T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 2, 2005, Vol. 9, No. 27 Headlines AAMES MORTGAGE: Moody's Junks Series 2001-2 Class B Certificates ABS MORTGAGE: Fitch Puts Low-B Ratings on 2 $6.250MM Certificates ADELPHIA COMMS: Compensation Board Adopts 2005 Incentive Plan ADVENTIST NURSING HOME: Case Summary & Largest Unsecured Creditors AKA HOSPITALITY LLC: Voluntary Chapter 11 Case Summary ALLEGHENY TECH: Earns $35 Million of Net Income in Fourth Quarter AMCAST INDUSTRIAL: Comm. Taps FTI Consulting as Financial Advisor AMERICAN BUSINESS: Look for Bankruptcy Schedules by Mar. 18 AMERICAN BUSINESS: Wants Ordinary Course Professionals to Continue AMERICAN RESTAURANT: Files Third Amended Disclosure Statement ANDREW CORP: Earns $14.6 Million of Net Income in First Quarter ASTRIS ENERGI: Completes Czech Affiliate Purchase ATA AIRLINES: Gets Lease Decision Period Extended to February 25 ATA AIRLINES: Wants Plan Filing Period Extended to June 23 AXIA NETMEDIA: Will Release 2005 Second Quarter Results Today BALL CORP: Agrees to $125 Million Accelerated Stock Buyback BANC OF AMERICA: Fitch Puts BB- Rating on $701,000 2005-1 Certs. BANC OF AMERICA: Fitch Assigns Low-B Ratings on 4 Mortgage Certs. BANC OF AMERICA: Fitch Puts Low-B Ratings on Two 2005-A Certs. BAYVIEW CAPITAL INC: Case Summary & 2 Largest Unsecured Creditors BUCKEYE TECHNOLOGIES: Moody's Puts B1 Rating on $85M Sr. Term Loan CHESAPEAKE ENERGY: Hosting Fourth Quarter Webcast on Feb. 23 CIRTRAN CORP: Completes Compromise Settlement with IRS CORNELL COS: Names Dr. Isabella Cunningham to Board COTT CORPORATION: Appoints Andrew Prozes to Board of Directors CP SHIPS: Expects $70 to $73 Million Net Income for 2004 CRANSTON, R.I.: Moody's Lifts Rating on General Obligation Bonds CWMBS INC: Fitch Puts Low-B Ratings on Two 2005-5 Mortgage Certs. DELTA AIR: Completes Flight Reductions at DFW Int'l. Airport DI GIORGIO: Tender Offer Termination Cues S&P to Affirm B Rating DUKE FUNDING: S&P Places Ratings on CreditWatch Negative DYCOAL INC: Sells Komar Briquetter Machine to Startec in 363 Sale EXCALIBUR INDUSTRIES: May Swap Debt for Equity to Reduce Debt EXTENDICARE INC: Acquires Assisted Living Concepts for $129.5MM EYE CARE: Extends Senior & Sub. Debt Tender Offer Until Feb. 16 FALCON PRODUCTS: Taps Stutman Treister as Reorganization Counsel FALCON PRODUCTS: Look for Bankruptcy Schedules by Apr. 18 FEDERAL-MOGUL: Champion Pension Trustees Okays FM Ignition Scheme FLEXTRONICS: Grants Stock Options to New Employees FOSTER WHEELER: Sets Annual Shareholders' Meeting For May 10 GE COMMERCIAL: S&P Places Low-B Ratings on Six Certificate Classes GLOBAL HOLDINGS: TSX Delists Multiple Voting Shares HIGH VOLTAGE: Seeks Interim Financing to Provide More Liquidity HILITE INT'L: Moody's Puts B3 Rating on $150M Sr. Sub. Notes HUNTSMAN CORP: Moody's Reviews Debt Ratings for Possible Upgrade HYDROCHEM INDUSTRIAL: Moody's Junks $150 Million Senior Notes IKON OFFICE: Earns $16.6 Million of Net Income in First Quarter INTERSTATE BAKERIES: Retains Houlihan Lokey as Financial Advisor JADE CBO: Fitch Maintains Junk Rating on $23.5 Million Sr. Notes K. HOVNANIAN: Moody's Upgrades Ratings & Says Outlook is Stable KAISER ALUMINUM: Judge Fitzgerald Approves PBGC Settlement Pact KAISER ALUMINUM: Court Approves Deal with Lloyds Underwriters LAIDLAW INT'L: Reports Greyhound Pension Funding Requirements LB COMM'L: Moody's Junks $2.678M Class M & $2.23M Class N Notes LEMONTONIC INC: Appoints Michael Geddes to Board of Directors LYNX THERAPEUTICS: Stockholders to Vote on Proposed Solexa Merger MAGNUM HUNTER: Moody's Reviewing Ratings & May Upgrade MERRILL LYNCH: Fitch Puts Low-B Ratings on Private Mortgage Certs. MILLPORT, ALABAMA: United States Wants a Receiver Appointed MIRANT CORP: Chief Executive Officer Marce Fuller Will Resign MOTHERS WORK: Moody's Junks $125 Million Senior Secured Notes NATIONAL CENTURY: Trust Objects to Claims of Three Ex-Directors NDCHEALTH CORP: Defaults on Sr. Notes Due to Late Quarterly Filing NEW WORLD: Retains Keen Realty to Market Winchester Property NORTH ATLANTIC: CFO Resignation Prompts S&P to Junk Ratings NOVELIS INC: TRC Capital Offers CDN $26.75 per Common Share O'SULLIVAN IND: Dec. 31 Balance Sheet Upside-Down by $184.5 Mil. OMEGA HEALTH: Earns $8.9 Million of Net Income in Fourth Quarter OZARK AIR: Wants Chapter 11 Case Converted to Chapter 7 PARMALAT CANADA: Sells North American Bakery Group POPE & TALBOT: Declares $0.08 Dividend per Common Share QUEENSGATE SPECIAL: Moody's Puts Ba1 Rating on $25 Million Notes RESIDENTIAL ASSET: Fitch Junks Two Home Equity Transactions SBC COMMUNICATIONS: Fitch Puts 'BB+' Rating on Watch Negative SBC COMM: AT&T Acquisition Prompts Moody's to Review Ratings SEVILLE ENTERPRISES: Case Summary & Largest Unsecured Creditors SLS INT'L: Appoints Steven Hicks & Dell Furano to Board SOLUTIA INC: Wants to Settle Four Environmental Proceedings SOLUTIA INC: CP Films Wants to Assume Amended Toray Supply Pact SPRINGFIELD GRANITE: Case Summary & 20 Largest Unsecured Creditors STEVENOT WINERY: Section 341(a) Meeting Slated for February 25 SYNAGRO TECH: Moody's Puts B2 Rating on $305M Credit Facility SYNAGRO TECHNOLOGIES: S&P Revises Rating Outlook to Negative TENNECO AUTOMOTIVE: To Make Voluntary $40 Million Debt Pre-Payment TRINITY LEASING: Voluntary Chapter 11 Case Summary TROPICAL SPORTSWEAR: Committee Taps Stroock & Stroock as Counsel UAL CORP: Renews Talks with TWU on Restructuring Agreements UAL CORPORATION: Files 10th Reorganization Status Report USGEN NEW ENGLAND: Files Plan of Liquidation in Maryland VISTEON CORP: Posts $115 Million Net Loss in Fourth Quarter W.R. GRACE: Won't Face Competing Chapter 11 Plans Until May 24 WASHINGTON MUTUAL: S&P Puts Low-B Ratings on Six Cert. Classes WORLDCOM INC: Bondholder Suit Against Andersen Going to Trial WORLDSPAN LP: Moody's Lowers B1 Senior Implied Rating to B2 Z PROMPT: Completes Restructuring & Exits from Bankruptcy * Alvarez & Marsal Names Sajan P. George as Co-Head * Upcoming Meetings, Conferences and Seminars ********* AAMES MORTGAGE: Moody's Junks Series 2001-2 Class B Certificates ---------------------------------------------------------------- Moody's Investors Service has downgraded one certificate class and has placed on review for possible downgrade one certificate class issued in two transactions issued by Aames Mortgage Trust in 2001. The transactions are backed mostly by first-lien fixed rate mortgage loans originated by Aames Financial Corporation and serviced by Countywide Home Loans, Inc. The Class B certificates issued by Aames Mortgage Trust 2001-2 have been downgraded, and the Class B certificates issued by Aames Mortgage Trust 2001-1 have been placed on review for possible downgrade. The transactions have taken significant losses causing gradual erosion of the overcollateralization. As of December 25, 2004, the realized cumulative losses were 5.58% and 5.50% for the 2001-1 and 2001-2 transactions, respectively. The existing credit enhancement levels in the transactions do not provide adequate protection to support the ratings on the most subordinate certificate classes. Moody's complete rating actions are: -- Issuer: Aames Mortgage Trust * Downgrade: * Series 2001-2; Class B, downgraded to Caa3 from B2 * Under review for downgrade: * Series 2001-1; Class B, current rating Ba2, under review for possible downgrade ABS MORTGAGE: Fitch Puts Low-B Ratings on 2 $6.250MM Certificates ----------------------------------------------------------------- Fitch rates Popular ABS mortgage pass-through trust series 2005-1: -- $504,060,000 classes AF-1 to AF-6, AV-1A, AV-1B, and AV-2 certificates 'AAA'; -- $44,060,000 class M-1 certificates 'AA'; -- $34,380,000 class M-2 certificates 'A'; -- $9,690,000 class M-3 certificates 'A-'; -- $9,060,000 class M-4 certificates 'BBB+'; -- $6,250,000 class B-1 certificates 'BBB'; -- $5,000,000 class B-2 certificates 'BBB-'; -- $6,250,000 privately offered class B-3 certificates 'BB+'; -- $6,250,000 privately offered class B-4 certificates 'BB'. The 'AAA' rating on the senior certificates reflects the 22.05% total credit enhancement provided by: * the 7.05% class M-1, * the 5.50% class M-2, * the 1.55% class M-3, * the 1.45% class M-4, * the 1.00% class B-1, * the 0.80% class B-2, * the 1.00% privately offered class B-3, * the 1.00% privately offered class B-4, and * the 2.70% target overcollateralization -- OC. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans and the integrity of the transaction's legal structure, as well as the primary servicing capabilities of Equity One, Inc. (rated 'RPS3+' by Fitch) and JPMorgan Chase Bank, as trustee. The certificates are supported by two collateral groups. Group I consists of fixed-rate mortgage loans while group II consists of adjustable-rate mortgage loans. As of the cut-off date, Dec. 31, 2004, the mortgage loans have an aggregate balance of $489,836,905. The weighted average coupon - WAC -- rate is approximately 7.129% while the weighted average remaining term to maturity is 345 months. The average cut-off date principal balance of the mortgage loans is approximately $144,452. The weighted average combined loan-to-value -- CLTV -- ratio of the mortgage loans at origination was approximately 85.39%, and the weighted average Fair, Isaac & Co. (FICO) score was 640. The properties are primarily located in: * Michigan (7.94%), * California (6.92%), and * New York (6.74%). ADELPHIA COMMS: Compensation Board Adopts 2005 Incentive Plan ------------------------------------------------------------- On January 26, 2005, the Compensation Committee of the Board of Directors of Adelphia Communications Corporation adopted the Adelphia Communications Corporation 2005 Short-Term Incentive Plan, effective January 1, 2005. The STIP provides for the payment of cash bonuses for the 2005 calendar year to certain eligible employees of the Company, subject to the satisfaction of certain qualitative and quantitative performance measures. In general, full-time employees with a title of Director and above, including certain of the Company's Named Executive Officers, are eligible to participate in the STIP. In addition, certain General Managers of local cable systems are also eligible to participate in the STIP. Awards are determined based on the satisfaction of certain performance criteria established for Adelphia Communications, and where relevant, the satisfaction of certain performance criteria for certain regional operations, and individual performance criteria. The Company and regional performance goals include: revenue, operating cash flow, capital expenditures, customer care, internal controls and level of basic subscribers. Awards under the STIP will be paid not later than March 14, 2006. These employees are not eligible to participate in the STIP: -- Employees on a sales commission plan or sales incentive plan; -- Temporary, term and leased employees, contract workers and interns; or -- Employees not on the Company payroll on the date that STIP awards are paid. In connection with the grant of awards under the STIP during 2005, the Company will send to each employee who is a participant in