/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/050606.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 6, 2005, Vol. 9, No. 132 Headlines 1301 CP AUSTIN: Taps Strasburger & Price as Bankruptcy Counsel 1301 CP AUSTIN: Gets Interim Okay to Use HUD's Cash Collateral ADVANSTAR COMMS: Soliciting Consents to Amend Floating Rate Notes AMERICAN REPROGRAPHICS: Moody's Lifts $86M Loan's Rating to Ba2 ANTONIO CHAMPION: Case Summary & 13 Largest Unsecured Creditors ARGOSY GAMING: Penn National Sale Update Cues S&P to Retain Watch ATA AIRLINES: Exclusive Plan Filing Period Extended to August 22 ATA AIRLINES: Appoints Francis Conway as Interim CFO ATRIUM COS: U.S. Dist. Attorney Subpoena Cues S&P's Negative Watch BANC OF AMERICA: Fitch Lowers $50M Class H Notes 3 Notches to BB- BANC OF AMERICA: Property Devaluation Cues Fitch to Lower Ratings BRASOTA: U.S. Trustee Picks 7 Creditors to Serve on Committee BRASOTA INC: State Court Receiver Files Final Report BROOKLYN HOME DIALYSIS: Voluntary Chapter 11 Case Summary C-BASS: Moody's Reviews Class B-3 Certs. Rating & May Downgrade CATHOLIC CHURCH: Court Allows Portland to Execute Easements CF CAPITAL ASSETS: Case Summary & 20 Largest Unsecured Creditors CHOICE COMMUNITIES: Wants Plan Filing Deadline Moved to Sept. 21 CLEARLY CANADIAN: Completes $5.7 Million of Equity Financing COLLEGE PROPERTIES: Voluntary Chapter 11 Case Summary COLLINS & AIKMAN: Hires John Boken as Chief Restructuring Officer COLLINS & AIKMAN: Final DIP Financing Hearing on June 20 COLLINS & AIKMAN: Hires Sitrick as Communications Consultant COMMERCIAL CAPITAL: Fitch Chips $17M Class G Notes a Notch to B- COMMERCIAL MONEY: Court Okays $1 Mil. Ameriana Bancorp Settlement CONTINENTAL AIRLINES: May 2005 Load Factor Up 4.7 Points From 2004 CONTRACTOR TECHNOLOGY: Look for Bankruptcy Schedules on June 15 CWMBS INC: Fitch Retains C Rating on Class B4 Certs. DELTA AIR: Amends Credit Agreement with GE Capital Corp. DLJ COMMERCIAL: Fitch Lifts $27M Class B-4 Certs. a Notch to BB+ EDWARD ARNOLD: Voluntary Chapter 11 Case Summary ESTEBAN DEL VALLE: Case Summary & 17 Largest Unsecured Creditors FARMLAND IND: Sues Pipeline Cos. for Breach of Utility Contract FAYE PATTERSON: Case Summary & 3 Largest Unsecured Creditors FERRO CORP: Poor Performance Prompts S&P to Lower Ratings FIBERMARK INC: Court Revises Timing for Chapter 11 Process FLINTKOTE COMPANY: Asbestos PI Committee Hires Legal Analysis FRESH CHOICE: Investors to Sponsor Proposed Reorganization Plan GLOBE-X MANAGEMENT LIMITED: Section 304 Petition Summary GRANDE COMMS: Moody's Affirms $136M Sr. Sec. Notes' Junk Rating GRAY TELEVISION: Moody's Rates New $400 Million Facilities at Ba1 HAYES LEMMERZ: Will Hold Stockholders Meeting on July 27 HIGH VOLTAGE: Committee Taps Lowenstein Sandler as Counsel HORSEHEAD IND: Selling Unimproved Real Property for $3,000,000 HOTEL ASSOCIATES: Case Summary & 4 Largest Unsecured Creditors INDYMAC MBS: Fitch Affirms Low-B Ratings on Two Security Classes J.E. GHILZON: Voluntary Chapter 11 Case Summary JACOBS ELECTRICAL: Voluntary Chapter 11 Case Summary JP MORGAN: Fitch Shaves $7.4M Class L Certs a Notch to B- KB TOYS: Bankruptcy Court Approves Plan Funding Bidding Procedures KB TOYS: Will Hold Plan Funding Auction on July 11 KAISER ALUMINUM: Exclusive Plan Filing Period Extended to June 30 KAISER ALUMINUM: Law Debenture & Liverpool Present New Argument LAIDLAW INT'L: Moody's Rates Proposed $600 Million Debt at Ba2 LAIDLAW INT'L: Soliciting Consents to Amend 10.75% Senior Notes LTX CORP: Inks New $60 Million Term Loan with Silicon Valley MM&G ASSOCIATES: Case Summary & 2 Largest Unsecured Creditors MAGRUDER COLOR: Case Summary & 20 Largest Unsecured Creditors MAJOR CONTRACTING: Voluntary Chapter 11 Case Summary MARSULEX INC: Moody's Affirms $60.7M Sr. Subord. Notes' B2 Rating METROPCS INC: Sr. Notes Offer Cues S&P to Withdraw Junk Ratings METROPOLITAN MORTGAGE: Asset Decline Cues Fitch to Lower Ratings MID-STATE RACEWAY: TrackPower Shareholders to Vote on Acquisition MIRANT CORP: $2.35 Billion Exit Financing Proposal Draws Fire MIRANT CORP: Gets Court Approval on Nine Settlement Agreements MIRANT CORP: Bayerische Opposes Substantive Consolidation MONADNOCK VIEW: Voluntary Chapter 11 Case Summary MOUNT SINAI: Moody'a Affirms $664 Million Bond Rating at Ba1 NORVERGENCE INC: State Court Dismisses Unfair Trade Practices Suit NUNET INC: Case Summary & 20 Largest Unsecured Creditors OWENS CORNING: Selling Texas Asphalt Unit to Pelican for $3.15M PARKVIEW APARTMENTS: Voluntary Chapter 11 Case Summary PETROVIC CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors PNM RESOURCES: SEC Approves TNP Enterprises Acquisition PRESIDENT CASINOS: Asset Sales Prompt Financial Filing Delay PRESTWICK CHASE: Robert J. Rock Approved as Bankruptcy Counsel PRESTWICK CHASE: APC Partners Objects to Use of Cash Collateral RAMP CORP: Files for Chapter 11 Protection in S.D. New York RAMP CORPORATION: Case Summary & 20 Largest Unsecured Creditors RAMP CORP: Faces Possible Delisting Due to Reporting Delays RECYCLED PAPERBOARD: Taps Keen to Dispose of Property in 363 Sale SECURITY CAPITAL: Has Until June 30 to File Financial Statements SENIOR CHOICE: Taps Thorp Reed as Bankruptcy Counsel SENIOR CHOICE: Wants Access to Bondholders' Cash Collateral SILGAN HOLDINGS: Moody's Rates Proposed $1 Bil. Facility at Ba3 SIRVA INC: Amends Receivable Sales Agreement with GECC & CIT TELESYSTEM INT'L: Completes $3.5 Billion Asset Sale to Vodafone TELESYSTEM INT'L: Common Shares Continue Trading on TSX TELESYSTEM INT'L: Gets Final Court Nod on Plan of Arrangement TRAVELCENTERS: S&P Rates Proposed $805 Mil. Credit Facility at BB TRAVELCENTERS OF AMERICA: Launches Cash Tender Offer for Sr. Notes U.S. ENERGY: Completes $18.8 Mil. Rocky Mountain Sale to Enterra U.S. MICROBICS: Recurring Losses Trigger Going Concern Doubt US AIRWAYS: Wants Exclusive Plan Period Stretched to June 30 USG CORP: Says Settlement Data Won't Predict Asbestos Liability VENTURE HOLDINGS: Committee to Prosecute Adversary Proceedings VERIFONE HOLDINGS: Apr. 30 Balance Sheet Upside Down by $120 Mil. WILD ABOUT HARRY'S: Case Summary & 20 Largest Unsecured Creditors WORLDCOM INC: Balks at Donald Hewitt's Motion to Lift Stay * Alvarez & Marsal Hires Chuck Bedsole as Managing Director * Construction Litigators Join Sheppard Mullin in San Francisco * BOND PRICING: For the week of May 30 - June 3, 2005 ********* 1301 CP AUSTIN: Taps Strasburger & Price as Bankruptcy Counsel -------------------------------------------------------------- 1301 CP Austin, Ltd., asks the U.S. Bankruptcy Court for the Western District of Texas for permission to employ Strasburger & Price, LLP, as its general bankruptcy counsel. Strasburger & Price is expected to: a) assist and advise the Debtor of its duties and obligations as a debtor-in-possession in the continued operation and management of its business and property; b) assist and advise the Debtor with its efforts to reorganize its business affairs and restructure its debts under chapter 11; and c) provide all other legal services that necessary and appropriate in the Debtor's bankruptcy case. Stephen A. Roberts, Esq., and Duane Brescia, Esq., are the lead attorneys from Strasburger & Price performing services for the Debtor. Mr. Roberts charges $415 per hour and Mr. Brescia charges $250 per hour. Mr. Roberts reports Strasburger & Price's professionals bill: Designation Hourly Rate ------------ ----------- Counsel $150 - $525 Legal Assistants $75 - $185 Strasburger & Price assures the Court that it does not represent any interest materially adverse to the Debtor or its estate. Headquartered in West Palm Beach, Florida, 1301 CP Austin, Ltd. -- http://www.thecrossingplace.com/-- owns and operates several apartments located in Texas and Michigan. The Company filed for chapter 11 protection on May 12, 2005 (Bankr. W.D. Tex. Case No. 05-12719). When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. 1301 CP AUSTIN: Gets Interim Okay to Use HUD's Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas gave 1301 CP Austin, Ltd., permission, on an interim basis, to use Cash Collateral securing repayment of pre-petition obligations to the United States Department of Housing and Urban Development. The Debtor tells the Court that it operates a 348-unit apartment located at 1301 Crossing Place, Austin, Texas. That apartment property was financed through an insured loan under rules and regulations promulgated by the HUD. The insured loan was extended under Section 221(d)(4) of the National Housing Act, with mortgage insurance provided by the Federal Housing Administration of HUD. A Regulatory Agreement between the Debtor and HUD limits annual distributions of net operating receipts to surplus cash available at the end of each year or semiannual period. The Debtor is the maker of a Promissory Note currently owned by HUD, payment for which is secured by the property under a Deed of Trust. The Regulatory Agreement, the Promissory Note and the Deed of Trust are collectively referred as the Loan Documents. The rents collected each month from the property constitute cash collateral under Section 363(a) of the Bankruptcy Code. That cash collateral is the primary source of the Debtor's revenue. The Debtor needs access to cash collateral securing repayment of its secured loan to HUD to avoid immediate and irreparable harm to its estate and pay its operating expenses incurred in the ordinary course of business. The Court granted the Debtor permission to use the cash collateral on an interim basis for a 60-day period, from May 1, 2005, through June 30, 2005, in strict compliance with a budget approved by the Court. A full-text copy of a three-page Monthly Budget is available at no charge at: http://bankrupt.com/misc/1301CPAustinBudget.pdf To adequately protect its interest, HUD is granted a first priority mortgage lien on the Debtor's property and all liens granted under the Court's Interim Order are deemed perfected. The Court will convene a hearing at 1:30 p.m., on June 20, 2005, to consider the Debtor's request to use the cash collateral on a permanent basis. Headquartered in West Palm Beach, Florida, 1301 CP Austin, Ltd. -- http://www.thecrossingplace.com/-- owns and operates several apartments located in Texas and Michigan. The Company filed for chapter 11 protection on May 12, 2005 (Bankr. W.D. Tex. Case No. 05-12719). Stephen A. Roberts, Esq., and Duane Brescia, Esq., at Strasburger & Price, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. ADVANSTAR COMMS: Soliciting Consents to Amend Floating Rate Notes ----------------------------------------------------------------- Advanstar Communications Inc. commenced a cash tender offer for its Second Priority Senior Secured Floating Rate Notes due 2008. Pursuant to the terms and conditions of the offer, Advanstar will purchase any and all of its outstanding Floating Rate Notes. Advanstar is also soliciting consents to proposed amendments to the indenture governing the Floating Rate Notes that would eliminate, with respect to the Floating Rate Notes only, substantially all of the restrictive covenants and certain default provisions in the indenture. The proposed amendments would also release the security interest in the collateral under the indenture and security documents with respect to the Floating Rate Notes. The tender offer will expire at 5:00 p.m., New York City time, on June 28, 2005, unless extended or terminated. The tender offer and consent solicitation are being made solely pursuant to an Offer to Purchase and Consent Solicitation Statement dated May 31, 2005, and the related Consent and Letter of Transmittal, which include a more comprehensive description of the terms and conditions thereof. Subject to the terms and conditions of the tender offer, the purchase price for each $1,000 principal amount outstanding of Floating Rate Notes validly tendered and accepted for purchase by Advanstar will be $1,043. Holders who tender their Floating Rate Notes and deliver their consents prior to 5:00 p.m. on June 13, 2005, will also receive a consent payment of $30 per $1,000 outstanding principal amount of Floating Rate Notes tendered and accepted in the offer, which will make the total consideration to be received in the Offer $1,073 for each $1,000 outstanding principal amount of Floating Rate Notes accepted in the Offer. Holders should note that, as a result of principal amortization, while each Note was issued in a face amount of $1,000, the outstanding principal amount of each Note is currently $982.50. Accordingly, a Holder will not receive $1,043 as the Tender Offer Consideration or $30 of Consent Payments in respect of each such Note, but rather an amount equal to 104.3% and 3%, respectively, of the actual outstanding principal amount of such Note. Holders whose Notes are accepted for purchase in the tender offer will also receive accrued and unpaid interest to, but not including, the Settlement Date for the tender offer. Consent Solicitation The principal purpose of the tender offer is to use a portion of the proceeds from Advanstar's sale of certain assets to QUESTEX Media Group, Inc., on May 23, 2005, to reduce Advanstar's leverage. The primary purpose of the consent solicitation is to eliminate substantially all of the restrictive and reporting covenants and certain events of default contained in the indenture with respect to the Floating Rate Notes so that any non-tendered Floating Rate Notes do not restrict the future financial and operating flexibility of the Company. The proposed amendments would also release the security interest in the collateral under the indenture and security documents with respect to the Floating Rate Notes. The tender offer and consent solicitation are conditioned upon certain general conditions described in the Statement. The tender offer is not conditioned upon obtaining consents from holders of a majority of the aggregate principal amount of Floating Rate Notes but the proposed amendments will only become operative if the Requisite Consents are received. Certain of the proposed amendments will not become operative unless the Consent of holders of at least two-thirds of the outstanding aggregate principal amount of Floating Rate Notes are received. Holders who desire to tender their Floating Rate Notes must consent to all the proposed amendments and may not deliver a consent without tendering their Floating Rate Notes. Any Floating Rate Notes tendered before the Consent Date may be withdrawn at any time on or prior to the Consent Date, but not thereafter, except as required by law. Any Floating Rate Notes tendered after the Consent Date may not be withdrawn, except as may be required by law. Credit Suisse First Boston is the exclusive Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the tender offer and consent solicitation may be directed to Credit Suisse First Boston's Liability Management Group, at 800-820-1653 or 212-538-0652 (collect). Requests for the Statement, Consent and Letter of Transmittal or other documents related to the tender offer and solicitation may be directed to the Information Agent, Morrow & Co., Inc., at 800-607- 0088 (toll free). About the Company Advanstar Communications Inc. -- http://www.advanstar.com/-- is a leading worldwide media company providing integrated marketing solutions for the Fashion, Life Sciences and Powerports industries. Advanstar serves business professionals and consumers in these industries with its portfolio of 55 expositions and conferences, 55 publications and directories, 75 electronic publications and Web sites, as well as educational and direct marketing products and services. Market leading brands and a commitment to delivering innovative, quality products and services enables Advanstar to "Connect Our Customers With Theirs." Advanstar has approximately 1,000 employees and currently operates from multiple offices in North America and Europe. * * * As reported in the Troubled Company Reporter on Apr. 8, 2005, Standard & Poor's Ratings Services revised its outlook on Advanstar Communications Inc. to negative from stable. At the same time, Standard & Poor's affirmed its existing ratings on the company, including its 'B' corporate credit rating. The Duluth, Minnesota-based business-to-business media firm, which is analyzed on a consolidated basis with its parent company, Advanstar Inc., had $753 million in consolidated debt on Dec. 31, 2004. The outlook change follows Advanstar's announcement that it is selling its trade show, publishing, and other businesses serving five sectors. Gross proceeds for these assets, which produced about 27% of the company's revenue, will total $185 million. Advanstar has not specified for what the proceeds will be used, which creates some concern. "Barring a substantial debt reduction, the lost profit from the sold assets will weaken the company's already marginal total interest coverage, modest discretionary cash flow, and high debt leverage," said Standard & Poor's credit analyst Steve Wilkinson. In addition, using the excess liquidity from the sale for acquisitions may not improve the company's business or financial profile from that which existed prior to the asset sales. AMERICAN REPROGRAPHICS: Moody's Lifts $86M Loan's Rating to Ba2 --------------------------------------------------------------- Moody's