment by wire transfer to: Mellon Bank Pittsburgh, PA ABA# 043000261 Credit: Reliance Insurance Company CHIPS No.: 044840 S.W.I.F.T.: MELN US 3P A/C#: 079-7806 Ref.: K. Lee The Commutation Agreement will resolve any and all liability of the Lloyd's Underwriters to MBPI, its automobile dealers, automobile purchasers and any other customers arising under any of the Agreements. Once the Commutation Agreement is authorized by a representative of both RIC and the Lloyd's Underwriters, and approved by the Commonwealth Court, the $11,696,473 will be released. The Commutation Agreement was negotiated between RIC and the Lloyd's Underwriters, Ms. Cohen says. The Commutation Agreement is fair and reasonable to the estate and is in the best interests of policyholders, claimants and the general public. The Commutation Amount is adequate for the reinsurance and unearned premium obligations to RIC. Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) ROBERDS, INC.: Has Until April 13 to File a Chapter 11 Plan ----------------------------------------------------------- The Honorable Thomas F. Waldron awarded Roberds, Inc., more time to file a chapter 11 plan. Roberds has the exclusive right to file a chapter 11 plan through April 13, 2005, and has the exclusive right to solicit creditors' acceptances of that plan through June 9, 2005. Initially, the Debtor had hoped to file a plan of reorganization. Early in its restructuring process, Roberds closed some stores in Florida and Cincinnati. After trying to formulate and implement a business plan focusing on its remaining locations, the debtor concluded that its remaining assets needed to be liquidated to preserve the value of its assets. The debtor then closed its remaining stores in Georgia, Indiana and Ohio and a court appointed liquidator conducted going-out-of-business sales at those locations. Subsequently, the company's remaining property was sold at public auction. Roberds now hopes to file a liquidating chapter 11 plan. Several preference actions have already been filed by the debtor. Other assets are being pursued, such as money due from Hilco Retail Trading, LLC as liquidators in this estate and monies due from vendors on credit memoranda, on claims against Lumbermens Mutual Casualty Co. relative to a certain insurance policy, and on certificates of deposit possible held as security deposits for state obligations of the debtor. In addition, Debtor is dealing with administrative claim issues, warranty service contract issues, and employee medical plan issues. Consequently, the facts necessary to develop a plan are not yet fully known. In addition the debtor states that it is premature for a plan to be formulated and filed in the immediate future, as the debtor does not have sufficient funds on hand at this time to pay administrative expenses on the Effective Date. Roberds, Inc., was a leading retailer of a broad range of home furnishing products, including furniture, bedding, major appliances and consumer electronics. The company filed for chapter 11 protection (Bankr. S.D. Ohio Case No. 00-30194) on August 22, 2001 before the Honorable Walter H. Rice. Robert Bruce Berner, Esq and Timothy Alan Riedel, Esq. of Arter & Hadden and Nick Vincent Cavalieri, Esq. and Yvette Ackison Cox, Esq. and Helen Marie Mac Murray of Kegler Brow Hill & Ritter represent the debtor in its restructuring efforts. ROCHESTER HOUSING: S&P Cuts $4.2M Bond Rating to 'B+' from 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Rochester Housing Authority -- Stonewood Village Apartments, New York's $4.2 million bonds series 1993 bonds to 'B+' from 'BB'. The outlook is stable. The downgrade reflects the continued decline in debt service coverage to 0.77x maximum annual debt service (MADS) for the fiscal year ended September 2003, down from 0.94x MADS for the fiscal year ended September 2002. The ability of the project manager to increase revenues has been limited as indicated by the average rental income for the project for fiscal 2002-2003 remaining stable at $722 per unit per month. Expenses per unit increased sharply by 15% to $5,452, from $4,736 in fiscal 2001-2002. Gross monthly contract rent per unit also remained stable at $733. The project has not received any rental increases since 1997. The rents at the property are currently 102% above fair market rents. Projects with rents above HUD's fair market rents are highly susceptible to rent freeze. The expense ratio for fiscal 2002-2003 was at 60%, higher than 52% for fiscal 2001-2002. The increase in expenses is primarily due to: -- 16% increase in administrative expenses, -- 10% increase in maintenance and repair expenses, and -- 17% increase in tax and insurance expenses. SALOMON BROTHERS: S&P Hacks Class F-DS Certificate Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Salomon Brothers Mortgage Securities VII Inc.'s commercial mortgage pass- through certificates on classes C, D, E-NM, and F-NM from series 2001-CDC and placed them on CreditWatch with negative implications. At the same time, the ratings on classes E-DS and F-DS are lowered, and the ratings on classes B, E-GF, F-GF, and X-3B-DS are affirmed. This transaction initially consisted of 17 LIBOR-based adjustable loans. Three loans remain. The lowered ratings reflect the deterioration in the operating performance of the collateral of the remaining loans, all three of which are in special servicing. The largest remaining loan (representing 65% of the mortgage pool balance) consists of a $60.4 million senior interest in a $79.0 million whole loan, known as the Divco-SVP loan, secured by seven flex/office buildings in California. Net cash flow -- NCF -- for the year ended Dec. 31, 2003, for the Divco-SVP loan portfolio has declined by 43% since issuance. Occupancy dropped to 81% at year-end 2003 from 100% at year-end 2002, reflecting the weakness of the office market and after- effects of the technology crash in the Bay Area. In September 2004, the loan was extended to Dec. 11, 2005, from its initial maturity date of Dec. 11, 2003, following a one-time, principal reduction of $3.8 million in April 2004. The loan remains current. The second largest remaining loan (representing 20% of the mortgage pool balance) consists of a $18.8 million senior interest in a $29.0 million whole loan secured by 74 New Montgomery, a 119,481-square-foot office building in downtown San Francisco, California. The loan matures in February 2005, with one 12-month extension available. While NCF for the property has increased since issuance, and the building is presently 95% occupied, the major tenant in the building is requesting that its existing lease rate be reduced to current market rents in connection with its possible renewal of its lease(s), which represent more than 50% of the building's total space before expiration in March 2005. Standard & Poor's has placed four classes, including the two raked classes specifically tied to this loan, on CreditWatch with negative implications, pending the resolution of the renewal of the major tenant. Depending on the outcome, further rating actions may be warranted. The third loan (representing 15% of the mortgage pool balance) is known as the GF Hotel Portfolio loan, and consists of a $14.4 million senior interest in a $27.9 million whole loan. The loan, which was originally secured by a portfolio of nine hotels, matured in May 2004. Eight of the nine hotels have been liquidated, and proceeds were used to pay outstanding advances and reduce principal. As a result, the A portion of the senior interest of this loan has been paid off. The remaining hotel, a 176-room Radisson in Enfield, Connecticut, is under contract and expected to close in January 2005. Based on conversation with Midland Loan Services Inc. (which is both the servicer and the special servicer on this transaction), it is expected that, upon liquidation of this last remaining asset, a loss will be realized on the raked classes specifically tied to this loan. Ratings Lowered and Placed on Creditwatch Negative Salomon Brothers Mortgage Securities VII Inc. Commercial mortgage pass-thru certificates 2001-CDC Rating ------ Class To From ----- -- ---- C BBB-/Watch Neg A D BBB-/Watch Neg A- E-NM BB/Watch Neg BBB F-NM BB-/Watch Neg BBB- Ratings Lowered Salomon Brothers Mortgage Securities VII Inc. Commercial mortgage pass-thru certificates 2001-CDC Rating ------ Class To From ----- -- ---- E-DS B+ BBB+ F-DS B BBB Ratings Affirmed Salomon Brothers Mortgage Securities VII Inc. Commercial mortgage pass-thru certificates 2001-CDC Class Rating ----- ------ B AAA E-GF CCC F-GF CCC- X-3B-DS AAA SAN LUIS: Section 341(a) Meeting Slated for January 20 ------------------------------------------------------ The U.S. Trustee for Region 19 will convene a meeting of San Luis Hills Farm, Inc.'s creditors at 1:30 p.m., on Jan. 20, 2004, at the U.S. Custom House, 721 19th Street, Room 104, Denver, Colorado 80202. This is the first of creditors required under U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Fort Garland, Colorado, San Luis Hills Farm, Inc. operates a farm. The Company filed for chapter 11 protection on December 13, 2004 (Bankr. D. Colo. Case No. 04-36809). Deanna L. Westfall, Esq., at Bennington Johnson Biarman & Craigmile, LLC and Robert Padjen, Esq., at Rubner Padjen & Lauffer, LLC represent the Debtor's restructuring. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. SAN LUIS: Hires Bennington Johnson & Rubner Padjen for Legal Work ----------------------------------------------------------------- San Luis Hills Farm, Inc. asks the U.S. Bankruptcy Court for the District of Colorado for permission to jointly employ Bennington Johnson Biarman & Craigmile, LLC, and Rubner Padjen & Lauffer, LLC, as its general bankruptcy counsel in its chapter 11 restructuring. Bennington Johnson and Rubner Padjen are expected to: a) provide the Debtor with legal counsel with respect to the Debtor's powers and duties as a debtor in possession; b) prepare on behalf of the Debtor a plan of reorganization and disclosure statement and assist in obtaining approval and confirmation for the plan and disclosure statement; c) assist and represent the Debtor at all Court appearances and negotiations in its chapter 11 case; d) assist and represent the Debtor in the litigation of adversary proceedings and contested matters; and e) perform other legal services for the Debtor that will me appropriate and necessary. Deanna L. Westfall, Esq., a Member at Bennington Johnson, and Robert Padjen, Esq., a Member at Rubner Padjen, are the lead attorneys for the Debtor. Ms. Westfall discloses that her Firm received a 6,553.01 retainer and she will bill the Debtor at $225 per hour. Mr. Padjen discloses his Firm also received a 6,553.01 retainer, and he will bill the Debtor at $240 per hour. Ms. Westfall reports Bennington Johnson's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Philip Johnson Member $240 Jacqueline Wayne Associate 160 Tami Sapp Associate 160 Rachel Dengler Paralegal 50 Mr. Padjen reports Rubner Padjen's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Joel Lauffer Counsel $300 Robert Padjen Counsel 240 Bennington Johnson and Rubner Padjen assure that Court that they do not represent any interest adverse to the Debtor or its estate. Headquartered in Fort Garland, Colorado, San Luis Hills Farm, Inc., operates a farm. The Company filed for chapter 11 protection on December 13, 2004 (Bankr. D. Colo. Case No. 04-36809). When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. SENIOR LIVING: Zurich Settles "Partner" Claims for $47.5 Million ---------------------------------------------------------------- ZC Specialty Insurance Company (ZCSIC), a US subsidiary of Zurich Financial Services Group, reached a comprehensive settlement with the Trustee for the Senior Living Properties Trust resolving all pending litigation between the parties arising from the bankruptcy of the Senior Living Properties nursing home chain operating in Texas and Illinois. The settlement agreement is subject to approval by the U.S. Bankruptcy Court for the Northern District of Texas. The $47.5 million settlement results in a complete resolution of all claims against ZCSIC and its affiliates relating to SLP. In particular, it resolves a lawsuit against ZCSIC seeking damages of approximately $421 million, which were later increased to $528 million plus costs and more than $200 million in contingent attorney fees. Debtor's De Facto Partner On April 22, 2004, the US Bankruptcy Court for the Northern District of Texas held that ZCSIC was a de facto partner in SLP's nursing home business, and, therefore, liable for SLP's unpaid debts. ZCSIC appealed the Bankruptcy Court's decision to the U.S. District Court for the Northern District of Texas. The appeal is pending, but will be dismissed as moot under the settlement agreement. Following the April 22 decision, the Trustee filed a complaint against ZCSIC seeking damages of approximately $421 million, which were later increased to $528 million plus costs and more than $200 million in contingent attorney fees. Even though ZCSIC believes that the decision of the Bankruptcy Court would eventually be reversed on appeal, it has agreed to pay $47.5 million to resolve all claims now. No Admission In settling the case, ZCSIC does not admit liability. The settlement agreement provides that the Trustee will release ZCSIC and its affiliates from all claims arising out of or related to SLP and its nursing home business. In addition, the settlement provides for the Bankruptcy Court to enter a permanent injunction barring all creditors and parties in interest from suing ZCSIC and its affiliates for any alleged debts resulting from a de facto partnership with SLP. The settlement is beneficial to ZCSIC because it limits the Company's exposure, will minimize additional litigation costs, and puts an end to the diversion of its personnel and resources. Zurich believes this settlement is a favorable outcome for ZCSIC and its affiliates. Zurich Financial Services is an insurance-based financial services provider with a global network that focuses its activities on its key markets in North America and Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. Zurich has offices in more than 50 countries and employs about 62,000 people. Senior Living Properties, LLC's, with its principal offices in Carmel, Indiana, was formed in 1998 and currently operates 48 skilled nursing and assisted living facilities in Texas and 24 skilled nursing facilities in Illinois. Like many other health care facility operators, SLP was adversely affected by changes in Medicare and Medicaid reimbursement, imposition of regulatory penalties and personal injury litigation. As a result, SLP filed for protection in the U.S. Bankruptcy Court on May 14, 2002. SLP's confirmed chapter 11 plan was declared effective on Nov. 19, 2003, completing the Company's emergence from bankruptcy. SEROLOGICALS CORP: S&P Affirms Low-B Ratings & Positive Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on life science company Serologicals Corporation to positive from stable in light of the company's use of equity financing to repay acquisition-related debt. The 'B+' corporate credit, 'BB-' bank loan, and 'B-' subordinated debt ratings on Atlanta, Georgia-based Serologicals are affirmed. The recovery rating of '1' is also affirmed. "The outlook revision reflects the company's improved capital structure and demonstrated commitment to the careful use of borrowings to support its growth initiatives," said Standard & Poor's credit analyst David Lugg. "The latter is evidenced by the recently completed equity offering." Serologicals will use the proceeds to repay the $80 million term loan used to finance the October 2004 acquisition of privately held Upstate Biotech. Pro forma for the acquisition and subsequent equity offering, adjusted total debt to EBITDA falls to 2.8x from 3.2x and total debt to capital falls to 28% from 43%. The acquisition of Upstate Biotech broadened Serologicals' existing portfolio of specialty laboratory reagents by adding a substantial range of tools to research cell signaling. Moreover, Upstate has a rapidly growing business that performs assays on a contract basis, a new opportunity for Serologicals. The low, speculative-grade ratings on Serologicals continue to reflect the risks related to its acquisitive growth model and its vulnerable niche positions in the laboratory supply market. The company produces a range of products used by health care companies to discover and manufacture drugs and diagnostic products. Its products range from specialized reagents for basic research to supplements used in the manufacture of monoclonal antibodies. The supplements are attractive because of the high margins they command and because the drug company customers that use them face high switching costs imposed by regulation. SOLUTIA INC: St. Clair County Wants to Collect Ad Valorem Taxes --------------------------------------------------------------- For many years, Solutia Inc. and its debtor-affiliates or their predecessors have operated a plant at St. Clair County in Sauget, Illinois. During that time, the Debtors have provided St. Clair County with substantial receipts in tax revenues arising from the assessment of ad valorem taxes on the Debtors' real property located at the Plant and other real property located in St. Clair County. The County is located in Southern Illinois and the various taxing bodies there rely heavily on tax revenues from corporations like the Debtors doing business in the County. When preparing their internal budget and facilitating budget requests to State and Federal agencies, the taxing bodies depend on the anticipated tax receipts of the Debtors. Ad valorem tax revenues are a chief source of public revenue in St. Clair County. David A. Sosne, Esq., at Summers, Compton, Wells & Hamburg, in St. Louis, Missouri, relates that in the case of the Debtors' Plant, ad valorem taxes fund many different operations, including: -- Cahokia Unit #187 School District; -- SWIC District #522, a community college district; -- Village of Sauget; -- Centerville Township; -- East Side Health, which provides public health services; -- Metro East Sanitary; and -- St. Clair County. Without the tax revenues, the schools, roads, fire protection, public health and other municipal and local services will suffer substantially, Mr. Sosne explains. Cahokia Unit #187 School District, which is on the State of Illinois Financial Watch List for schools in financial trouble, cannot afford to lose any additional revenue. Furthermore, the communities being served by these taxes have a substantial number of poor and low-income citizens and can ill afford any loss or delay in tax revenue. The County and the other taxing entities are political subdivisions of the State of Illinois and are authorized to assess, levy and collect ad valorem taxes on real property located within their jurisdictions pursuant to the Illinois Constitution and the Illinois Property Tax Code. The Debtors owe the County $1,331,598 for 2003 ad valorem taxes with interest accruing and becoming due on a monthly basis at 1-1/2% per month beginning June 30, 2004. The Debtors owe the County $1,353,467 as of November 30, 2004, after taking into account interest and a small payment made by the Debtors for postpetition taxes. The Illinois Property Tax Code provides that a lien for all taxes, penalties, interest and cost will attach to any property on which a lien is imposed by law on the first day of the year of the tax year in issue and will continue in full force until discharged by payment or sale. Under Illinois law, a lien for