the STIP an award letter that sets forth the level of the participant's award, at target, which is designated as a percentage of the participant's salary. Headquartered in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADVENTIST NURSING HOME: Case Summary & Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Adventist Nursing Home, Inc. PO Box 95 Livingston, New York 12541 Bankruptcy Case No.: 05-10507 Type of Business: The Debtor operates a nursing home. Chapter 11 Petition Date: January 31, 2005 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Marc S. Ehrlich, Esq. Ehrlich Hanft Baird & Arcodia 64 Second Street Troy, New York 12180 Tel: (518) 272-2110 Total Assets: $3,931,893 Total Debts: $3,145,372 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ New York State Department of Health $754,305 Jerome Alaimo Assessment Fund Administrator Office of Pool Admin PO Box 4757 Syracuse, NY 13221 Sloan Management, Inc. $336,425 3 College Avenue Frederick, MD 21701 Visiting Nurses Home Care $93,301 Suite 300A 855 Central Avenue Albany, NY 12206 Bond, Schoeneck & King $81,238 111 Washington Avenue Albany, NY 12210 Cardinal Health 110, Inc. $58,913 c/o Menter, Rudin & Trivelpiece, PC 500 South Salina Street Syracuse, NY 13202 Any-Time Home Care, Inc. $57,601 PO Box 995 Nyack, NY 10960 Unlimited Care, Inc. $46,387 Kosco $28,000 Amos Post Division NYAHSA/FLTC $26,820 GC Risk Management Service $26,016 State Insurance Fund $24,962 Juliete Payne/GCG Risk Management New York Oncology Hematology, PC $18,457 Niagara Mohawk Power Corporation $17,475 Attn: Bankruptcy Unit VTA Management Services, Inc. $14,139 Ginsberg's $11,041 MTM Pharmacy Services, Inc. $10,088 Regional Rehabilitation Services $8,499 New York State Department of $7,500 Taxation & Finance Mead Johnson $7,200 Heatlhmedx, Inc. $6,831 AKA HOSPITALITY LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: AKA Hospitality LLC dba Courtesy Inn 8345 West Freeway Fort Worth, Texas 76116 Bankruptcy Case No.: 05-31160 Type of Business: The Debtor operates an inn. Chapter 11 Petition Date: January 31, 2005 Court: Northern District of Texas (Dallas) Judge: Steven A. Felsenthal Debtor's Counsel: Arthur I. Ungerman, Esq. Arthur I. Ungerman, Esquire One Glen Lakes Tower 8140 Walnut Hill Lane, No. 301 Dallas, Texas 75231 Tel: (972) 239-9055 Fax: (972) 239-9886 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ALLEGHENY TECH: Earns $35 Million of Net Income in Fourth Quarter ----------------------------------------------------------------- Allegheny Technologies Incorporated (NYSE:ATI) reported net income of $35 million, on sales of $778.1 million for the fourth quarter ended December 31, 2004. Results included inventory valuation reserve charge of $29.5 million, primarily due to continued increases in raw material costs. Retirement benefit expense was $25.0 million in the quarter. In the fourth quarter 2003, ATI reported a net loss of $232.7 million, on sales of $484.4 million. Results included net non- recurring special charges of $198.3 million. Fourth quarter 2003 results also included a LIFO inventory valuation reserve charge of $14.2 million and retirement benefit expense of $32.7 million. Net income for the full-year 2004 was $19.8 million, on sales of $2.7 billion. Results for 2004 included a LIFO inventory valuation reserve charge of $112.2 million, retirement benefit expense of $119.8 million, and a $40.4 million, or $0.48 per share, special gain related to actions taken to control certain retiree medical costs, net of costs related to the new ATI Allegheny Ludlum labor agreement and the June 2004 J&L asset acquisition. For the full-year 2003, results were a net loss of $314.6 million, on sales of $1.9 billion. Results for 2003 included net special charges of $201.3 million, a $1.3 million charge for the cumulative effect of change in accounting principle, a LIFO inventory valuation reserve charge of $37.0 million, and retirement benefit expense of $134.4 million. "ATI's results are an outcome of our strategy to transition ATI to profitability and position the Company for long-term success," said Pat Hassey, Chairman, President and Chief Executive Officer of Allegheny Technologies. "Revenues significantly increased in each of our segments as a result of improved demand from most markets, pricing actions, and higher raw material surcharges. Compared to last year, sales increased 61% to $778 million in the fourth quarter 2004 and increased by 41% to $2.7 billion for the full-year 2004. Importantly, ATI was profitable for the full-year 2004, and the fourth quarter net income of $0.35 per share demonstrated the results of our revenue growth, strategic investments and cost reductions. "Flat-Rolled Products segment fourth quarter results were aided by the recovery in the U.S. stainless steel market, pricing actions, and the successful integration of our recently acquired stainless steel assets. Continuing operating efficiencies and cost reductions were both enhanced by our new progressive labor agreement in our stainless steel business. A key 2004 strategy for ATI was to 'fix' our stainless steel business. We believe our stainless steel business is now positioned for long-term profitable growth and cash generation. "Fourth quarter results in our High Performance Metals segment were very good as a result of improved demand from commercial aerospace, higher selling prices, and operating efficiencies from our recently expanded Richburg, SC rolling mill. In addition, our exotic alloys business performed well due to continued strong demand, improved product mix, and continuing operating efficiencies and cost reductions. Segment operating margins reached nearly 19% of sales. "In our Engineered Products segment, fourth quarter results improved as a result of strong demand from several key markets, higher selling prices, and the benefits from cost reductions. "We continue to be optimistic about 2005. While 2004 was a period of transition and transformation for ATI, we expect 2005 to be a year of revenue growth and accelerating profitability. Most of our end markets remain strong. Sales are expected to grow due to the full year impact of significantly improved prices and higher volumes. Overall, we expect base-prices to be higher in 2005 than in 2004 for approximately 95% of this year's shipments in our Flat-Rolled Products and High Performance Metals segments. Our High Performance Metals segment unfilled orders increased by approximately $100 million at the end of 2004 compared to year-end 2003. We remain encouraged by the aerospace market build forecasts in terms of both the number and size of aircraft as well as increased high performance metal content," said Pat Hassey. "We expect a full year of benefits in 2005 from the strategic assets added in 2004, principally the stainless steel melt shop and finishing operations in Midland, PA and Louisville, OH acquired in June 2004, the upgraded Brackenridge, PA stainless steel melt shop completed in September 2004, and the expanded high performance metals long-products rolling mill in Richburg, SC, which began production in mid-2004. "We plan to continue to improve operating performance through the ATI Business System. We have established a 2005 cost reduction goal of approximately $100 million, before the effects of inflation, which includes certain synergies and cost reductions from the J&L asset acquisition and the new labor agreement in our stainless steel business. Finally, retirement benefit expense is projected to be approximately $33 million lower in 2005 than in 2004, primarily as a result of actions taken in 2004 to control retiree medical costs." Fourth Quarter 2004 Financial Highlights a. Sales of $778 million increased 61% compared to the fourth quarter 2003 b. Operating profit improved to $75.1 million as a result of improved performance across all business segments c. Net income of $35.0 million, or $0.35 per share Full-Year 2004 Financial Highlights a. Sales increased 41% to $2.7 billion compared to 2003 b. Net income improved to $19.8 million, or $0.22 per share c. Gross cost reductions totaled $142 million, significantly exceeding $104 million plan About the Company Allegheny Technologies Incorporated -- http://www.alleghenytechnologies.com/ -- (NYSE:ATI) is one of the largest and most diversified specialty materials producers in the world, with revenues of approximately $1.9 billion in 2003. The Company has approximately 8,800 employees world-wide and its talented people use innovative technologies to offer growing global markets a wide range of specialty materials. High-value products include nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, super stainless steel, exotic alloys, which include zirconium, hafnium and niobium, tungsten materials, and highly engineered strip and Precision Rolled Strip products. In addition, we produce commodity specialty materials such as stainless steel sheet and plate, silicon and tool steels, and forgings and castings. * * * As reported in the Troubled Company Reporter on Sept. 3, 2004, Moody's Investors Service confirmed Allegheny Technologies Incorporated's senior implied rating of B1 and senior unsecured ratings of B3. The ratings confirmation is based on: * the company's improving cost structure, * favorable purchase price for additional low-cost stainless capacity, and * enhanced liquidity position from its recent equity offering. The ratings continue to reflect, however: * Allegheny Technologies' high leverage, * its concentration in cyclical end-use markets, and * exposure to volatility of input costs. The outlook is stable. AMCAST INDUSTRIAL: Comm. Taps FTI Consulting as Financial Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio gave the Official Committee of Unsecured Creditors of Amcast Industrial Corporation and its debtor-affiliates permission to employ FTI Consulting, Inc., as its financial advisor. FTI Consulting will: a) assist the Committee in the review of financial related disclosures required by the Court and with information and analyses required for the Debtors' debtor-in-possession financing; b) assist the Committee with a review of the Debtors' short- term cash management procedures and their proposed key employee retention program and other critical employee benefit programs; c) assist and advise the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; d) assist in the review of the Debtors' performance of cost benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; e) assist in the review of financial information distributed by the Debtors to the creditors, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various assets and liability accounts, and analysis of proposed transactions for which Court approval is required; f) assist in the review and preparation of information and analysis necessary for the confirmation of a chapter 11 plan and in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; g) provide litigation services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Committee; and h) render all other general business consulting services to the Committee and its counsel that is necessary in the Debtors' chapter 11 case. Micheal J. Selwood, a Managing Director at FTI Consulting, dislcoses the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Senior Managing Directors $560 - $653 Directors/Managing Directors $415 - $560 Associates/Consultants $195 - $385 Paraprofessionals $ 95 - $168 Mr. Selwood reports that FTI Consulting's compensation consists of a monthly fee of $125,000 in the first month of the Debtors' engagement of the Firm, $100,000 on the second month, and $75,000 on the third month and for every succeeding month. FTI Consulting assures the Court that it does not represent any interest adverse to the Committee, the Debtors or their estates. Headquartered in Dayton, Ohio, Amcast Industrial Corporation -- http://www.amcast.com/-- is a manufacturer and distributor of technology-intensive metal products to end-users and supplier in the automotive and plumbing industry. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004 (Bankr. S.D. Ohio Case No. 04-40504). Jennifer L. Maffett, Esq., at Thompson Hine LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $104,968,000 and total debts of $165,221,000. AMERICAN BUSINESS: Look for Bankruptcy Schedules by Mar. 18 ----------------------------------------------------------- American Business Financial Services, Inc., and its debtor- affiliates sought and obtained an extension until Mar. 18, 2005, from the U.S. Bankruptcy Court for the District of Delaware to file their Equity Holder Lists, Schedules of Assets and Liabilities and Statements of Financial Affairs. Rule 1007(a)(3) of the Federal Rules of the Bankruptcy Procedure requires the Debtors to file their list of equity security holders, Schedules of Assets and Liabilities, and Statements of Financial Affairs within 15 days from the Petition Date. Pursuant to Rule 1007-1(d) of the Local Rules of the Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, the Debtors have an automatic extension of 30 days to deliver these documents. Bonnie Glantz Fatell, Esq., at Blank Rome, LLP, in Wilmington, Delaware, told the Court that the Debtors have over 6,000 equity holders and more than 30,000 creditors. The Debtors are in the process of identifying equity holders at the street level and of preparing separate Schedules and Statements for each of the Debtors on a deconsolidated basis. Due to the number of equity holders and creditors, the current deadlines by which the Debtors are required to file their Equity Holder Lists, Schedules and Statements may not be sufficient. Ms. Fatell explained that this task is particularly burdensome because the individuals available to complete the task on the Debtors' behalf must divide their time between gathering the information necessary to prepare the Schedules and Statements and managing the Debtors' operations. 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 Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICAN BUSINESS: Wants Ordinary Course Professionals to Continue ------------------------------------------------------------------ Prior to the Petition Date, American Business Financial Services, Inc., and its debtor-affiliates, in the ordinary course of business, regularly call on attorneys, accountants and public relation firms in connection with their businesses and other aspects of operations. The services provided by these Ordinary Course Professionals include, among other things: (1) prosecuting or otherwise handling various collection, foreclosure, mortgagor bankruptcy and related real estate matters; (2) providing services and advice, as needed, with respect to various truth-in-lending, employment discrimination and workers' compensation matters or litigation matters that are not otherwise stayed; (3) handling various discrete corporate or regulatory matters; (4) prosecuting claims against non-mortgagor third parties for breach of contract, negligence, defamation and other torts; (5) performing various tax and accounting services; (6) providing consulting services for strategic communications, public relations and investor relations; and (7) performing various other matters requiring the expertise and assistance of professionals. To ensure the Debtors' businesses and operations continue uninterrupted, the Debtors assert that it is necessary to continue to employ and compensate the Ordinary Course Professionals without the need for the Debtors or the Ordinary Course Professionals to file employment and fee applications. Many of the Ordinary Course Professionals receive only modest fees and may not be willing to continue performing services for the Debtors if forced to comply strictly with the retention and fee requirements. In lieu of preparing and filing employment and fee applications for every Ordinary Course Professional, the Debtors propose to implement these procedures: (a) Each Ordinary Course Professional to be employed by the Debtors postpetition will file or cause to be filed a declaration setting forth that an Ordinary Course Professional does not represent or hold any interest Adverse to the Debtors or their estates. (b) Each Declaration will also provide a description of: (i) the scope of the Services to be provided; and (ii) the rates proposed to be charged for the Services. (c) The Declaration will be filed as promptly as possible after the Petition Date or after the Debtors' engagement of an Ordinary Course Professional postpetition. It will be served on: (i) the US Trustee; (ii) the 20 Debtors' largest unsecured creditors or counsel to a creditors' committee, if appointed; (iii) counsel to U.S. Bank, N.A., as indenture trustee for Subordinated Unsecured Notes and the Subordinated Collateralized Notes; and (iv) counsel to the Debtors' postpetition lender. (d) The notice parties will have 10 days after their receipt of a Declaration to object to an Ordinary Course Professional retention. The objecting party will serve any objections on the Debtors, the affected Ordinary Course Professional and the Notice Parties on or before the Objection Deadline. If any objection cannot be resolved within 10 days, the matter will be set for hearing on the next regularly scheduled omnibus hearing date or on a later date as may be agreeable to the parties. If no objection is received by the Objection Deadline, the Debtors will be authorized to retain and pay the Ordinary Course Professional subject additional requirements. (e) The Debtors will pay each Ordinary Course Professional 100% of their fees and expenses upon the submission to, and approval by, the Debtors of an invoice setting forth in reasonable detail the nature of the Services rendered and expenses actually incurred; provided, however, that if any Ordinary Course Professional's fees exceeds $25,000 -- not including expert witness fee or other expenses -- in any month during the pendency of the Debtors' cases, then the payment to that Ordinary Course Professional during the month will be subject to the prior approval of the Court. (f) On every 90 days commencing on the date the motion is approved, the Debtors will file and serve on the Notice Parties a statement setting forth: (i) the name of every Ordinary Course Professional retained to date and a general description of the Services provided by each Ordinary Course Professional; (ii) for each Ordinary Course Professional, the aggregate amount paid as compensation for Services rendered and expenses incurred during the preceding Statement Period; and (iii) for each Ordinary Course Professional, the aggregate amount paid as compensation for Services rendered and expenses incurred during the Debtors' cases. The Debtors anticipate filing a number of formal retention applications to employ various professionals in their bankruptcy proceedings. The proposed OCP Procedures will not apply to those professionals for whom the Debtors are filing separate applications for employment. Accordingly, the Debtors seek the Court's permission to retain and compensate the Ordinary Course Professionals pursuant to the OCP Procedures. 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 Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICAN RESTAURANT: Files Third Amended Disclosure Statement ------------------------------------------------------------- American Restaurant Group, Inc., and its debtor-affiliates filed their Third Amended Disclosure Statement explaining their Third Amended Plan of Reorganization with the U.S. Bankruptcy Court for the Central District of California. A full-text copy of the Disclosure Statement explaining the Plan is available for a fee at: http://www.researcharchives.com/download?id=040812020022 The Debtors revised the Disclosure Statement twice to satisfy the Official Committee of Unsecured Creditors. The Committee previously complained that the Debtors' Disclosure Statement was full of mistakes and omissions. One complaint focused on the Disclosure Statement saying that the Debtors' estates would be substantively consolidated when the Plan says creditor constituencies will be treated separately. The Third Amended Disclosure Statement contains some other changes: * balance sheet projection; * summary of net liquidation proceeds; * valuation of each of the Debtors' estates; * allowed unsecured claims is changed from $164.9 to $163.8 million; * general unsecured creditors will receive a pro rata share of approximately 12% of their allowed claim from the Allocated New Common Stock (no more cash distribution); * voting and balloting procedures; and * distribution to creditors in a substantive consolidation of the Debtors. About the Plan American Restaurant's Plan aims to restructure the Debtors' debt, capital structure and business operations to permit the Debtors to emerge from bankruptcy with a viable business and a deleveraged capital structure. The Plan projects debt reduction from $204.5 million to approximately $26.5 million through a debt-to-equity swap. The noteholders' committee, holding in excess of 75% of the aggregate principal amount of the outstanding old notes, supports the Debtors' Plan. Wells Fargo Foothill pledged a $40 million exit financing facility upon the consummation of the Plan. Headquartered in Los Altos, California, American Restaurant Group, Inc., through its subsidiaries operating as Stuart Anderson's, specializes in U.S.D.A. Choice fresh-cut steak; seasoned, seared, and slow-roasted prime rib; and a variety of seafood entrees complete with 'all the fixin's'. The company and its debtor- affiliates filed a chapter 11 petition on Sept. 28, 2004 (Bankr. C.D. Cal. Case No. 04-30732). Thomas R. Kreller, Esq., at Milbank, Tweed, Hadley & Mccloy represents the Debtors in their restructuring efforts. When the Debtor filed for bankruptcy protection, it listed $77,873,000 in assets and $273,395,000 in total debts. ANDREW CORP: Earns $14.6 Million of Net Income in First Quarter --------------------------------------------------------------- Andrew Corporation, a global communications systems and equipment supplier, reported first quarter sales of $474.1 million, up 15% from $410.8 million in the year ago quarter and higher than previous guidance of $440 million to $470 million. Higher sales were