Investors Service upgraded all the credit ratings of American Reprographics Company, LLC and changed the outlook to positive. The ratings upgrade reflects a long track record of: * consistent free cash flow generation; * solid operating margins; and * substantial repayments of senior secured debt over the last year including about $60 million with the proceeds from a recent initial public offering. The positive outlook anticipates: * continued debt reduction from internal cash flow generation; * top line growth due to an increase in demand from the company's core customers in the architectural; * engineering and construction sectors; and * improving operating margins due to the relatively fixed nature of the company's expense base. Moody's upgraded these ratings: * $30 million senior secured first lien revolving credit facility due 2008, upgraded to Ba2 from B1; * $86 million senior secured first lien term loan B due 2009, upgraded to Ba2 from B1; * $158 million second lien term facility due 2009, upgraded to B1 from B3; * senior implied rating, upgraded to Ba3 from B1; and * senior unsecured issuer rating, upgraded to B2 from Caa1. The rating outlook is positive. The ratings upgrade reflects the significant debt reduction and improvement in financial performance in 2004 and the first quarter of 2005. Total debt declined from $359 million at December 31, 2003 to about $262 million at March 31, 2005. The debt reduction reflects payments made with internally generated cash flow and the application of about $60 million of proceeds from the February 2005 initial public offering by the company's parent, American Reprographics Company. The company has been a consistent generator of free cash flow. Despite a weak economy and declining rates of non-residential construction spending, free cash flow in 2002 and 2003 was $51 million and $43 million, respectively. Free cash flow improved to $55 million in 2004. The company's liquidity is solid with $7.7 million of cash and cash equivalents as of March 31, 2005 and about $28 million of availability under the $30 million revolving credit facility. After a period of modest revenue declines in 2002 and 2003, ARC showed top line growth in 2004 and the first quarter of 2005. Total and organic revenue growth in 2004 was 6.7% and 4.5%, respectively. The increase in revenues was primarily due to the stronger US economy, particularly in California, acquisition activity, new branch openings and increased market share in certain markets. The company has increased revenues in its facilities management business from $59 million in 2003 to $72 million in 2004. Profitability measures were also solid with gross and EBIT margins improving to 41% and 16%, respectively. The ratings benefit from the company's leading position as a provider of document management services to the AEC industry scale with over 180 service centers in 141 cities. The national scale gives the company significant purchasing power, the resources to service national customers and the ability to invest in its technology infrastructure. ARC utilizes its proprietary online application PlanWell and other software products to distinguish an otherwise relatively commoditized product offering. The company has completed over 80 acquisitions since 1989 and has an experienced senior management team. The ratings also reflect: * the cyclical nature of non-residential construction; * pricing pressure in the highly fragmented reprographic services market; * relatively low barriers to entry; and * geographic concentration with about 50% of revenues generated in California. The positive ratings outlook anticipates moderate revenue gains as the company benefits from improving demand from the AEC industry and continued growth in the facilities management business. Due to its substantial operating leverage, revenue growth should lead to improving operating margins and free cash flows. Moody's expects free cash flows to be utilized primarily for debt reduction and niche acquisitions. The ratings could be upgraded if the company continues to utilize free cash flows to reduce debt, maintains sustainable free cash to flow to debt in the 15%-20% range and reduces lease adjusted debt to EBITDAR to about 3.5 times. The ratings outlook would likely be changed to stable or negative if a change in the competitive climate or downturn in the AEC industry caused a material decline in revenues, operating margins and free cash flow generation. The Ba2 rating on the first lien revolver and term loan facility, notched one level above the senior implied rating, reflects strong enterprise value coverage in the event of default and loss absorption support from the second lien term facility. The B1 rating on second lien facility, notched one level below the senior implied, recognizes good enterprise value coverage in the event of default despite the effective subordination of second lien debtholders to a significant level of first security debt (including capital leases). The first and second lien credit facilities are secured by a first and second lien, respectively, on ARC's assets, including the stock and assets of its domestic subsidiaries. The company's free cash flow metrics are strong for the ratings category. Free cash flow to debt was 17% in 2004 and is expected to be in the 15%-20% range in 2005. Lease adjusted debt to EBITDAR was 4.9 times in 2004 and it is expected to decline to about 4 times in 2005. American Reprographics, a leading US reprographic service provider, is based in Glendale, California. The company reported sales of approximately $444 million in 2004. ANTONIO CHAMPION: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Antonio Marc & Yannique Nina Champion 704 Clear Spring Cove Round Rock, Texas 78664 Bankruptcy Case No.: 05-13194 Chapter 11 Petition Date: June 3, 2005 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtors' Counsel: Frederick E. Walker, Esq. Fred E. Walker P.C. 609 Castle Ridge Road, Suite 220 Austin, Texas 78746 Tel: (512) 330-9977 Fax: (512) 330-1686 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtors' 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sallie Mae Student Loans $50,095 P.O. Box 9500 Wilkes-Barre, PA 18773-9500 Mercedes Benz Credit Purchase Money $55,396 P.O. Box 685 Value of security: Roanoke, TX 76262 $39,365 Providian Financial Credit card purchases $7,090 P.O. Box 9180 Pleasanton, CA 94566 Volkswagen Credit Security Agreement $38,301 P.O. Box 3 Value of security: Hillsboro, OR 97123-0003 $31,805 Visa Credit Card Credit card purchases $3,007 Services/Bank One 225 Chastain Meadows Court Kennesaw, GA 30144 Matthew & Alana McNiel Executory Contract/ $3,000 1600 Forest Vista Cove Security Deposit Round Rock, TX 78664 Capital One Services Credit card purchases $2,819 P.O. Box 60000 Seattle, WA 98190-6000 Fred E. Walker, P.C. Attorney Fees $2,500 Attorney at Law 609 Castle Ridge Road, Suite 220 Austin, TX 78746 Lowe's Credit card purchases $686 P.O. Box 103080 Roswell, GA 30076 Lowe's Credit card purchases $681 P.O. Box 103080 Roswell, GA 30076 Velocity Credit Union Money Borrowed $250 fka AMFCU P.O. Box 1089 Austin, TX 78767-1089 Kohl's Goods and Services $83 PO Box 2983 Milwaukee, WI 53201-2983 Settle Pou Attorney for Novastar Bank $0 3333 Lee Parkway, Eighth Floor Dallas, TX 75219 ARGOSY GAMING: Penn National Sale Update Cues S&P to Retain Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services ratings on casino owner and operator Argosy Gaming Co., including its 'BB' corporate credit rating, remain on CreditWatch with negative implications where they were placed on Nov. 3, 2004. The CreditWatch listing followed the company's announcement that it had agreed to be acquired by Penn National Gaming Inc. (BB-/Positive/B-2) in a transaction valued at $2.2 billion, including the assumption of debt. The transaction is expected to close during the second half of 2005, subject to regulatory approvals. Standard & Poor's expects that Argosy's existing bank facility will be refinanced upon closing of the transaction, and that the rating on this facility will be withdrawn. Argosy's subordinated note issues carry a change-of-control provision requiring Penn to initiate a tender offer. If any of the notes remain outstanding, Standard & Poor's expects to equalize their rating with Penn's existing subordinated debt rating, as Standard & Poor's is taking a consolidated approach to the credits, given the economic and strategic importance of the acquisition to Penn. However, Penn has publicly stated they intend to tender for these notes. Once the tenders are complete, ratings on these notes would also be withdrawn. ATA AIRLINES: Exclusive Plan Filing Period Extended to August 22 ---------------------------------------------------------------- ATA Airlines, Inc. and its debtor-affiliates sought and obtained permission from the United States Bankruptcy Court for the Southern District of Indiana to extend the period during which they have the exclusive right to file a plan of reorganization to and including August 22, 2005. The Debtors will have more time to continue to work diligently towards the filing of the Plan. 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 Nos. 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. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Appoints Francis Conway as Interim CFO ---------------------------------------------------- ATA Holdings Corp. (Pink Sheets:ATAHQ) disclosed changes in its leadership team with the naming of Francis J. Conway to the position of Interim Chief Financial Officer. Mr. Conway's experience working with financially distressed companies, both from the perspective of an officer and director, as well as an advisor to such entities, is in excess of 20 years and involves dozens of transactions. With regard to his position at ATA, 47- year-old Mr. Conway will serve as the CFO on a fully dedicated basis and will work closely with ATA's leadership team as the Company continues its efforts to reorganize its operations under the protection of the U.S. Bankruptcy Code. Mr. Conway is a Managing Director with Navigant Capital Advisors, LLC, the dedicated corporate finance advisory business of Navigant Consulting, Inc. Navigant is a specialized, independent consulting firm that provides advisory services to a broad constituency of clients throughout the U.S. and abroad. At Navigant, Conway leads the firm's restructuring practice. Mr. Conway brings significant aviation industry experience to this role, including serving as financial advisor to scheduled carriers as well as an officer and director with several aircraft leasing entities. Mr. Conway has been appointed as an officer of ATA Holdings by its Board of Directors, and a retention motion has been filed with the U.S. Bankruptcy Court. Prior to assuming his role at Navigant in late 2004, Mr. Conway was a Partner at Deloitte & Touche where he served as National Managing Partner for Deloitte & Touche's Reorganization Services Group. Prior leadership roles included Managing Director and Regional Practice Leader of the Corporate Recovery Group of KPMG, and First Vice President at Lehman Brothers, where Mr. Conway specialized in workouts and restructurings involving equity investments made by Lehman clients, as well as the financial restructuring of certain merchant banking investments made by Lehman and predecessor firms. ATA's new CFO graduated from New York University with a Bachelor of Science Degree in Accounting and Management and is a Certified Public Accountant. Mr. Conway replaces ATA's CFO, Gilbert Viets, who will remain with the Company as Assistant to the Chairman and as a member of the Board of Directors. Mr. Viets will work on several projects, including the sale of the Company's subsidiary travel club, Ambassadair. George Mikelsons, CEO of ATA Holdings Corp., said, "We thank Gil for his tireless efforts during the past months and for leading ATA's reorganization to this point. We welcome Frank to the ATA leadership team as we pursue a sustainable restructuring of our operations and financial affairs, allowing the Company to ultimately emerge from bankruptcy protection." ATA also announced the appointment of Subodh Karnik to Senior Vice President and Chief Commercial Officer (CCO). He will oversee all revenue-related functions, including sales, marketing, market planning, pricing, revenue management, e-commerce and distribution. "Subodh brings a wealth of airline experience to ATA," said John Denison, CEO of ATA Airlines. "We are counting on Subodh to help ATA return to profitability in the not too distant future. Our Company is fortunate to have been able to attract Subodh to become a member of the leadership team." Mr. Karnik has 15 years of airline industry experience. His career includes a wide range of leadership positions at three major carriers, including Delta Air Lines, where he was Senior Vice President of Marketing Planning after first serving as Vice President, Finance for Corporate Development, Fleet Planning and International; Continental Airlines, where he was Staff Vice President of International Finance, CFO of subsidiary Continental Micronesia and board member of COPA Airlines; and Northwest Airlines, where he had responsibilities in alliances, international sales, revenue management and strategic planning. Mr. Karnik is a native of Mumbai, India, and graduated from the Birla Institute of Technology and Science and the University of Michigan Ross School of Business. ATA also discloses a new Managing Director of Market Planning with the addition of Mark Suman. Mr. Suman was the co-founder of Las Vegas-based National Airlines where he served as Senior Vice President of Strategic Planning and oversaw all aspects of passenger revenue generation. "We welcome Mark Suman's market planning expertise and ability to profitably allocate aircraft across the ATA network," said Stan Hula, ATA's Vice President, Planning. Mr. Suman's experience includes the successful implementation of America West's codeshare with Continental Airlines while he was Senior Director of Market Planning for America West. Prior to his airline career, Mr. Suman was Vice President of Kurth & Co, Inc. and a transportation analyst for the Civil Aeronautics Board prior to deregulation of the airline industry. He graduated from Wittenberg University with Bachelor Degrees in economics and political science. 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 Nos. 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. ATRIUM COS: U.S. Dist. Attorney Subpoena Cues S&P's Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed all its ratings, including its 'B' corporate credit rating, on Dallas, Texas-based Atrium Cos. Inc. on CreditWatch with negative implications. The rating action followed the company's announcement that it has received a subpoena from the U.S. District Attorney's office in Dallas with regard to various accounting and financial records and that Atrium's board of directors has placed its CEO on a leave of absence. Moreover, this announcement followed the recent resignation of the company's CFO on May 13, 2005. "We will continue to monitor the investigation as well as the company's liquidity position, the relationship with its creditors, and its accounting and management practices," said Standard & Poor's credit analyst Lisa Wright. "Ratings could be lowered if the company's access to liquidity is restricted or its financial profile is considerably affected by the investigation or further material adverse revelations that could severely affect its financial profile." Atrium still has not filed its 2004 financial statements because of an ongoing review of its 2003 financial statements that uncovered a number of accounting errors, which appear limited in scope at this point. Although the specific nature of the U.S. District Attorney's investigation is unclear, this chain of events raises concern and uncertainty about the company's prior management and accounting practices, investor confidence, and the ability of Atrium to access its $50 million revolving credit facility. BANC OF AMERICA: Fitch Lowers $50M Class H Notes 3 Notches to BB- ----------------------------------------------------------------- Fitch Ratings downgrades Banc of America Large Loan, Inc.'s commercial mortgage pass-through certificates, series 2002-FLT1: -- $50.1 million class H to 'BB-' from 'BBB-'; -- $11.1 million class J to 'B' from 'BB'. In addition, Fitch affirms these classes: -- Interest only classes X-1a and X-1b at 'AAA'; -- $33.7 million class C at 'AAA'; -- $27.6 million class D at 'AAA'; -- $26.0 million class E at 'AAA'; -- $22.8 million class F at 'AAA'; -- $21.2 million class G at 'AA'. The following classes have been paid in full: A-1, A-2, B, and X-2. The downgrades are due to the deterioration in the value of the office building that secures the Central Research Park loan (36.4%). The more senior classes, however, have benefited from repayments of five of the original seven loans in the transaction, resulting in a 76.7% paydown as of the May 2005 distribution date. The two remaining loans are Central Research Park, a senior participation interest in a whole loan and IHFC (63.7% of the pool), a whole loan. Central Research Park is an office property located in Sunnyvale, CA. Although the property is 