T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 24, 2005, Vol. 9, No. 19 Headlines AMERICAN BANKNOTE: Taps Andrews Kurth as Bankruptcy Counsel AMERICAN BANKNOTE: Taps MacKenzie Partners as Balloting Agent AMERICAN BUSINESS: Files for Chapter 11 Protection in Delaware AMERICAN BUSINESS: Case Summary & 20 Largest Unsecured Creditors AMRESCO RMBS: Fitch Junks Class B-1F Group I of Series 1997-3 ATA AIRLINES: Wants to Reject GE Maintenance Service Contract BAKER TANKS: Reduced Asset Protection Cues Moody's to Lower Rating BISHOP GOLD: Appoints Gary Nordin as Director BOMBARDIER: Reorganizes Corporate Structure & Reduces Personnel BUILDERS FIRSTSOURCE: Moody's Puts Low-B Ratings on New Notes BULK MIXER INC: Case Summary & 20 Largest Unsecured Creditors CALPINE CORP: Commences $260 Million Preferred Equity Offering CALPINE CORPORATION: Provides 2004 4th Quarter Update CATHOLIC CHURCH: Judge Perris Allows Portland to Execute Deeds CARRIAGE SERVICES: Prices $130 Million Senior Notes Due 2015 CITATION CAMDEN: Has Until Mar. 16 to Make Lease-Related Decisions CHIQUITA BRANDS: Hosting 4th Qtr. 2004 Conference Call on Feb. 24 COGECO CABLE: Goes Into Partnership With Station Mont Tremblant COVANTA ENERGY: DIP Financing Facility Extended to Dec. 31, 2005 CROSS COUNTY RECYCLING: Voluntary Chapter 11 Case Summary DELPHI CORP: Posts $102 Million Net Loss in Fourth Quarter 2004 DIVERSIFIED ASSET: Moody's Junks $18.5 Million Class B-1L Notes DYNCORP INT'L: S&P Rates Proposed $410M Secured Facility at B+ ENDURANCE CLO: Fitch Sees Decrease in Junk Ratings Since Oct. 2003 ENRON CORP: Reorganized Debtors' First Post-Confirmation Report EXCO RESOURCES: S&P Places B+ Rating on CreditWatch Negative E*TRADE ABS: S&P Junks Preference Shares E. BROWN, INC: Case Summary & 20 Largest Unsecured Creditors FERRO CORP: Provides Update on Restatement Process GOTT CREEK INC: Case Summary & 13 Largest Unsecured Creditors GREIF INC: Improved Financial Profile Prompts S&P to Lift Ratings HIA TRADING: Abacus Advisors Approved as Financial Consultants HIA TRADING: Look for Bankruptcy Schedules by Feb. 28 HOLLINGER: Prices Retractable Common Shares at $4.65 per Share INTELSAT LTD: Satellite Failure Cues Moody's to Revise Outlook iSTAR ASSET: S&P Lifts Rating on Class M Bonds from BB+ to A- iSTAR FIN'L: Proposed Falcon Acquisition Has No Effect on Ratings JEAN COUTU: Will Hold Second Quarter 2004 Conference Call Tomorrow JEANETTE'S LITTLE: Case Summary & 13 Largest Unsecured Creditors KAISER ALUMINUM: Judge Fitzgerald Okays Old Republic Stipulation KEY ENERGY: William Austin Replaces Royce Mitchell as CFO LEPPLA MOVING & STORAGE: Voluntary Chapter 11 Case Summary LIONEL CORP: Files Schedules of Assets and Liabilities LUNA GOLD: Closes $2,270,350 Private Equity Placement LYONDELL CHEMICAL: Declares $0.225 Per Share Quarterly Dividend MACC PRIVATE: Auditors Raise Doubt about Going Concern Ability MERRILL LYNCH: Fitch Junks $6.9 Million 1997-C2 Certificates MID OCEAN: Moody's Junks $12.5 Million Class B-1 6.9889% Notes MORGAN STANLEY: Fitch Puts 'B+' on $13.9 Million 1998-XL1 Certs. NATIONSLINK FUNDING: Fitch Junks $12.2 Million 1998-1 Certificates NETWORK INSTALLATION: Buys Com Services for $430K in Cash & Stock NETWORK INSTALLATION: Wins Project Order for 73 Foot Locker Stores NFINET COMMUNICATIONS: Voluntary Chapter 11 Case Summary NORTH AMERICAN: Profit Overstatement Cues Moody's to Pare Ratings OMT INC: Names Bill Baines as Executive Chairman OWENS CORNING: Court Concludes Asbestos Estimation Proceedings PORT TOWNSEND: Moody's Reviewing Low-B & Junk Ratings & May Lower QUALITY DISTRIBUTION: S&P Junks $85 Million Senior Unsecured Notes QUIK COMMISSIONS: Postpones Annual Meeting Until March 3 RADIANT COMMS: Closes Placement of $2.75MM of Convertible Notes REMEDIATION FINANCIAL: Has Until Jan. 28 to File a Chapter 11 Plan RIVER NORTH: Moody's Puts Ba3 Rating on $14.25M Subordinated Notes SGD HOLDINGS: Wants Ordinary Course Professionals to Continue SGD HOLDINGS: Wants to Hire Cross & Simon as Bankruptcy Counsel SPIEGEL INC: Illinois Revenue Dept. Asks to Vacate Tax Claim Order SR TELECOM: Refinancing Efforts Spur S&P to Slice Ratings to 'CC' STEWART ENT: Solicits Consents to Amend $300MM Sr. Note Indenture STRUCTURED ASSET: Fitch Rates Class B2 Series 2003-AM1 With 'BB' STRUCTURED ASSET: Fitch Rates Two Classes With Double B TEMBEC INC: Reports 1st Quarter Financial Results UAL CORP: Asks Court to Approve Revised CBA With ALPA UAL CORP: Wants to Extend Exclusive Plan Filing Until April 30 UNIFI INC: Posts $7.7 Million Net Loss in Second Quarter 2004 US AIRWAYS: Achieves $1 Bil. Plus Savings in Ratified Labor Pacts US LEC CORP: Expands Service Reach in Virginia Market VARTEC TELECOM: Committee Taps XRoads as Financial Advisors VIVENDI UNIVERSAL: Looking at Options Securing Elektrim Investment VOEGELE MECHANICAL: Confirmation Hearing Set for Jan. 27 WAVEFRONT ENERGY: Negotiates $540,000 Private Equity Placement WESTPOINT STEVENS: Files Plan of Reorganization in S.D. New York WESTAR ENERGY: Moody's Reviewing Low-B Ratings & May Upgrade WILLIAMS COS: S&P Assigns B+ Rating on $100MM Floating-Rate Certs. WILLIAMS COS: S&P Places B+ Rating on $400 Mil. 6.750% Certs. W3 GROUP: Inks Letter of Intent to Buy Cristina Acquisition * Anthony Alvizu Joins Alvarez & Marsal's Forensics Group * Fitch Outlook: U.S. Airports Face Growing Challenges in 2005 * Fried Frank Expands Paris Office with New Attorneys * BOND PRICING: For the week of January 24 - January 28, 2005 ********* AMERICAN BANKNOTE: Taps Andrews Kurth as Bankruptcy Counsel ----------------------------------------------------------- American Banknote Corporation asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Andrews Kurth LLP as its general bankruptcy counsel. Andrews Kurth is expected to: a) advise the Debtor with respect to its powers and duties as a debtor in possession in the continued operation of the Debtor's business and the management of its properties, including the negotiation and finalization of any financing agreements; b) assist the Debtor in implementing a plan of reorganization and to take necessary legal steps in order to confirm that plan, including the preparation and filing of a disclosure statement explaining that plan; c) prepare and file on behalf of the Debtor, all necessary applications, motions, orders, reports, adversary proceedings and other pleadings and documents; d) appear in Court and protect the interests of the Debtor before the Court; e) analyze claims and negotiate with creditors on behalf of the Debtor; and f) perform all other legal services for the Debtor which may be necessary in the Debtor's bankruptcy proceedings. Paul N. Silverstein, Esq., a Member at Andrews Kurth LLP, is the lead attorney for the Debtor. Mr. Silverstein discloses that the Firm received a $338,998.47 retainer. Mr. Silverstein reports Andrews Kurth's professionals bill: Designation Hourly Rate ----------- ----------- Partners $370 - 695 Counsel 180 - 400 Associates 220 - 630 Paralegals/Clerks 40 - 220 Andrews Kurth assures the Court that is does not represent any interest adverse to the Debtor or its estate. Headquartered in Englewood Cliffs, New Jersey, American Banknote Corporation, -- http://www.americanbanknote.com/-- is a holding company, which operates through its subsidiary companies, principally in the United States, Brazil, Argentina, Australia, New Zealand and France. Through these subsidiaries, the Company manufactures, markets, distributes and supplies related services to, a variety of secure documents, media, and fulfillment and reconciliation systems. The Company filed for chapter 11 protection on January 19, 2005 (Bankr. D. Del. Case No. 05-10174). When the Debtor filed for protection from its creditors, it listed total assets of $124,709,527 and total debts of $115,965,530. AMERICAN BANKNOTE: Taps MacKenzie Partners as Balloting Agent ------------------------------------------------------------- American Banknote Corporation asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ MacKenzie Partners, Inc., as its balloting agent. MacKenzie Partners is expected to: a) mail solicitation packages to the Debtor's creditors and interest holders in relation to the proposed Disclosure Statement and Plan of Reorganization; b) receive, tabulate and report on ballot cast for or against the Plan by holders of claims against and interests in the Debtor; c) respond to inquiries from creditors and equity security holders relating to the Plan, the Disclosure Statement, the ballots, and all matters related to those documents, including the procedures and requirements for voting to accept or reject the Plan and for objections to confirmation of the Plan; and d) contact creditors and interest holders regarding the Plan. Jeanne Carr, Executive Vice-President of MacKenzie Partners, discloses that the Firm's compensation consist of a fee of $8,000 and $0.50 cent for every ballot received and processed by the Firm. Mackenzie Partners assures the Court that it does not represent any interest adverse to the Debtor or its estate. Headquartered in Englewood Cliffs, New Jersey, American Banknote Corporation, -- http://www.americanbanknote.com/-- is a holding company, which operates through its subsidiary companies, principally in the United States, Brazil, Argentina, Australia, New Zealand and France. Through these subsidiaries, the Company manufactures, markets, distributes and supplies related services to, a variety of secure documents, media, and fulfillment and reconciliation systems. The Company filed for chapter 11 protection on January 19, 2005 (Bankr. D. Del. Case No. 05-10174). Adam Singer, Esq., at Cooch and Taylor and Paul N. Silverstein, Esq., at Andrews Kurth LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $124,709,527 and total debts of $115,965,530. AMERICAN BUSINESS: Files for Chapter 11 Protection in Delaware -------------------------------------------------------------- American Business Financial Services, Inc., filed a voluntary chapter 11 petition in the United States Bankruptcy Court for the District of Delaware on Friday, Jan. 21, 2005, citing its rapidly depleting cash and its limited ability to sell subordinated debentures during the second quarter of fiscal 2005 resulting in an event of default under the terms of these indentures. As previously reported, as a result of the Company's continuing liquidity issues, the Company is currently not in compliance with several requirements in both of its credit facilities. Under the terms of these credit facilities, this noncompliance creates an event of default and the lenders may declare all amounts outstanding under the facilities immediately due and payable; however, to date, the lenders have not elected to take such action. An event of default under these credit facilities also creates an event of