ad valorem taxes on real property subject to those taxes is created and effective as of January 1st of each year. According to Mr. Sosne, the 2003 ad valorem taxes owed by the Debtors to the County comprise all or primarily a prepetition secured claim because the taxes were assessed as of January 1, 2003. Payment of 2004 ad valorem taxes, which become due June and September 2005 constitute a postpetition secured claim. In Illinois, the taxes "shall be a prior and first lien on the property, superior to all other liens and encumbrances, from and including the first day of January in the year in which the taxes are levied until the taxes are paid or until the property is sold under the Code." Therefore, the County holds a first lien secured on the Debtors' property located within the County for all prepetition taxes owed by the Debtors. Furthermore, the County has obtained a postpetition lien as of January 1, 2004, on all of the Debtors' real property situated in the County for payment of 2004 ad valorem taxes owed by the Debtors. Perfection of the County's lien for payment of the Debtors' 2004 ad valorem taxes is exempted from the automatic stay. Moreover, interest accrues on all delinquent taxes at a rate of 1-1/2% per month from the date of delinquency. Since payment of Debtors' 2003 ad valorem taxes was due: (a) June 30, 2004 -- for one half of the amount owed; and (b) September 1, 2004 -- for the remaining one half owed, the County's current prepetition secured claim will further increase at $19,153 per month. As of September 30, 2004, the Debtors had in about $92,000,000 reserve cash and cash equivalents. Accordingly, the County asks the Court to: (a) direct the Debtors to satisfy the County's prepetition secured claim; or (b) in the alternative, authorize the Debtors to make monthly interest payments at 1-1/2% per month to the County as adequate protection retroactive to the date of delinquency. Mr. Sosne points out that a tax collector of another county -- the Tax Collector of Escambia County, Florida -- obtained a Court order, pursuant to which the Debtors are required to make payments of prepetition secured tax claims, which are similar, if not identical, to the type of claim that St. Clair County has. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) ST. LOUIS: Moody's Affirms B3 Rating on Senior Revenue Bonds ------------------------------------------------------------ Moody's affirms the B3 rating and negative outlook assigned to St. Louis Industrial Development Authority's $98 million in senior lien hotel revenue bonds. Affirmation of the rating follows a draw on the debt service reserve fund to pay a portion of senior lien debt service due on December 15, 2004, a clear sign of continued credit stress. In August 2004, Moody's downgraded the rating to B3 from Ba3 based on the project's poor financial performance. At that time, we anticipated the reserve fund draw would occur in order to make the December 15th payment, given the project's failure to generate revenues sufficient to cover operations and dwindling resources available to pay debt service. If the project were to rely solely on project revenues, a default could occur as early as December 2005. However, Moody's has not lowered the rating at this time, given Moody's view of the financial incentives of equity-holder Kimberly-Clark Corporation (senior unsecured debt rated Aa2), acting through its affiliate, Housing Horizons, LLC, to make additional cash contributions in the future. The bonds were issued in 2000 to finance a portion of the costs of construction and renovation of the headquarters hotels for the America's Center Convention Center in downtown St. Louis. The 165- room Renaissance Suites opened for business in April 2002, and the 918-room Renaissance Grand opened for business in February 2003. The bonds are secured by a pledge and assignment of net revenues, generated primarily from the operation of the two hotels, a debt service reserve fund, standby credit facilities, and a first lien mortgage on the project. As expected, continued poor performance required drawdown of remaining standby commitment balances earlier this month to cover the operating deficit in 2004. The project could draw down the remainder of the senior lien debt service reserve as soon as June 15, 2005, if project revenues or other third party resources are not sufficient to cover debt service due at that time. Despite the anticipated depletion of reserves, the B3 rating is supported by our expectation that equity-holder Kimberly-Clark Corporation (senior unsecured debt rated Aa2), acting through its affiliate, Housing Horizons, LLC, although not obligated, will continue to subsidize operations as long as their benefits from the substantial federal tax credits associated with the project outweigh Kimberly-Clark's required financial contribution to the hotel. Based on current projections, Moody's expects these tax credits will remain significantly larger than the required financial contribution in each of 2005 and 2006. THE BRICKMAN GROUP: S&P Affirms Low-B Rating & Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on The Brickman Group Ltd. to stable from negative. At the same time, the 'BB-' corporate credit and senior secured debt ratings, and 'B' subordinated debt rating, were affirmed. Brickman had about $237 million in total debt outstanding as of Sept. 30, 2004. For analytical purposes, Standard & Poor's continues to view Brickman and parent company Brickman Group Holding Inc. as one economic entity. "The outlook revision reflects Brickman's improved financial profile and the expectation that the company's credit protection measures will remain appropriate for the rating," said Standard & Poor's credit analyst Jean C. Stout. The speculative-grade ratings reflect Brickman's narrow focus, limited financial flexibility, and high debt burden. These factors are somewhat mitigated by the company's good position within the highly fragmented commercial landscape maintenance service market and by the favorable growth prospects in the industry. Gaithersburg, Maryland-based Brickman provides commercial landscape maintenance and design, and snow removal services. The U.S. landscaping sector is extremely fragmented and highly price competitive. Brickman is one of only two national providers focused solely on the U.S. commercial landscape maintenance services market. The company's broad geographic presence and maintenance contracts with diverse customers somewhat limit the risk from changes in a single market and provide a stream of recurring revenue. Ratings stability incorporates the expectation that, despite participation in a highly fragmented and competitive environment, Brickman is expected to maintain credit protection measures appropriate for the rating. THE MIIX GROUP: Files for Chapter 11 Protection in Delaware ----------------------------------------------------------- The MIIX Group, Incorporated (OTC:MIIX) and its subsidiary, New Jersey State Medical Underwriters, Inc., each filed a voluntary petition under Chapter 11 of Title 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. The companies continue to operate their businesses and manage their properties as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. To date, no creditors' committee or trustee has been appointed in this case. The Board of Directors has retained Traxi LLC, a special situation advisory firm, as a financial and restructuring consultant to assist the Company with the Chapter 11 filing and related restructuring efforts. Perry M. Mandarino, a Senior Managing director at Traxi, was appointed Chief Restructuring Officer leading the restructuring engagement. As disclosed previously the Company has received one indication of interest from MDAdvantage Holdings, Inc., to acquire certain assets of Underwriters and one additional possible offer. The Company continues to negotiate with MDAdvantage Holdings, Inc., the documentation relating to a possible sale of Underwriter's assets, subject to the receipt of all necessary approvals and "higher or better offers" prior to closing. The bankruptcy filing does not include MIIX Insurance Company, which on September 28, 2004 was placed into rehabilitation by Order of the Superior Court of New Jersey. The Commissioner of the New Jersey Department of Banking and Insurance serves as Rehabilitator with exclusive control over the business and property of MIIX Insurance Company. Headquartered in Lawrenceville, New Jersey, The MIIX Group -- http://www.miix.com/-- provides management and claims administrative services to the medical professional liability insurance industry, and a range of consulting products to physician and healthcare providers. The MIIX Group of Companies currently protects existing physician, medical professional, and institutional insureds through its long-term commitment to run-off insurance operations. The Company and its debtor-affiliate filed for chapter 11 protection on Dec. 20, 2004 (Bankr. D. Del. Case No. 04-13588). Andrew J. Flame, Esq., at Drinker Biddle & Reath LLP represent the Debtors in their restructuring efforts. When the MIIX Group filed for protection from its creditors, it listed $9,871,000 in total assets and $8,974,000 in total debts. As of petition date, New Jersey State Medical Underwriters, Inc., estimated between $10 million to $50 million in total assets and debts. THE MIIX GROUP INC: Case Summary & 31 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: The MIIX Group, Incorporated Two Princess Road Lawrenceville, New Jersey 08648 Bankruptcy Case No.: 04-13588 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- New Jersey State Medical Underwriters, Inc. 04-13589 Type of Business: The Company provides management services to medical malpractice insurance companies. See http://www.miix.com/ Chapter 11 