92.7% occupied as of March 2005, market rents in the Sunnyvale submarket have declined dramatically since issuance. The market vacancy rate as of first quarter 2005 was 30.4%. As such, Fitch evaluated the loan with the existing above-market leases marked to market. All leases expire within three years of loan maturity. The Fitch stressed debt service coverage ratio for the senior participation interest, based on a stressed refinance constant, as of year-end December 2004, was 0.82 times (x) compared to 1.50x at issuance. Fitch is concerned with the loan's refinance risk. The borrower has exercised two extension options and the loan will mature in August 2006 with no extension options remaining. Certain structural features partially mitigate this concern: the master servicer, Wachovia Securities, currently holds a $1.5 million reserve for tenant releasing costs and the junior participation interest of $30 million, which is held outside of the trust, is in the first loss position. IHFC is a furniture showroom building in Highpoint, NC. Fitch is concerned about the potential impact of World Market Center, a 7.5 million square foot home furnishing and convention complex in Las Vegas, NV. IHFC is located in the well-established High Point market and has maintained a high occupancy and an increasing net cash flow compared to last year and since issuance. Even with a 15% vacancy stress to revenues, the Fitch stressed DSCR for TTM October 2004 remains 1.82x compared to 1.83x at issuance. The loan matures in December 2005. BANC OF AMERICA: Property Devaluation Cues Fitch to Lower Ratings ----------------------------------------------------------------- Fitch Ratings downgrades Banc of America Structured Notes, Inc.'s commercial mortgage pass-through certificates, series 2002-1: -- $36.7 million class A to 'BB+' from 'BBB+'; -- $24.5 million class B to 'B' from 'BB'. The certificates represent beneficial ownership interest in the trust, primary assets of which are two classes of Banc of America Large Loan, Inc. series 2002-FLT1 (BALL 2002-FLT1), specifically classes H and J. Although the ratings of classes A and B are highly dependent on the ratings of classes H and J, class A of this deal has more credit enhancement than class H of BALL 2002- FLT1. The downgrades are due to the deterioration in the value of the building that secures the Central Research Park loan. BRASOTA: U.S. Trustee Picks 7 Creditors to Serve on Committee ------------------------------------------------------------- The United States Trustee for Region 21 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Brasota Mortgage Company Inc. and its debtor-affiliates' chapter 11 cases: 1. Charles F. Dubs 555 S. Gulfstream Avenue Suite 1601 Sarasota, FL 34236 Tel: (941) 362-4728 2. Patrick F. Egan 7515 3rd Avenue North West Bradenton, FL 34209 Tel: (941) 795-1144 3. Ruth L. Goetz 810 Prentice Avenue Ashland, WI 54806 Tel: (715) 682-9223 4. Chester Matteucci 1000 Riverside Drive, #301B Palmetto, FL 34221 5. Richard Dennis Stripling 4312 34th Avenue East Bradenton, FL 34208 Tel: (941) 747-7240 6. Paul Vannette 1104 Cimarron Circle Bradenton, FL 34209 Tel: (941) 794-5553 7. Philip M. Weaver, Trustee Vitality Seed Company Trust 2426 Bay Dr. Bradenton, FL 34207 Tel: (941) 756-3834 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Bradenton, Florida, Brasota Mortgage Company Inc. is a full service mortgage lender. The Company and its affiliates filed for chapter 11 protection on April 4, 2005 (Bankr. M.D. Fla. Case No. 05-06215). Heath A. Denoncourt, Esq., at Hinshaw & Culbertson LLP, represents the Debtors in their restructuring efforts. Gerard A. McHale, Jr., was appointed as chapter 11 trustee on April 14, 2005. When the Company filed for protection from its creditors, it estimated more than $100 million in assets and debts. BRASOTA INC: State Court Receiver Files Final Report ---------------------------------------------------- On February 8, 2005, the Circuit Court of Manatee County, Florida, put Brasota Mortgage Inc. and its affiliates' estates under receivership at Brasota's president Gloria Morrison and vice- president Robert Coey's behest. Mrs. Morrison succeeded her husband William Morrison as company president upon his death. Mrs. Morrison found the company's finances in disarray and decided she'd put the business on the hands of a state court receiver. John R. Ray, III, was appointed as the receiver for the estates. On February 18, 2005, an involuntary chapter 7 petition was filed against Brasota by Olga Del Valle Revocable Trust, JW Balkany Family Trust and Caron Balkany Pension and Profit Sharing [Case No. 8:05-bk-02798-KRM]. On April 4, 2005, Brasota and its affiliates filed for chapter 11 protection. Three days later, three unsecured creditors (Robert E. Kirsch, William and Melvalyn Buyak and Sue Wedge) filed a motion in the U.S. Bankruptcy Court for the Middle District of Florida asking the Court to appoint a chapter 11 trustee in the Debtors' cases. The Court approved that motion and appointed Gerard A. McHale, Jr., as chapter 11 trustee. Mr. Ray delivered his final report and accounting to the U.S. Bankruptcy Court for the Middle District of Florida and has turned over control of the Debtors' businesses to the chapter 11 trustee. Mr. Ray's Final Report The Receiver oversaw the estates from February 8 to April 13. Mr. Ray's efforts were focused on three primary activities. First, Mr. Ray attempted to construct the Debtors' financial statements for 2005 in order to determined the financial condition and historical financial performance of each affiliate. Second, the Receiver began reconstructing Brasota's loan portfolio in order to implement a variety of critical operating activities for a mortgage company including: monthly mortgage payments, loan payoffs, reinstitution of collection activity on defaulted loans, and the initiation of foreclosure proceedings. To date, the Receiver reviewed 450 loan files. Third, Mr. Ray commenced an investigation and pursuit of potential asset recoveries. He was in various stages of his investigation on these potential related party transactions, including court actions against: -- The Sara Denton Umbrella Company, -- COP, LLC, -- Clancy's Restaurant, and -- Realty Reality. To date, 687 claims totaling $49,312,202 have been filed and are pending in the Bankruptcy Court. Receivership Is Expensive Mr. Ray billed Brasota $286,000 in legal fees for attorneys who represented him and the Brasota entities from February to early April. Avidity Partners, where Mr. Ray works, will receive $389,000 in fees. Broad and Cassel, the Tampa firm that handled Mr. Ray's legal affairs, also sought the bankruptcy court's approval to be paid $124,000 for services rendered from April 4 to April 29. The total cost of the receivership nears $800,000 for the three months following the company's placement into the hands of the courts. Michael C. Markham, Esq., at Johnson, Pope, Bokor, Ruppel & Burns, LLP, serves as counsel for the chapter 11 Trustee. Headquartered in Bradenton, Florida, Brasota Mortgage Company Inc. is a full service mortgage lender. The Company and its affiliates filed for chapter 11 protection on April 4, 2005 (Bankr. M.D. Fla. Case No. 05-06215). Heath A. Denoncourt, Esq., at Hinshaw & Culbertson LLP, represents the Debtors in their restructuring efforts. Gerard A. McHale, Jr., was appointed as chapter 11 trustee on April 14, 2005. When the Company filed for protection from its creditors, it estimated more than $100 million in assets and debts. BROOKLYN HOME DIALYSIS: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Brooklyn Home Dialysis Training Center Inc. 3131 Kings Highway, Suite 1-A Brooklyn, New York 11234 Tel: (718) 692-0097 Bankruptcy Case No.: 05-18896 Type of Business: The Debtor operates a health care facility for kidney dialysis patients. Chapter 11 Petition Date: June 2, 2005 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Robert P. Herzog, Esq. 150 East 69th Street, Suite 24-K New York, New York 10021 Tel: (212) 725-0001 Fax: (212) 535-4165 Financial Condition as of December 31, 2004: Total Assets: $1,707,000 Total Debts: $1,415,000 The Debtor did not file a list of its 20 Largest Unsecured Creditors. C-BASS: Moody's Reviews Class B-3 Certs. Rating & May Downgrade --------------------------------------------------------------- Moody's Investors Service has placed one tranche issued by C-Bass 2002-CB5 Trust on review for downgrade. The underlying collateral consists of subprime residential mortgage loans. The certificates are being placed on review for downgrade based upon the poorer than anticipated performance of the underlying mortgage pool. Complete rating actions are: Issuer: C-Bass 2002-CB5 Trust Review for Downgrade: * Class B-3, Currently: Ba1 CATHOLIC CHURCH: Court Allows Portland to Execute Easements ----------------------------------------------------------- As previously reported in the Troubled Company Reporter on Mar. 8, 2005, the Archdiocese of Portland seeks authority from the U.S. Bankruptcy Court for the District of Oregon to execute: (a) in favor of PacifiCorp, an Oregon Corporation, a Right of Way Easement for an area of parish property to provide additional electric service to Holy Redeemer School on North Portland; and (b) a Grant of Easement for Road and Right of Way Purposes, in favor of Clackamas County, over Gethsemani Cemetery property, in exchange for frontage improvements to the cemetery. PacifiCorp Holy Redeemer Church requires additional electrical service for its school located at 127 N. Portland Boulevard. To provide additional service, PacifiCorp requires an easement for right of way over an area approximately 10 feet by 225 feet of parish property owned by Holy Redeemer Church, but as to which record title is in the name of the Archdiocese. Holy Redeemer Church is and will be responsible for the costs of the improvements and for all amounts owed to PacifiCorp as a result of the electrical improvements. * * * The U.S. Bankruptcy Court for the District of Oregon authorizes the Archdiocese of Portland in Oregon to grant a way of easement to PacifiCorp regarding electrical service to Holy Redeemer School. Judge Perris approves the terms, conditions, and transactions contemplated by the request, including the transfer of the Archdiocese's interest in the property regarding the PacifiCorp easement. The transfer of Portland's interest, if any, in the property is likewise approved and authorized. Judge Perris rules that the portion of the Debtors' request concerning easement for road and right-of-way purposes at Gethsemani Cemetery is continued pending the Archdiocese's submission of a declaration by Delia Wilson, Portland's property manager, concerning the factual basis for the request. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. (Catholic Church Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) CF CAPITAL ASSETS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: CF Capital Assets LLC aka Convenient Food Mart 467 North State Street Painesville, Ohio 44077 Bankruptcy Case No.: 05-11557 Type of Business: The Debtor operates a convenience store. Chapter 11 Petition Date: June 2, 2005 Court: District of Delaware Debtor's Counsel: Michael David Debaecke, Esq. Blank Rome LLP 1201 Market Street, Suite 800 Wilmington, Delaware 19899 Tel: (302) 425-6400 Fax: (302) 425-6464 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Lyden Oil Company $465,345 3711 LaHarps Road Youngstown, OH 44515 Michael A. Shore $73,878 23230 Chagrin Boulevard Beachwood, OH 44122 J.D.S. Properties $43,691 19107 Old Detroit Road Rooky River, OH 44116 James Rokakis $39,893 Cuyahoga County Treasurer 1219 Ontario Street Cleveland, OH 44113 Carmen Savarino $19,927 Associated Agencies, Inc. $16,498 Cuyahoga County Treasurer $14,003 HV9, Inc. $13,500 Columbo Enterprises $13,141 Musca Properties, LLC $13,028 RGIS Inventory Specialist $12,025 Friduss, Lukes, Schiff & Company, P.C. $12,000 McSteen & Associates $11,000 Caveli & Associates CPA, LLC $10,450 Ambassadors Holding, LLC $10,438 Woodrow Jedlicka $10,000 Gross Shuman Brizdle & Gilfillan, P.C. $8,949 Con Inc. $8,812 Klondike Limited Partnership, LP $8,036 Dartmoor Plaza $7,869 CHOICE COMMUNITIES: Wants Plan Filing Deadline Moved to Sept. 21 ---------------------------------------------------------------- Choice Communities asks the U.S. Bankruptcy Court for the District of Maryland to extend the time within which it has the exclusive right to file a reorganization plan to Sept. 21, 2005. The Debtor also asks the Court to extend the period within which it has the exclusive right to solicit acceptances of a chapter 11 plan to Nov. 20, 2005. Diarmuid F. Gorham, Esq., at Shapiro Sher Guinot & Sandler, in Baltimore, Maryland, tells the Court that after its chapter 11 filing, the Debtor was faced with: (1) complicated bond issues, (2) a liquidity crisis that demanded that the Debtor find sufficient cash immediately to continue providing an appropriate level of care to its existing patients, (3) the need to find new sources of admissions to keep the Debtor's beds full given the intrinsically high nature of turnover in the health care industry, and (4) the challenge of retaining employees and addressing employment issues, all while working with its professionals to ensure that it was complying with all of the requirements of Chapter 11. Nevertheless, since the Petition Date, the Debtor has stabilized its operations, held talks with a potential refinancing source, and has also explored the possibility of proposing a stand-alone plan of reorganization. The Debtor has been working with its creditors, has secured DIP financing and has obtained authorization for use of cash collateral. The Honorable Duncan W. Keir extended the exclusive filing period until he can decide on the Debtor's request. Bankruptcy Court documents does not yet indicate when the Court will hear the request. Headquartered in Baltimore, Maryland, Choice Communities, Inc., owns and operates a licensed 180-bed nursing facility. The Company filed for chapter 11 protection on Jan. 24, 2005 (Bankr. D. Md. Case No. 05-11536). Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and estimated debts between $10 million to $50 million. CLEARLY CANADIAN: Completes $5.7 Million of Equity Financing ------------------------------------------------------------ Clearly Canadian Beverage Corporation (OTCBB:CCBEF) completed the final portion of its $5.7 million financing. Clearly Canadian is also pleased to announce the appointment of Matthew J. Hoogendoorn, CA, CPA (Illinois), as the Chief Financial Officer of the Company. Mr. Hoogendoorn has been a chartered accountant for 27 years, and is a partner with Hoogendoorn Vellmer, Chartered Accountants. In addition to his accounting expertise, Mr. Hoogendoorn brings to the Company a great deal of experience in strategic financial planning. "I am pleased to report that the key elements to our restructuring and refinancing are now complete. Having raised in excess of $5.7 million in equity financing, the Company believes that it has established a firm foundation to support its current operations and future growth, and the addition of Matt Hoogendoorn to the Clearly Canadian team will be a great benefit to the Company as we move forward," said Douglas L. Mason, President and C.E.O. of Clearly Canadian Beverage Corporation. "We are extremely pleased that BG Capital has recognized the depth and value of Clearly Canadian's commitment to broadening distribution and availability of brand Clearly Canadian and to exploring profitable alternatives to further utilize the Clearly Canadian brand name. BG Capital shares our vision and supports our plans for growth," said Mason. Summary of Company Matters On Feb. 18, 2005, the Company completed its short-term financing arrangement with BG Capital Group Ltd, in which BG Capital advanced $1,000,000 to Clearly Canadian under a secured loan agreement. On Apr. 5, 2005, the Company concluded an agreement with BG Capital pursuant to which BG Capital agreed to subscribe for $1,000,000 of preferred shares and agreed to convert its $1,000,000 secured loan into preferred shares, each at a price of $1. per preferred share. Concurrently the Company reported its restructuring plan, as well as an additional common share private placement of US$3,000,000. On May 2, 2005, the Company's shareholders approved the Company's corporate restructuring plan. On May 4, 2005, the Company completed its reverse split (consolidation) on a 10 old for 1 new share basis and, effective May 5, 2005, the common shares of the Company began trading on the OTCBB on a post-consolidated basis under the new trading symbol CCBEF. On May 10, 2005, the Company completed its $1,000,000 preferred share equity financing with BG Capital (1,000,000 Class A Preferred shares issued at US$1.00 per preferred share) and the conversion of the $1,000,000 BG Capital Loan into preferred shares (1,000,000 Class A shares issued at US$1.00 per preferred share). On May 24 & 25, 2005, the Company completed: (1) $1,010,000 brokered private placement with Standard Securities Capital Corporation (1,010,000 common shares issued at US$1 per share); (2) $2,065,00 non-brokered private placement (2,065,000 commons shares issued at $1.00 per share); (3) the exchange by BG Capital