primarily due to increased market demand for products within the Wireless Infrastructure and Satellite Communications segments. Net income was $14.6 million or $0.09 per share, compared to net income of $3.8 million or $0.02 per share in the year ago quarter and higher than previous guidance of $0.03 to $0.06 per share. "Our first quarter results were stronger than anticipated, driven by higher sales in each major region and improved operating leverage," said Ralph Faison, president and chief executive officer, Andrew Corporation. First quarter results include intangible amortization of $7.7 million or $0.03 per share and pre-tax restructuring charges of $1.8 million. The year ago quarter included intangible amortization of $9.4 million or $0.04 per share, a pre-tax loss of $4.5 million or $0.02 per share related to the sale of assets, and pre-tax restructuring charges of $0.7 million. Additionally, in the first quarter fiscal 2005, the company recorded a $2.6 million or $0.01 per share benefit for the reversal of previously accrued taxes resulting from a favorable resolution of certain tax-related matters. Orders for the first quarter increased 11% to $453 million versus the prior year quarter due mainly to increased demand for Wireless Infrastructure, offset partially by lower orders for Satellite Communications and Network Solutions. The book-to-bill ratio was less than one in the first quarter, but improved sequentially from the prior quarter. The top 25 customers represented 68% of sales compared to 68% in the prior quarter and 70% in the year ago quarter. Major original equipment manufacturers (OEMs) accounted for 41% of sales, compared to 37% in the prior quarter and 41% in the year ago quarter. The largest customer for the first quarter was Lucent Technologies at 10.5% of sales. Sales By Market Segment and Major Region Effective for the first quarter fiscal 2005, the company will report sales by market segment. Wireless Infrastructure sales consist of the Antenna and Cable Products Group, Base Station Subsystems Group, Network Solutions Group and Wireless Innovations Group. Wireless Infrastructure sales increased 11% versus the prior year quarter driven by increased demand in all major regions. Satellite Communications sales increased 69% versus the prior year quarter driven by a significant volume ramp for certain products supporting the consumer broadband satellite market. Americas Sales increased 11% versus the year-ago quarter driven by higher sales for all major product groups supporting network upgrades and expansion in Latin America and growth in Satellite Communications in North America. Sales in Antenna and Cable Products and Base Station Subsystems declined versus the prior year quarter driven by weaker near-term trends in North America relating to operator consolidation and asset rationalization. Sales in Network Solutions declined modestly versus the prior year quarter due to the timing of geolocation hardware installations. Europe, Middle East, Africa (EMEA) Sales increased 27% compared to the prior year quarter due mainly to Antenna and Cable Products and Base Station Subsystems supporting network upgrades and expansion in Western Europe and emerging markets. Sales in Wireless Innovations increased modestly supporting operator needs for increased coverage solutions. EMEA sales also benefited from favorable foreign currency exchange rates due mainly to a weaker dollar against the euro. Asia Pacific Sales in Asia Pacific increased 7% versus the prior year quarter driven by higher sales in Antenna and Cable Products and Wireless Innovations supporting network expansion and coverage in India and China. Base Station Subsystems declined modestly versus the prior year quarter. Recent Highlights -- Acquired Xenicom following the close of the quarter for approximately $11.5 million in cash. Xenicom adds additional software capabilities to the Network Solutions Group and is focused on helping wireless operators manage and optimize 2G, 2.5G, and 3G wireless networks. -- Acquired selected assets of ATC Tower Services for approximately $10 million, consisting of cash and the assumption of lease obligations. ATC provides an immediate national construction services presence and additional channel distribution opportunities for Wireless Infrastructure products. -- Expanded presence in China with the opening of the Andrew Technology Center in Shanghai. The Shanghai center will focus on active radio frequency (RF) subsystems. -- Expanded manufacturing capabilities for base station antennas in Sorocaba, Brazil, to better support the growing needs of our customers in Central America, South America and the Caribbean. "The strength of our globally diversified customer base and industry-leading portfolio of products and services position Andrew for long-term sales growth and improved profitability," said Faison. "The acquisitions of Xenicom and ATC expand our addressable market beyond traditional hardware and enhance our ability to deliver full systems support to both our OEM and wireless operator customers." First Quarter Financial Summary Gross margin was 23.3%, compared with 22.2% in the prior quarter and 25.3% in the year ago quarter. Consistent with previous guidance, gross margin increased 110 basis points sequentially from the prior quarter due to the completed relocation of certain manufactured product lines within the Antenna and Cable Product Group, lower start-up costs for certain filter product lines within the Base Station Subsystems Group and a more favorable product mix within the Base Station Subsystems Group. Research and development expenses were $26.9 million or 5.7% of sales, compared to $25.6 million or 6.2% of sales in the year ago quarter. Research and development expenses decreased as a percentage of sales due mainly to higher sales leverage and a continued focus on project rationalization. Sales and administrative expenses were $51.0 million or 10.8% of sales, compared to $52.5 million or 12.8% of sales in the year ago quarter. Sales and administrative expenses continue to decrease due mainly to higher sales leverage and the effects of our cost savings and merger integration programs. "The strength of our business model continues to deliver greater operating leverage. With 15% growth in sales, sales and administrative expenses declined in absolute dollars compared to the prior year quarter," said Faison. Intangible amortization was $7.7 million in the first quarter, compared to $9.4 million in the year ago quarter. It is anticipated that total intangible amortization will decrease from $38.3 million in fiscal 2004, to approximately $22.0 million in fiscal 2005. Interest income increased to $1.7 million in the first quarter, compared to $0.7 million in the year ago quarter due mainly to $0.8 million of interest income associated with a favorable resolution of certain tax-related matters. Interest expense was $3.7 million in the first quarter, compared to $3.9 million in the year ago quarter. The reported tax rate for the first quarter was 24.1%, reflecting an underlying effective tax rate on operations of 37.5% and a $2.6 million benefit related to the reversal of previously accrued taxes resulting from a favorable resolution of certain tax-related matters. Total diluted shares outstanding increased to 181 million from 159 million in the year ago quarter due mainly to the accounting effects of outstanding convertible debt and 1.7 million shares issued in conjunction with the MTS Wireless Components acquisition in March 2004. Balance Sheet and Cash Flow Highlights Cash and cash equivalents were $179 million at December 31, 2004, compared to $189 million at September 30, 2004. Cash and cash equivalents declined primarily due to increased working capital requirements associated with higher sales and annual incentive plan payouts for fiscal 2004. Accounts receivable were $447 million and days' sales outstanding (DSOs) were 82 days at December 31, 2004, compared to $417 million and 74 days at September 30, 2004. DSOs increased mainly because of a higher mix of international sales, but remained within our historical target range of 80 to 85 days. Inventories were $356 million and inventory turns were 4.1x at December 31, 2004, compared to $351 million and 4.3x at September 30, 2004. Total debt outstanding was $303 million at December 31, 2004, compared to $299 million at September 30, 2004. Total debt to capital decreased to 16.1% at December 31, 2004, compared to 16.4% at September 30, 2004. Cash flow used in operations was $18.8 million in the first quarter, compared to cash flow used in operations of $15.7 million in the year ago quarter. Capital expenditures were $14.0 million in the first quarter, compared to $19.6 million in the prior year quarter. It is anticipated that capital expenditures will be slightly lower than depreciation for fiscal 2005. Second Quarter Fiscal 2005 Guidance For the second quarter, sales are anticipated to range from $450 million to $480 million driven by improving trends in North America and global growth in Wireless Infrastructure, offset partially by a sequential decline of approximately $15 million to $20 million of sales in Satellite Communications due mainly to a reduced level of involvement in certain consumer broadband satellite programs. Gross margin is anticipated to increase in the second quarter due mainly to operational improvements and a favorable product mix, offset partially by higher raw material costs. Total operating expenses are anticipated to modestly increase on an absolute basis compared to the first quarter due mainly to higher expenses associated with the acquisitions of ATC and Xenicom and Sarbanes-Oxley compliance requirements. This outlook does not include any impact related to the expensing of stock options under the Financial Accounting Standards Board's Statement 123(R), which is effective for quarters beginning after June 15, 2005. The company anticipates an effective tax rate of approximately 37.5%, which does not reflect the impact of any potential repatriation of cash under the American Jobs Creation Act. Earnings per share are anticipated to range from $0.07 to $0.10, including intangible amortization and restructuring costs of approximately $0.02 per share. Diluted shares are anticipated to be approximately 181 million. "The underlying long-term trends driving network upgrades and expansion continue to be healthy and we are encouraged by the opportunities we see globally in the industry," said Faison. "Our focus remains committed to delivering sales growth above the market, improved operational performance and increased cash flow from operations in fiscal 2005." Attached to this news release are preliminary financial statements for the first fiscal quarter ended December 31, 2004. About Andrew Andrew Corporation (NASDAQ:ANDW) designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. Andrew -- http://www.andrew.com/-- headquartered in Orland Park, IL, is an S&P 500 company founded in 1937. * * * As reported in the Troubled Company Reporter on July 9, 2004, Standard & Poor's Ratings Services assigned its 