default under other debt instruments to which the Company is a party. The Company is in discussions with its lenders regarding these defaults. There can be no assurance that the Company will be able to obtain the necessary waivers or that the waivers will not contain conditions that are unacceptable to the Company. The Company has also received a notice from the landlord of its Philadelphia facility that the Company is in default under its lease. Concurrent with the filing, the Company said that, subject to Court approval, it has received a commitment for $500 million in debtor-in-possession (DIP) financing from Greenwich Capital Financial Products, Inc. The DIP financing includes a $65 million working capital line of credit and $435 million in mortgage warehouse financing. ABFS believes the DIP financing will provide it with sufficient liquidity to pay its normal business obligations and to immediately finance new loans to customers, which it intends to sell into the secondary market with servicing released. "We are gratified by the support we have received from our lender. With the DIP financing in place, we are confident that, through the restructuring process, the Company can improve its capital structure and take advantage of the fundamental strength of its loan origination business," said Anthony J. Santilli, chairman and chief executive officer of the Company. According to the Company, the decision to restructure its debt under Chapter 11 was made primarily to address ABFS's liquidity issues which left the Company unable to originate new loans. ABFS said that it expects day-to-day operations to continue as usual during the restructuring. The Company will seek authority from the Bankruptcy Court to pay employees and honor benefits without interruption or delay and expects the request to be granted as part of the Court's "first day" orders. "We appreciate the ongoing loyalty and support of our employees. Their dedication and hard work are critical to our success and integral to the future of the Company," Mr. Santilli said. "ABFS also wants to thank our vendors and business partners for their continued patience and support during this process. The DIP financing and the protections afforded under the Chapter 11 process should provide sufficient liquidity to ensure that vendors are paid in the ordinary course for post-petition purchases." Under federal law the Company is prohibited from paying pre- petition obligations until a Plan of Reorganization has been approved by creditors and the Court. This prohibition applies to all of the Company's pre-petition obligations, including obligations to subordinated debt holders. "We sincerely regret any hardship this situation presents for our subordinated debt investors and other creditors. We sought any number of solutions that would have avoided a Court-supervised debt restructuring, but in the end concluded that restructuring the Company's debt under Chapter 11 was the best way to resolve the Company's financial and liquidity issues," Mr. Santilli said. As reported in the Troubled Company Reporter on Jan. 20, 2005, the law firm of Berger & Montague, P.C., and the Guiliano Law Firm filed a securities class action complaint in the United States District Court for the Eastern District of Pennsylvania against American Business Financial Services, Inc., and certain of its officers and directors. This suit asserts claims on behalf of purchasers of ABFI's notes, subordinated money market notes, subordinated debt securities or subordinated debentures purchased during the period Jan. 18, 2002 through Dec. 23, 2004. The complaint alleges that throughout the Class Period, defendants issued registration statements and prospectuses containing untrue statements and material omissions concerning the operations and financial results of the Company. In November to December of 2004 with respect to some or all of the notes, ABFI stopped paying principal or interest on maturity and stopped honoring checks written on ABFI money market accounts. On Dec. 23, 2004, the Company issued a press release stating in part that the Company currently is unable to make any payments on Notes as they become due. The press release also stated that the Company "may seek protection under the federal bankruptcy laws or may be forced into involuntary bankruptcy." Members of the class said they have suffered damage as a result with their Notes declining materially in value or becoming worthless. Headquartered in Philadelphia, Pennsylvania, American Business Financial Services, Inc., together with its subsidiaries, is a financial services organization operating mainly in the eastern and central portions of the United States and California. The Company originates, sells and services home mortgage loans through its principal direct and indirect subsidiaries. The Company, along with four of its subsidiaries, filed for chapter 11 protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203). Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,083,396,000 in total assets and $1,071,537,000 in total debts. AMERICAN BUSINESS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: American Business Financial Services, Inc. The Wanamaker Building 100 Penn Square East Philadelphia, Pennsylvania 19107 Bankruptcy Case No.: 05-10203 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Tiger Relocation Company 05-10204 American Business Credit, Inc. 05-10206 HomeAmerican Credit, Inc. 05-10207 American Business Mortgage Services, Inc. 05-10208 Type of Business: The Debtor, through its principal direct and indirect subsidiaries, originates, sells and services home equity and purchase money mortgage and business loans. See http://www.abfsonline.com/ Chapter 11 Petition Date: January 21, 2005 Court: District of Delaware Judge: Mary F. Walrath Debtor's Counsel: Bonnie Glantz Fatell, Esq. Blank Rome LLP 1201 Market Street, Suite 800 Wilmington, Delaware 19801 Tel: (302) 425-6423 Fax: (302) 425-6464 Consolidated Financial Condition as of December 2, 2004: Total Assets: $1,083,396,000 Total Debts: $1,071,537,000 Consolidated List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Stewardship Center Subordinated $2,054,080 PO Box 411634 Uncollateralized Saint Louis, Missouri 63141 Noteholder Attn: Bob Bamberger Tel: (636) 937-6306 John A. Malack & Subordinated $1,916,552 Eileen E. Malack Uncollateralized 607 Wilma Street Noteholder Endicott, New York 13760-4515 Tel: (607) 785-2954 EMS Executive Mailing Services Mailing Services $1,642,474 7855 West 111th Street Palos Hills, Illinois 60465 Attn: Dave Gust Tel: (708) 974-0100 Fax: (708) 974-0081 Independence Blue Cross Insurance $1,469,965 1901 Market Street Provider Philadelphia, Pennsylvania 19103 Attn: Robert E. Fattori Tel: (215) 241-3474 Christopher D'Ambrosio & Subordinated $1,435,193 Julia M. D'Ambrosio Uncollateralized 9 Iddings Lane Noteholder Newton Square, Pennsylvania 19073 Tel: (610) 989-0988 ZC Sterling Corporation Insurance $1,397,894 Attn: Escrow Accounting Provider 2812 Belle Hollow Court Glenwood, Maryland 21738 Attn: Joe Stellone Tel: (410) 489-0738 Fax: (410) 489-0739 Walter J. Woeger Subordinated $1,232,393 1115 Rhawn Street Philadelphia, Pennsylvania 19111 Tel: (215) 725-6087 Hackley Family Trust Senior $1,174,233 Dated Jan. 1, 1990, & Subordinated Bart M. Hackley, Jr., Trustee Collateralized 106 South Bayfront Noteholder Newport Beach, California 92662 Tel: (949) 673-1992 Wanamaker Office Lease LP Landlord $1,132,606 210 Rittenhouse Square Philadelphia, Pennsylvania 19103 Attn: Steve Gleason Tel: (215) 893-6042 Fax: (215) 893-6060 Fatemeh Kaffashan Subordinated $1,065,275 c/o Zoray Godwin Uncollateralized 7601 Crittendon Street Noteholder Philadelphia, Pennsylvania 19118 Tel: (215) 247-1915 Arthur A. Hall & Subordinated $1,034,280 Patricia A. Hall Uncollateralized 25514 Dayton Avenue Noteholder Barstow, California 92311-3453 Tel: (760) 253-5244 Robert Revitz Trust Subordinated $1,021,232 Dated Mar. 23, 1996, & Uncollateralized Robert Revitz, Trustee Noteholder 8338 North Canta Redondo Paradise Valley, Arizona 85253 Tel: (480) 998-0050 Albert Broddack, Sr. Senior $933,487 625 Dunellen Avenue Subordinated Dunellen, New Jersey 08812 Uncollateralized Tel: (732) 968-8784 Noteholder & Subordinated Collateralized Noteholder Lowermybills.com Internet Sales $928,734 2401 Colorado Avenue Santa Monica, California 90404 Attn: Ted Dhanik Tel: (310) 998-6417 Fax: (310) 998-6997 Frank J. Person Subordinated $820,074 20 Molly Pitcher Drive Uncollateralized Hazlet, New Jersey 07730-2435 Noteholder Tel: (732) 739-1620 Mack-Cali Landlord $772,226 11 Commerce Drive Cranford, New Jersey 07016 Attn: Michael Nevines Tel: (908) 272-8000 Fax: (908) 272-6755 Un Shun Wong & Subordinated $727,524 Su Shui Wong Uncollateralized 8118 Tuckerman Lane Noteholder Potomac, Maryland 20854-3742 Tel: (301) 299-2495 Sylvia Ho Senior $690,655 832 Royal Ann Lane Subordinated Concord, California 94518 Uncollateralized Tel: (925) 709-0345 Noteholder & Subordinated Collateralized Noteholder Moore Wallace Printing Services $662,503 c/o RR Donnelley Receivables Inc. Clinton, Illinois 61727 Attn: Kurt Albright Tel: (312) 326-7233 Fax: (312) 326-8344 Bread & Butter Ltd. Subordinated $658,957 Partnership & Uncollateralized Theodore Shoolman Noteholder 2301 Northeast 45th Street Lighthouse Point, Florida 33064 Tel: (978) 887-3627 AMRESCO RMBS: Fitch Junks Class B-1F Group I of Series 1997-3 ------------------------------------------------------------- Fitch Ratings upgraded two, affirmed 27, and downgraded two (one of which was on Rating Watch Negative) classes from AMRESCO issues: Series 1997-1 Group 1: -- Class A-7 - A-8 affirmed at 'AAA'; -- Class M-1F affirmed at 'AA'; -- Class M-2F affirmed at 'A'; -- Class B-1F affirmed at 'BBB'. Series 1997-1 Group 2: -- Class M-1A is affirmed at 'AA+'; -- Class M-2A is upgraded to 'A+ from 'A'; -- Class B-1A is upgraded to 'BBB+' from 'BBB'; Series 1997-2 Group 1: -- Class A-7 - A-8 affirmed at 'AAA'; -- Class M-1F affirmed at 'AA+'; -- Class M-2F affirmed at 'A+'. Series 1997-2 Group 2: -- Class A-9 affirmed at 'AAA'; -- Class M-1A affirmed at 'AA'; -- Class M-2A affirmed at 'A'; Series 1997-3 Group 1: -- Class A-8, A-9 affirmed at 'AAA'; -- Class M-1F affirmed at 'AA'; -- Class M-2F downgraded to 'BBB' from 'A'; -- Class B-1F downgraded to 'C' from 'BB' and removed from Rating Watch Negative. Series 1997-3 Group 2: -- Class M-1A affirmed at 'AA'; -- Class M-2A affirmed at 'A'; -- Class B-1A affirmed at 'BBB-'. Series 1998-3 Group 1: -- Class A-4 - A-6 affirmed at 'AAA'; -- Class B-1F affirmed at 'BBB'. Series 1998-3 Group 2: -- Class A-7 affirmed at 'AAA'; -- Class M-1A affirmed at 'AA'; -- Class M-2A affirmed at 'A'; -- Class B-1A affirmed at 'BBB'. The affirmations, affecting approximately $182,712,013 of outstanding certificates, reflect performance and credit enhancement - CE -- levels that are generally consistent with expectations. The upgrades, affecting $1,972,936 of the outstanding M-2A class and B-1A class certificates of series 1997-1 Group 2, are due to the significant increase in CE from original levels. As of the December 2004 remittance period the CE, which is inclusive of subordination and overcollateralization -- OC, has increased from 2% to 27.52% for class B-1A and 11.75% to 28.88% for class M-2A. The OC amount is currently above target at approximately $2.87 million. The downgrades, affecting $4,395,424 of the outstanding M-2F class and B-1F class certificates of series 1997-3 Group 1, are due to mounting collateral losses resulting in a decrease in credit enhancement. The CE amount of class B-1F has decreased to 1.84% (originally 2.30%) and the OC amount is currently $18,000 but had been completely exhausted in the previous four months. Classes B-1F and B-1A of series 1997-2 have matured. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/ ATA AIRLINES: Wants to Reject GE Maintenance Service Contract ------------------------------------------------------------- In September 2000, ATA Airlines, Inc., and GE Engine Services, Inc., entered into a CFM56-7 Maintenance Cost Per Hour Engine Service Agreement. Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that the MCPH Contract provides ATA Airlines and its debtor-affiliates with certain engine maintenance, both scheduled and unscheduled. Under the MCPH Contract, the Debtors pay for scheduled maintenance by remitting on the 15th day of the calendar month to GE Engine an amount per engine flight hour that the engines covered by the MCPH were actually flown in the prior calendar month, subject to a minimum monthly EHF total. Unscheduled maintenance is paid pursuant to fee schedules within the MCPH Contract. Mr. Nelson contends that the aircraft engines covered by the MCPH Contract are fairly "young" and the Debtors believe that the EHF amounts being paid are in excess of any value that would be returned on the MCPH Contract for some time. The Debtors can obtain the services currently received under the MCPH Contract at a lower cost than provided in the MCPH Contract. Hence, the Debtors want to walk away from the MCPH Contract. 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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) BAKER TANKS: Reduced Asset Protection Cues Moody's to Lower Rating ------------------------------------------------------------------ Moody's Investors Service lowered its rating of the first lien debt of Baker Tanks to B2 from B1, but affirmed the company's B2 senior implied rating. The rating outlook is stable. The downgrade of the first lien notes reflects the reduced asset protection afforded to the holders of these securities as a result of Baker's plan to: (1) make a distribution to equity investors; (2) reduce junior debt; and (3) fund these transactions by increasing first lien debt. Moody's does not believe that the resulting level of asset protection available to the holders of the first lien debt will be sufficient to support a ratings lift above the senior implied level. However, notwithstanding the simultaneous reduction in equity and increase in consolidated debt, Moody's expects that Baker Tanks' overall debt protection measures will remain supportive of a B2 senior implied rating. The company maintains leading market share positions, its liquidity is sound, utilization rates continue to strengthen, and earnings and cash generation are improving. The stable outlook anticipates that the company will preserve a competitive business position and will continue to benefit from the continued recovery in demand. At January 2004, when the private equity group Code Hennessy & Simmons acquired Baker Tanks, the company's capital structure consisted of: -- a $125 million first lien term loan; -- a $20 million (unutilized) first lien revolving credit facility; -- $88 million in junior debt, and -- $79 million in book equity. The book value of tangible assets provided a 1.2x coverage of the first lien funded debt. Under the terms of the proposed transaction, total first lien debt will increase to $175 million and junior debt will fall to $75 million. In addition, book asset coverage of the first lien obligations will decline to 0.90 times. Moreover, total first lien funded debt would represent 60% of the company's capital structure, up from 43%. The revolving credit facility is not anticipated to be utilized. Moody's downgraded these ratings: * B2 from B1 for the $20 million senior secured revolving credit facility, due 2009, * B2 from B1 for the proposed $175 million senior secured term loan, due 2011. Moody's affirmed these ratings: * B2 senior implied rating, * B3 senior unsecured issuer rating. Baker Tanks continues to enjoy important and competitive strengths. It has leading market share positions and strong brand recognition, the largest national network in its segment, healthy margins, and a relatively young fleet. In addition, the company's operating performance is benefiting from favorable industry and economic dynamics. Growth in the containment rental industry is being driven by increasing environmental awareness and enforcements. Additionally, the cost-benefit of renting versus owning and maintaining tanks often favors rental. These positive factors are moderated by modest cash flow generation relative to the high leverage employed in Baker Tanks' capital structure, its small size that makes the company vulnerable to potential adverse operating and financial risks, and the challenges associated with maintaining its growth strategy as the company expands into the water filtration market. Baker Tanks achieved 7.5% revenue growth in fiscal 2004 and expects a mid-teen growth in fiscal 2005 (ending in January 2005). Principal drivers for the company's growth are continued opportunities in most end markets, improved utilization rates through better equipment management, expansion into the infiltration/pump business, and potential price increases. Future free cash flow will be significantly constrained by the increased debt burden, which may limit the company's financial flexibility. Moody's estimates that free cash flow (cash from operations less capex but add back the "one-time" distribution) in the near- to medium-term will range between 2%-4% of pro forma debt. However, the company does have the benefit of a relatively young fleet, which gives it some flexibility in managing its capital spending during difficult operating periods. The B2 rating on the $195 senior secured credit facilities reflects the benefits of the collateral package and its seniority in the company's capital structure. The security package will consist of all tangible and intangible assets of Baker Tanks, as well as 100% of the capital stock of the borrower, holding companies and its subsidiaries. The senior secured facility is composed of a $20 million revolving facility and a proposed $175 million term loan. The credit facility will rank senior to the existing senior subordinated notes issued by the company, which are increasing by $7.5 million to $75 million. The subordinated notes will carry a 13.5% cash coupon. The note offering will be held by the Blackstone Group and Goldman Sachs Capital Partners. Moody's does not rate this issuance. Headquartered in Seal Beach, California, Baker Tanks, Inc., is a leading provider of containment rental equipment. BISHOP GOLD: Appoints Gary Nordin as Director --------------------------------------------- Bishop Gold, Inc., appointed Mr. Gary D. Nordin as a new director of the company. The appointment follows the resignation of Mr. Scott Reeves as director of Bishop. Mr. Reeves will continue to act as the corporate secretary for Bishop. Mr. Nordin's experience in public company management, exploration, development and mining will greatly benefit the company's board. Mr. Nordin has 33 years experience in the mining industry with a proven track record of success. Mr. Nordin has been actively involved with mineral exploration and development since graduating with a Bachelor of Science (Honors) in Geology from the University of Alberta in 1970. He is a leading exploration geologist with a proven track record of identifying and developing mining projects. As a co-founding Director and Vice President of Bema Gold Corporation, he successfully identified significant open pit type heap leach gold reserves in the United States and Chile, including the Refugio deposit (6 to 8 million oz). Subsequently, as a founding Director, Executive Vice President and Chief Consulting Geologist of Eldorado Corporation Ltd. and Eldorado Gold Corporation from 1990 to 2000, Mr. Nordin participated in the discovery and development of several important gold deposits, including the La Colorado Mine in Mexico (1.0 million oz.), the Indian Rose in California (1.0 million oz.), and the Efemcukuru deposit (1.0 million oz.) and the Kisladag deposit (3.0 million oz.), both located in Turkey. Mr. Nordin has served on the Board of Directors of several publicly listed exploration and mining companies and is currently a Director of Nevada Pacific Gold Corp. and Portal Resources Ltd. The Company and the board of directors wish to thank Mr. Reeves for his support and service as director. Bishop is a junior precious metals exploration company focused on the acquisition and development of mineral properties of significant historic merit in Western and Northern Canada. Bishop owns 100% of two historically significant epithermal gold prospects; the "The Lawyers Group" and "The Ranch" (also known as "The Al Group") properties in the Toodoggone region of north- central British Columbia. Bishop also owns 100% of the Gordon Lake Property in the Giant Bay Region near Yellowknife, NWT. Going Concern Doubt Bishop Gold's 3rd Quarter Report ending June 30, 2004, says: "The Company has realized recurring losses from operations, and has a working capital deficiency of $191,905. These factors, amongst others, cast substantial doubt with respect to the Company's ability to continue as a going concern." BOMBARDIER: Reorganizes Corporate Structure & Reduces Personnel --------------------------------------------------------------- Bombardier Inc. (TSX:BBD.MV.A) disclosed a reorganization of its corporate office and the decentralization of certain functional responsibilities to Bombardier Aerospace and Bombardier Transportation. The reorganization follows the previously announced creation of the Office of the President that regroups strategic and executive management responsibilities around the Chairman and Chief Executive Officer and the Presidents of the Corporation's two main operating groups. A total of 60 corporate office positions will be eliminated. Bombardier