of its 2,000,000 Class A preferred shares for 2,000,000 Class B preferred shares; and (4) the Company's reduction of its previous eight member board of directors to five members, three of whom are nominees of BG Capital. On June 2, 2005, the Company closed an additional non-brokered private placement for gross proceeds of $635,953. A total of 635,953 common shares were issued at $1.00 per share. Directors, officers, and employees of the Company subscribed for 585,953 shares. Prior to this additional financing, the Company redeemed all of its outstanding convertible debentures and debenture holders who held a majority of the debentures reinvested their debenture redemption proceeds in this private placement. About BG Capital BG Capital Group is a merchant bank specializing in small to mid- cap growth opportunities. Its holdings include 100%, 50% and largest shareholder positions in numerous public and private companies throughout the United States and Canada. BG Capital has over 20 years of investor relations experience as well as in-depth marketing and financial management expertise. It has an incredible track record of success in identifying promising enterprises and profitably growing them with an effective hands-on management style. About Clearly Canadian Beverage Corporation Based in Vancouver, B.C., Clearly Canadian Beverage Corporation -- http://www.clearly.ca/-- markets premium alternative beverages and products, including Clearly Canadian(R) sparkling flavoured water and Clearly Canadian O+2(R) oxygen enhanced water beverage, which are distributed in the United States, Canada and various other countries. At Mar. 31, 2005, Clearly Canadian Beverage Corporation's balance sheet showed a $4,286,000 stockholders' deficit, compared to a $3,515,000 deficit at Dec. 31, 2004. COLLEGE PROPERTIES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: College Properties 1 & 2 Limited Partners 100 West Camelback, Suite 106 Phoenix, Arizona 85013 Bankruptcy Case No.: 05-10095 Chapter 11 Petition Date: June 3, 2005 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: John T. Ryan, Esq. 3440 North 16th Street, Suite 5 Phoenix, Arizona 85016 Tel: (602) 264-6928 Fax: (602) 279-0758 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. COLLINS & AIKMAN: Hires John Boken as Chief Restructuring Officer ----------------------------------------------------------------- Joseph M. Fischer, Esq., at Carson Fischer, P.L.C., in Birmingham, Michigan, relates that KZC Services, LLC, an affiliate of Kroll Zolfo Cooper LLC, is one of the world's leading financial advisory, interim management, litigation support and forensic accounting firms, with a team of 500 restructuring, litigation and forensic specialists in North America and Europe. KZC has served as interim managers and financial advisors in financially complex bankruptcies and workouts involving billions of dollars in debt. Moreover, the firm has a reputation for quality and breadth of experience and a proven track record for success, earned by serving clients in numerous nationally prominent bankruptcy proceedings. By this motion, the Debtors ask the Court to approve a service agreement dated May 17, 2005, with KZC and John R. Boken, a KZC employee and managing director at Kroll Zolfo Cooper. The Debtors believe that the KZC and Mr. Boken are well qualified to assist them in their Chapter 11 restructuring cases. The salient terms of the Services Agreement are: A. Engagement KZC will serve as an independent contractor to the Debtors. The firm will provide Mr. Boken and additional individuals to assist the Debtors in their restructuring efforts. B. Duties The firm will assign Mr. Boken to serve as the Debtors' Chief Restructuring Officer and the Associate Directors of Restructuring to perform other services that will be required of the firm. The firm and Mr. Boken will be authorized to make decisions with respect to all aspects of the management and operation of the Debtors' business. Mr. Boken will keep the Debtors' Board of Directors fully apprised of his findings, plans and activities. C. Term The term of the Service Agreement will be retroactive to the Petition Date and will continue on a month-to-month basis until terminated by either party at the end of the month. The firms' services will start only after Court approval of the Service Agreement. D. Compensation KZC will charge the Debtors for its services at these standard hourly rates: Managing Directors $615 - $760 Professional Staff $125 - $610 Support Personnel $50 - $225 The rates will be adjusted on July 1, 2005. The firm will receive a $5,000,000 Consummation Fee, payable in cash or other immediately available funds upon confirmation of: (i) a Chapter 11 plan of reorganization on or before two years from the Petition Date; and (ii) a sale of substantially all of the Debtors' assets on or before two years from the Petition Date. In the event that a confirmation does not occur on or before two years from the Petition Date, the Consummation Fee will be reduced quarterly by $200,000 on the last day of each quarter thereafter until the terms set forth in the Services Agreement are met. However, in no event will the Consummation Fee be less than $4,000,000. The firm will receive reimbursement of all reasonable out-of- pocket expenses. The Debtors will pay the firm a security retainer prior to the commencement of its activities. The firm will hold the security retainer throughout the duration of its employment. The firm has already received a $750,000 prepetition retainer, which will be returned to the Debtors upon payment in full of the firm's outstanding invoices or applied to any outstanding invoices at the conclusion of the firm's engagement. E. Indemnification The Debtors will indemnify and hold harmless Mr. Boken, KZC, including its principals and other employees and representatives or agents, to the fullest extent permitted under: (i) the Debtors' Articles of Incorporation and By-laws; (ii) the laws of the State of Delaware; and (iii) any Court order providing for indemnification of the persons engaged in the Debtors' reorganization proceedings. Mr. Boken assures the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 04; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Final DIP Financing Hearing on June 20 -------------------------------------------------------- The Debtors and JPMorgan Chase Bank, N.A., in its capacity as Agent for the DIP Lenders and Prepetition Agent for the Prepetition Secured Lenders, agreed on the record at the First Day Hearing to stipulate to certain amendments and modifications to the DIP Interim Financing Order. The parties agree that all committees appointed in the Debtors' Chapter 11 cases will be permitted to use up to $200,000 to perform investigations regarding and object, contest or raise any defense to, the validity, perfection, extent or enforceability of any amount due under the DIP Documents or the Existing Agreements, or Court-approved liens or claims, and assert any Claims or Defenses or causes of actions against JPMorgan, the DIP Lenders, and the Prepetition Secured Lenders. The Court will hold a final hearing to consider the Debtors' request to incur postpetition indebtedness at 10:00 a.m., on June 20, 2005. Objections to the Debtors' request must be filed by June 15, 2005, at 4:00 p.m., prevailing Eastern time. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 04; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Hires Sitrick as Communications Consultant ------------------------------------------------------------ The Debtors seek the Court's authority to employ Sitrick and Company, Inc., as corporate communications consultant. The Debtors need Sitrick to: -- develop and implement communications programs and related strategies and initiatives for communications with the Debtors' key constituencies including customers, employees, vendors, shareholders and the media, regarding the Debtors' operations and financial performance and the Debtors' progress through the Chapter 11 process; -- develop public relations initiatives for the Debtors to maintain public confidence and internal morale during these cases; -- prepare press releases and other public statements for the Debtors, including statements relating to major Chapter 11 events; -- prepare other forms of communication to the Debtors' key constituencies and the media, potentially including materials to be posted on the Debtors' Web sites; and -- perform other communications consulting services as may be requested by the Debtors. The Debtors believe that Sitrick is particularly well suited to serve as their corporate communications consultants. Sitrick specializes in addressing sensitive business situations that require communications strategies targeted to a variety of constituencies, including customers, employees, vendors, shareholders, bondholders and the media. The Debtors also explain that Sitrick has substantial experience providing corporate communications services to large corporations in connection with both in- and out-of-court restructurings. Sitrick served as lead corporate communications consultant in numerous cases under the Bankruptcy Code, including the Chapter 11 cases of Conseco, USG Corporation, US Airways Group, America West Airlines, Solutia Inc., Eddie Haggar Limited, Inc., Fine Host Corporation, FoxMeyer Corporation, Purina Mills, Inc., and Service Merchandise Company, Inc. Sitrick also is familiar with the Debtors' current corporate communications needs. Immediately prior to the Petition Date, Sitrick assisted in the development and implementation of a comprehensive communications strategy designed to facilitate the smooth transition of the Debtors' operations into Chapter 11. Pursuant to this communications strategy, the Debtors, among other things, (a) made public announcements of the commencement of these cases and (b) made other communications to all relevant audiences. Through these and other ongoing activities, Sitrick's professionals have worked closely with the Debtors' management, internal communications staff and other professionals and have become well acquainted with the Debtors' corporate communications needs. The Debtors intend to compensate Sitrick on an hourly basis in accordance with its ordinary and customary hourly rates and reimburse the firm's actual and necessary out-of-pocket expenses. The Sitrick professionals that will primarily provide the services and their hourly rates are: Sandra Steinberg $550 Steven Goldberg $395 Giovanna Falbo $245 Meaghan Repko $185 The Debtors also propose to indemnify Sitrick for any liabilities, costs and expenses incurred in connection with the services to be rendered by Sitrick unless the amounts are judicially determined to have resulted from Sitrick's gross negligence or willful misconduct. Steven Goldberg, a member of Sitrick, discloses that prior to the Petition Date, Sitrick received an advance payment retainer of $90,000 from the Debtors' operating funds. The remaining balance of the advance payment retainer is approximately $36,000 after giving effect to payment of certain prepetition fees and expenses paid from the retainer. The Debtors have agreed that any portion of the advance payment retainer not used to compensate Sitrick or its prepetition services and expenses ultimately will be used by Sitrick to apply against postpetition bills. Any funds remaining from the retainer will be returned to the Debtors' estates. As of the Petition Date, the Debtors did not owe Sitrick any amounts for prepetition services rendered, according to Mr. Goldberg. Mr. Goldberg further informs the Court that the firm has provided services to Golden Tree Asset Management, Black Diamond Capital Management and Canyon Capital Advisors LLC in matters unrelated to the Debtors' cases. Nonetheless, Mr. Goldberg assures the Court that Sitrick neither holds nor represents any interest adverse to the Debtors or their estates. The firm is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 04; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMMERCIAL CAPITAL: Fitch Chips $17M Class G Notes a Notch to B- ---------------------------------------------------------------- Commercial Capital Access One, Inc.'s commercial mortgage series 3, is downgraded by Fitch Ratings: -- $17.3 million class G to 'B-' from 'B'. In addition, Fitch upgrades this class: -- $43.4 million class B to 'AA+' from 'AA'. Fitch affirms these classes: -- $183.7 million class A2 at 'AAA'; -- $100,000 class X at 'AAA'; -- $43.4 million class C at 'A'; -- $19.5 million class D at 'BBB'; -- $6.5 million class E at 'BBB-'; -- $10.8 million class F at 'BB'; Fitch does not rate class H. Class A-1 has paid off in full. The downgrade is attributable to the expected losses on several of the specially serviced loans. Currently there are three loans (14.5%) in special servicing with losses expected on two (13.5%). The upgrade is the result of improved credit enhancement levels from principal paydown and loan payoff. As of the May 2005 distribution report, the transaction has paid down 21.9% to $338.6 million from $433.7 million at issuance. Bank of New York, as master servicer, is not required and does not prepare a watch list for the portfolio. In addition, the transaction has historically been slow to report financials. 34% of the remaining pool is covered by a limited guaranty provided by Sun America, Inc. The guaranty requires Sun America to pay the special servicer, on behalf of the trustee, an amount equal to any realized losses arising from specially serviced loans, or to purchase the specially serviced loans directly from the trust. Prior losses have reduced the outstanding coverage from $14.4 million at issuance to approximately $11.3 million. There are three loans (14.5%) in special servicing. The largest loan in special servicing (9.63%) is secured by a 618,899 square foot (SF) office property located in St. Paul, MN. The loan transferred to the special servicer due to monetary default. A forbearance agreement was negotiated at the time but the borrower failed to perform under the requirements. The loan is 90 days delinquent and some losses are possible upon liquidation. The second largest loan in special servicing (2.1%) is secured by a 230-room limited-service hotel located in Sandston, VA. The loan transferred to special servicer due to monetary default and became real estate owned (REO) in the end of year 2003. The property is being marketed for sale. Recent appraisal values indicate a potential loss upon the disposition of this asset. COMMERCIAL MONEY: Court Okays $1 Mil. Ameriana Bancorp Settlement ----------------------------------------------------------------- Ameriana Bancorp (NASDAQ/NM:ASBI) reached a settlement with the Bankruptcy Trustee in the Commercial Money Center, Inc., bankruptcy proceedings, which has now been approved by the bankruptcy court. The agreement will result in a recovery of approximately $1 million. The Company expects to receive the money within the next 10 days. The anticipated settlement amount reflects actual collections to date on leases that were part of two pools of equipment leases, the income streams of which were purchased by Ameriana in 2001 for approximately $12 million. CMC, an equipment-leasing company, originated and sold the lease pools. The initial servicer of the lease pools was Commercial Servicing Corporation. Each lease in the two pools was backed by a surety bond issued by either American Motorist Insurance Company or RLI Insurance Co., guaranteeing payment of all amounts due under the leases in the event of default by the lessee. CMC and CSC declared bankruptcy over two years ago, resulting in a $10.9 million charge-off by Ameriana on its remaining investment. Ameriana subsequently filed claims in the CMC/CSC bankruptcies, and the Trustee in bankruptcy filed adversary proceedings against Ameriana. The agreement reported to settle the litigation involving Ameriana, together with approximately 18 other banks, and the Trustee, will dismiss all adversary proceedings against Ameriana and will pay to Ameriana all funds collected from the RLI lease pool by the current servicer, U.S. Bancorp. In late 2004, Ameriana settled its litigation against AMICO with respect to the pool it had guaranteed, recovering $2.3 million. Ameriana continues to pursue its litigation against RLI to collect on the surety bond it issued on the other pool. About Ameriana Bancorp Ameriana Bancorp is a bank holding company. Through its wholly owned subsidiary, Ameriana Bank and Trust SB, the Company offers an extensive line of banking services and provides a range of investments and securities products through branches in the central Indiana area. As its name implies, Ameriana Bank and Trust SB also offers trust and investment management services. The Bank has interests in Family Financial Holdings, Inc. and Indiana Title Insurance Company, and owns Ameriana Insurance Agency, a full-service insurance agency. Commercial Money Center, Inc., filed for chapter 11 protection on May 30, 2002 in the U.S. Bankruptcy Court for the Southern District of Florida. The Case was converted into a chapter 11 proceeding on June 28, 2002. The Florida Bankruptcy Court ordered that all collections by the servicers and sub-servicers under the leases be paid in escrow to the