'B+' rating to Andrew Corp.'s $240 million 3.25% convertible subordinated notes due Aug. 15, 2013. In addition, Standard & Poor's assigned its preliminary BB/B+ ratings to the company's $750 million Rule 415 shelf registration for senior unsecured/subordinated debt. A 'BB' corporate credit rating also was assigned to Andrew Corp. The outlook is stable. As a result of the Allen Telecom and Celiant Corp. acquisitions in July 2003 and June 2002, respectively, Andrew Corp. is one of the leading global suppliers of communications products and systems to the wireless subsystem infrastructure market. The company provides total customer solutions, including virtually all components of a wireless base station that are outsourced by major network original equipment manufacturers and operators. As of March 31, 2004, total debt outstanding was about $353 million, adjusted for operating leases. "The ratings reflect a below-average business profile due to the highly competitive and cyclical spending environment of the wireless and cable television industries in which the company operates, as well as its acquisitive growth strategy," said Standard & Poor's credit analyst Rosemarie Kalinowski. "This is partially offset by a solid financial profile for the rating and the company's strong market position in wireless infrastructure components." ASTRIS ENERGI: Completes Czech Affiliate Purchase ------------------------------------------------- Astris Energi, Inc., (OTC Bulletin Board:ASRNF) completed the purchase of its affiliate Astris s.r.o., located in the Czech Republic. The terms of the deal were agreed to in a Memorandum of Understanding signed in September 2004 and approved by Astris shareholders at Astris' Annual and Special Meeting of Shareholders on October 22, 2004. Prior to the purchase, Astris owned 30% of the shares of Astris s.r.o. The remaining 70% was owned by Macnor Corp., a company controlled by Astris President and CEO Jiri K. Nor. With the completion of this purchase, Astris now owns 100% of the issued and outstanding shares of Astris s.r.o. Under the purchase terms, Macnor received an aggregate consideration of 5,000,000 purchase units. Each purchase unit consists of one common share and one share purchase warrant. 2,000,000 of the warrants are exercisable at CDN$0.90; 2,000,000 of the warrants are exercisable at CDN$1.10; and 1,000,000 are exercisable at CDN$1.30. The warrants expire three years from the closing date. Since 1992, Astris s.r.o. has focused on AFC electrode research and development. The company owns a 1.5-acre property in Vlasim, Czech Republic with a 8,000 square foot manufacturing facility. Currently, the site is the location of Astris' pilot production line for the manufacture of its POWERSTACK(TM) MC250 fuel cells, a key component to Astris' product line of AFC-powered portable and stationary generators. "The purchase of Astris s.r.o. adds approximately CDN$2.2 million to our assets and completes a key phase of our business development plan," said Anthony Durkacz, Vice President of Finance. "This will enable us to aggressively pursue institutional funding; target large strategic partners; and develop new revenue streams from product sales and licensing." Astris Energi, Inc., -- http://www.astris.ca/-- is a late-stage development company committed to becoming the leading provider of affordable fuel cells and fuel cell generators internationally. Over the past 21 years, more than $17 million has been spent to develop Astris' alkaline fuel cell for commercial applications. Astris is commencing pilot production of its POWERSTACK(TM) MC250 technology in 2005. Astris is the only publicly traded company in North America focused exclusively on the alkaline fuel cell. Going Concern Doubt The Company has incurred several years of losses. At Sept. 30, 2004, the Company reported a deficit of $7,816,381 and continues to expend cash amounts that significantly exceed revenues. These conditions cast significant doubt as to the ability of the Company to continue in business and meet its obligations as they come due. Management is considering various alternatives, including possible private placements to raise capital in fiscal 2004. Nevertheless, there is no assurance that these initiatives will be successful. The Company's continuance as a going concern is dependent on the success of the efforts of its directors and principal shareholders in providing financial support in the short term, the success of the Company in raising additional long-term financing either from its own resources or from third parties, the commercialization of one or more of the Company's research projects and the Company achieving profitable operations. ATA AIRLINES: Gets Lease Decision Period Extended to February 25 ---------------------------------------------------------------- As previously reported, Jeffrey Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that ATA Airlines and its debtor-affiliates were lessees or sublessees with respect to a number of unexpired non-residential real property leases. As part of their restructuring efforts, the Debtors are in the process of evaluating the property covered by the Leases. The Debtors' decision with respect to each Lease depends in large part on whether the location will play a future role under the Debtors' plan or reorganization. Whether each Lease is assumed, assumed and assigned, or rejected will depend, most significantly, on whether the Debtors will continue operations at the location once a plan of reorganization is implemented. Accordingly, the Debtors ask the Court to extend the time within which they may assume, assume and assign, or reject unexpired non- residential real property leases, to and including the earlier of February 25, 2005, or the date on which a Plan is confirmed. * * * Pursuant to Section 365(d)(4) of the Bankruptcy Code, the period in which the Debtors must assume, assume and assign, or reject any and all unexpired non-residential real property leases is extended through the earlier of February 25, 2005, or the date of confirmation of a plan of reorganization. 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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Wants Plan Filing Period Extended to June 23 ---------------------------------------------------------- Since the Petition Date, ATA Airlines and its debtor-affiliates and their advisors have been evaluating all facets of their businesses and operations to determine the best method for returning value to their creditors, including analyzing leases of aircraft used in the Debtors' operations and executory contracts. Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that the Debtors undertook an auction of certain assets that culminated in the closing of a deal with Southwest Airlines Co., involving the sale of certain of the Debtors' assets at Midway Airport in Chicago, Illinois. Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the Petition Date during which a debtor has the exclusive right to file a plan of reorganization. Section 1121(d) further provides that: "On request of a party in interest . . . and after notice and a hearing, the court may for cause reduce or increase the 120- day period or the 180-day period. . . ." Mr. Nelson tells Judge Lorch that due to the complexity of the auction and sale process, the overall complexity of these Chapter 11 cases, and despite diligent efforts working towards a fair and equitable plan formulation, the Debtors will not be able to file a plan by February 23, 2005. Accordingly, the Debtors ask the United States Bankruptcy Court for the Southern District of Indiana to extend the exclusive period during which they may file a plan to and including June 23, 2005. The Debtors' motion filed with the U.S. Bankruptcy Court does not seek an extension of the exclusive period to solicit acceptances of the plan of reorganization. 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. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) AXIA NETMEDIA: Will Release 2005 Second Quarter Results Today ------------------------------------------------------------- Axia will release its fiscal Second Quarter 2005 results today, February, 2, 2005. Additionally, a conference call for the investment community will be held Thursday, February 3, 2005 at 2:30 p.m. (Eastern) and 12:30 p.m. (Mountain). Axia Chairman and CEO Art Price, President Murray Wallace and Chief Financial Officer Peter McKeown will participate. To participate in the conference call, dial (416) 640-4127 in Toronto and internationally. If you are connecting from other parts of Canada, dial 1-800-814-4857. Please call 10 minutes prior to the start of the call. In addition, a live webcast (listen-only mode) of the conference call will be available at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1004080 A replay of the conference call will be available at (416) 640-1917 or 1-877-289-8525, passcode 21110624 followed by the number sign from 4:30 p.m. (ET) February 3, 2005 to midnight (ET) Thursday, February 10, 2005, or through the webcast archives at http://www.newswire.ca/ Axia NetMedia Corporation is a leading designer, provisioner and operator of Real Broadband networks to government and enterprise customers in Canada and other parts of the world. As an "operator of operators", Axia provides Real Broadband guaranteed connectivity using a unique business model that levels the playing field for both urban and rural customers in a geographic region. Axia's high-end e-learning applications connect people with the tools and information they need to perform more effectively. Axia has 186 employees and trades on the Toronto Stock Exchange under the symbol "AXX". * * * As reported in the Troubled Company Reporter on May 28, 2004, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to industrial products manufacturer AXIA, Inc. The outlook is stable. BALL CORP: Agrees to $125 Million Accelerated Stock Buyback ----------------------------------------------------------- Ball Corporation (NYSE: BLL) has agreed to repurchase approximately $125 million of its outstanding common stock in a privately negotiated accelerated stock repurchase transaction with BNP Paribas using cash on hand and available borrowings. The transaction immediately reduces Ball's reported outstanding common stock by three million shares. The shares are subject to a market price adjustment provision which may require a payment to be made by Ball or to Ball based on the volume weighted average trading price of the company's shares over an agreed upon period of time. After Monday's transaction, approximately eight million shares remain under a stock repurchase authorization approved by the company's board of directors in July 2004. About the Company Ball Corporation is a supplier of high-quality metal and plastic packaging products to the beverage and food industries. The company also owns Ball Aerospace & Technologies Corp., which develops sensors, spacecraft, systems and components for government and commercial markets. Ball employs more than 14,000 people worldwide and reported 2004 sales of $5.4 billion. * * * As