Petition Date: December 20, 2004 Court: District of Delaware (Delaware) Debtor's Counsel: Andrew J. Flame, Esq. Drinker Biddle & Reath LLP 1100 North Market Street, Suite 1000 Wilmington, Delaware 19801 Tel: (302) 467-4200 Fax: (302) 467-4201 Chief Restructuring Officer: Perry M. Mandarino Traxi LLC 212 West 35th Street New York, New York 10001 Crisis Managers: Traxi LLC 212 West 35th Street New York, New York 10001 Financial Advisors: SSG Capital Advisors, L.P. Five Tower Bridge, Suite 420 300 Barr Harbor Drive West Conshohocken, Pennsylvania 19428 Financial Condition of The MIIX Group, Inc. as of September 30, 2004: Total Assets: $9,871,000 Total Debts: $8,974,000 Financial Condition of New Jersey State Medical Underwriters, Inc.: Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The MIIX Group, Inc.'s 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Jersey State Medical Intercompany Debt $8,605,415 Underwriters, Inc. 2 Princess Road Lawrenceville, New Jersey 08648 Stuart Glasser, M.D. Law Suit $2,500,000 c/o Stephen A. Weiss, Esq. Seeger Weiss LLP One William Street New York, New York 10004 Pegasus Advisors Intercompany Debt $40,644 2 Princess Road Lawrenceville, New Jersey 08648 Saiber Schlesinger Satz & Legal Fees $18,116 Goldstein, LLC Tri State Financial Press SEC Printing $13,022 PriceWaterhouseCoopers Tax Services $6,690 Equiserve Transfer Agent Fee $2,202 Shareholder.com Investor Relations $1,500 Mellon Global Securities Investment Fees $1,335 Business Wire SEC Printing $160 Neil E. Weisfeld Unknown New Jersey State Medical Underwriters, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Administration & Information Intercompany Debt $5,091,822 Management 2 Princess Road Lawrenceville, New Jersey 08648 MIIX Insurance Company Intercompany Debt $3,220,956 c/o The Honorable Holly C. Bakke Department of Banking & Insurance PO Box 325 Trenton, New Jersey 08625-0325 Medical Brokers, Inc. Intercompany Debt $2,382,664 2 Princess Road Lawrenceville, New Jersey 08648 Pegasus Advisors Intercompany Debt $520,838 2 Princess Road Lawrenceville, New Jersey 08648 Gordon Lawrenceville Realty Office Space Rental $37,996 PBCC Copier Lease $30,493 Systems Union Computer Service $16,953 Roynan, James Severance $15,577 Saiber Schlesinger Satz & Legal Fees $13,298 Li, Xyion Severance $12,436 Davis, Williams Severance $12,432 Thornton, Virginia Severance $11,515 Honeywell, Inc. Security $9,641 Ascential Software Vendor $9,044 Myers, Dawn Severance $8,388 Bloomberg Investments $8,100 Six Peak Software Consulting $6,270 Verizon Telephone $4,670 Modern Facilities Services Janitorial Services $3,559 Sunguard Recovery Services Recovery Fees $3,238 THERMADYNE HOLDINGS: David Dyckman Replaces James Tate as CFO ------------------------------------------------------------- Thermadyne Holdings Corporation (OTCBB:THMD) has appointed David L. Dyckman Executive Vice President and Chief Financial Officer. He replaces James H. Tate, who resigned effective Dec. 15, 2004 to pursue other business interests. In this position, Mr. Dyckman will be a member of the company's executive leadership team and will be directly responsible for financial reporting and control, compliance, corporate development, the business planning process, investor relations, information technology, legal and human resources administration. Mr. Dyckman has served as Chief Financial Officer and Vice President of Corporate Development of NN, Inc., a publicly-traded global manufacturer of precision bearing components since 1998. Previously, he has served as Vice President, Marketing and International Sales of the Veeder-Route Division of Danaher Corporation, a manufacturer of tools and environmental control products, and has held various managerial and executive positions with Emerson Electric Co. He holds an M.B.A. and a B.A. in Applied Mathematics from Cornell University. "Over the past year, we have begun to reorganize, restructure and rebuild the organization to execute our new business plan and we are very pleased to have Dave join our executive team to further advance our progress," said Paul D. Melnuk, Thermadyne's Chairman and Chief Executive Officer. "He brings proven financial leadership as well as operational management and analytical capabilities that will contribute to the necessary improvement in the underlying performance of our business," he added. About the Company Thermadyne Holdings Corporation -- http://www.Thermadyne.com/-- headquartered in St. Louis, Missouri, is a leading global marketer of cutting and welding products and accessories under a variety of brand names including Victor(R), Tweco(R) / Arcair(R), Thermal Dynamics(R), Thermal Arc(R) , Stoody(R), GenSet(R) and Cigweld(R). Its common shares trade on the OTC Bulletin Board under the symbol THMD. * * * As reported in the Troubled Company Reporter on Dec. 13, 2004, Standard & Poor's Ratings Services revised its outlook on Thermadyne Holdings Corporation to negative from stable while, at the same time, affirming the 'B+' corporate credit and 'B-' subordinated debt ratings on the company. Total debt outstanding at Sept. 30, 2004, was $260 million. "The outlook revision reflects the firm's weakened financial profile resulting from high-volume inefficiencies, causing operating margin and EBITDA to decline and debt to increase, despite double-digit sales gains," said Standard & Poor's credit analyst Daniel DiSenso. "Failure of Thermadyne to make steady progress in improving operating performance and reducing bloated inventories could result in a ratings downgrade." THINK AGAIN: Files for Chapter 11 Protection in E.D. Tennessee -------------------------------------------------------------- PMC Wholefood Farmacy Corp.'s (Pink Sheets: WFMC) wholly owned subsidiary, Think Again, Inc., filed for protection under Chapter 11 of the Bankruptcy Act in the United States Bankruptcy Court for the Eastern District of Tennessee, Greenville Division. The Company disclosed that Don Tolman has officially resigned from all his positions in the Company and that Mark Bowen and Steve Tilton have been elected to the Company's Board of Directors replacing the former board. The Board then selected Mr. Bowen to be the Company's Chief Executive Officer and Tilton as its new president. In commenting on the news, Steve Tilton stated: "We believe these actions were in the best interest of the Company to protect it from any adversity which may arise from the Whole Living, Inc. lawsuit. We believe the Company will be able to move forward with its business plans and emerge from Chapter 11 as a stronger company. Headquartered in Rogersville, Tennessee, Think Again, Inc. (d/b/a Great American Whole Food Farmacy) -- http://www.wholefoodfarmacy.com/- - is at the forefront of the emerging health and wellness industry. The Company's products include whole foods and Phi Plus. The Company filed for chapter 11 protection on Dec. 8, 2004 (Bankr. E.D. Tenn. Case No. 04-24141). TODD MCFARLANE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Todd Mcfarlane Productions, Inc. 1711 West Greentree Drive, Suite 208 Tempe, Arizona 85284 Bankruptcy Case No.: 04-21755 Type of Business: The Company is a comic book publisher of Spawn, Hellspawn, & Sam and Twitch. See http://www.spawn.com/ Chapter 11 Petition Date: December 17, 2004 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Kelly Singer, Esq. Squire Sanders & Dempsey, L.L.P. 40 North Central Avenue, #2700 Phoenix, Arizona 85004-4498 Tel: (602) 528-4000 Fax: 602-253-8129 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tony Twist Litigation $15,000,000 c/o Stanley M. Hammerman 3101 North Central, Suite 500 Phoenix, Arizona 85012 McFarlane Toys, Inc. Intercompany Debt $683,902 1711 West Greentree Drive Allocation of Suite 208 Administrative Tempe, Arizona 85284 Expenses Greg Capullo Contract Artist $18,250 Brian Haberlin Contract Artist $13,600 Brian Holguin Contract Artist $8,800 Atwell, Curtis & Brooks, Ltd. Collection Agency $7,649 For Arthur Andersen Bank of America Outstanding Check $6,000 Jay Fotos Contract Artist $5,600 Danny Miki Contract Artist $4,070 Angel Medina Contract Artist $3,960 Henry & Home, PLC 2004 Tax Planning $3,200 Comicraft Contract Artist $2,200 Tom Orzechowski Contract Artist $2,200 Greg Scott Contract Artist $1,750 Kim Kolomyjec Trade Debt $1,560 Anna Brooks Outstanding Check $1,000 Register of Copyrights Outstanding Check $60 Neil Gaiman Litigation Claim Unknown TRICO MARINE: Nasdaq Delists Common Stock from Trading ------------------------------------------------------ Trico Marine Services, Inc. (OTC Pink Sheets: TMAR) disclosed that the Company's common stock has been delisted and is no longer eligible to trade on the Nasdaq National Market. The delisting follows the Company's receipt of notification from Nasdaq that the Company's common stock would no longer be listed on the Nasdaq National Market as of the opening of business on Dec. 17, 2004. The Company expects that its common stock may be available for trading on the Pink Sheets and may be available for trading on the Over-The-Counter Bulletin Board, although there is no assurance that the Company's common stock will be or remain available for trading on either of these quotation services, or that a trading market for the Company's common stock will develop or be maintained. As previously announced on November 12, 2004, the Company and its two primary U.S. subsidiaries, Trico Marine Assets, Inc. and Trico Marine Operators, Inc. have commenced soliciting consents from the holders of the Company's outstanding $250 million 8-7/8% senior notes due 2012 to approve a "pre-packaged" plan of reorganization under Chapter 11 of Title 11 of the United States Code. The Plan contemplates, among other things, that outstanding shares of the Company's common stock will be cancelled, and that current holders of these