bankruptcy trustee pending final resolution of rights to those collections. On Sept. 18, 2002, the Florida Court transferred the Debtor's chapter 11 case to the U.S. Bankruptcy Court for the Southern District of California (Case No. 02-09721). CONTINENTAL AIRLINES: May 2005 Load Factor Up 4.7 Points From 2004 ------------------------------------------------------------------ Continental Airlines (NYSE: CAL) reported a May 2005 consolidated (mainline plus regional) load factor of 79.1 percent, 4.7 points above last year's May consolidated load factor, and a mainline load factor of 79.8 percent, 5.1 points above last year's May mainline load factor. The carrier reported a domestic mainline load factor of 81.2 percent, 6.1 points above May 2004, and an international mainline May load factor of 78.0 percent, 3.8 points above May 2004. All four were operational records for May. During the month, Continental recorded a U.S. Department of Transportation on-time arrival rate of 83.7 percent and a systemwide mainline completion factor of 99.8 percent. In May 2005, Continental flew 6.7 billion consolidated revenue passenger miles (RPMs) and 8.4 billion consolidated available seat miles (ASMs), resulting in a traffic increase of 10.8 percent and a capacity increase of 4.2 percent as compared to May 2004. In May 2005, Continental flew 5.9 billion mainline RPMs and 7.4 billion mainline ASMs, resulting in a mainline traffic increase of 9.8 percent and a mainline capacity increase of 2.8 percent as compared to May 2004. Domestic mainline traffic was 3.4 billion RPMs in May 2005, up 7.9 percent from May 2004, and domestic mainline capacity was 4.1 billion ASMs, down 0.3 percent from May 2004. For the month of May 2005, consolidated passenger revenue per available seat mile (RASM) is estimated to have increased between 8.5 and 9.5 percent compared to May 2004, while mainline passenger RASM is estimated to have increased between 9.0 and 10.0 percent compared to May 2004. The principal factor contributing to Continental's improved estimated RASM performance for May 2005 versus May 2004 was load factor improvement versus the prior period. Also contributing to the estimated RASM performance was the impact of recent domestic fare increases and the carrier's actions to appropriately revenue manage the emerging trend of customers booking closer in to flight dates, to improve the mix of local versus flow traffic, and to reduce its discounting. For April 2005, consolidated passenger RASM increased 2.2 percent compared to April 2004 and mainline passenger RASM increased 2.4 percent from April 2004. Continental's regional operations (Continental Express) set a record May load factor of 73.7 percent, 1.9 points above last year's May load factor. Regional RPMs were 739.3 million and regional ASMs were 1,002.6 million in May 2005, resulting in a traffic increase of 19.3 percent and a capacity increase of 16.2 percent versus May 2004. Continental Airlines -- http://continental.com/-- is the world's sixth-largest airline, serving 128 domestic and 111 international destinations -- more than any other airline in the world -- and serving nearly 200 additional points via codeshare partner airlines. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 51 million passengers per year. FORTUNE ranks Continental one of the 100 Best Companies to Work For in America, an honor it has earned for six consecutive years. FORTUNE also ranks Continental as the top airline in its Most Admired Global Companies in 2004. * * * As reported in the Troubled Company Reporter on Apr. 25, 2005, Standard & Poor's Ratings Services lowered its ratings on selected enhanced equipment trust certificates (EETCs) of Continental Airlines Inc. (B/Negative/B-3) as part of an industrywide review of aircraft-backed debt. Those and EETC ratings that were affirmed were removed from CreditWatch, where they were placed with negative implications Feb. 24, 2005. "The rating actions reflect Standard & Poor's concern that repayment prospects for holders of aircraft-backed debt could suffer in a potential scenario of further multiple bankruptcies of large U.S. airlines weakened by high fuel prices and intense price competition," said Standard & Poor's credit analyst Philip Baggaley. "Downgrades of EETCs were focused on debt instruments that would be hurt in such a scenario, particularly debt backed by aircraft that are concentrated heavily with large U.S. airlines and junior classes that would be at greater risk in negotiated restructurings or sale of repossessed collateral," the credit analyst continued. As reported in the Troubled Company Reporter on Feb. 28, 2005, Standard & Poor's Ratings Services placed its single-B ratings on Continental Airlines Inc. equipment trust certificates and enhanced equipment trust certificates on CreditWatch with negative implications. S&P's rating action does not affect issues that are supported by bond insurance policies. "The CreditWatch review is prompted by Standard & Poor's concern that a prolonged difficult airline industry environment, characterized by high fuel prices, excess capacity, and intense price competition in the domestic market, has weakened the financial condition of almost all U.S. airlines and increased the risk of widespread simultaneous bankruptcies," said Standard & Poor's credit analyst Philip Baggaley. CONTRACTOR TECHNOLOGY: Look for Bankruptcy Schedules on June 15 --------------------------------------------------------------- Contractor Technology, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Texas for more time to file its Schedules of Assets and Liabilities, Statements of Financial Affairs, and Lists of Executory Contracts and Unexpired Leases. The Debtor wants until June 15, 2005, to file those documents. The Debtor explains that it needs more time because its financial situation is complex, with over 500 creditors and a significant amount of personal property. The Debtor relates that on May 25, 2005, the company's Chief Financial Officer, Steven Goldwitz, was hospitalized with chest pains and heart attack like symptoms. Mr. Goldwitz was working with the Debtor's counsel to complete the Schedules and Statements at the time he was hospitalized. Mr. Goldwitz is currently recuperating and the Debtor anticipates that with his contribution, the preparation and completion of the Schedules and Statements can be finished on or before June 15. Headquartered in Houston, Texas, Contractor Technology, Ltd. -- http://www.ctitexas.com/-- is a producer of recycled concrete and asphalt. The Company filed for chapter 11 protection on May 13, 2005 (Bankr. S.D. Tex. Case No. 05-37623). Gregory R. Travis, Esq., at The Travis Law Firm, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. CWMBS INC: Fitch Retains C Rating on Class B4 Certs. ---------------------------------------------------- Fitch Ratings has taken these rating actions on the CWMBS (IndyMac) Inc. mortgage pass-through certificates: CWMBS (IndyMac), mortgage pass-through certificates, series 2000-G (RAST 2000-A7): -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA; -- Class B2 affirmed at 'AA'; -- Class B3 downgraded to 'C' from 'CCC'; -- Class B4 remains at 'C'. CWMBS (IndyMac), mortgage pass-through certificates, series 2000-H (RAST 2000-A8): -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'B'. The affirmations on the above classes reflect credit enhancement consistent with future loss expectations and affect approximately $25.2 million of outstanding certificates. The downgrades on class B3 of Series 2000-G (RAST 2000-A7) was taken due to the losses incurred and the delinquencies in relation to decreasing credit support provided by class B4 and affect $1,806,874 of outstanding certificates. As of the May 25, 2005 distribution, there have been $4.6 million in cumulative losses and 40.50% of outstanding loans are in the 90+ day delinquency bucket (including foreclosure and REO). Fitch will continue to continue to closely monitor these deals. For specific delinquency and loss information, visit the Fitch Ratings web site at http://www.fitchratings.com/ DELTA AIR: Amends Credit Agreement with GE Capital Corp. -------------------------------------------------------- On May 31, 2005, Delta Air Lines, Inc., entered into an amendment to the Credit Agreement, dated as of November 30, 2004, with General Electric Capital Corporation, as a lender and Agent, and other lenders. The Amendment modifies certain financial covenants in the GE Commercial Finance Facility, which: -- reduces the specified levels of EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent, as defined) that Delta is required to achieve for designated rolling periods. Delta requested a change to the EBITDAR Covenant due to historically high fuel prices. -- increases the unrestricted funds that Delta is required to maintain to not less than $1 billion at all times. Prior to the Amendment, the Liquidity Covenant required Delta to maintain not less than $1 billion in unrestricted funds at all times from March 1, 2005 through October 31, 2005 and $750 million at all times thereafter. Delta has a number of other commercial relationships with GE Commercial Finance and its affiliates, including financing agreements, aircraft leases, and contracts for the purchase of engines, among other arrangements. Delta entered into comparable amendments with American Express Travel Related Services Company, Inc., to amend the EBITDAR and Liquidity Covenants in the financing agreements between Delta and Amex (and its affiliates). Delta Air Lines -- http://delta.com/-- is the world's second- largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 490 destinations in 85 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta's marketing alliances allow customers to earn and redeem frequent flier miles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. At March 31, 2005, Delta Air's balance sheet showed a $6.6 billion stockholders' deficit, compared to a $5.8 billion deficit at Dec. 31, 2004. DLJ COMMERCIAL: Fitch Lifts $27M Class B-4 Certs. a Notch to BB+ ---------------------------------------------------------------- DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CF1 are upgraded by Fitch Ratings: -- $10 million class B-3 to 'BBB' from 'BBB-'; -- $27.1 million class B-4 to 'BB+' from 'BB'. In addition, Fitch affirms these classes: -- $465.1 million class A-1B 'AAA'; -- Interest-only classes CP and S 'AAA'; -- $50.4 million class A-2 'AAA'; -- $50.3 million class A-3 'AA'; -- $41.9 million class B-1 'A'; -- $6.3 million class B-7 'B-'. Fitch does not rate the $14.7 million class B-2, $15 million class B-5, $15 million class B-6 or $13.7 million class C certificates. Class A-1A has paid in full. The upgrades reflect improved credit enhancement levels as a result of loan performance and amortization. As of the May 2005 distribution date, the pool's aggregate certificate balance has been reduced 15.4% since issuance, to $709.6 million from $838.8 million. The largest loan in the pool, the Showboat loan (12.9%), is the only credit-assessed loan in the transaction. The Dec. 31, 2004 debt service coverage ratio is 1.20 times (X) compared to 1.14x at issuance. The increase is attributed to the annual rent steps based on the Consumer Price Index. DSCR is calculated using servicer provided ground lease payments and actual debt service with a refinance constant. Fitch maintains an investment grade credit assessment on this loan. The pool has a 20.3% exposure to five hotel properties. The risk of this property type concentration is mitigated by the credit quality of the Showboat loan and the strong performance of the second largest loan (4.2%) in the pool. The second largest loan is secured by a full service hotel located in Washington, DC. The property has shown improved performance since issuance. Four loans are currently in special servicing (1.7%), the largest loan is secured by a hotel property (0.8%) in Cleveland, OH and is real-estate owned. The property is currently under contract for sale and losses are expected. The second largest loan (0.6%), is secured by a multifamily property in Winston-Salem, NC and is 60 days delinquent. The special servicer has appointed a receiver at the property and is pursuing foreclosure. EDWARD ARNOLD: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Edward Harold Arnold 15 Rooster Hill Road P.O. Box 152 Valley Forge, Pennsylvania 19841 Bankruptcy Case No.: 05-17702 Chapter 11 Petition Date: June 2, 2005 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Dimitri L. Karapelou, Esq. Ciardi & Ciardi, P.C. One Commerce Square, Suite 2020 2005 Market Street Philadelphia, Pennsylvania 19103 Tel: (215) 557-3550 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ESTEBAN DEL VALLE: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Esteban Nieves Del Valle HC 01 Box 6853 Bo Hato Nuevo Gurabo, Puerto Rico 00778 Bankruptcy Case No.: 05-05035 Chapter 11 Petition Date: June 1, 2005 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Irving K. Hernandez Valls, Esq. Irving K. Hernandez Valls, C.P.A. 1002 Munoz Rivera Olimpo Plaza, Suite 208 San Juan, Puerto Rico 00927 Tel: (787) 767-0446 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Felizx R. Flores Falero $652,500 Apartado 295 Las Piedras, PR 00771 Banco Popular de PR $235,279 Bankruptcy Department P.O. Box 366818 San Juan, PR 00936-6818 R & G Mortgage Corporation $139,208 P.O. Box 195079 San Juan, PR 00919-5079 Vidal Perez Cotto $78,000 R & G Mortgage Corporation $71,987 GE Capital $50,000 Gloria Roma Ramos $44,612 Alberto Hadad Ramirez $25,000 Daisy Medina Ocasio $25,000 Israel Morales Vargas $20,000 Jose M. Velazquez Serrano $15,000 Daimler - Chrysler Serv. $11,000 Eliza Astacio Lopez $7,000 Ford Motor Credit $7,000 Edwin San Miguel Barraco $5,000 Juan Aleman Figueroa $5,000 Luis Angel Acevedo Ramos $5,000 FARMLAND IND: Sues Pipeline Cos. for Breach of Utility Contract --------------------------------------------------------------- The Business Journal of Kansas City reports that Farmland Industries Inc. through its court-appointed trustee -- J.P. Morgan Co. -- sued Mid-American, Texaco Natural Gas Inc., Williams Energy Services and Oneok Inc. for breaching utility laws and contractual agreements. Farmland Industries filed the suit in the U.S. District Court for the District of Kansas after the pipeline companies barred Farmland from using their pipeline network in southeast Kansas, the Journal relates. One contract breach Texaco made was allowing Oneok Inc. access to the pipeline network in September 2001. Oneok used the pipeline to deliver gas to an El Dorado refinery, which competed with Farmland, the Journal relates. According to the Journal, Farmland Industries suffered "irreparable harm" because of the pipeline-access cut off. Also, Mid-America should have obtained the Kansas Corporation Commission's approval before it terminated Farmland's access to the pipelines. The lawsuit was filed in the U.S. District Court for the District of Kansas on May 31, 2005 (Case No. 2:05-cv-02231-CM-JPO). Constance L. Shidler, Esq., and James P. Zakoura, Esq., at Smithyman and Zakoura in Overland Park, Kansas, represent the Plaintiff, JP Morgan Trust Company, National Association. Farmland Industries, Inc., was one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of Bryan Cave LLP. When the Debtors filed for chapter 11 protection, they listed total assets of $2.7 billion and total debts of $1.9 billion. Pursuant to the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc. and its debtor- affiliates, the court declared May 1, 2004 as the Effective Date of the Plan. FAYE PATTERSON: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Faye Patterson 1406 Crooked Tree Circle Stone Mountain, Georgia 30088 Bankruptcy Case No.: 05-70155 Type of Business: The Debtor is president of Heritage Christian School for Children, Inc. Chapter 11 Petition Date: June 3, 2005 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Ralph Goldberg, Esq. Ralph Goldberg, PC 1766 Lawrenceville Highway Decatur, Georgia 30033 Tel: (404) 636-0331 Total Assets: $4,613,300 Total Debts: $1,642,700 Debtor's 3 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fleet Business Credit $50,000 C/o Macy, Wilinkski & Cohen Suite 600, Marquis Tower 285 Peachtree Center Avenue Atlanta, GA 30303-1229 Bill Barry $37,000 3732 Stone Mountain Highway Snellville, GA 30039 U.S. Foodservice Inc. $10,000 c/o Simpson Law Offices One Securities Centre, Suite 300 3490 Piedmont Road Northeast Atlanta, GA 30305 FERRO CORP: Poor Performance Prompts S&P to Lower Ratings --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Cleveland, Ohio-based Ferro Corp., including the corporate credit and senior unsecured debt ratings to 'BB' from 'BB+'. Standard & Poor's also removed the ratings from CreditWatch, where they were placed in July 2004, and assigned a stable outlook. The downgrade reflects Standard & Poor's concerns regarding the company's ability to restore operating margins and earnings to a level appropriate for the prior rating category. "Sluggish conditions in Europe, elevated raw-material costs, and the cyclicality of certain markets, including electronic materials and automotive, call into question the prospects for a meaningful strengthening of profitability during the next