also disclosed that Mr. Michael Denham, Senior Vice President, Strategy, is leaving the Corporation effective immediately. Mr. Richard Bradeen is appointed Senior Vice President, Strategy and CASRA (Corporate Audit Services and Risk Assessment) and will assume the corporate strategy function in addition to his present responsibilities. "Announcing layoffs is always difficult, but the restructuring of our corporate office allows certain functions to reside in the operating groups and be managed by the respective Presidents, Mr. Andre Navarri at Bombardier Transportation and Mr. Pierre Beaudoin at Bombardier Aerospace," said Mr. Laurent Beaudoin, Chairman of the Board and Chief Executive Officer, Bombardier Inc. "I wish to sincerely thank those employees leaving us for their years of devoted service to Bombardier." "I also wish to thank Michael for his loyal service to Bombardier," added Mr. Beaudoin. "His contribution in many critical files over the past four years has been significant. On behalf of the Board of Directors and all Bombardier employees, I wish him well in his new endeavours." "Richard Bradeen has been a solid leader at Bombardier for seven years now. With his background in corporate strategy, he is well positioned to support me and the Office of the President as we focus on the development of the Corporation's overall strategy," said Mr. Beaudoin. The Corporation also announced the appointment of Mr. John Paul Macdonald as Senior Vice President, Public Affairs, effective immediately. Mr. Macdonald assumes his duties in addition to his current communications and government affairs responsibilities at Bombardier Aerospace. "John Paul is an experienced communicator who has proven himself since he joined Bombardier Aerospace three years ago. I am very pleased to have him join my management team," concluded Mr. Beaudoin. About Bombardier A world-leading manufacturer of innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, Bombardier Inc. -- http://www.bombardier.com/-- is a global corporation headquartered in Canada. Its revenues for the fiscal year ended Jan. 31, 2004 were $15.5 billion US and its shares are traded on the Toronto and Frankfurt stock exchanges (BBD and BBDd.F). * * * As reported in the Troubled Company Reporter on Dec. 15, 2004, Standard & Poor's Ratings Services placed its ratings, including its 'BB' long-term corporate credit ratings, on transportation- equipment manufacturer Bombardier, Inc., and its subsidiaries on CreditWatch negative. "The CreditWatch placement reflects new uncertainty about Bombardier's financial policies and strategic direction following the resignation of the company's CEO," said Standard & Poor's credit analyst Kenton Freitag. The increased uncertainty adds to Standard & Poor's previously stated concerns, formerly reflected in a negative outlook, that adverse developments in the U.S. airline industry could further affect the company's profitability. BUILDERS FIRSTSOURCE: Moody's Puts Low-B Ratings on New Notes ------------------------------------------------------------- Moody's Investors Services assigned a B1 rating to the new senior secured bank credit facilities of Builders FirstSource, Inc., and a B3 rating to the company's second lien notes. The ratings reflect the company's high and increased leverage resulting from the substantial debt-financed dividend payment. The ratings also reflect the company's favorable competitive position in the markets where it operates, record of strong working capital management, and ability to continue to leverage off of the strong home building market. The speculative grade liquidity rating of SGL-2 reflects good liquidity, adequate revolver availability, and lack of immediate short-term debt maturities. Moody's assigned these ratings for Builders FirstSource, Inc: * $110 million senior secured revolving credit facility, due 2010, rated B1; * $15 million senior secured pre-funded letter of credit, due 2011, rated B1; * $250 million senior secured term loan, due 2011, rated B1; * $250 million senior secured second lien floating rate notes, due 2012, rated B3; * Speculative grade liquidity rating, rated SGL-2; * Senior implied at B1; * Senior unsecured issuer rating at Caa1. The ratings outlook is stable. The ratings are subject to the receipt of final documentation that is consistent with that relied upon by Moody's in its analysis. The new $375 million senior secured credit facilities are comprised of a $110 million five-year revolver and a $15 million pre-funded letter of credit, as well as a $250 million first lien term loan. The company is also issuing a $250 million second lien floating rate notes. Proceeds from the transaction are being applied towards the refinancing of $243 million of existing debt, a $237 million dividend to shareholders, and various other fees and expenses. The ratings are constrained by the significant increase in leverage from the company's decision to fund a $237 million dividend. The ratings also consider the company's competitive business environment, high seasonality, and the cyclical nature of the business. The company's seasonality results from the effects of weather patterns on homebuilding schedules while the economic cyclicality of the business is tied to the swings in homebuilding demand. Additionally, many of the company's products are commodity like in nature and are therefore subject to commodity price swings. The company's EBITDA margins, while higher than its peers, are unlikely to increase significantly over the intermediate term. The company's ratings benefit from its strong market position. Although the company operates in only 11 states, it is typically one of the top two suppliers in its markets and benefits from scale and scope that is more competitive than its peers. Moody's notes that approximately 35% of the company's revenues come from the national home builders and that this provides some insulation in the event of an economic downturn. The company's business model incorporates a vertically integrated manufacturing and distribution model that allows the company to benefit from just in time delivery schedules that result in better working capital usage. In recent years the company has streamlined its operations into three divisions from eight previously and implemented state of the art information technology infrastructure. The assignment of the SGL-2 rating is based on the company's good cash flow generation, low capital expenditures relative to its size, and the absence of significant near-term principal repayment obligations. Additional liquidity support comes from the expected availability under its $110 million revolver. Maximum usage due to seasonal working capital swings is anticipated to be in the area of $30 million. BFS' covenants are expected to be comprised of a Net Debt to EBITDA covenant set initially at a maximum of 5.25 to 1.00 times, and an interest coverage covenant to be set initially at 3.5 to 1.0 times. Moody's expects the company to be in compliance for at least the next twelve months while maintaining a moderate cushion under the covenants for each quarter. Furthermore, BFS has relatively few sources of alternate liquidity as all of its assets will be encumbered. The $375 million senior secured credit facilities include a $110 million revolver used to fund the company's working capital needs. The credit facility is being issued at Builders FirstSource, Inc., an intermediate holding company that lies beneath JLL Building Products, LLC, and above the operating subsidiaries. The $250 million term loan will amortize in equal quarterly installments at an annual rate of 1% per year. The facilities will include an acquisition basket not to exceed $30 million per year. The facilities will include an excess cash flow sweep. The facilities will be fully and unconditionally guaranteed by JLL Building Products, LLC, and by all of its existing and future direct and indirect subsidiaries of the borrower. The facilities also benefit from a perfected first priority pledge of all tangible and intangible assets. The $250 million floating rates second priority senior secured notes are also being issued at Builders FirstSource Inc. The notes are due 2012 and are fully and unconditionally guaranteed. The notes are secured by a second priority interest in the assets securing the bank facilities. The second priority notes are rated two notches below the company's senior credit facility to reflect the low level of asset protection that would likely be available for the second lien holders after the first lien is paid off in the event of default. The ratings and or outlook may deteriorate if the company's acquisition strategy was to result in higher leverage without a corresponding improvement in cash flow, if growth in the home market was to decelerate significantly, or if free cash flow was to deteriorate to under 5% of total debt. The ratings may improve if the company was to significantly lower its debt burden by at least 25% or increase its free cash flow to over 12% of total debt on a sustainable basis. The company's EBITDA to interest for 2005 is expected to be over 3.5 times while its total debt to EBITDA is expected to be around 3.3 times. The company's 2004 EBITDA is estimated to be above $120 million. Although the company's cash flow sweep is expected to support deleveraging, this will partially depend on acquisitions. The company's free cash flow for 2005 is estimated to be above $40 million and compares with total debt of $500 million for a free cash flow to total debt ratio of 8%. Builders FirstSource, Inc., headquartered in Dallas, Texas, is one of the four largest building materials suppliers for the home industry. For the twelve months ended December 31, 2004, its revenues were just over $2 billion. BULK MIXER INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Bulk Mixer, Inc. 601 Mill Street West Monroe, Louisiana 71291 Bankruptcy Case No.: 05-30157 Type of Business: The Debtor is engaged in drilling fluids management. See http://www.bulkmixer.com/ Chapter 11 Petition Date: January 20, 2005 Court: Western District of Louisiana (Monroe) Debtor's Counsel: Gary K. McKenzie, Esq. 3029 South Sherwood Forest Boulevard #100 Baton Rouge, LA 70816 Tel: 225-368-1006 Fax: 225-368-0696 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Shell Exploration & Production Co. $307,850 Attn: Paul Van Doorne, Manager 200 N. Dairy Ashford Houston, TX 77210 Blake Whitlach $105,000 116 Tuscany Circle West Monroe, LA 71291 James E. Norwood $70,000 109 Avant Street West Monroe, LA 71291 William N. "Billy" Mullins $58,367 Richard Bradley $35,000 Dr. Charles G. Norwood $35,000 James E. Norwood $30,000 Jimmy Morrison $25,000 David Barrow $20,000 Hogan Agency, Inc. $17,306 National Oilwell $13,398 Gemini Insurance Co. $10,502 Louisiana Worker's