outstanding shares will receive, in exchange for their shares, warrants for new common stock on a basis yet-to-be determined. Details of the Plan, including a copy of the Plan, the Company's disclosure statement and related documents are available at http://www.kccllc.net/trico/ The solicitation period expired on December 13, 2004. The Company intends to promptly commence a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. While there is no assurance that the Company will file such a reorganization petition or that the Plan will be adopted or implemented as contemplated in the solicitation, under the Plan the outstanding shares of the Company's common stock will have no value other than the value of the warrants to be exchanged for such shares. About the Company Trico Marine provides marine support services to the oil and gas industry, primarily in the Gulf of Mexico, the North Sea, Latin America and West Africa. The services provided by the Company's diversified fleet of vessels include the marine transportation of drilling materials, supplies and crews and support for the construction, installation, and maintenance and removal of offshore facilities. UAL CORP: Court Permits Panel to Intervene in Adversary Proceeding ------------------------------------------------------------------ As reported in the Troubled Company Reporter on Nov. 30, 2004, the Honorable Eugene Wedoff of the United States Bankruptcy Court for the Northern District of Illinois issued a temporary restraining order barring a group of creditors, which controls about one-third of United Airline's fleet, from repossessing up to eight Boeing 767s and six 737s. Trustees Respond James E. Spiotto, Esq., at Chapman and Cutler, contends that U.S. Bank and The Bank of New York are entitled to take possession of the aircraft pursuant to Section 1110(a)(1) of the Bankruptcy Code. The Trustees have terminated the Interim Adequate Protection Stipulations and made written demands upon the Debtors to surrender the aircraft. Section 1110 expressly and unambiguously immunizes aircraft creditors' repossession rights from any and all powers of the Court, no matter the source of that power. Accordingly, the Court is without power or authority to grant the Debtors' request. Mr. Spiotto reminds Judge Wedoff that at numerous junctures, the Debtors have defended the Trustees. The Debtors indicated that the formation of the Chapman Group made negotiation possible. The Debtors stated that the Trustees' interests were aligned with the Debtors. The Debtors refused to join the Official Committee of Unsecured Creditors in its antitrust witch-hunt. Now, the Debtors argue that the structure of the Trustees is unfair. The Debtors cannot have it both ways. The Debtors have repeatedly told the Court that if the Trustees could earn superior rates, they should repossess their aircraft and test the public markets. Indeed, the Debtors have argued that the Trustee's unwillingness to take back their aircraft was proof that the Interim Adequate Protection Stipulations provided fair compensation. Now, "the Trustees have reached the end of their patience with the Debtors," says Mr. Spiotto. The Trustees have finally called the Debtors' bluff, and the Debtors are now crying foul to the Court. * * * Judge Wedoff permits the Creditors Committee to intervene in the Adversary Proceeding. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 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, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITED HOSPITAL: Look for Bankruptcy Schedules on Feb. 1 -------------------------------------------------------- The Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York gave New York United Hospital Medical Center more time to file its list of creditors and equity security holders, schedules of assets and liabilities, statement of financial affairs, and schedule of executory contracts and unexpired leases. The Debtor has until Feb. 1, 2005, to file those documents. The Debtor explain to the Court that because of the size and complexity of its business operations and financial affairs, it will require additional time to bring its books and records up to date and to collect the data needed for the preparation and filing of its Schedules and Statements. The Debtor relates that it will take a substantial time and effort on its part to compile all the necessary information from its books, records and documents relating to numerous creditors and multitude of transactions. The Debtor tells the Court that the extension will give it more time to mobilize its employees in working diligently to assemble all the necessary information to accurately complete and file its Schedules and Statements on or before the extension deadline. Headquartered in Port Chester, New York, New York United Hospital Medical Center is a 224-bed, community healthcare provider and a member of the New York-Presbyterian Healthcare System, serving several Westchester communities, including Port Chester, Rye, Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont. The Company filed for chapter 11 protection on December 17, 2004 (Bankr. S.D.N.Y. Case No. 04-23889). Lawrence M. Handelsman, Esq., at Stroock & Stroock represents the Debtor in its restructuring. When the Debtor filed for protection from its creditors, it listed total assets of $39,000,000 and total debts of $78,000,000. UNITED HOSPITAL: Wants to Hire Stroock & Stroock as Bankr. Counsel ------------------------------------------------------------------ New York United Hospital Medical Center asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Stroock & Stroock & Lavan LLP as its general bankruptcy counsel. Stroock & Stroock is expected to: a) advise the Debtor with respect to its powers and duties as a debtor in possession; b) assist the Debtor in negotiating, formulating, and taking the necessary legal steps to confirm a plan of reorganization or liquidation; c) prepare and file all necessary applications, motions, orders, reports, adversary proceedings, responses, pleadings and documents; d) represent the Debtor at Court hearings and proceedings to protect its interests; e) prosecute and defend all actions and proceedings by or against the Debtor; f) represent and negotiate on behalf of the Debtor regarding any sale of assets; g) counsel and represent the Debtor regarding the assumption and rejection of executory contracts and unexpired leases and analyze claims and negotiate all matters with creditors on behalf of the Debtor; and h) perform all other legal services for the Debtor that may be desirable and necessary for the efficient and economic administration of its chapter 11 case. Lawrence M. Handelsman, Esq., a Partner at Stroock & Stroock, is the lead attorney for the Debtor's restructuring. Mr. Handelsman discloses that the Firm received a $350,000 retainer. Mr. Handelsman will bill the Debtor at $750 per hour. Mr. Handelsman reports Stroock & Stroock's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Eric M. Kay Associate $495 Anna M. Taruschio Associate 365 Omeca N. Nedd Associate 205 Stroock & Stroock assures the Court that it does not represent any interest adverse to the Debtor or its estate. Headquartered in Port Chester, New York, New York United Hospital Medical Center is a 224-bed, community healthcare provider and a member of the New York-Presbyterian Healthcare System, serving several Westchester communities, including Port Chester, Rye, Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont. The Company filed for chapter 11 protection on December 17, 2004 (Bankr. S.D.N.Y. Case No. 04-23889). When the Debtor filed for protection from its creditors, it listed total assets of $39,000,000 and total debts of $78,000,000. US AIRWAYS: Retiree Committee Retains Alvarez as Advisors --------------------------------------------------------- The Section 1114 Retiree Committee sought and obtained the Bankruptcy Court's authority to retain Alvarez & Marsal, LLC, as financial advisors. Daniel A. Lowenthal, Esq., at Thelen, Reid & Priest, in New York City, relates that the Retiree Committee selected A&M as financial advisors because of the firm's extensive experience and knowledge of business reorganizations under Chapter 11 of the Bankruptcy Code and its familiarity with all aspects of employee benefits, including health care. A&M will: a) advise and assist the Committee in examining and analyzing US Airways and its debtor-affiliates' proposed retiree benefit modifications; b) advise and assist the Committee in reviewing the Debtors' support information for any modifications, including historical financials, projections, underlying assumptions and specifics of the retiree plans; c) meet and negotiate with the Debtors, their advisors and counsel on proposed modifications, underlying assumptions and support information; d) provide expert testimony on related matters; and e) other requested general business consulting or assistance. A&M will be compensated for its services on an hourly basis in accordance with rates in effect on the date the services are rendered. A&M will also be reimbursed for actual, reasonable and necessary out-of-pocket expenses. A&M's rates range from: Professional Hourly Rate ------------ ----------- Managing Director $525-$625 Director $375-$525 Associate/Analyst $175-$375 A&M may employ the advisory services of Sustman Associates of Montgomery, Texas. Sustman Associates specializes in working with companies in the retirement benefit area and has extensive employee benefit experience in many industries including the wholesale, retail, manufacturing and health care industries. Scott C. Sustman is the President of Sustman Associates. A&M will charge $375 per hour for Sustman Associates' advisory services. Sustman Associates will support A&M by providing certain specialized services within Sustman Associates' unique expertise, including the creation of a Committee of Actuaries. Sustman Associates also will: a) identify candidates to serve as actuarial consultants; b) evaluate the qualifications of the candidates; c) make recommendations for the Committee of Actuaries; d) advise and assist A&M in evaluating the financial ramifications of the proposed retiree benefit modifications, including developing counter-proposals; e) assist in efficiently transitioning knowledge to the Committee Actuaries. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. WELLS FARGO: Fitch Assigns Low-B Ratings on Classes B-4 & B-5 ------------------------------------------------------------- Fitch rates Wells Fargo mortgage pass-through certificates, series 2004-DD: -- $580,578,100 classes I-A-1, II-A-1, II-A-2, II-A-3, II-A- 4, II-A-5, II-A-6, II-A-7, II-A-8, II-A-R and II-A-LR (senior certificates) 'AAA'; -- $7,202,000 class B-1 'AA+'; -- $5,101,000 class B-2 'A+'; -- $3,000,000 class B-3 'BBB+'; -- $2,100,000 class B-4 'BB'; -- $900,000 class B-5 'B.' The 'AAA' rating on the senior certificates reflects the 3.25% subordination provided by: * the 1.20% class B-1 certificates, * the 0.85% class B-2 certificates, * the 0.50% class B-3 certificates, * the 0.35% privately offered class B-4 certificates, * the 0.1 5% privately offered class B-5 certificates, and * the 0.20% privately offered class B-6. Classes rated based on their respective subordination: * B-1 'AA+', * B-2 'A+', * B-3 'BBB+', * B-4 'BB', and * B-5 'B'. The class B-6 certificates are not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures and the servicing capabilities of Wells Fargo Bank, N.A. (WFB; rated 'RPS1' by Fitch). The transaction is secured by two pools of mortgage loans, which consist of fully amortizing, one- to four-family, adjustable-rate mortgage loans that provide for a fixed interest rate during an initial period of approximately five years. Thereafter, the interest rate will adjust on an annual basis to the sum of the weekly average yield on US Treasury Securities adjusted to a constant maturity of one year and a gross margin. Approximately 84.9% of the aggregate mortgage loans are interest only loans, which require only payments of interest until the month following the first adjustment date. The mortgage loan groups are cross- collateralized and aggregated for statistical purposes as represented below. The mortgage loans have an aggregate principal balance of approximately $600,082,218 as of the cut-off date Dec. 1, 2004, an average balance of $374,817, a weighted average remaining term to maturity -- WAM -- of 359 months, a weighted average original loan-to-value ratio -- OLTV -- of 71.53% and a weighted average coupon -- WAC -- of 4.832%. Rate/Term and cashout refinances account for 22.81% and 8.90% of the loans, respectively. The weighted average FICO credit score of the loans is 738. Owner occupied properties and second homes comprise 90.25% and 9.75% of the loans, respectively. The states that represent the largest geographic concentration are: * California (37.02%), * Florida (7.68%), * Virginia (5.78%) and * New Jersey (5.22%). All other states represent less than 5% of the outstanding balance of the mortgage loans. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' available on the Fitch Ratings web site at http://www.fitchratings.com/ All of the mortgage loans were generally originated in conformity with underwriting standards of Wells Fargo Home Mortgage, Inc. -- WFHM. WFHM sold the loans to Wells Fargo Asset Securities Corporation -- WFASC, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB, an affiliate of WFHM, will act as servicer, master servicer and custodian, and Wachovia Bank, N.A. will act as trustee and paying agent. For federal income tax purposes, elections will be made to treat the trust as two separate real estate mortgage investment conduits -- REMICs. WELLS FARGO: Fitch Puts Low-B Ratings on Two Private Classes ------------------------------------------------------------ Wells Fargo mortgage pass-through certificates, series 2004-BB, is rated by Fitch Ratings: -- $871,424,100 classes A-1 through A-7 and A-R (senior certificates) 'AAA'; -- $10,802,000 class B-1 'AA'; -- $7,202,000 class B-2 'A'; -- $4,501,000 class B-3 'BBB'; -- $1,351,000 privately offered class B-4 'BB'; -- $1,800,000 privately offered class B-5 'B'. The privately offered class B-6 certificate is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 3.20% subordination provided by: * the 1.20% class B-1 certificates, * the 0.80% class B-2 certificates, * the 0.50% class B-3 certificates, * the 0.15% privately offered class B-4 certificates, * the 0.20% privately offered class B-5 certificates, and * the 0.35% privately offered class B-6. Classes rated based on their respective subordination: * B-1 'AA', * B-2 'A', * B-3 'BBB', * B-4 'BB' and * B-5 'B'. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures and the servicing capabilities of Wells Fargo Bank, N.A. (WFB; rated 'RPS1' by Fitch). The transaction is secured by one pool of mortgage loans. The mortgage loans consist of fully amortizing, one- to four-family, adjustable-rate mortgage loans that provide for a fixed interest rate during an initial period of approximately five years. Thereafter, the interest rate will adjust on an annual basis to the sum of the weekly average yield on US Treasury Securities adjusted to a constant maturity of one year and a gross margin. The mortgage loans have an aggregate principal balance of approximately $900,231,409 as of the cut-off date Dec. 1, 2004, an average balance of $354,143, a weighted average remaining term to maturity -- WAM -- of 358 months, a weighted average original loan-to-value ratio -- OLTV -- of 72.30% and a weighted average coupon -- WAC -- of 4.85%. Rate/Term and cashout refinances account for 19.33% and 8.19% of the loans, respectively. The weighted average FICO credit score for the group is 738. Owner occupied properties and second homes comprise 90.69% and 9.31% of the loans, respectively. The states that represent the largest geographic concentration are: * California (33.18%), * Florida (18.46%) and * Virginia (5.78%). All other states represent less than 5% of the outstanding balance of the mortgage loans. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' available on the Fitch Ratings web site at http://www.fitchratings.com/ All of the mortgage loans were generally originated in conformity with underwriting standards of Wells Fargo Home Mortgage, Inc. -- WFHM. WFHM sold the loans to Wells Fargo Asset Securities Corporation -- WFASC, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB, an affiliate of WFHM, will act as servicer, master servicer and custodian, and Wachovia Bank, N.A. will act as trustee and paying agent. For federal income tax purposes, an election will be made to treat the trust as a real estate mortgage investment conduit -- REMIC. WESCO DISTRIBUTION: S&P Raises Corp. Debt Rating to BB- from B+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on WESCO Distribution Inc. to 'BB-' from 'B+' and its subordinated debt rating to 'B' from 'B-'. At the same time, Standard & Poor's removed the ratings from CreditWatch, where they were placed on Dec. 9, 2004. The outlook is positive. At Sept. 30, 2004, the Pittsburgh, Pennsylvania-based distributor of electrical products had approximately $790 million of total debt, including off-balance-sheet account receivable securitizations and the present value of operating leases. "The upgrade reflects our expectations of less-aggressive financial policies and continued favorable intermediate-term prospects, both of which should continue to improve WESCO's credit profile," said Standard & Poor's credit analyst Joel Levington. "We believe that the company's recently completed offering of common equity is signaling a stronger commitment by management to maintain a less aggressive capital structure in the future. We also expect increasing profitability in the near-to-intermediate term as WESCO benefits from recovery in important industrial and construction markets as well as from high operating leverage." The offering had net proceeds of approximately $108 million to be used to repurchase outstanding subordinated debt. WESCO is a leading distributor of electrical construction products; maintenance, repair and operating supplies; and integrated supply and outsourcing services. "In the intermediate term, we expect WESCO business strategies to focus on expanding strategic relationships with national accounts, to extend its geographic reach, particularly as customers expand their geographic footprints, and occasionally to pursue bolt-on acquisitions to further expand its product and service offerings. If WESCO's financial discipline is sustained, the credit profile should strengthen to at least our expectations in the next 18-24 months, which could lead to a modestly higher rating," Mr. Levington said. WINDHAM MILLS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Windham Mills Development Corporation dba Windham Mills Technology Center 322 Main Street Willimantic, Connecticut 06226 Bankruptcy Case No.: 04-23619 Type of Business: The Company leases building spaces for company offices. See http://www.windhammills.com/ Chapter 11 Petition Date: December 15, 2004 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Robert U. Sattin, Esq. Reide & Riege, P.C. One Financial Plaza Hartford, Connecticut 06103 Tel: (860) 278-1150 Estimated Assets: $0 to $50,000 Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ State of Connecticut Value of Security: $15,000,000 Department of Economic & $5,200,000 Community Development Attn: Managing Director 505 Hudson Street Hartford, Connecticut 06106 State of Connecticut Value of Security: $7,000,000 Department of Economic & $5,200,000 