few years," said Standard & Poor's credit analyst Wesley E. Chinn. "Moreover, management is still having to contend with the distractions arising from an accounting investigation and the inability to file Form 10-K for 2004 and Form 10-Q, although Standard & Poor's stable outlook anticipates that the ultimate resolution of this situation will not lead to any substantial negative financial developments." The ratings on Ferro reflect its aggressive debt leverage, cyclicality of the company's markets, vulnerability to raw- material costs, and lackluster operating margins and return on capital. These negatives are partially offset by the geographic diversity of its fair-size chemicals portfolio, strengthening earnings, and reasonable liquidity. Ferro is the largest global producer of ceramic glaze and porcelain enamel coatings, as well as a meaningful producer of electronic materials and inorganic pigments and colorants. A global profile--over 50% of revenues are generated outside North America--somewhat mitigates adverse effects from the cyclicality of the company's key end markets: (1) building and renovation, (2) major appliances, (3) transportation, (4) household furnishings, (5) industrial products, and (6) packaging. Volume prospects are enhanced in part by an expanding manufacturing presence in Asia. In this regard, there are new or planned facilities for that region for the production of color (to address in part the growth in the dinnerware sector), electrolyte, porcelain enamel, and tile. However, the economic environment in Europe, which represents about one-third of Ferro's overall sales, remains sluggish, thus continuing to negatively affect a large portion of Ferro's tile, porcelain enamel and color and glass businesses. A modest improvement in overall earnings is expected for 2005, aided by price increases, moderating raw-material cost increases, the benefits of programs to reduce the cost base and realign businesses to a more profitable mix, and strengthening conditions in the electronic materials sector. However, Ferro's ability to restore the financial profile and overall profit improvement will be hampered by restructuring charges and costs related to the accounting investigation. Moreover, the strength of domestic automotive and appliance markets near term is unclear. Operating margins before depreciation and amortization are expected to strengthen modestly from the mediocre level of less than 10% for 2004. Some improvement also appears in store for return on capital which is low at well under 10% in recent years. FIBERMARK INC: Court Revises Timing for Chapter 11 Process ---------------------------------------------------------- As reported in the Troubled Company Reporter on Apr. 21, 2005, the U.S. Bankruptcy Court for the District of Vermont directed the U.S. Trustee to appoint an independent examiner in FiberMark, Inc.'s chapter 11 case to investigate intercreditor disputes and associated issues. The Court set a $200,000 spending cap on the examination process, ordered the Examiner to submit written findings by June 8, and set a status conference for June 15 to review the case and the Examiner's report and recommendations. Extension Request At the examiner's request, the Court extended the examination period until June 30, 2005, established a report filing deadline of July 6, 2005, and scheduled a report review hearing for July 12, 2005. The Court also granted FiberMark's request that the extension not affect the timetable for the company's filing of a plan of reorganization, agreeing to lift the moratorium on the filing of nonconsensual plans as of June 15. The company intends to file a new plan of reorganization as soon as possible. The deadline for any plan of reorganization filing remains Aug. 8, 2005. In his motion to request the extension, the examiner indicated that his "investigation as to the dispute among Committee members and the Debtors concerning corporate governance issues and fiduciary duties is more complicated and extends over a greater period of time than that which may have been originally anticipated." Headquartered in Brattleboro, Vermont, FiberMark, Inc. -- http://www.fibermark.com/-- produces filter media for transportation applications and vacuum cleaning; cover stocks and cover materials for books, graphic design, and office supplies and base materials for specialty tapes, wall coverings and sandpaper. The Company filed for chapter 11 protection on March 30, 2004 (Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J. Baker, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $329,600,000 in total assets and $405,700,000 in total debts. At Mar. 31, 2005, FiberMark, Inc.'s balance sheet showed a $105,404,000 stockholders' deficit, compared to a $101,876,000 deficit at Dec. 31, 2004. FLINTKOTE COMPANY: Asbestos PI Committee Hires Legal Analysis ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Asbestos Personal Injury Claimants appointed in the chapter 11 cases of The Flintkote Company and Flintkote Mines Limited, permission to hire Mark A. Peterson and his company, Legal Analysis Systems, Inc., as its asbestos-related bodily injury consultant, nunc pro tunc to February 14, 2005. Legal Analysis will provide expert services regarding the identification and treatment of asbestos bodily injury claimants. Legal Analysis will also: a. estimate the number and value of present and future asbestos personal injury claims; b. develop claims procedures to be used in the development of financial models of payments and assets of a claims resolution trust; c. review and analyze the Debtors' claims database and review and analyze the Debtors' resolution of asbestos claims; d. evaluate reports and opinions of experts and consultants retained by other parties to these bankruptcy proceedings; e. evaluate and analyze proposed proofs of claim and bar dates and analyses of data from those proofs of claim; f. analyze quantitatively other matters related to asbestos bodily injury claims as may be requested by the Committee; and g. testify on matters as requested by the Committee. The Committee selected Legal Analysis based upon its extensive experience and knowledge with respect to analyzing and solving complex problems associated with asbestos-related bodily injury matters. Mark A. Peterson's experience includes extensive analytical support in estimating the number and time of potential asbestos-related bodily injury claims by disease, development of alternative methods of providing compensation for asbestos-related issues, estimation of the costs of such compensation and consulting with asbestos trusts on claims, procedures and estimations. Mr. Peterson charges $600 per hour. Daniel Relles, Legal Analysis' statistician, bill $375 per hour. Mr. Peterson assured the Court that Legal Analysis: * is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code and holds no interest adverse to the Debtors or their estates for the matters for it is to be employed; and * has no connection to the Debtors, their creditors or other related parties. Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. The Company and its affiliate, Flintkote Mines Limited, filed for chapter 11 protection on April 30, 2004 (Bankr. Del. Case No. 04-11300). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. FRESH CHOICE: Investors to Sponsor Proposed Reorganization Plan --------------------------------------------------------------- Fresh Choice, Inc. (Pink Sheets:SALDQ) entered into a letter agreement with the Official Committee of Unsecured Creditors appointed in its chapter 11 case, Crescent Real Estate Equities Limited Partnership and Cedarlane Natural Foods, Inc., whereby Crescent and Cedarlane will sponsor a recapitalization of the Company pursuant to a plan of reorganization. Crescent is the holder of 100% of the Company's Class B Preferred Stock. Cedarlane is a leading producer of Gourmet and organic food preparation and commissary operations with a specific focus on food of the same type and style as served at Fresh Choice restaurants. Under the proposed joint plan of reorganization to be filed by the Company, the Committee, Crescent and Cedarlane in the United States Bankruptcy Court for the Northern District of California Crescent and Cedarlane would acquire 100% of the new equity interests in the reorganized Company. Existing holders of the Company's common equity interests would not receive any consideration on account of such interests under the terms of the Plan to be proposed in accordance with the Agreement. Both the Plan and the disclosure statement with respect thereto, are subject to Bankruptcy Court approval. The Committee supports approval of the Plan. Headquartered in Morgan Hill, California, Fresh Choice, Inc. -- http://www.freshchoice.com/-- owns and operates 35 salad bar eateries, mostly located in California. The company filed for chapter 11 protection on July 12, 2004 (Bankr. N.D. Calif. Case No. 04-54318). Debra I. Grassgreen, Esq., Tobias S. Keller, Esq., and Joshua M. Fried, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $29,651,000 in total assets and $14,348,000 in total debts. GLOBE-X MANAGEMENT LIMITED: Section 304 Petition Summary -------------------------------------------------------- Petitioners: Clifford A. Johnson Wayne J. Aranha Joint Official Liquidators Debtors: Globe-X Management Limited Nassau, Bahamas -- and -- Globe-X Canadiana Limited Nassau, Bahamas Case Nos.: 05-14032 & 05-14034 Type of Business: The Debtors managed investments accounts. Cinar Corporation's vice president transferred US$122 million to the Debtors without Cinar's Board of Directors' knowledge. The Debtors then invested the funds in Norshield Mosaic Fund Limited. Norshield Mosaic informed the Debtors that they transferred the funds to Norshield Composite. Norshield Composite then entered a Total Return Swap with the Debtors totaling US$100 million. Norshield Composite purchased from Royal Bank of Canada Dominion Securities Corporation 1,000 Cash- Settled European Style Index Call Options for a total premium of US$15,000,000, exercisable on July 29, 2004. The Petitioners want to stop RBC from paying Norshield Composite on the exercise or early termination of the CSI Call Option. Petitioners also want RBC, Norshield Asset Management Ltd. Chicago and Terri Engelman-Rhoads to produce documents regarding the CSI Option and TRS transactions. Section 304 Petition Date: June 3, 2005 Court: Southern District of New York (Manhattan) Judge: Prudence Carter Beatty Petitioners' Counsel: David M. Green, Esq. Stevens & Lee, P.C. 485 Madison Avenue, 20th Floor New York, New York 10022-3904 Tel: (212) 319-8500 Fax: (212) 319-8505 Estimated Assets Estimated Debts ---------------- --------------- Globe-X Management Limited $10 Million to $50 Million to $50 Million $100 Million Globe-X Canadiana Limited $10 Million to $50 Million to $50 Million $100 Million GRANDE COMMS: Moody's Affirms $136M Sr. Sec. Notes' Junk Rating --------------------------------------------------------------- Moody's Investors Service affirmed Grande Communications' Caa2 senior implied rating, SGL-3 speculative grade liquidity rating and revised the rating outlook to positive. The positive outlook reflects the company's success in reducing leverage meaningfully following last year's debt issuance (debt declined from about eight times EBITDA to about five times as of March 31, 2005) and replacing very sizable revenues that were lost when MCI ceased to be a customer with new revenues. It also recognizes continued opportunities for de-levering as a result of revenue and margin appreciation. Moody's remains concerned about the company's sizable capital expenditure requirements given its uncertain access to capital, as well as the overall risks associated with the overbuilder strategy (predominantly competition from well capitalized incumbents). Moody's affirmed these ratings: -- $136 Million of Senior Secured Notes due 2011 -- Caa2 -- Senior Implied Rating -- Caa2 -- Speculative Grade Liquidity Rating -- SGL-3 The rating outlook is positive. The Caa2 senior implied rating continues to reflect the company's: * still high leverage and low coverage (albeit meaningfully improved from last year); * the expectation of ongoing cash burn; and * the consequent need to raise additional capital in order to fund the company's expected growth. Moreover, Grande's capital expenditure requirements still relate in part to network buildouts, in addition to more success-based capital requirements. While Moody's believes Grande could sustain a lower growth model over the near term, such a strategy would inevitably inhibit long term returns as well as exacerbate concerns regarding the firm's potential enterprise value, since operations are predominantly in overbuilt territories. Also, given the lower EBITDA margins inherent to overbuilders, mostly due to lower market penetration, Moody's believes the company's current capital structure constrains its financial flexibility. Similarly, as a relatively small service provider, operating in markets with far better capitalized incumbents, including TimeWarner, SBC and Echostar and the potential for additional new entrants, Grande is particularly vulnerable to competition. However, the ratings also consider the company's: * attractive network (fully deployed 860 MHZ); * assets which today can provide a complete product bundle (video, high speed data and telephony); * the potential to organically de-lever without additional capital over the near term; and * the opportunity to benefit from the good demographics within its territory (within Texas). The positive outlook reflects Moody's belief that the Caa2 senior implied rating could improve if the company either continues to meet its projections and raises the additional capital as anticipated by the management team, or, contrarily, slows its growth pace and consequently reduces capital expenditure requirements and de-leverages in this manner. Ratings above the Caa1 level are not likely until the company meaningfully improves its liquidity, preferably with both bank availability and common equity, but potentially with either if revenues and profitability improve beyond current expectations. The outlook could revert to stable or negative if the company's financial flexibility becomes more constrained either because the growth is not supported by increases in contributed capital or because competition ultimately prevents Grande from growing into its capital structure. As of March 31, 2005, leverage is high with debt of about 5.3 times the last quarter's annualized EBITDA, and cash flow coverage is negative as capital expenditures exceed EBITDA. Importantly, given the absence of a bank facility, the company has about $50 million in cash (of which $20 million must be reserved). Leverage is projected to continue to decline, driven by EBITDA growth; nonetheless, by 2006, Grande is likely to require additional capital. Given the characteristics of an overbuilder and the potential for a liquidity shortfall, determining Grande's recovery value in a distressed scenario is challenging. The reluctance of incumbent MSOs to compete directly with one another, at least historically, reduces the likelihood of non-financial buyers in a distress scenario. As such, asset valuations for overbuilt systems are more uncertain, raising the prospect of principal impairment in a restructuring scenario. The Caa2 senior implied rating incorporates the possibility that Grande's obligations are not likely to be fully covered in a default scenario. The Caa2 rating for the senior secured notes is rated at parity with the senior implied in recognition of the preponderance of the senior notes within the company's debt capital structure as well as the security interest in the company's assets. The indenture allows for the ability to incur a secured bank credit facility, subject to the incurrence test within the indenture. Grande Communications Holdings, Inc. is a provider of video, Internet and telephony services primarily serving communities in six Texas markets. The company also operates a competitive local exchange carrier. The company maintains its headquarters in San Marcos, Texas. GRAY TELEVISION: Moody's Rates New $400 Million Facilities at Ba1 ----------------------------------------------------------------- Moody's Investors Service upgraded today all of the long term ratings of Gray Television, Inc. by one notch. Additionally, Moody's assigned Ba1 ratings to Gray's $400 million in new senior secured credit facilities ($100 million Revolving Credit Facility, $100 million term loan A facility, $200 million term loan B facility). The rating outlook is stable. Proceeds from the new senior secured transaction plus cash on hand will be used to repay the company's $374 million in existing senior secured credit facilities. The one notch upgrade is based on Gray's 2004 financial performance, which exceeded Moody's expectations resulting in an improved balance sheet and credit metrics. It is our expectation that absent additional acquisitions the company has the ability to delever through free cash flow going forward, balanced by the company's willingness to return cash to shareholders instead of bondholders. Additionally, the upgrade incorporates the expanded revenue opportunities presented by