Compensation $9,325 Corporation Gail Mackey $9,000 Rowe Law Firm, LLC $8,266 James B. Bradley, Jr. $8,000 John Sieberth $6,793 Borel & Associates, CPAs $5,624 Thayer Borel $5,195 Norwood & Norwood, Attorneys $4,500 CALPINE CORP: Commences $260 Million Preferred Equity Offering -------------------------------------------------------------- Calpine Corporation (NYSE: CPN) reported that Calpine European Funding (Jersey) Limited, a new, wholly owned subsidiary of Calpine, intends to commence an offering of $260 million of Redeemable Preferred Shares that will be due 180 days after issuance. This financing is a part of Calpine's recently announced plans to evaluate strategic financial alternatives for its 1,200-megawatt Saltend Energy Centre, including the potential sale of this facility. The proceeds from the offering of the Redeemable Preferred Shares will initially be loaned to a holding company, which indirectly owns Calpine's Saltend cogeneration power plant. The net proceeds from this offering will ultimately be used as permitted by Calpine's existing bond indentures. Net proceeds from any sale of the facility would be used to first redeem the existing $360 million, two-year redeemable preferred shares. And, second, to redeem the $260 million Redeemable Preferred Shares with the remaining proceeds to be used in accordance with the asset sale provisions of Calpine's existing bond indentures. The Redeemable Preferred Shares have not been registered under the Securities Act of 1933, and may not be offered in the United States absent registration or an applicable exemption from registration requirements. The Redeemable Preferred Shares will be offered in a private placement in the United States under Regulation D under the Securities Act of 1933 and outside of the United States pursuant to Regulation S under the Securities Act of 1933. This press release shall not constitute an offer to sell or the solicitation of an offer to buy. Securities laws applicable to private placements limit the extent of information that can be provided at this time. Calpine Corporation -- http://www.calpine.com/-- is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. The company, founded in 1984, is listed on the S&P 500 and was named FORTUNE's 2004 Most Admired Energy Company. Calpine is publicly traded on the New York Stock Exchange under the symbol CPN. * * * As reported in the Troubled Company Reporter on Oct. 13, 2004, Standard & Poor's Ratings Services assigned its 'CCC+' rating to Calpine Corp.'s (B/Negative/--) $736 million unsecured convertible notes due 2014. The rating on the notes is the same as Calpine's existing unsecured debt and two notches lower than the corporate credit rating. The outlook is negative. CALPINE CORPORATION: Provides 2004 4th Quarter Update ----------------------------------------------------- In advance of its Feb. 24, 2005, earnings conference call, Calpine Corporation (NYSE: CPN) is providing these update on: (i) liquidity and liquidity-enhancing transactions, (ii) an adjustment to its year-end proved gas reserves and a non-cash charge on certain of its gas properties, and (iii) a preliminary estimate of its GAAP earnings and EBITDA, as adjusted for non-cash and other charges, for the period ending Dec. 31, 2004. Liquidity During 2004, Calpine introduced a target of raising approximately $3 billion of liquidity with the completion of a number of transactions. These included the sale of the company's Canadian gas assets and selected U.S. gas assets, issuance of additional 1st lien debt, contract monetizations, and the sale of preferred interests in certain projects, along with other opportunities. To date, Calpine has successfully completed approximately $2 billion of these liquidity-enhancing transactions and continues to move forward on several opportunities totaling approximately $1 billion. On Dec. 31, 2004, the company's cash and liquidity totaled approximately $1.6 billion. This included cash and cash equivalents on hand of approximately $0.8 billion, the current portion of restricted cash of approximately $0.6 billion, and approximately $0.2 billion of borrowing and letter of credit capacity available under various credit facilities upon meeting certain conditions precedent. Adjustment to Estimated Proved Gas Reserves Calpine and its independent, third party engineer have completed the annual review of the company's proved oil and gas reserves as of Dec. 31, 2004. The engineer's year-end reserve report estimate, based on SEC guidelines, of 389 billion cubic feet equivalent (bcfe) is approximately 25 bcfe, or 6% below Calpine's pre-reserve report year-end projection. This reduction will be reflected in Calpine's reported year-end gas reserve figures. In addition, in accordance with generally accepted accounting principles -- GAAP, Calpine completed field-by-field impairment testing for all of its gas properties comparing each field's carrying value to the sum of future undiscounted cash flows. During this testing, it was determined that the carrying value of certain fields in South Texas and Offshore Louisiana exceeded the sum of projected undiscounted cash flows. As a result, Calpine will be required to reduce the carrying value of those fields to fair market value by recording a pre-tax, non-cash charge preliminarily estimated to be approximately $200 million. This charge will be reflected in the company's financial results for the period ending Dec. 31, 2004. Following the reduction in proved reserves and the non-cash impairment charge, Calpine's estimated total proved reserves of 389 bcfe will have an estimated value of approximately $912 million (based on the present value of estimated future cash flows discounted at 10%, in accordance with SEC guidelines), compared to a carrying value of approximately $607 million. Preliminary 2004 Guidance For the quarter ended Dec. 31, 2004, the company currently estimates that GAAP earnings will reflect a loss of approximately $0.48 to $0.56 per share. This estimate includes the pre-tax non- cash gas reserve impairment charge of approximately $200 million, along with other charges for project repair and maintenance expenses, and development project and equipment write-downs. EBITDA, as adjusted for non-cash and other charges, will be approximately $200 to $250 million for the quarter. For the year ended Dec. 31, 2004, the company currently estimates that GAAP earnings will reflect a loss of approximately $0.69 to $0.78 per share. EBITDA, as adjusted for non-cash and other charges, will be approximately $1.60 to $1.65 billion for the year. These estimates are subject to final adjustments and the company will provide further detail on these results on its earnings conference call. Calpine plans to announce its fourth quarter and year-end 2004 financial results on Thursday, Feb. 24, 2005, before the market opens. The company has scheduled a conference call to discuss the results at 8:30 a.m. Pacific Time on that day. Interested parties may access the teleconference via a web cast on Calpine's Investor Relations page, http://www.calpine.com/,or by dialing 1-888-603-6685 (1-706-634-1265 for international callers) at least five minutes before the start of the call. The call will be open to the public and media in a listen-only mode by telephone and web broadcast. A replay and transcript of the conference call will be available for 30 days on Calpine's Investor Relations page at http://www.calpine.com/ Calpine Corporation is a power company dedicated to providing electric power to customers from clean, efficient, natural gas- fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. For the company, EBITDA is not a measure of operating results, but rather a measure of its ability to service debt and to raise additional funds. It should not be construed as an alternative to either: (i) income from operations, or (ii) cash flows from operating activities. It is defined as net income less income from unconsolidated investments, plus cash received from unconsolidated investments; plus provision for tax, plus interest expense (including distributions on trust preferred securities and one-third of operating lease expense, which is management's estimate of the component of operating lease expense that constitutes interest expense); plus depreciation, depletion and amortization. The interest, tax, and depreciation and amortization components of discontinued operations are added back in calculating EBITDA, as adjusted. The non-GAAP measure, EBITDA, as adjusted for non-cash and other charges, is presented as a further refinement of EBITDA, as adjusted, to reflect the company's ability to service debt with cash. Calpine Corporation -- http://www.calpine.com/-- is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. The company, founded in 1984, is listed on the S&P 500 and was named FORTUNE's 2004 Most Admired Energy Company. Calpine is publicly traded on the New York Stock Exchange under the symbol CPN. * * * As reported in the Troubled Company Reporter on Oct. 13, 2004, Standard & Poor's Ratings Services assigned its 'CCC+' rating to Calpine Corp.'s (B/Negative/--) $736 million unsecured convertible notes due 2014. The rating on the notes is the same as Calpine's existing unsecured debt and two notches lower than the corporate credit rating. The outlook is negative. CATHOLIC CHURCH: Judge Perris Allows Portland to Execute Deeds -------------------------------------------------------------- The Archdiocese of Portland in Oregon seeks Judge Perris' authority to execute contract fulfillment deeds to contract vendees that have completed performance under land sale contracts. Van Handel Land Sale Contract On December 29, 1986, Catherine Van Handel, Christina Van Handel, and Margaret Van Handel entered into a contract to sell their real property located in Marion County, Oregon, to Charles and Barbara Sherman for $55,000. On February 12, 1992, the Van Handels entered into another contract to sell additional real property in Marion County to Mr. Sherman for $100,250. In 1999, St. Boniface Church, Sublimity, and the Society for the Propagation of the Faith, each received from the Christine Van Handel Estate a one-fifth interest in both the 1986 and 1992 Contracts. At the time of the bequest, the Shermans owe: -- $14,520 under the 1986 Contract; and -- $24,392 under the 1992 Contract. Santiam Escrow, Inc., handled the collection escrow for both Contracts. As payments were received, Santiam distributed the appropriate monthly payments received to both St. Boniface Church and to Portland for the Society for the Propagation of the Faith. The final payments due under the 1986 and the 1992 Contracts were paid in June 2004. Santiam has requested fulfillment deeds for both Contracts. Accordingly, Portland wants to execute fulfillment deeds for the properties so that the Shermans may receive clear title to the properties. Dorothy Elledge Contract of Sale In 1962, St. Anne Church in Grants Pass, Oregon, sold a small parcel of real property located in Rogue River for $1,900 to Dorothy Elledge. The Elledge Contract was paid off in 1969 and St. Anne Church no longer has an interest in the property. Although a warranty deed conveying title to Ms. Elledge was executed in 1996 and placed in escrow with First National Bank in Grants Pass, the deed was never recorded, and is presumed lost. The Elledge Property is subject to a pending sale and Portland has been asked to a Bargain and Sale Deed to evidence fulfillment of the Elledge Contract so that the corresponding title exceptions may be removed. Muff Contract Sale On March 20, 1981, Leonard and Elvira Muff purchased real property located in Clackamas County from the Archdiocese for $23,000. The Purchase Agreement was recorded on April 9, 1981, in the Official Records of Clackamas County, No. 81-12444. The Muffs or their tenants or invitees have been in continuous possession of the property since April 1981. The final balance due under the Agreement is $180. The Muffs have agreed to tender the final payment in exchange for a fulfillment deed completing the Agreement. Portland wants to execute a fulfillment deed for the property so that the Muffs may receive clear title to the properties. * * * Judge Perris authorizes Portland to execute fulfillment deeds to: -- Charles and Barbara Sherman for the properties in Marion County; and -- Dorothy Elledge for the property in Rogue River. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the Portland Archdiocese in its restructuring efforts. Portland's Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARRIAGE SERVICES: Prices $130 Million Senior Notes Due 2015 ------------------------------------------------------------ Carriage Services, Inc. (NYSE: CSV) disclosed the pricing of its previously announced offering of $130 million of senior notes due 2015. The senior notes will bear interest at 7.875% per year and were priced at par. The notes will be guaranteed by all of the Company's existing subsidiaries and will rank equally with any future senior unsecured indebtedness of the Company. The offering is expected to close in late Jan. 2005. Carriage Services intends to use the net proceeds from the offering to pay in full the principal, interest and make-whole premium on the Company's existing senior notes due in 2006 and 2008, to bring current the TIDES preferred securities' unpaid interest that has been deferred since September 2003, to repay all outstanding borrowings under its existing revolving credit facility, and for general working capital purposes. The notes are being offered in an unregistered offering and may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act of 1933. The notes will not initially be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws. About the Company Carriage Services is the fourth largest publicly traded death care company. As of Jan. 20, 2005, Carriage operated 135 funeral homes and 30 cemeteries in 28 states. * * * As reported in the Troubled Company Reporter on Jan. 13, 2005, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to the funeral home and cemetery operator Carriage Services, Inc., and assigned its 'B-' debt rating to the company's proposed $130 million in senior unsecured notes due in 2015, issued under Rule 144A with registration rights. The company is expected to use the proceeds from the issue for existing debt refinancing and general corporate purposes. Pro forma debt outstanding (including the company's term income deferrable equity securities, or TIDES) is $238 million. The outlook is stable. Carriage's unsecured senior notes are rated 'B-', or one notch below the corporate credit rating, in line with Standard & Poor's criteria. Although these notes are considered senior, the rating assumes that in a distress scenario there would be a significant amount of priority debt, including the company's unrated $35 million revolving bank facility (expected to be fully drawn) and its capitalized leases. Because of the magnitude of priority debt, totaling more than 15% of total eligible assets, the unsecured notes are considered materially disadvantaged. "The low-speculative-grade ratings reflect Carriage's still-significant financial burden in an industry that, while fairly predictable, is subject to uncertainties," said Standard & Poor's credit analyst David Peknay. CITATION CAMDEN: Has Until Mar. 16 to Make Lease-Related Decisions ------------------------------------------------------------------ Citation Camden Castings Center, Inc., and its debtor-affiliates sought and obtained an extension until March 16, 2005, from the U.S. Bankruptcy Court for the Northern District of Alabama to decide whether to assume, assume and assign, or reject unexpired leases of nonresidential real property pursuant to Section 365(d)(4) of the Bankruptcy Code. The Court understands that due to the size and complexity of the Debtors' business operations, they need more time to thoroughly analyze these unexpired leases so as to avoid making premature assumption or rejection decisions. Headquartered in Camden, Tennessee, Citation Camden Castings Center, Inc. -- http://www.citation.net/-- an affiliate of Citation Corporation, manufactures ductile iron parts for disc brakes. The Company filed for chapter 11 protection on Dec. 7, 2004 (Bankr. N.D. Ala. Case No. 04-10781). Cathleen C. Moore, Esq., and Michael Leo Hall, Esq., at Burr & Forman represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $655,575 in total assets and $324,334,598 in total debts. CHIQUITA BRANDS: Hosting 4th Qtr. 2004 Conference Call on Feb. 24 ----------------------------------------------------------------- Chiquita Brands International, Inc. (NYSE: CQB) will release fourth quarter and full-year 2004 financial results on Feb. 24, 2005, after the market closes and will host a conference call at 4:30 p.m. EST that day. For telephone access, contact one of the following numbers 10 minutes prior to the scheduled start time. In the United States and Canada, dial 1-800-810-0924. For all other locations, dial +913-981-4900. A replay of the call will be available until March 3. To access, dial 1-888-203-1112 in the United States or +719-457-0820 from other locations and provide the confirmation code 7419970. To listen to the audio webcast of the conference call, use the link on Chiquita's home page -- http://www.chiquita.com/ The webcast will also be distributed over CCBN's StreetEvents Network -- http://www.streetevents.com/ The archived webcast will be available after the call at http://www.chiquita.com/until 5 p.m. on March 10. About the Company Chiquita Brands International is a leading international marketer, producer and distributor of high-quality bananas and other fresh produce, which are sold primarily under Chiquita premium brands and related trademarks. The company is one of the largest banana producers in the world and a major supplier of bananas in Europe and North America. The company also distributes and markets fresh-cut fruit and other branded, value-added fruit products. Additional information is available at http://www.chiquita.com/ * * * As reported in the Troubled Company Reporter on Sept. 23, 2004, Moody's Investors Service assigned a B2 rating to the prospective senior unsecured note issue of Chiquita Brands International, Inc., and affirmed Chiquita's B1 senior implied rating. The outlook is stable. COGECO CABLE: Goes Into Partnership With Station Mont Tremblant --------------------------------------------------------------- Cogeco Cable, Inc., has entered into a partnership with Station Mont Tremblant -- SMT, an Intrawest Division that manages the customer services at Mont Tremblant Quebec. As of January 1, 2005, both organizations committed to a seven-year agreement for the provision of fully digital cable network and video services by Cogeco Cable to all the hotels, condominiums and rental properties owned and managed by SMT for Intrawest at Mont Tremblant Quebec. Cogeco Cable will continue to provide state of the art digital video services including a complete line up of digital TV programming services to the Mont Tremblant area and will expand its existing network of services to the newly planned expansion projects recently announced by Intrawest and managed by SMT. This new partnership will ensure that the Cogeco Cable's digital networks will be leveraged and expanded so as to meet the needs of an ever demanding residential, business and leisure clientele to the Mont Tremblant area. In the past years, Cogeco Cable and SMT have worked together to provide optimum state of the art digital TV Cable services to Quebec's northern playground so as to leverage the investments made by Intrawest, in the area, and enhance the diversity and quality of services offered by Cogeco Cable to the millions of seasonal tourists and investors coming to Mont Tremblant. Cogeco Cable is the second largest cable operator in both Ontario and Quebec, and ranks fourth in Canada in terms of the number of basic service customers it serves. Cogeco Cable provides about 1,319,000 revenue-generating units to about 1,430,000 households passed within its service territory. Through its two-way broadband cable infrastructure, Cogeco Cable provides its residential and commercial customers with analog and digital video and audio services, as well as high-speed Internet access. Cogeco Cable's subordinate voting shares are listed on the Toronto Stock Exchange (CCA.SV) * * * As reported in the Troubled Company Reporter on Dec. 21, 2004, 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. COVANTA ENERGY: DIP Financing Facility Extended to Dec. 31, 2005 ---------------------------------------------------------------- As previously reported, Remaining Debtors Covanta Warren Energy Resources Co., LP, Covanta Warren Holdings I, Inc., Covanta Warren Holdings II, Inc., and Covanta Lake II, Inc., sought and obtained the Court's authority to continue to obtain credit pursuant to the New DIP Facilities. The maturity date of the $2,000,000 DIP Facility for Covanta Warren Energy Resources Co., LP, Covanta Warren Holdings I, Inc., and Covanta Warren Holdings II, Inc., is extended until December 31, 2005. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy Corporation and its core subsidiaries emerged from chapter 11 as a wholly owned subsidiary of Danielson Holding Corporation. Some of Covanta's non-core subsidiaries have liquidated under separate chapter 11 plans. (Covanta Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) CROSS COUNTY RECYCLING: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Cross County Recycling Inc. c/o John Persichilli 16 Elms Bark Lane East Northport, New York 11731-0000 Bankruptcy Case No.: 05-10797 Type of Business: The Debtor was engaged in the waste management business. Chapter 11 Petition Date: January 20, 2005 Court: Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: James P. Pagano, Esq. 277 Broadway, Suite 706 New York, New York 10007 Tel: (212) 732-4740 Total Assets: $1,285,210 Total Debts: $973,724 The Debtor doesn't have any unsecured creditors who are not insiders. DELPHI CORP: Posts $102 Million Net Loss in Fourth Quarter 2004 --------------------------------------------------------------- Delphi Corp. (NYSE: DPH) reported preliminary, unaudited fourth quarter and calendar year 2004 results. These results are preliminary and subject to change due to the ongoing investigation being conducted at the direction of the audit committee of the company's Board of Directors. "During these challenging times for the automotive industry, Delphi has remained focused on the actions needed to advance its transformation - and 2004 showed significant progress," said J.T. Battenberg III, Delphi's chairman and CEO. "To that end, we were successful in our efforts to deliver on our long-term value drivers, evidenced by a 20 percent increase in non-GM revenues over 2003, and a reduction of 9,675 positions through our restructuring actions over the past 15 months. These results are proof that our transformation is progressing. Although our preliminary Q4 results are not satisfactory, due in part to short- term headwinds facing the industry, we recognize that the quarter was on the path to transform Delphi into a leaner, more profitable company and that we have continued moving forward on our key value drivers." Delphi reported strong operating cash flow of $495 million for the fourth quarter of 2004, bringing calendar year 2004 operating cash flow to $1.5 billion. Delphi continued to aggressively implement revenue growth and cost reduction initiatives in support of its cash-generation strategy to fund the company's transformation plans. Delphi grew its Q4 non-GM business to $3.4 billion, representing an increase of 14 percent year-over-year from Q4 2003. Fourth Quarter 2004 Financial Highlights "In the fourth quarter, we recorded charges associated with our transformation activities - including a required asset impairment charge related to the recoverability of certain of Delphi's U.S. legacy plant and employee cost structure, as well as a restructuring charge - ultimately resulting in a GAAP net loss of $102 million for the quarter," said Alan S. Dawes, Delphi's vice chairman and chief financial officer. "Excluding the impact of special items (detailed below), Delphi reported a net loss of $51 million, or $79 million of pre-tax loss. Delphi's Q4 2004 financial highlights include: (i) Revenue of $7.0 billion, down 3 percent year-over-year from Q4 2003. (ii) Non-GM revenue of $3.4 billion, up 14 percent from $3.0 billion in Q4 2003. For the quarter, Delphi's non-GM sales reached a record high of 49 percent. (iii) Operating cash flow of $495 million. -- Q4 GAAP net loss of $102 million, or a loss of $0.18 per share, which includes the impact of a $15 million after-tax charge related to ongoing restructuring programs and a $265 million after-tax charge primarily related to the recoverability of Delphi's U.S. legacy cost structure, offset by the benefit of $165 million from the release of tax accruals in the quarter primarily associated with the completion of tax audits related to pre- separation periods and reversal of $64 million of deferred tax valuation allowance on foreign tax credits resulting from a combination of tax law changes in October 2004 and tax regulation changes in late December 2004. Excluding these items, Q4 net loss was $51 million, or a loss of $0.09 per share. Balance Sheet / Cash Flow Update During 2004, Delphi generated $1.5 billion of operating cash flow, which was used to fund various initiatives, including cash restructuring charges of $0.4 billion and pension contributions of $0.6 billion. Restructuring Update In 2004, Delphi continued to focus on its underperforming manufacturing sites through its Automotive Holdings Group -- AHG -- structure. In September 2004, Delphi completed the consolidation activities at its Automotive Holdings Group Flint West, Mich., manufacturing operation. Also, manufacturing operations have ceased at Delphi's Tuscaloosa, Alabama site and operations will completely wind down at the Olathe, Kansas and Anaheim, California sites over the next few weeks. As part of its 2005 restructuring initiatives, Delphi is continuing global actions designed to address under-performing operations and appropriately size the company's global salary and hourly workforce by further reducing its workforce by 8,500 positions in 2005, as announced in Delphi's 2005 outlook in Dec. 2004. "We are steadfast in our efforts to match our attrition rate to these lower production levels and will continue to find ways to reduce our legacy cost structure," Mr. Dawes said. In addition, effective Jan. 1, 2005, Delphi placed three additional manufacturing operations into the AHG to help address and resolve the competitiveness issues facing these sites and help stabilize Delphi's U.S. manufacturing operations. They include sites at Laurel, Miss.; Kettering, Ohio; and Home Avenue/Vandalia, Ohio. These sites will go through Delphi's fix, sell, or close analysis. Earlier this month, Delphi disclosed the appointment of Rodney O'Neal as Delphi's president, chief operating officer and member of the Board of Directors. David Wohleen was named a new vice chairman, responsible for Delphi's commercial vehicle accounts, Delphi Medical Systems Corp., the company's advanced research and development, as well as serving as the strategic champion for Delphi's GM customer team. About the Company Delphi -- http://www.delphi.com/-- is a world leader in mobile electronics and transportation components and systems technology. Multi-national Delphi conducts its business operations through various subsidiaries and has headquarters in Troy, Michigan, USA, Paris, Tokyo and Sao Paulo, Brazil. Delphi's two business sectors -- Dynamics, Propulsion, Thermal & Interior Sector and Electrical, Electronics & Safety Sector -- provide comprehensive product solutions to complex customer needs. Delphi has approximately 186,500 employees and operates 171 wholly owned manufacturing sites, 42 joint ventures, 53 customer centers and sales offices and 34 technical centers in 41 countries. * * * As reported in the Troubled Company Reporter on Dec. 23, 2004, Standard & Poor's Ratings Services lowered its corporate credit rating on Delphi Corp. to 'BB+' from 'BBB-' and its short-term corporate credit rating to 'B' from 'A-3'. The ratings were removed from CreditWatch where they were placed Dec. 2, 2004. The outlook is stable. "The action reflected our view that Delphi's earnings outlook will remain weak for the next few years because of challenging conditions in the automotive industry, a heavy dependence on General Motors Corp. (BBB-/Stable/A-3), which is losing market share in the U.S., and continued heavy underfunded employee benefit obligations," said Standard & Poor's credit analyst Martin King. DIVERSIFIED ASSET: Moody's Junks $18.5 Million Class B-1L Notes --------------------------------------------------------------- Moody's Investors Service lowered the ratings of four classes of notes issued by Diversified Asset Securitization Holdings III, L.P.: * to Aa3 (from Aa2 on review for downgrade), the U.S. $215,000,000 Class A-1L Floating Rate Notes Due July 2036; * to Aa3 (from Aa2 on review for downgrade), the U.S. $70,000,000 Class A-2 7.4202% Notes Due July 2036; * to Baa3 (from Baa1 on review for downgrade), the U.S. $30,000,000 Class A-3L Floating Rate Notes Due July 2036; and * to Ca (from B3 on review for downgrade), the U.S. $18,500,000 Class B-1L Floating Rate Notes due July 2036. This transaction closed on June 28, 2001. According to Moody's, its rating action results primarily from significant deterioration in the par coverage of the collateral pool. Despite the paydown of the Class A-1L and Class A-2 Notes on the most recent payment date, the overcollateralization tests remain out of compliance. As of the most recent trustee report, the Weighted Average Rating of the portfolio is 656 (425 covenant). Rating Action: Downgrade Issuer: Diversified Asset Securitization Holdings III, L.P. Class Description: U.S. $215,000,000 Class A-1L Floating Rate Notes Due July 2036 Prior Rating: Aa2 on review for downgrade Current Rating: Aa3 Class Description: U.S. $70,000,000 Class A-2 7.4202% Notes Due July 2036 Prior Rating: Aa2 on review for downgrade Current Rating: Aa3 Class Description: U.S. $30,000,000 Class A-3L Floating Rate Notes Due July 2036 Prior Rating: Baa1 on review for downgrade Current Rating: Baa3 Class Description: U.S. $18,500,000 Class B-1L Floating Rate Notes due July 2036 Prior Rating: B3 on review for downgrade Current Rating: Ca DYNCORP INT'L: S&P Rates Proposed $410M Secured Facility at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to government contractor DynCorp International LLC. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' bank loan rating and '2' recovery rating to the proposed $410 million secured credit facility and its 'B-' rating to the proposed $320 million subordinated notes. The notes are to be offered under SEC Rule 144A with registration rights. "The ratings on DynCorp reflect a weak financial profile resulting from high debt leverage, limited contract diversity, and the risky nature of some its operations," said Standard & Poor's credit analyst Christopher DeNicolo. "The ratings benefit somewhat from the firm's leading market positions, high demand for its services, and a fairly stable revenue base." DynCorp is being purchased from its current owner, Computer Sciences Corp. -- CSC, by the private equity firm Veritas Capital, for $850 million. The transaction will be financed with the proceeds from a $345 million secured bank loan, $320 million of subordinated notes, a $100 million cash equity investment from Veritas, and $125 million preferred stock investment by CSC and a third-party investor. The subordinated notes will be co-issued by DynCorp and DIV Capital Corp., a subsidiary with nominal assets, and guaranteed by DynCorp's domestic subsidiaries. DynCorp is a leading provider of defense technical services and government outsourced solutions. The company operates in two segments, international technical services (ITS, around 60% of revenues) and field technical services (FTS, 40%). ITS provides a wide range of logistical and security support services, including international police, drug eradication, peacekeeping support, and personal security. FTS provides aircraft maintenance, logistics support, and