reported in the Troubled Company Reporter on Nov. 10, 2004, Fitch Ratings has affirmed the ratings for Ball Corporation's (NYSE: BLL) senior secured credit facilities and senior notes at 'BB+' and 'BB', respectively, and revised the Rating Outlook to Positive. Approximately $1.6 billion of debt is affected by these actions. The ratings are supported by BLL's leading market positions, stability of end markets and customers, steady margin performance, and strong free cash flow generation. In the past two years, BLL has successfully integrated the Schmalbach acquisition and has utilized free cash flow to improve the balance sheet. Concerns include higher share repurchases, potential leverage hikes related to acquisition activities, price pressures in the plastics and food can businesses, adverse weather conditions, and the uncertain resolution of the German Deposit Law. The Positive Outlook recognizes BLL's consistent delevering efforts, improving financial performance, and the expectation that the company will maintain current credit profile. Fitch believes the company's targeted $250 million reduction in net debt in 2004 is achievable, given its margin expansion trend and strong free cash flow generation. At the same time, Fitch expects the company to significantly increase share repurchases beyond 2004 in the absence of large acquisition opportunities, limiting further balance sheet improvement. BLL's credit profile is strong for the rating category: at September 30, 2004 on an LTM basis: * EBITDA/interest was 6.4 times (x), * total adjusted debt/EBITDA was 2.5x, and * total adjusted debt/capital was 64.5%. BANC OF AMERICA: Fitch Puts BB- Rating on $701,000 2005-1 Certs. ---------------------------------------------------------------- Banc of America Funding Corporation mortgage (BAFC) pass-through certificates, series 2005-1, are rated by Fitch Ratings: -- $193,197,087 classes 1-A-1 through 1-A-10, 30-IO, 30-PO, and 1-A-R 'AAA' (senior certificates); -- $3,304,000 class B-1 'AA'; -- $1,501,000 class B-2 'A'; -- $701,000 class B-3 'BBB'; -- $701,000 class B-4 'BB'. The 'AAA' rating on the senior certificates reflects the 3.50% subordination provided by * the 1.65% class B-1, * the 0.75% class B-2, * the 0.35% class B-3, * the 0.35% privately offered class B-4, * the 0.25% privately offered class B-5, and * the 0.15% privately offered class B-6 (B-5 and B-6 are not rated by Fitch). The ratings on the class B-1, B-2, B-3, and B-4 certificates are based on their respective subordination. Fitch believes the amount of credit enhancement will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral purchased by Banc of America Funding Corporation, the integrity of the legal and financial structures, and the master servicing capabilities of Wells Fargo Bank, N.A. (rated 'RMS1' by Fitch) and Washington Mutual Securities Corp. (rated 'RMS2+' by Fitch). The transaction consists of one group of 368 fully amortizing, fixed interest rate, first lien mortgage loans, with original terms to maturity of approximately 20-30 years. The aggregate unpaid principal balance of the pool is $200,205,119 as of Jan. 1, 2005 (the cut-off date), and the average principal balance is $544,036. The weighted average original loan-to-value ratio - OLTV -- of the loan pool is approximately 70.52%; approximately 5.7% of the loans have an OLTV greater than 80%. The weighted average coupon - WAC -- of the mortgage loans is 6.039%, and the weighted average FICO score is 721. Cash-out and rate/term refinance loans represent 25.14% and 30.84% of the loan pool, respectively. The states that represent the largest geographic concentration are: * California (49.99%), * New York (6.35%), and * Illinois (5.54%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, see the press release 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' dated May 1, 2003, available on the Fitch Ratings web site at http://www.fitchratings.com/ BAFC, a special purpose corporation, purchased the mortgage loans from: * Bank of America, N.A., * Wells Fargo Bank, N.A., * National City Mortgage Co., * Chase Home Finance LLC, * Countrywide Home Loans, Inc., * Loan City, and * American Home Mortgage and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. Wells Fargo Bank, N.A. and Washington Mutual Mortgage Securities Corp. will serve as master servicers. Wells Fargo Bank, N.A. will serve as securities administrator. Wachovia Bank, N.A. will serve as trustee. For federal income tax purposes, an election will be made to treat the trust as a real estate mortgage investment conduit. BANC OF AMERICA: Fitch Assigns Low-B Ratings on 4 Mortgage Certs. ----------------------------------------------------------------- Banc of America Mortgage Securities, Inc., series 2005-1, mortgage pass-through certificates are rated: Group 1 certificates: -- $240,024,624 classes 1-A-1 through 1-A-24, 1-A-R, 1-A- LR, 30-IO, and 30-PO 'AAA' (senior certificates); -- $3,454,000 class 30-B-1 'AA'; -- $1,233,000 class 30-B-2 'A'; -- $740,000 class 30-B-3 'BBB'; -- $494,000 class 30-B-4 'BB'; -- $370,000 class 30-B-5 'B'. Group 2 certificates: -- $76,723,652 classes 2-A-1, 15-IO, and 15-PO 'AAA' (senior certificates); -- $507,000 class 15-B-1 'AA'; -- $351,000 class 15-B-2 'A'; -- $78,000 class 15-B-4 'BB'; -- $78,000 class 15-B-5 'B'. The 'AAA' ratings on the group 1 senior certificates reflect the 2.70% subordination provided by: * the 1.40% class 30-B-1, * the 0.50% class 30-B-2, * the 0.30% class 30-B-3, * the 0.20% privately offered class 30-B-4, * the 0.15% privately offered class 30-B-5, and * the 0.15% privately offered class 30-B-6. Classes rated based on their respective subordination: * 30-B-1 'AA', * 30-B-2 'A', * 30-B-3 'BBB', * 30-B-4 'BB', and * 30-B-5 'B'. Class 30-B-6 is not rated by Fitch. The 'AAA' ratings on the group 2 senior certificates reflect the 1.70% subordination provided by: * the 0.65% class 15-B-1, * the 0.45% class 15-B-2, * the 0.25% class 15-B-3 certificates, * the privately offered 0.10% class 15-B-4, * the privately offered 0.10% class 15-B-5, and * the privately offered 0.15% class 15-B-6. Classes rated based on their respective subordination: * 15-B-1 'AA', * 15-B-2 'A', * 15-B-4 'BB', and * 15-B-5 'B'. Classes 15-B-3 and 15-B-6 are not rated by Fitch. The ratings also reflect the quality of the underlying collateral, the primary servicing capabilities of Bank of America Mortgage, Inc. (rated 'RPS1' by Fitch), and Fitch's confidence in the integrity of the legal and financial structure of the transaction. The transaction is secured by two pools of mortgage loans. Loan group 1, respectively, collateralizes the group 1 certificates. Loan group 2, respectively, collateralizes the group 2 certificates. The group 1 collateral consists of 498 recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans with original terms to stated maturity ranging from 240 to 360 months. The weighted average original loan-to-value ratio - OLTV -- for the mortgage loans in the pool is approximately 68.69%. The average balance of the mortgage loans is $495,353, and the weighted average coupon - WAC -- of the loans is 5.812%. The weighted average FICO credit score for the group is 751. Second homes constitute 5.41% and there are no investor-occupied properties. Rate/term and cash-out refinances represent 36.79% and 16.69%, respectively, of the group 1 mortgage loans. The states that represent the largest geographic concentration of mortgaged properties are: * California (49.22%), * Florida (6.82%), and * Virginia (6.72%). All other states constitute fewer than 5% of properties in the group. The group 2 collateral consists of 137 recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to two-family residential mortgage loans with original terms to stated maturity ranging from 120 to 180 months. The weighted average OLTV for the mortgage loans in the pool is approximately 61.30%. The average balance of the mortgage loans is $569,715, and the WAC of the loans is 5.320%. The weighted average FICO credit score for the group is 746. Second homes constitute 12.46%, and there are no investor-occupied properties. Rate/term and cash-out refinances represent 43.59% and 23.29%, respectively, of the group 2 mortgage loans. The states that represent the largest geographic concentration of mortgaged properties are: * California (43.73%), * Florida (13.14%), and * Illinois (7.72%). All other states constitute fewer than 5% of properties in the group. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, see the press release 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' dated May 1, 2003, available on the Fitch Ratings web site at http://www.fitchratings.com/ Banc of America Mortgage Securities, Inc., deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as two separate real estate mortgage investment conduits. Wells Fargo Bank, National Association, will act as trustee. BANC OF AMERICA: Fitch Puts Low-B Ratings on Two 2005-A Certs. -------------------------------------------------------------- Banc of America Funding Corporation's -- BAFC -- mortgage pass-through certificates, series 2005-A, are rated by Fitch Ratings: Group 4 certificates: -- $152,993,000 classes 4-A-1 'AAA' (group 4 senior certificates); -- $2,451,000 class 4-B-1 'AA'; -- $949,000 class 4-B-2 'A'; -- $632,000 class 4-B-3 'BBB'; -- $475,000 class 4-B-4 'BB'; -- $316,000 class 4-B-5 'B'. The 'AAA' rating on the group 4 senior certificate reflects the 3.25% subordination provided by classes 4-B-1 through 4-B-6. The 'AA' rating on the class 4-B-1 certificate reflects the 1.70% subordination provided by classes 4-B-2 through 4-B-6. The 'A' rating on the class 4-B-2 certificate reflects the 1.10% subordination provided by classes 4-B-3 through 4-B-6. The 'BBB' rating on the class 4-B-3 certificate reflects the 0.70% subordination provided by classes 4-B-4 through 4-B-6. The 'BB' rating on the class 4-B-4 certificate reflects the 0.40% subordination provided by classes 4-B-5 and 4-B-6. The 'B' rating on the class 4-B-5 certificate reflects the 0.20% subordination provided by class 4-B-6. Class 4-B-6 certificate is not rated by Fitch. Fitch believes the amount of credit enhancement will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral purchased by Banc of America Funding Corporation, the integrity of the legal and financial structures, and the servicing capabilities of Wells Fargo Bank, N.A. (rated 'RPS1' by Fitch), Bank of America, N.A. (rated 'RPS1'), Countrywide Home Loans Servicing LP (rated 'RPS1'), and GreenPoint Mortgage Funding, Inc. (rated 'RPS2-'). The trust is comprised of five loan groups of adjustable interest rate, fully-amortizing mortgage loans secured by first liens on one- to four-family residential properties. Loan groups 1, 2, and 3 are cross-collateralized; loan group 4 is a stand alone group; and loan group 5 is a stand alone group. Fitch did not rate the certificates collateralized by loan groups 1, 2, 3 and 5. Loan group 4 consists of 282 mortgage loans that have an original term to maturity of 360 months. The aggregate unpaid principal balance of the pool is $158,132,581.16 as of Jan. 1, 2005 (the cut-off date) and the average principal balance is $560,754. The weighted average original loan-to-value ratio - OLTV -- of the loan pool is approximately 69.90%. The weighted average coupon - WAC -- of the mortgage loans is 5.391% and the weighted average FICO score is 736. Cash-out and rate/term refinance loans represent 8.25% and 27.31% of the loan pool, respectively. The state that represents the largest geographic concentration of mortgaged properties is California (69.14%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003, entitled 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation,' available on the Fitch Ratings web site at http://www.fitchratings.com/ BAFC, a special purpose corporation, deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. Wachovia Bank, N.A. will serve as trustee and Wells Fargo Bank, N.A. will serve as securities administrator. Elections will be made to treat the trust as multiple real estate mortgage investment conduits for federal income tax purposes. BAYVIEW CAPITAL INC: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Bayview Capital, Inc. 317 Dutchmans Point Road Mantolokin, New Jersey 08738-1011 Bankruptcy Case No.: 05-12757 Chapter 11 Petition Date: January 31, 2005 Court: District of New Jersey (Trenton) Debtor's Counsel: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver, LLC 25 Abe Voorhees Drive Manasquan, New Jersey 08736 Tel: (732) 223-8484 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ James Maggs, Esq. $113,812 Maggs & McDermott 800 Old Bridge Rd Brielle, NJ 08730-1334 James Maggs, (732) 223-9870 Howard Schraub Trade debt $67,000 8746 Caminito Sueno La Jolla, CA 92037-1604 BUCKEYE TECHNOLOGIES: Moody's Puts B1 Rating on $85M Sr. Term Loan ------------------------------------------------------------------ Moody's Investors Service assigns a B1 rating to Buckeye Technologies Inc.'s (Buckeye) $85 million increase of its senior secured term loan B, affirms all other ratings, and changes outlook to stable from negative. Buckeye is amending its current bank agreement to increase the size of its existing term loan B by $85 million. Proceeds from the increased term loan along with $15 million of cash on hand will be used to repurchase all, approximately $100 million, of the company's outstanding 9.25% senior subordinated notes. Ratings affirmed are: * Senior implied rated B2 * Senior unsecured issuer rating rated Caa1 * US$150 million, guaranteed senior secured term loan B, due October 15, 2008, rated B1 * US$70 million, guaranteed senior secured revolver, due September 15, 2008, rated B1 * US$200 million, 8.5%, guaranteed senior unsecured notes, due 2013, rated B3 * US$100 million, 9.25% senior subordinated notes, due 2008, rated Caa1 * US$150 million, 8.0% senior subordinated notes, due 2010, rated Caa1 The outlook is stable. Affirmation of the B2 senior implied rating reflects Buckeye Technologies' leading position for several of its product, continued focus on cost reduction, and improved liquidity. The ratings also reflect Buckeye's relatively weak operating performance, (over the past several years) and earnings the volatility in its earnings, which is due in part to its product mix, as well as competitive pressures and industry over capacity in various segments. The change in outlook to stable from negative reflects the company's improved liquidity due in part to an improving price environment for a number of its products, a continued focus on cost reduction, and lower debt levels. The stable outlook also reflects Moody's expectation that operating performance will continue to improve, that management will continue to focus on costs and further debt reduction, while maintaining the quality of its asset base, and liquidity remains adequate. In an effort to reduce the volatility of its earnings mix Buckeye Technologies has been trying to reduce its dependence on market fluff pulp production, which accounted for approximately 18% of total sales in fiscal year 2004. However, the Company continues to have a sizeable position with 250,000 tonnes of fluff pulp, of which only 50,000 tonnes is used internally for the production of airlaid non-woven products. Significant competition and industry capacity expansion in 2001 have also lead to over capacity in airlaid non-woven products. Buckeye's aggregate operating rate for airlaid non-wovens is approximately 70%. Cotton cellulose based products have also been significantly impacted in recent years due to the decrease in use of higher quality cotton based paper. Despite having a leading market position for a number of its products the company competes against companies that are substantially larger and with greater financial flexibility such as Archer-Daniels-Midland, Borregard, Rayonier, Tembec, and Weyerhauser for specialty fibers and Ahlstrom, GP, Kimberly Clark, PGI, and Rayonier for airlaid non-wovens. Over the past three and a half years Buckeye Technologies has taken approximately $11 million in restructuring charges and $104 million in impairment charges as a result of its two phase restructuring and impairment programs to reduce costs and improve it competitiveness. Even after adjusting for these one-time items credit metrics have been very weak. Leverage has consistently been around 7.0x, with coverage below 2.0x and adjusted operating earning unable to cover interest. Buckeye Technologies has been able to generate positive free cash flow on a rolling twelve-month basis for the last several quarters, which has enabled it to reduce debt from approximately $661 million in the 4Q03 to $571 million in the 2Q05 (the company has a June fiscal year end). However, despite a recent improvement in gross margins, free cash flow has been driven in large part by capex levels that have been significantly below depreciation and a steady benefit from working capital due in part to the closure of several facilities. Although these events have enabled the company to reduce debt, these events will not sustain cash flow over the long term and the company must rely on an improved pricing environment and a continued focus on costs to improve operating performance and generate stronger credit metrics going forward. Although Buckeye Technologies is exposed to commodity type products a large percentage of its product mix is focused towards more specialty items, which tend to have less volatile pricing. These products are used in the manufacturing of LCD screens, tire cords, thickeners, and food casings (chemical cellulose), as well as more value added consumer staples such as diapers, wipes and fem care products (non-wovens and fluff pulp), in addition to filter and specialty papers including currency (customized fibers). Buckeye Technologies has also focused a significant amount of effort on cost reductions with the closure of several inefficient high cost facilities and reduced headcount from 2,200 to approximately 1,700. Closure of the Lumberton and Cork facilities should reduce working capital requirements by $14 million. The company also announced the closure of their Glueckstadt facility in Germany, which will cease operations by calendar year-end 2005. Factors that could negatively impact the ratings or outlook would be deterioration in operating performance or liquidity due in part to a weak pricing environment for its products, higher inputs costs, or increased competition, whereas a sustained improvement in credit metrics and liquidity would be positive events. Over the near term, Moody's anticipates leverage moderating below the 5.0x level with coverage exceeding 2.0x and retained cash flow before working capital approaching 10% on a sustained basis. If the Company meets or exceeds these levels on a sustained basis while maintaining the quality of its asset base and adequate liquidity the ratings and/or outlook would likely improve. Moody's believes Buckeye Technologies is likely to remain free cash flow breakeven to slightly positive over the next twelve months and although cash on the balance sheet will be modest there should be adequate availability under its $70 million revolver. Although there are restrictions under its various bond indentures limiting the amount of bank debt outstanding at anyone time the most strict limitation is under its 2010 bond indenture for $275 million, which will allow for the increase in the term loan to $185 million and the ability to draw under the revolver if needed. Buckeye Technologies, Inc., based in Memphis, Tennessee, produces and markets specialty cellulose products made from both wood and cotton, utilizing air-laid and wet-laid processes. CHESAPEAKE ENERGY: Hosting Fourth Quarter Webcast on Feb. 23 ------------------------------------------------------------ Chesapeake Energy Corporation (NYSE: CHK) has scheduled its 2004 fourth quarter and full year earnings release to be issued after the close of trading on the New York Stock Exchange on Tuesday, Feb. 22, 2005. A conference call is scheduled for Wednesday morning, Feb. 23, 2005, at 9:00 am EST to discuss the release. The telephone number to access the conference call is 913-981-5520. We encourage those who would like to participate in the call to place your calls between 8:50 and 9:00 am EST. For those unable to participate in the conference call, a replay will be available for audio playback at 12:00 pm EST on Wednesday, Feb. 23, 2005 and will run through midnight Tuesday, March 8, 2005. The number to access the conference call replay is 719-457-0820; passcode for the replay is 9640052. The conference call will also be simulcast live on the Internet and can be accessed by going directly to the Chesapeake website at http://www.chkenergy.com/and selecting "Conference Calls" under the "Investor Relations" section. The webcast of the conference call will be available on our website indefinitely. About the Company Chesapeake Energy Corporation is the sixth largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. The company's Internet address is http://www.chkenergy.com/ * * * As reported in the Troubled Company Reporter on Dec. 3, 2004, Moody's assigned a Ba3 rating to Chesapeake Energy's $600 million of 10-year senior unsecured notes, affirmed its Ba3 senior unsecured note, Ba3 senior implied, and SGL-2 liquidity ratings, and moved the outlook to positive from stable. CIRTRAN CORP: Completes Compromise Settlement with IRS ------------------------------------------------------ CirTran Corporation (OTCBB:CIRT) has completed a compromise settlement with the Internal Revenue Service, taking what it called "a major step forward" in restructuring its balance sheet. Iehab J. Hawatmeh, founder, president and CEO of CirTran, an international full-service contract manufacturer of IT, consumer and consumer electronics products, said the agreed-to $500,000 was sent to the IRS "on-schedule and in accordance" with a settlement reached late last year. "CirTran has now satisfied all of its outstanding federal tax liabilities, thus taking a major step forward in restructuring our balance sheet," he said. The IRS said it was owed $2.3 million by CirTran as of Sept. 30, 2004, when the company began the