Gray's utilization of its digital spectrum, which presents the company with the opportunity of adding incremental channels in existing markets at limited additional cost (Gray currently has four UPN channels running on digital spectrum, with six more in the pipeline). Moody's has assigned these ratings: 1) a Ba1 rating to the $100 million senior secured revolving credit facility due 2011; 2) a Ba1 rating to the $100 million senior secured term loan A due 2011; and 3) a Ba1 rating to the $200 million senior secured term loan B due 2012. Moody's has upgraded these ratings: 1) the company's senior implied rating to Ba2 from Ba3; 2) the senior subordinated notes to B1 from B2; and 3) the senior unsecured issuer rating to Ba3 from B1. The rating outlook is stable. Moody's is withdrawing the current Ba2 ratings on the existing senior secured term loan facilities. The ratings reflect Gray's: * strong management track record of successfully integrating its acquisition of television assets; * maintenance of its dominant position within its markets (23 of its 31 stations rank #1 in its news markets while 21 of its 31 stations rank #1 in sign-on and sign-off); * ability to garner a disproportionate share of revenues in their regions (averages approximately 40% in-market revenue); and * generate operating metrics that are at or above industry broadcasting peers. The ratings benefit from the diversity of network affiliations (16 CBS, 8 NBC and 7 ABC) and cash flows (no television station accounted for more than 10% of revenues in 2004). Moody's also notes that Gray benefits from operating in markets with less television broadcast competition (74% of its markets have three or less local television station competitors). Further, the ratings are supported by the meaningful asset value present in Gray's portfolio of mid-market television stations. The ratings remain constrained by the company's: * relatively high debt burden; * the likelihood that the company will continue its strategy of growing through acquisition of television stations in new and/or existing markets; and * Gray's willingness to return capital to shareholders. Moody's note that in 2004 Gray returned about $32 million in cash to shareholders in the form of dividends and share repurchases. Additionally, Gray increased its share repurchase program in November 2004 upsizing the program from 2.0 million to 4.0 million shares in aggregate. The ratings also reflect the risks posed from the cyclicality of the advertising market and broader concerns regarding the sustainability of broadcast audiences and diversification of advertising spend over a growing number of mediums (e.g. Internet, satellite radio). Finally, the ratings incorporate the lower margins of the company's much smaller publishing business, and the risks and challenges associated with the same, including paper price volatility and economic cyclicality. The stable outlook incorporates Moody's belief that the challenging operating environment in 2005 given the off-year in political advertising spending will be partially offset by the expanded revenue opportunities of digital channel offerings. Additionally, the stable outlook incorporates Moody's expectations that leverage will improve over time as the company uses free cash flow to repay debt. Moody's note that in 2004, about 14% of Gray's revenue was politically sourced, the highest percentage of any broadcaster in the country. With the absence of political advertising spending in 2005, the rating agency expects leverage (defined as total debt plus preferred to EBITDA) to increase to about 6 times. Given the weaker expected operating environment in 2005, Moody's does not expect the ratings to move up in the near-term. The outlook may be revised to negative if the company initiates further distributions to shareholders (in the form of special dividends or share repurchases) instead of using excess free cash flow to reduce leverage. As of March 31, 2005, pro forma for the refinancing, leverage as measured by total debt plus preferred/EBITDA is high at about 5 times. Coverage as reflected by (EBITDA-CapEx)/(Interest+Preferred Dividends) is modest at about 2 times. Going forward, we expect interest coverage after capital expenditures to improve given that the company has largely completed the upgrade of its facilities for digital television. The Ba1 rating for the bank credit facilities reflects their: * senior most position in the capital structure; * the security interest in the company's assets; * subsidiary guarantees; and * the overall benefits of the sizable collateral coverage. The B1 rating for the senior subordinated notes reflects their effective and contractual subordination to the bank credit facilities, as well as the benefits of the subsidiary guarantees. Gray Television, Inc. is a diversified media company with interests in: * TV broadcasting, * newspaper publishing, * paging, and * satellite uplink services. The company is headquartered in Atlanta, Georgia. HAYES LEMMERZ: Will Hold Stockholders Meeting on July 27 -------------------------------------------------------- Hayes Lemmerz International, Inc., will hold its Annual Stockholders Meeting on July 27, 2005, at 8:00 a.m. Eastern Daylight Saving Time, at the Company's world headquarters located at 15300 Centennial Drive in Northville, Michigan. According to Patrick C. Cauley, Hayes Lemmerz' Vice President, General Counsel and Secretary, during the meeting, stockholders are expected to: -- elect three Class II Directors to serve on the Board of Directors for a three-year term. The nominees are: * William H. Cunningham; * Laurie Siegel; and * Moshen Sohi; -- ratify the selection of KPMG LLP as independent auditors for the fiscal year ending January 31, 2006; and -- transact other business that might properly come before the meeting or any adjournment or postponement thereof. Only shareholders of record at the close of business on May 31, 2005, are entitled to receive notice of and to vote at the Annual Meeting. A full-text copy of Hayes Lemmerz' Proxy Statement is available at the Securities and Exchange Commission at: http://tinyurl.com/9bhf4 Hayes Lemmerz International, Inc., is a world leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company filed for chapter 11 protection on December 5, 2001 (Bankr. D. Del. Case No. 01-11490) and emerged in June 2003. Eric Ivester, Esq., and Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meager & Flom represent the Debtors. (Hayes Lemmerz Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on April 11, 2005, Moody's Investors Service assigned a B2 rating for HLI Operating Company, Inc.'s proposed $150 million guaranteed senior secured second-lien term loan facility. HLI Opco is an indirect subsidiary of Hayes Lemmerz International, Inc. The rating outlook remains stable. While the company has reaffirmed its earning guidance and the senior implied and guaranteed senior secured first-lien facility ratings remain unchanged at B1, Moody's determined that widening of the downward notching of HLI Opco's guaranteed senior unsecured notes was necessary to reflect additional layering of the company's debt. The senior unsecured notes are effectively subordinated to the proposed new senior secured second-lien term facility, and approximately $75 million of higher-priority debt will be added to the capital structure. These specific rating actions were taken by Moody's: * Assignment of a B2 rating for HLI Operating Company, Inc.'s proposed $150 million guaranteed senior secured second-lien credit term loan C due June 2010; * Downgrade to B3, from B2, of the rating for HLI Operating Company, Inc.'s $162.5 million remaining balance of 10.5% guaranteed senior unsecured notes maturing June 2010 (the original issue amount of $250 million was reduced as a result of an equity clawback executed in conjunction with Hayes Lemmerz's February 2004 initial public equity offering); * Affirmation of the B1 ratings for HLI Operating Company, Inc.'s approximately $527 million of remaining guaranteed senior secured first-lien credit facilities, consisting of: * $100 million revolving credit facility due June 2008; * $450 million ($427.3 million remaining) bank term loan B facility due June 2009 (which term loan is still expected to be partially prepaid through application of about half of the net proceeds of the proposed incremental debt issuance); * Affirmation of the B1 senior implied rating; * Downgrade to Caa1, from B3, of the senior unsecured issuer rating (which rating does not presume the existence of subsidiary guarantees). HIGH VOLTAGE: Committee Taps Lowenstein Sandler as Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts gave the Official Committee of Unsecured Creditors of High Voltage Engineering Corporation and its debtor-affiliates permission to employ Lowenstein Sandler PC as its counsel. Lowenstein Sandler will: a) provide legal advice with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; b) provide legal advice to the Committee with respect to any chapter 11 plan and disclosure statement filed in the Debtors' chapter 11 cases and in relation to the process of approving that disclosure statement and confirming that plan; b) prepare on behalf of the Committee all necessary applications, motions, complaints, answers, orders, agreements and other legal papers; c) appear before the Bankruptcy Court to present necessary motions, applications and pleadings and protect the interests of the Committee before that Court; and d) perform all other legal services for the Committee that are necessary and proper in the Debtors' bankruptcy proceedings. Kenneth A. Rosen, Esq., a Director at Lowenstein Sandler, reports the Firm's professionals' bill: Designation Hourly Rate ------------ ----------- Partners $300 - $575 Counsel $250 - $350 Associates $160 - $295 Legal Assistants $75 - $150 Lowenstein Sandler assures the Court that it does not represent any interest materially adverse to the Committee, the Debtors or their estates. Headquartered in Wakefield, Massachusetts, High Voltage Engineering Corporation -- http://www.asirobicon.com/-- owns and operates a group of three industrial and technology based manufacturing and services businesses. HVE's businesses focus on designing and manufacturing high quality applications and engineered products which are designed to address specific customer needs. The Debtor filed its first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No. 04-11586). Its Third Amended Joint Chapter 11 Plan of Reorganization was confirmed on July 21, 2004, allowing the Company to emerge on Aug. 10, 2004. High Voltage filed its second chapter 11 petition on Feb. 8, 2004 (Bankr. Mass. Case No. 05-10787). Douglas B. Rosner, Esq., at Goulston & Storrs, represents the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $457,970,00 in total assets and $360,124,000 in total debts. Stephen S. Gray is the Chapter 11 Trustee for the Debtors' estates. John F. Ventola, Esq., at Choate, Hall and Stewart represents the Chapter 11 Trustee. HORSEHEAD IND: Selling Unimproved Real Property for $3,000,000 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Horsehead Industries, Inc., and its debtor-affiliates permission to sell their unimproved real property, adjacent to its former Monaca plant, to SCB Services Corp. for $3 million. The sale is subject to higher and better offers. The Hon. Stuart M. Bernstein also approved bidding procedures for the sale. All those interested to bid for the property must submit an initial bid not less than $3,175,000 on or before 4:00 p.m. (EST) on June 9, 2005. The bid must include evidence, satisfactory to the Debtors and the Official Committee of Unsecured Creditors, of the bidder's financial ability to close the sale of the property. The Debtors will hold an auction on June 13, 2005, if they will receive one or more competing bids. The Auction will start at 10:00 a.m., at the office of: Angel & Frankel, P.C 460 Park Avenue New York, NY 10022 If the Debtors will choose a buyer other than SCB Services, SCB Services is entitled to a $175,000 break-up fee. The Court will hold a hearing to consider final approval of the sale on June 15, 2005. Horsehead Industries, Inc., d/b/a Zinc Corporation of America, was the largest zinc producer in the United States, and its affiliates filed for chapter 11 protection on August 19, 2002 (Bankr. S.D.N.Y. Case No. 02-14024). Laurence May, Esq., at Angel & Frankel, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $215,579,000 in assets and $231,152,000 in debts. On December 12, 2003, the Court authorized the sale of the Debtors' businesses and substantially all of their assets to Horsehead Acquisition Corp. The sale closed on Dec. 23 and 24, 2003. The Debtors are in the process of selling their remaining assets. HOTEL ASSOCIATES: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Hotel Associates, LLC dba Ramada Plaza Hotel Columbia One Surrey Court Columbia, South Carolina 29212 Bankruptcy Case No.: 05-06477 Type of Business: The Debtor owns and operates a hotel. See http://www.columbiaramadaplaza.com/ Chapter 11 Petition Date: June 3, 2005 Court: District of South Carolina (Columbia) Judge: John E. Waites Debtor's Counsel: Julio E. Mendoza, Jr., Esq. Nexsen Pruet Adams Kleemeier, LLC 1441 Main Street, Suite 1500 Columbia, South Carolina 29201 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CRIIMI MAE Services Limited Real property with $6,440,661 Partnership, as Special improvements thereon Servicer for the Trust consisting of a 186 Entitled-LaSalle Bank N.A. room full service f/k/a LaSalle National Bank, hotel commonly known as Trustee for the as the "Ramada Plaza" Registered Holders of located at 8105 Two Mortgage Capital Notch Road, Funding, Inc. Columbia, SC Multifamily/Commercial Value of security: Mortgage Pass-Through $1,881,589 Certificates, Series 1997-MCI c/o Thomas Waring, Esquire P.O. Box 22828 Charleston, SC 29413 Ramada Franchise Systems, Franchise Fees $19,946 Inc. P.O. Box 981337 El Paso, TX 799981337 Lodgenet Entertainment Corp. Trade Debt $4,892 P.O. Box 952141 Saint Louis, MO 631952141 Safemark Systems Trade Debt $990 P.O. Box 102008 Atlanta, GA 303682008 INDYMAC MBS: Fitch Affirms Low-B Ratings on Two Security Classes ---------------------------------------------------------------- Fitch Ratings has affirmed the following IndyMac MBS, Inc., Residential Asset Securitization Trust transaction: IndyMac MBS Residential Asset Securitization Trust, series 2004-A2 Group 1 -- Class 1A 'AAA'. IndyMac MBS Residential Asset Securitization Trust, series 2004-A2 Group 2 -- Class 2A 'AAA'; -- Class 2B1 'AA'; -- Class 2B2 'A'; -- Class 2B3 'BBB'; -- Class 2B4 'BB'; -- Class 2B5 'B'. The affirmations on these classes reflect credit enhancement consistent with future loss expectations and affect approximately $170.34 million of outstanding certificates. The trust, which consists of two pools of residential mortgage loans are not cross-collateralized. The Group 1 mortgage pool consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one-to four-family residential mortgage loans with original terms to stated maturity of 30 years. The weighted average FICO score for the mortgage pool is approximately 706. The Group 2 mortgage pool consists of seasoned, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans with original terms to stated maturity of 15 or 30 years. The weighted average loan age of the Group 2 mortgage loans will be approximately 93 months. The weighted average FICO score for the mortgage pool is approximately 712. IndyMac Bank, FSB (IndyMac; rated 'RMS2+' by Fitch) is the master servicer. Fitch will continue to continue to closely monitor these deals. For specific delinquency and loss information, visit the Fitch Ratings web site at http://www.fitchratings.com/ J.E. GHILZON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: J. E. Ghilzon D.D.S., PLLC 50706 Van Dyke Avenue Shelby Township, Michigan 48317 Bankruptcy Case No.: 05-58063 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- James Edward Ghilzon 05-58135 Type of Business: The Debtor offers dental services. Chapter 11 Petition Date: June 3, 2005 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Eugene W. Pyatenko, Esq. 143 Cady Center #203 Northville, Michigan 48167 Tel: (313) 737-0302 Total Assets: Unknown Total Debts: Unknown The Debtors' List of its 20 Largest Unsecured Creditors was not available at press time. JACOBS ELECTRICAL: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Jacobs Electrical Construction, Inc. 1813 Austin Drive Troy, Michigan 48083 Bankruptcy Case No.: 05-57964 Type of Business: The Debtor is an electrical contractor. Chapter 11 Petition Date: June 2, 2005 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Kenneth L. Gross, Esq. Thav, Gross, Steinway & Bennett, P.C. 30150 Telegraph Road, Suite 444 Birmingham, Michigan 48025-4519 Tel: (248) 645-1700 Total Assets: Unknown Total Debts: Unknown The Debtor's List of its 20 Largest Unsecured Creditors was not available at press time. JP MORGAN: Fitch Shaves $7.4M Class L Certs a Notch to B- --------------------------------------------------------- Fitch Ratings downgrades JP Morgan Commercial Mortgage Finance Corp., commercial mortgage pass-through certificates, series 2000- C10: -- $7.4 million class L to 'B-' from 