aircrew training. Almost all sales are to the U.S. government, primarily the departments of Defense and State. Although the company has 52 contracts with over 100 active task orders, the top three contracts comprise almost 60% of revenues, making the company susceptible to program cancellation. Also, around 35% of contracts are indefinite delivery, indefinite quantity -- IDIQ, meaning actual revenues could be significantly lower than the forecast total contract value. DynCorp's positive free cash flow generation and fairly stable revenue base should enable it to reduce high debt leverage as a result of the acquisition by Veritas. Credit protection measures are likely to be appropriate for current ratings in the intermediate term. ENDURANCE CLO: Fitch Sees Decrease in Junk Ratings Since Oct. 2003 ------------------------------------------------------------------ Fitch Ratings affirms the class A notes of Endurance CLO I, Ltd./Endurance CLO I, Corp. at 'AAA'. The transaction is a cash flow collateralized loan obligation - CLO -- that enables investors to gain exposure to a diversified, high yield loan portfolio. The portfolio is managed by ING Capital Advisors, LLC. The class A notes are insured by MBIA Insurance Corp. Since the last rating action in October 2003, the transaction has continued to perform within expectations. Endurance is in its revolving period with five years remaining. The class A overcollateralization - OC -- test has improved to 116.82% from 114.17% since the last rating action. However, the class A interest coverage - IC -- test has declined to 178.7% from 240.7% but is still above the trigger level set at 140%. Assets rated 'CCC+' or lower in the portfolio decreased since the last rating action to 4.06% from 8.22%. The amount of defaulted assets outstanding has gone down to $2.06 million (0.75% of portfolio collateral) from $5.99 million (2.20% of portfolio collateral). However, the weighted average spread has declined to 2.69% from 3.36% since the last rating action. The rating of the class A notes addresses 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 on Feb. 15, 2014. The rating for the class A notes is based on the insurance policy provided by MBIA (rated 'AAA' by Fitch). As a result of this analysis, Fitch has determined that the current rating assigned to the class A notes still reflects the current risk to noteholders. 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/ ENRON CORP: Reorganized Debtors' First Post-Confirmation Report --------------------------------------------------------------- Pursuant to Judge Gonzalez's order dated August 6, 2004, Reorganized Enron Corporation and its debtor-affiliates are required to submit periodic reports advising the Court of their actions towards consummation of their Chapter 11 Plan. Accordingly, on January 18, 2005, the Reorganized Debtors filed with the Court their first post-confirmation report. The Reorganized Debtors advise the Court that the Plan has been substantially consummated. On or before the Effective Date, the Debtors satisfied or waived the conditions precedent to the effectiveness of the Plan. According to Martin A. Sosland, Esq., at Weil Gotshal & Manges LLP, in New York, the Debtors have taken these steps to consummate the Plan: A. Commencement of Distributions in Excess of $16 Million Holders of Allowed Secured Claims, Allowed Priority Claims, Allowed Administrative Claims, and Allowed Convenience Claims received cash distributions aggregating more than $16.1 million, in full satisfaction of their claims, including payment in excess of $12 million in taxes. In addition, more than $400,000 have been paid to cure defaults relating to assumption of executory contracts and unexpired leases pursuant to the Plan. B. Claims Resolution Process The Reorganized Debtors have made significant progress in the reconciliation of claims: -- Over 11,000 claims have been ordered disallowed; -- Over 1,900 claims have been withdrawn; and -- Over 2,100 claims have been either ordered allowed or subordinated, with over 3,300 claims still pending before the Court. The Debtors identified over 2,400 claims for allowance. The Debtors consider seeking an extension of the March 14, 2005 deadline established under the Plan for filing claim objections. The Debtors are evaluating whether there is any need to extend the deadline in any respect. c. Property Transfers For the benefit of holders of Enron Common Equity Interests and Enron Preferred Equity Interests, pursuant to the Plan, the Reorganized Debtors transferred new shares of: (i) Exchanged Enron Common Stock to the Common Equity Trust; and (ii) Exchanged Enron Preferred Stock to the Preferred Equity Trust. All outstanding Enron Common Equity Interests and Enron Preferred Equity Interests were cancelled and are of no force or effect. D. Equity Trusts On November 16, 2004, each of the Common Equity Trust and the Preferred Equity Trust was created under the Plan, the Common Equity Trust Agreement, and the Preferred Equity Trust Agreement. Stephen Forbes Cooper, LLC, a New Jersey limited liability company, serves as a trustee of each of the Trusts. E. Executory Contracts As of the Effective Date, the Reorganized Debtors rejected ___ executory contracts and unexpired leases, and assumed 381 executory contracts and unexpired leases. F. Creditors' Committee Pursuant to the Plan, the Official Committee of Unsecured Creditors assumed a limited role. G. Enron Corp. Examiner On July 26, 2004, the ENE Examiner and his professionals were released and discharged from their obligations outstanding pursuant to the Investigative Orders of the Bankruptcy Court, to the extent not previously discharged. H. Enron North America Corp. Examiner On the Effective Date, the ENA Examiner's role terminated pursuant to the Plan and the Court's order dated December 21, 2004. I. SEC Filings A Form 8-K was filed with the Securities and Exchange Commission, pursuant to Section 12 or 15(d) of the Securities Exchange Act of 1934, indicating that Enron is no longer a publicly held entity. J. Assumption of Control of Business. Enron and many of the other Reorganized Debtors are now managed by a newly appointed board of directors or managing members. The directors for Reorganized Enron are: a) John J. Ray, III, Chairman; b) Robert M. Deutschman, Vice-Chairman; c) Stephen D. Bennett; d) Rick A. Harrington; and e) James R. Latimer, III. On the Effective Date, Stephen Forbes assumed the role of Plan Administrator in accordance with a Reorganized Debtor Plan Administration Agreement and the Plan. Mr. Sosland notes that several creditors appealed the Confirmation Order. However, as of January 18, 2005, the only appeals still being actively prosecuted are those filed by Upstream Energy Services and American Electric Power. Headquartered in Houston, Texas, Enron Corporation is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. EXCO RESOURCES: S&P Places B+ Rating on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed Dallas, Texas-based exploration and production -- E&P -- company EXCO Resources Inc.'s 'B+' corporate credit rating on CreditWatch with negative implications. The CreditWatch listing follows EXCO's announcement that its board approved an agreement to sell the company's Canadian subsidiary (Addison Energy Inc. (unrated)), which represents about 43% of the company's current production (as of Sept. 30, 2004) and about 34% of the company's total proved reserves (as of year-end 2003 pro forma for the acquisition of North Coast Energy Inc. (unrated)), to NAL Oil and Gas Trust (unrated) for U.S. $452 million (Cdn $550 million). "Although EXCO's liquidity will be significantly bolstered in the near term as proceeds are realized from the transaction, the negative CreditWatch listing reflects uncertainty regarding the direction of proceeds, the low likelihood that funds will be used for debt reduction, and the potential execution risks facing the company, if it seeks to reinvest proceeds into additional domestic U.S. oil and gas properties (particularly given elevated commodity prices)," noted Standard & Poor's credit analyst Jeffrey B. Morrison. The CreditWatch listing will be resolved in the near term, pending Standard & Poor's meeting with management to assess the company's business profile going forward, discuss the expected timing and deployment of proceeds, and evaluate the transaction's effect on the company's reserve base and credit measures in the near-to-intermediate term. E*TRADE ABS: S&P Junks Preference Shares ---------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B, C-1, and C-2 notes, composite securities, and preference shares issued by E*Trade ABS CDO I Ltd., a cash flow arbitrage CDO of ABS/RMBS. At the same time, the ratings on the class C-1, and C-2 notes, composite securities, and preference shares are removed from CreditWatch negative, where they were placed Jan. 3, 2005. At the same time, the ratings on the class A-1 and A-2 notes are affirmed based on the credit enhancement available to support the notes. The current rating actions reflect factors that have negatively affected the credit enhancement available to support the notes since the July 20, 2004, rating actions. These factors include continued negative migration in the collateral pool, primarily within the manufactured housing sector. Standard & Poor's noted that according to the Nov. 30, 2004, monthly report, $19.768 million (or approximately 10.08%) of the underlying assets are rated 'CCC+' and below, and all come from bonds issued in ABS manufactured housing transactions. Furthermore, recoveries on ABS manufactured housing assets held in E*Trade ABS CDO I Ltd. have further declined since the July 20, 2004, rating action. Standard & Poor's also noted that for purposes of calculating its overcollateralization test ratios, E*Trade ABS CDO I Ltd. "haircuts" (or reduces the principal value of) a percentage of assets rated below 'B-'. Without haircutting the principal value of these assets, the class A/B overcollateralization ratio, as of the Nov. 30, 2004, monthly report, would have been approximately 109.21% instead of 104.81%; the class C overcollateralization ratio would have been approximately 102.36% instead of 98.1668%. Standard & Poor's reviewed the results of the current cash flow runs generated for E*Trade ABS CDO I to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios, while still paying all of the interest and principal due on the notes. When the results of these cash flow runs were compared with the projected default performance of the performing assets in the collateral pool it was determined that the ratings assigned to the class B, C, composite securities, and preference shares were no longer consistent with the credit enhancement available. Rating Lowered E*Trade ABS CDO I Ltd. Rating &nbs