Community Development Attn: Managing Director 505 Hudson Street Hartford, Connecticut 06106 Town of Windham Value of Security $2,250,000 Attn: Legal Department $5,200,000 979 Main Street PO Box 94 Willimantic, Connecticut 06226 Lisa Silvestri, Esq. Legal Fees $55,000 Stonehill Insurance $25,741 Windham Water/Sewer Department $21,345 Downes Construction Company $21,154 G. Donovan Associates $17,605 Select Energy Utility $6,199 Carlin, Charron & Rossen $3,239 Select Energy Utility $3,231 CL&P Utility $2,659 CPM $2,150 Creative Illumination $1,850 Yankee Gas Services Utility $1,217 Thyssen Krupp Elevator $740 Datacom Marketing $399 Amerigas $359 Staples Credit Plan $177 Village Springs Distributor $30 YUKOS OIL: Will Seek Damages Against Parties Participating in Sale ------------------------------------------------------------------ Yukos Oil Company issued a notice to all persons and entities: (1) who participated in the auction on Sunday, Dec. 19, 2004, of the Stock of Yuganskneftegas to Baikal Finance Group, or (2) who may participate: (a) in the consummation of the sale or purchase of that Stock, or (b) the financing of that transaction, or in other actions that interfere with property of Yukos' Chapter 11 bankruptcy estate, that the Stock is property of Yukos' Chapter 11 estate and the Auction was a violation of the automatic stay which became immediately effective when Yukos filed bankruptcy. As reported in the Troubled Company Reporter yesterday, the Russian Federal Property Fund auctioned Yukos' 76.8% equity stake in Yuganskneftegas at 4:00 p.m. Sunday afternoon in Moscow. The bidding started at $8.6 billion and ended with OOO Baikalfinansgroup presenting the winning $9.35 billion bid (RUR260.75 billion). Nobody knows who OOO Baikalfinansgroup is or who financed its bid. Baikal is the name of a lake in Siberia; Baikalfins' home office is located in Tver in western Russia. Some people speculate, because of the large amount of money involved, that OAO Surgutneftegaz is Baikalfins' financier. Lukoil said Sunday that it didn't participate in the auction. Gazprom participated in the auction despite the temporary restraining order entered by the U.S. Bankruptcy Court in Houston prohibiting it from doing so. Hugh Ray, Esq., at Andrews Kurth LLP, representing Gazprom's lending consortium, says the banks subject to the TRO halted all financing talks with Gazprom last week. If the sale of the Stock is completed, it will damage Yukos in excess of $20 billion and the Company will pursue damages against all third parties who participate in the sale, the financing of the sale, and any transaction relating to the value of the Stock. A copy of the notice that Yukos filed with the Bankruptcy Court is available at http://www.yukosbankruptcy.com/ Headquartered in Houston, Texas, Yukos Oil Company -- http://www.yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. YUKOS OIL: Says It'll Pursue All Options Available After Auction ---------------------------------------------------------------- "Yukos management will pursue every legal and commercial remedy available to it to recover the corporate value that will be unjustifiably destroyed if the auction of its largest production unit, Yuganskneftegas, that was held in Moscow [Sun]day, becomes a completed transaction. The so-called winners of this process along with any entity that supports them has subjected their businesses to considerable legal risks." As previously reported in the Troubled Company Reporter, the Russian Federal Property Fund auctioned Yukos' 76.8% equity stake in Yuganskneftegas at 4:00 p.m. Sunday afternoon in Moscow. The bidding started at $8.6 billion and ended with OOO Baikalfinansgroup presenting the winning Rbs260.75 billion (US$9.35 billion) bid. Baikal Who? Nobody knows who OOO Baikalfinansgroup is or who's financed its bid. Baikal is the name of a lake in Siberia; Baikalfins' home office is located in Tver in western Russia. CBS MarketWatch reports that Russian news agency Itar-Tass said the address given on the organization's filing houses only a mobile phone store and a grocery in a town called Tver. Some people speculate believe that Baikal may just be an arm of Gazprom. Gazprom denies any link with Baikal. Others speculate, because of the large amount of money involved, that OAO Surgutneftegaz is Baikalfins' financier. Lukoil said Sunday that it didn't participate in the auction. Gazprom participated in the auction despite the temporary restraining order entered by the U.S. Bankruptcy Court in Houston prohibiting it from doing so. Hugh Ray, Esq., at Andrews Kurth LLP, representing Gazprom's lending consortium, says the banks subject to the TRO halted all financing talks with Gazprom last week. The Russian Federal Anti-Monopoly Service cleared Baikal to participate in the auction on Friday, Dec. 17. Baikal was not subject to the Bankruptcy Court's TRO. The Russian Federation proceeded with the auction regardless of the 10-day temporary restraining order issued by the U.S. Bankruptcy Court for the Southern District of Texas, enjoining Gazpromneft and two other earlier bidders, First Venture Co. and ZAO Interkom, and their lenders from participating in the auction. Auction Drama Arkady Ostrovsky reporting for the Financial Times from Moscow relates that the auction was high in drama. Media personnel were crowding outside the iron gate waiting to be admitted. "The lucky ones whose names were on a list were waved through. The less fortunate -- including two US lawyers for Menatep, Yukos's largest shareholder -- were kept out in the cold in the drizzly rain," Mr. Ostrovsky says. The media, Mr. Ostrovsky continues, were ferried to the 16th floor of the Federal Property Fund building to witness the proceedings from a giant screen. The auction, however, was held on the fourth floor. Security personnel were stationed at every floor. The auction was a two-bidder event between Baikal and Gazpromneft. Press reports relate the bidders were given lollipop-style bidding paddles marked 1 and 2. Baikal, Mr. Ostrovsky relates, went first, placing a bid of Rbs260.75 billion ($9.3 billion) "so quietly that the auctioneer misheard it and repeated in a loud voice that a starting bid of Rbs246.75bn ($8.6bn) had been made." Nobody objected. "The auctioneer turned to [Gazpromneft], requesting that it place its bid. But Gazpromneft's representative asked to make a call and left the room in clear violation of the rules," Mr. Ostrovsky recounts. "After a couple of minutes he silently re-entered the room and sat down. This prompted Baikal to repeat its bid of Rbs260.75bn, but Gazpromneft remained silent. "The auctioneer called the price three times, then brought the hammer down." Can Baikal Perform? There's speculation that Baikal doesn't have adequate financial backing to close and will default on the transaction. Baikal has until Jan. 11 to complete the purchase. YUKOS OIL: Wants to Maintain Existing Bank Accounts --------------------------------------------------- The Office of the United States Trustee generally requires debtors-in-possession to close all prepetition bank accounts and open new "debtor-in-possession" bank accounts. In addition, the U.S. Trustee often requires debtors-in-possession to maintain separate accounts for cash collateral and for taxes. However, in complex Chapter 11 cases, courts often waive these requirements, recognizing that they are often impractical in those cases. Yukos Oil Company believes that a similar waiver is appropriate in its Chapter 11 case because the Russian Government currently exerts complete control over its accounts and it is not possible for Yukos to close the accounts. Zack A. Clement, Esq., at Fulbright & Jaworski, LLP, in Houston, Texas, explains that the Russian Government is sweeping the accounts daily to pay $27,500,000,000 in taxes which the Government asserts are owed by the Debtor. Any attempt by Yukos to alter its Russian bank accounts would run afoul of Russian law. Any Yukos employee in Russia who attempted such a change would likely be jailed. Yukos' subsidiaries' crude oil is sold internationally through Petroval, a Yukos subsidiary which acts only as a broker in the transactions. Under Russian law, the proceeds from sale of crude oil produced in Russia must be repatriated. To comply with the law, proceeds for the sales of crude oil are deposited daily into Russian bank accounts belonging to Yukos. There are between 20 and 30 Yukos Accounts held in between five to seven different Russian banks. In the past, the funds in the Yukos Accounts were subsequently downstreamed to the Yukos subsidiaries which produced the crude oil. The Russian Government has taken the position that it is a criminal offense for Yukos to use its funds for any purpose other than the payment of taxes. Therefore, although Yukos has no meaningful access to or control of the Yukos Account or the funds deposited therein, Mr. Clement relates that Yukos must maintain the existing accounts to comply with Russian law. "As a practical matter, [Yukos] has no effective control over the funds in its bank accounts located in Russia," Mr. Clement says. By this motion, Yukos asks the United States Bankruptcy Court for the Southern District of Texas for authority to: (a) designate, maintain and continue to use any or all of the existing Bank Accounts in the names and with the account numbers existing immediately prior to its Chapter 11 case; provided, however, that it reserves the right to close some or all of its prepetition Bank Accounts and open new debtor-in-possession accounts; (b) deposit funds in and withdraw funds from any accounts by all usual means including, but not limited to, checks, wire transfers, automated clearing house transfers, electronic funds transfers, and other debits; (c) treat its prepetition Bank Accounts and any accounts opened