appeals process. In November 2004, it notified CirTran that its offer in compromise had been accepted. Concurrent with announcing its settlement with the IRS in November, CirTran also said it had reached agreement with Utah State Tax Commission, allowing it to pay its liability in equal monthly installments through December 2005. Mr. Hawatmeh said CirTran is "on-schedule " with these payments as well. "The difficult times endured by the IT industry worldwide took their toll on CirTran as well," said Mr. Hawatmeh. "Now we see light at the end of the tunnel, and believe that all these problems will soon be behind us. CirTran had a strong second half of fiscal 2004 and are about the progress made in the early days of 2005." About the Company CirTran Corporation (OTCBB:CIRT) -- http://www.cirtran.com/-- is a premier international full-service contract manufacturer of low to mid size volume contracts for printed circuit board assemblies, cables and harnesses to the most exacting specifications. Headquartered in Salt Lake City, CirTran's modern 40,000-square foot manufacturing facility is the largest in the Intermountain Region, providing "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities, while reducing costs and ensuring speedy time-to-market. About CirTran-Asia CirTran-Asia -- http://www.CirTran-Asia.com/-- was formed in 2004 as a high-volume manufacturing arm and wholly-owned subsidiary of CirTran Corporation with its principal office in ShenZhen, China. CirTran-Asia operates in three primary business segments: high- volume electronics, fitness equipment and household products manufacturing, focusing on being a leading manufacturer for the multi-billion dollar Direct Response Industry, which sells through infomercials, print and Internet advertisements. * * * As reported in the Troubled Company Reporter on Jan. 5, 2005, Cirtran Corporation sustained losses of $1,497,673 and $2,910,978 for the nine months ended Sept. 30, 2004, and the year ended Dec. 31, 2003, respectively. As of Sept. 30, 2004, and Dec. 31, 2003, the Company had an accumulated deficit of $19,638,953 and $18,141,280, respectively, and a total stockholders' deficit of $3,684,023 and $4,915,251, respectively. In addition, the Company used, rather than provided, cash in its operations in the amounts of $1,075,957 and $1,123,818 for the nine months ended September 30, 2004, and the year ended Dec. 31, 2003, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In addition, the Company is a defendant in numerous legal actions. These matters may have a material impact on the Company's financial position, although no assurance can be given regarding the effect of these matters in the future. CORNELL COS: Names Dr. Isabella Cunningham to Board --------------------------------------------------- Cornell Companies, Inc. (NYSE: CRN) has appointed Isabella C. M. Cunningham, Ph.D., to the Company's Board of Directors. Dr. Cunningham began her service on the board on Jan. 26, 2005. In addition, Director Marcus A. Watts has informed the Company that he will not stand for reelection to the Company's Board of Directors. Dr. Cunningham is a private consultant and has held a variety of positions in communications, marketing, law and business education in the United States and internationally. Since 1983, she has been the Ernest A. Sharpe Professor in Communication at The University of Texas at Austin. Prior to that time, Dr. Cunningham developed the first Criminal Justice Program at St. Edward's University. At that time, Dr. Cunningham worked closely with the Texas Commission on Law Enforcement Officer Standards and Education and its Director, Mr. Fred Toler, to develop academic standards for promotion and advancement of officers, and a graduate program in the Criminal Justice area. She taught several courses in that program and worked to develop specific training for peace officers. She has been published extensively in the area of business, marketing and communications. She holds a Ph.D. and a Master's Degree in Business Administration and Marketing from Michigan State University, a Master's Degree in Business Administration from Escola de Administracao de Empresas de Sao Paulo, and a Doctor of Jurisprudence Degree from Faculdade da Direito da Universidade Catolica de Sao Paulo, Brazil. Dr. Cunningham is a director of XILIX Corp. and Dupont Photomasks, Inc. Anthony R. Chase, lead director of the board of directors and chairman of the Nominating Committee, said, "We welcome Isabella to the Board. She brings with her years of experience in corporate and community service, including specific experience in the criminal justice field. We are delighted to have Isabella join us and assist with our workload. Her wealth of experience, including her marketing expertise, will benefit Cornell and we look forward to her valuable contributions in the future." Regarding Mr. Watts' decision, his term of service will end as of the Company's next annual meeting of stockholders. In connection with this decision, Mr. Watts said, "I have enjoyed my time on the board and am pleased to have been able to serve with such a distinguished group of directors." "The Company was very lucky to have had Marc on the Board. His contribution over the past four years has been invaluable. We understand his decision to not stand for reelection and wish him the best," stated Mr. Chase. About the Company Cornell Companies, Inc. is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education in an environment of dignity and respect, emphasizing community safety and rehabilitation in support of public policy. Cornell -- http://www.cornellcompanies.com/-- has 67 facilities in 16 states and the District of Columbia and 5 facilities under development or construction, including a facility in one additional state. Cornell has a total service capacity of 18,390, including capacity for 2,138 individuals that will be available upon completion of facilities under development or construction. * * * Moody's Rating Services and Standard & Poor's assigned their single-B ratings to Cornell Companies' 10-3/4% Senior Notes last year. COTT CORPORATION: Appoints Andrew Prozes to Board of Directors -------------------------------------------------------------- Cott Corporation (NYSE:COT; TSX:BCB) reported the appointment of Andrew Prozes, CEO of LexisNexis Group, to the Company's Board of Directors effective immediately. Cott's Board of Directors took the action at its regular meeting on January 27, 2005. A Canadian citizen, Mr. Prozes heads up the LexisNexis Group. LexisNexis is a leader in global legal, news and business information. A member of Reed Elsevier Group plc, LexisNexis does business in over 100 countries with approximately 14,000 employees worldwide. In addition to its flagship Web-based Lexis(R) and Nexis(R) research services, the company includes some of the world's most respected legal publishers such as Martindale-Hubbell, Matthew Bender, Butterworths, JurisClasseur, and Quicklaw. Mr. Prozes serves on the Board of Directors of Reed Elsevier. He has also held senior executive positions with Thomson Corporation and Southam Inc. "We're thrilled to welcome Andy to our Board," commented Frank Weise, chairman of Cott Corporation. "His global perspective and executive level experience with successful companies in both Canada and the U.S. will be great assets to the Board of Directors as Cott continues to expand its reach while working to improve profit performance." Mr. Prozes graduated from the first co-op mathematics class at the University of Waterloo with a degree in Computer Science. He holds an MBA from York University. Mr. Prozes graduated from the Harvard Executive Management program in Strategic Marketing. "I'm honoured to be joining Cott's Board of Directors at this time," added Mr. Prozes. "In addition to the talent and experience that my fellow directors bring to the Company, John Sheppard and his management team have a clear plan for the Company's future and I'm pleased to be a part of it." Cott Corporation is the world's largest retailer brand soft drink supplier, with the leading take home carbonated soft drink market shares in this segment in its core markets of the United States, Canada and the United Kingdom. * * * As reported in the Troubled Company Reporter on Sept. 2, 2004, Standard & Poor's Rating Services revised its outlook for Cott Corp. to positive from stable. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit and 'B+' subordinated debt ratings on Toronto, Ontario-based Cott Corp. Total debt outstanding was about US$362 million at July 3, 2004. As reported in the Troubled Company Reporter on Aug. 23, 2004, Moody's Investors Service upgraded the ratings for Cott Corporation recognizing the company's strong and consistent financial and operating performance throughout the recent past and affirming Moody's expectation of continued success over the ratings horizon. CP SHIPS: Expects $70 to $73 Million Net Income for 2004 -------------------------------------------------------- CP Ships Ltd. is in the process of finalizing its 2004 fourth quarter and annual results and plans to report these fully on February 10, 2005. Based on preliminary estimates, CP Ships expects its 2004 full year net income to be in the $70 to $73 million range, before unusual charges of $5 million. The unusual charges are for legal and other costs of the Board's Special Committee review of the August 2004 restatement and for costs of the departure of the former CEO in December 2004. In reporting third quarter results on 15th November 2004, CP Ships expected 2004 net income to be similar to 2003's $82 million before restatement. "Fourth quarter operating income before unusual charges will likely be our best quarter ever, albeit a little down on previous guidance," said Chairman Ray Miles. "So long as current industry and market conditions continue, we maintain our outlook that 2005 earnings will substantially exceed 2004." Management will host a conference call and webcast presentation with the investment community at 11:00 EST, 4:00 pm UK time on February 10. The webcast will be accessible on the CP Ships website -- http://www.cpships.com/-- where it will also be available in archive. One of the world's leading container shipping companies, CP Ships provides international container transportation services in four key regional markets: TransAtlantic, Australasia, Latin America and Asia. Within these markets CP Ships operates 39 services in 23 trade lanes, most of which are served by two or more of its brands: ANZDL, Canada Maritime, Cast, Contship Containerlines, Italia Line, Lykes Lines and TMM Lines. As of Sept. 30, 2004, CP Ships' vessel fleet was 81 ships and its container fleet 457,000 teu. Its 2003 volume was 2.2 million teu, more than 80% of which was North American exports or imports. It also owns Montreal Gateway Terminals, which operates one of the largest marine container terminal facilities in Canada. CP Ships' stock is traded on the Toronto and New York stock exchanges under the symbol TEU. It is listed in the S&P/TSX 60 Index of top Canadian publicly listed companies. * * &nb