after the Petition Date for all purposes as debtor- in-possession accounts. Yukos also seeks permission to continue utilizing its existing cash management system including, without limitation, waiving any requirement that it establish separate accounts for cash collateral or tax payments. Yukos intends to pay costs or expenses associated with the maintenance of the cash management system. Yukos also asks Judge Clark to direct all banks with which it maintains its Bank Accounts to continue to maintain, service, and administer the accounts. Yukos has made no voluntary transfers out of the Bank Accounts in months and no checks have been issued or dated prior to the Petition Date, Mr. Clement reports. As of the Petition Date, Yukos has no bank accounts in its own name located in the United States. Headquartered in Houston, Texas, Yukos Oil Company -- http://www.yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. (Yukos Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) YUKOS OIL: Wants Investment & Deposit Guidelines Waived ------------------------------------------------------- Yukos Oil Company asks the United States Bankruptcy Court for the Southern District of Texas waive the investment and deposit requirements under Section 345 of the Bankruptcy Code in light of the unusual circumstances it finds itself regarding its bank accounts. Section 345(a) authorizes deposits or investments of money of a bankruptcy estate, like cash, in a manner that will "yield the maximum reasonable net return on such money, taking into account the safety of such deposit or investment." For deposits or investments that are not "insured or guaranteed by the United States or by a department, agency or instrumentality of the United States or backed by the full faith and credit of the United States," Section 345(b) provides that the estate must require from the entity with which the money is deposited or invested a bond in favor of the United States secured by the undertaking of an adequate corporate surety. Zack A. Clement, Esq., at Fulbright & Jaworski, LLP, in Houston, Texas, explains that Yukos' bank accounts are located outside of the United States, and the Debtor does not have meaningful control over them. Mr. Clement asserts that waiving the U.S. Trustee's investment and deposit requirements on an interim basis so that Yukos can fully inform the U.S. Trustee's Office of the nature of its bank accounts and cash management system is appropriate in Yukos' Chapter 11 case. Headquartered in Houston, Texas, Yukos Oil Company -- http://www.yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. (Yukos Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Alvarez & Marsal Welcomes John D. Schissler as Director --------------------------------------------------------- Alvarez & Marsal, a leading global professional services firm, announced that John Schissler has joined the firm as a director. He will be based in the firm's Houston office. With several years of financial restructuring experience across various industries including energy, distribution, manufacturing, equipment rental, human resources and technology, Mr. Schissler has advised debtors and creditors in turnarounds and restructurings in out of court reorganizations and in bankruptcies. Mr. Schissler's advisory assignments include Enron Corp., Metals USA, US Liquids, Ameripol Synpol, Con Equip, Piccadilly Cafeterias as well as many privately held distressed companies. Prior to joining A&M, Mr. Schissler was a manager in the restructuring practice of a major accounting firm. Before that, he was an Assistant Vice President at KBK Financial, where he focused on the origination of mezzanine and asset based financing for troubled companies. Mr. Schissler earned a bachelor's degree in Accounting and Finance from Texas Christian University. He is a Certified Insolvency Restructuring Advisor (CIRA) and a Board Member of the Houston chapter of Turnaround Management Association (TMA). About Alvarez & Marsal Founded in 1983, Alvarez & Marsal is a global professional services firm that helps businesses and organizations in the corporate and public sectors navigate complex business and operational challenges. With professionals based in locations across the U.S., Europe, Asia, and Latin America, Alvarez & Marsal delivers a proven blend of leadership, problem solving and value creation. Drawing on its strong operational heritage and hands-on approach, Alvarez & Marsal works closely with organizations and their stakeholders to help address complex business issues, implement change and favorably influence results. Alvarez & Marsal's service offerings include Turnaround Management Consulting, Crisis and Interim Management, Creditor Advisory, Financial Advisory, Dispute Analysis and Forensics, Real Estate Advisory, Business Consulting and Tax Advisory. For more information about the firm, please visit http://www.alvarezandmarsal.com/ * King & Spalding Elects Three Partners to Policy Committee ----------------------------------------------------------- King & Spalding LLP, a leading international law firm, disclosed the election of three partners to the firm's 10-person policy committee, effective Jan. 1, 2005. They are Sarah R. Borders, George S. Branch and Graciela M. Rodriguez. The new members replace partners John L. Keffer (London), John J. Kelley III (Atlanta) and Kevin R. Sullivan (Washington, D.C.), whose terms expire at the end of this month. "We look forward to the leadership and infusion of new ideas Sarah, George and Grace will bring to the partnership," said Walter W. Driver, Jr., chairman of King & Spalding. "We are also indebted to the contributions John, 'J.' and Kevin have made as members of the policy committee." King & Spalding's policy committee is responsible for firm policies, strategic initiatives and the overall enhancement of the firm. Members are elected by the partnership to a 3-year term. The election of two women partners to King & Spalding's policy committee, its primary management group, is indicative of the firm's commitment to attracting, retaining, developing and advancing talented women within the firm. At King & Spalding, women hold more than 20 percent of the practice leadership positions. Sarah R. Borders - Borders is co-leader of the firm's financial restructuring practice, and she is resident in the firm's Atlanta office. She has extensive experience representing both creditors and debtors in some of the nation's largest workouts, restructurings and bankruptcy cases. George S. Branch - Branch is managing partner of King & Spalding's London office, which he established in 2002. He is also a senior partner in the firm's business litigation practice and represents clients on a wide range of commercial litigation and arbitration matters. Graciela M. Rodriguez - Rodriguez is head of the firm's special matters practice, focusing on a broad range of civil and criminal matters. She is resident in the firm's Washington, D.C., office. About King & Spalding LLP King & Spalding LLP is an international law firm with more than 800 lawyers in Atlanta, Houston, London, New York and Washington, D.C. The firm represents more than half of the Fortune 100, and in a Corporate Counsel survey in October 2004 was ranked one of the top ten firms representing Fortune 250 companies overall. For additional information, visit http://www.kslaw.com/ * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Airgate PCS Inc. CSA (80) 267 24 Akamai Tech. AKAM (144) 189 63 Alaska Comm. Syst. ALSK (12) 650 85 Alliance Imaging AIQ (41) 654 36 Amazon.com AMZN (721) 2,109 642 AMR Corp. AMR (314) 29,261 (1,824) Amylin Pharm. Inc. AMLN (42) 402 325 Arbinet-Thexchan. ARBX (1) 70 11 Atherogenics Inc. AGIX (19) 93 77 Blount International BLT (283) 423 103 CableVision System CVC (1,669) 11,795 223 CCC Information CCCG (131) 80 8 Cell Therapeutic CTIC (52) 174 87 Centennial Comm CYCL (538) 1,532 152 Choice Hotels CHH (175) 271 (16) Cincinnati Bell CBB (600) 1,987 (20) Compass Minerals CMP (109) 642 99 Conjuchem Inc. CJC (16) 24 19 Cotherix Inc. CTRX (44) 25 20 Cubist Pharmacy CBST (75) 155 (6) Delta Air Lines DAL (3,297) 23,526 (2,614) Denny's Corporation DNYY (246) 730 (80) Domino Pizza DPZ (575) 421 (16) Eagle Hospitality EHP (26) 177 N.A. Empire Resorts NYNY (13) 61 7 Foster Wheeler FWHLF (441) 2,268 (212) Foxhollow Tech. FOXH (60) 28 16 Graftech International GTI (44) 1,036 284 Hawaiian Holding HA (160) 236 (60) Hercules Inc. HPC (40) 2,658 362 IMAX Corp. IMAX (49) 222 9 Indevus Pharm. IDEV (34) 205 164 Isis Pharm. ISIS (18) 255 116 Kinetic Concepts KCI (29) 638 214 Level 3 Comm Inc. LVLT (159) 7,395 157 Lodgenet Entertainment LNET (68) 301 20 Lucent Tech. Inc. LU (1,379) 16,963 3,765 Maxxam Inc. MXM (649) 1,017 72 McDermott Int'l MDR (338) 1,245 (33) McMoran Exploration MMR (85) 156 29 Northwest Airline NWAC (2,166) 14,450 (431) Northwestern Corp. NWEC (603) 2,445 (692) ON Semiconductor ONNN (298) 1,221 270 Owens Corning OWENQ (4,132) 7,567 1,118 Per-se Tech. Inc. PSTI (25) 169 31 Phosphate Res. PLP (439) 316 5 Pinnacle Airline PNCL (18) 147 26 Primedia Inc. PRM (1,163) 1,577 (203) Primus Telecomm PRTL (113) 735 (23) Qwest Communication Q (2,477) 24,926 (509) SBA Comm. Corp. SBAC (27) 915 11 Sepracor Inc. SEPR (380) 974 600 Syntroleum Corp. SYNM (8) 48 11 U-Store-It Trust YSI (34) 536 N.A. US Unwired Inc. UNWR (234) 709 (280) Valence Tech. VLNC (48) 16 2 Vector Group Ltd. VGR (48) 528 110 Vertrue Inc. VTRU (44) 445 0 WR Grace & Co. GRA (118) 3,087 774 Young Broadcasting YBTVA (12) 798 85 ********* 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. 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. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman, Editors. Copyright 2004. 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 $675 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 ***