'B'; -- $5.5 million class M to 'CC' from 'B-'. In addition, Fitch affirms the following classes: -- $25.8 million class A-1 'AAA'; -- $471.3 million class A-2 'AAA'; -- Interest only class X 'AAA'; -- $31.4 million class B 'AA+'; -- $29.5 million class C 'A+'; -- $9.2 million class D 'A-'; -- $23.1 million class E 'BBB'; -- $10.2 million class F 'BBB-'; -- $14.8 million class G 'BB+'; -- $14.8 million class H 'BB'; -- $7.4 million class J 'BB-'; -- $5.5 million class K 'B+'. Fitch does not rate the $7.4 million class NR certificates. The downgrades are attributable to the expected losses on several of the specially serviced loans. Currently, nine loans (6.7%) are in special servicing, with losses expected on six of these loans. As of the May 2005 distribution date, the pool's aggregate principal balance has been reduced 9.96% to $663.3 million from $740.1 million at issuance. The largest loan in special servicing (1.2%) is collateralized by a 57,244 square foot office property in San Jose, CA. The loan transferred to the special servicer due to imminent default, as a result of a drop in occupancy. An unaffiliated investor has shown interest in the property and the borrower is considering entering a purchase and sale agreement. At the same time the special servicer is preparing for a foreclosure sale. Recent appraisal values indicate significant losses are possible upon sale of the asset. The loan remains 90 days delinquent. The second-largest loan in special servicing (1.1%) is collateralized by a 408,842 sf industrial warehouse property located in Aurora, IL. The loan transferred to the special servicer because of the borrower's request for a DPO (discounted payoff), due to significant rollover expected through 2005 and 2006. Negotiations between the special servicer and the borrower are ongoing. The loan remains current. KB TOYS: Bankruptcy Court Approves Plan Funding Bidding Procedures ------------------------------------------------------------------ The U.S. Bankruptcy Court approved uniform bidding procedures with respect to the proposed auction of the right to fund KB Toys, Inc.'s Plan of Reorganization. Under the approved procedures, qualified bids must be submitted by July 6, 2005. If any qualified bids are received, an auction will be conducted on July 11, 2005. As previously announced on May 13, 2005, the Company entered into a Plan Funding Agreement with PKBT Funding LLC, an affiliate of Prentice Capital Management, LP. The Company's agreement with PKBT is subject to the Company's receipt of higher or better offers, pursuant to the auction process, for the right to acquire either substantially all of the Company's assets, including assuming substantially all of the Company's leases for its retail stores, or the equity interests in the reorganized Company. The Bankruptcy Court authorized the Company to conduct the auction, approved certain procedures for the auction and approved a termination fee and certain expense reimbursement provisions negotiated with Prentice. Under the Bankruptcy Court hearing schedule, the Company expects that it will emerge from Chapter 11 before the 2005 holiday season. The Company's proposed Plan of Reorganization is available on the Company's Web site, http://www.kbtinfo.com/ One of the largest toy retailers in the United States, KB Toys -- http://www.kbtoys.com/-- (which once boasted 1,200 stores) operates about 650 stores under four formats: * KB Toys mall stores, * KB Toy Works neighborhood stores, * KB Toy Outlets and KB Toy Liquidator, and * KB Toy Express (in malls during the holiday season). The company along with its affiliates filed for chapter 11 protection on January 14, 2004 (Bankr. Del. Case No. 04-10120). The chapter 11 filing resulted in nearly 600 store closures and 4,000 layoffs. In March 2004, KB Toys sold its KBToys.com Internet business to an affiliate of D. E. Shaw, which renamed the company eToys Direct. Joel A. Waite, Esq., at Young, Conaway, Stargatt, & Taylor, LLP, represents the toy retailer. When the Debtors filed for protection from its creditors, they listed consolidated assets of $507 million and consolidated debts of $461 million. KB TOYS: Will Hold Plan Funding Auction on July 11 -------------------------------------------------- KB Toys Inc. and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to conduct an auction on July 11, 2005, for the right to fund their Plan of Reorganization. PKBT Funding LLC, an affiliate of Prentice Capital Management, LP, made an initial offer to fund KB Toys' Plan. The Plan Funding Agreement with PKBT Pursuant to the Agreement, PKBT will acquire on the effective date of the Plan: * all of the preferred equity interests in Reorganized KB Toys; and * 90% of new common equity of Reorganized KB Toys. The Plan Funding Agreement allows certain assets of the Debtors to be transferred to a Residual Trust for the benefit of the unsecured creditors: * $20 million in cash; * an aggregate number of common shares equal to 10% on a fully-diluted basis; and * the rights to the proceeds from the sale, refinancing, subletting or other disposition of the Debtors' distribution centers located in Alabama, Arizona and New Jersey. In exchange for the equity interests in Reorganized KB Toys, PBKT will pay the Reorganized Debtors $20 million and provide a seasonal overadvance credit facility of $25 million. The Plan Funding Agreement is expected to close by Sept. 7, 2005. Full-text copies of the Plan Funding Agreement and the bidding procedures approved by the Honorable Donal D. Sullivan are available for a fee at: http://www.researcharchives.com/bin/download?id=050603215739 One of the largest toy retailers in the United States, KB Toys -- http://www.kbtoys.com/-- (which once boasted 1,200 stores) operates about 650 stores under four formats: * KB Toys mall stores, * KB Toy Works neighborhood stores, * KB Toy Outlets and KB Toy Liquidator, and * KB Toy Express (in malls during the holiday season). The company along with its affiliates filed for chapter 11 protection on January 14, 2004 (Bankr. Del. Case No. 04-10120). The chapter 11 filing resulted in nearly 600 store closures and 4,000 layoffs. In March 2004, KB Toys sold its KBToys.com Internet business to an affiliate of D. E. Shaw, which renamed the company eToys Direct. Joel A. Waite, Esq., at Young, Conaway, Stargatt, & Taylor, represents the toy retailer. When the Debtors filed for protection from its creditors, they listed consolidated assets of $507 million and consolidated debts of $461 million. KAISER ALUMINUM: Exclusive Plan Filing Period Extended to June 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods within which Alpart Jamaica, Inc., Kaiser Jamaica Corporation, Kaiser Alumina Australia Corporation, and Kaiser Finance Corporation have the right to: (1) file a plan or plans of reorganization for an additional 60 days, through and including June 30, 2005; and (2) solicit acceptances of the plan for an additional two months thereafter, through and including August 31, 2005. The extension will simply align the Liquidating Debtors' Exclusive Periods with the confirmation schedule, providing the Liquidating Debtors with the ability to complete the confirmation process for the Liquidation Plans. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Law Debenture & Liverpool Present New Argument --------------------------------------------------------------- As previously reported, Kaiser Aluminum Corporation, its debtor- affiliates and other parties sought the Court to overrule the objections of Law Debenture Trust Company of New York. Law Debenture Trust Company of New York is the Indenture Trustee' under the Indenture dated as of February 1, 1993, under which Kaiser Aluminum & Chemical Corporation issued certain notes guaranteed by various debtor-subsidiaries of KACC, including Alpart Jamaica, Inc., Kaiser Jamaica Corporation, Kaiser Alumina Australia Corporation, and Kaiser Finance Corporation. Law Debenture objects to: * the Liquidation Plans' treatment of the 1993 Note Guarantees as subordinated; * the discrete subordination issues raised by Liverpool Limited Partnership; and * the discrete issue of the Liquidation Plans' treatment of Law Debenture's fees and expenses. * * * Law Debenture Trust Company of New York and The Liverpool Limited Partnership submit that the 1993 Note Guarantees are pari passu with, and not subordinated to, the 1994/96 Note Guarantees. Law Debenture and Liverpool address the most critical questions raised at the hearings, which are: * How should a public indenture be construed? * What is the proper interpretation of Section 3.01 of the 1993 Indenture? * If "Senior Indebtedness" as defined in a public indenture includes some debt but does not explicitly include guarantees of that debt, should those guarantees also be treated as senior? According to Francis A. Monaco, Esq., at Monzack and Monaco, P.A., these questions raise two additional questions that will be a primary focus of Law Debenture and Liverpool's argument: 1. What is the significance of the leading authority on public indentures, the "Commentaries on Model Debenture Indenture Provisions 1965, Model Debenture Indenture Provisions -- All Registered Issues 1967 and Certain Negotiable Provisions Which May Be Included in a Particular Incorporating Indenture," and how do the Commentaries address the issues raised in the dispute? 2. Most importantly, do the Commentaries address the exact guarantee issue that is the subject of the dispute? Public Indentures Mr. Monaco notes that when dealing with public indentures, the bondholders have access to only one source for determining the intention of the indenture, and that source is the indenture itself. The bondholders are not personally involved in the negotiations, they have no knowledge of what the issuer's Chief Financing Officer supposedly intended in his mind, they have no knowledge of what the issuer's counsel supposedly intended when he used "indebtedness" instead of "Indebtedness," they have no knowledge of what an underwriter who barely even read the indenture supposedly intended the indenture to mean, and they were told that they can't rely on the prospectus or the "road show" presentations as a source of contractual rights. "Because subordination provisions serve potentially to limit bondholder recoveries against issuers and guarantors, the bondholders need to be sure of exactly what those limitations are, not what the drafters now claim they 'intended' those limitations to be when they drafted the indenture 12 years earlier," Mr. Monaco says. All that is left is the indenture itself, which is why Law Debenture and Liverpool have no choice but to rely on the actual terms and provisions in the 1993 Indenture. Whether this is referred to as "strict construction," "the four corners of the document," or "basic contract law," Mr. Monaco says, it is a rule that applies to unambiguous public indentures in general and to subordination provisions in particular. Mr. Monaco recounts that the highest court in New York and other courts in the United States have emphasized that unambiguous public indentures should be interpreted within the four corners of the indenture. "To hold otherwise would require courts to go down the dangerous and slippery slope of considering self-serving declarations and non-contemporaneous documents that are all within the control of only one side to the litigation. Either the 1993 Indenture is unambiguous and says what it says without the need to resort to extrinsic evidence, or it is ambiguous." Section 3.01 of the 1993 Indenture Mr. Monaco cites PMI Investment v. Rose (In re Prime Motor Inns), 167 B.R. 261 (Bankr. S.D. Fla. 1994). Prime Motor was involved a dispute as to whether the language of Section 2.2 of a Prime Motor subordination agreement applied only to a loan or also applied to a guaranty of that loan. Section 2.2 of the Prime Motor subordination agreement provided that: "Anything in the Subordinated Indebtedness notwithstanding, all payments of or in connection with the Subordinated Indebtedness are and shall be expressly subordinate and junior in right of payment and exercise to the prior payment in full of the Senior Indebtedness to the extent and in the manner provided herein, and the Subordinated Indebtedness is hereby subordinated as a claim against the Borrowers or any of the assets of the Borrowers to the prior indefeasible payment in full of the Senior Indebtedness, whether or not such claim is in connection with a Reorganization. In furtherance of the foregoing, the Borrowers will not make, and PMI [the subordinated creditor] will not accept, any payment of or on account of Subordinated Indebtedness, whether such payments are made or attributable to any Borrower or any successor in interest before, during or after a Reorganization and whether such payments are attributable to principal, premium, if any, interest or other amounts (including any fees, expenses distributions on a claim against any Borrower, payment in a Reorganization intended to protect the interest of PMI with respect to the Subordinated Indebtedness, or any distributions to PMI in a Reorganization with respect to the Subordinated Indebtedness), until all the Senior Indebtedness has been indefeasibly paid in full in cash." While ordered differently, Law Debenture and Liverpool assert that both Section 3.01 of the 1993 Indenture and Section 2.2 of the Prime Motor subordination agreement are quite similar in substance. One substantial similarity is that neither Section 3.01 nor Section 2.2 refers to "guarantees" by name. The senior creditor -- FSA -- in Prime Motor made the exact same argument that the 1994/96 Parties have made, Mr. Monaco says. FSA placed heavy emphasis on the phrases "in connection with" and "on account of that are found in Section 2.2 and the phrase "as protection for" which is found in Section 2.3. FSA sought to explain the absence of any direct reference to payments by Northeast, Universal or the guarantors as unnecessary. According to FSA, because any payment by Northeast, Universal or the guarantors is either "in connection with," "on account of," or "as protection for" the Subordinated Indebtedness, then all those payments are to be covered. However, the Prime Motor Court rejected FSA's argument and gave exactly the same reasons that Law Debenture and Liverpool have given as a basis for rejecting the 1994/96 Parties' erroneous interpretation of Section 3.01 of the 1993 Indenture. In particular, the Prime Motor Court found: -- FSA's interpretation to be impermissibly predicated upon a selective reading of the Intercreditor Agreement isolating some clauses in sentences while ignoring other clauses in the same sentence. Moreover, the Court declared that FSA's interpretation appeared to be difficult to accept upon a reading of the Intercreditor Agreement in its totality; -- that the next sentence of Section 2.2 begins with the phrase, "[i]n furtherance of the foregoing, the (PMI) Borrowers will not make, and PMI will not accept, any payment of or on account of . . ." the Subordinated Indebtedness. While FSA in its argument emphasizes the words "on account of," when examined in the context of the entire sentence it appears an awkward way to state that payments by a guarantor are being referred to, especially considering that the sentence begins with the phrase "the Borrowers will not make . . ."; -- that FSA places great emphasis on the phrase "in connection with" that appears in the first sentence of Section 2.2. But FSA's interpretation ignores that this same sentence then goes on to expressly provide that the scope of the subordination being agreed upon is "to the extent and in the manner provided herein." The terms used in the second phrase are words of limitation and required that one look to the following provisions and the entire document to determine exactly what the "extent" and "manner" of the subordination is; and -- that the phrase "on account of" appears more naturally to refer to the long list of payments that are included in the parenthetical at the end of this sentence, which are various types of payments that may be made in the context of a Reorganization proceeding. These payments, like adequate protection payments or distributions on a claim, are payments not technically made by the Borrower, but most certainly are "on account of" the underlying debt and have as their source the assets and property of the Borrower's estate. "The Prime Motor Court got it right," Mr. Monaco asserts. Fundamentally, subordination provisions should be read in their entirety and in the context of the agreement as a whole, and if there is an intention (i) to subordinate a guaranty as well as the guaranteed obligation, and (ii) bind subsidiaries as well as the parent, the subordination agreement should say so explicitly rather than purportedly rely on vague phrases like "on account of" or "with respect to." Senior Indebtedness Law Debenture and Liverpool tells the Court that the 1993 Indenture contains literally scores of specific references to "guarantees" to the 1993 Note Guarantees and to the Subsidiary Guarantors, including elsewhere in the definition of "Senior Indebtedness" and including an entire Article Sixteen dedicated to the treatment of the 1993 Note Guarantees and the Subsidiary Guarantors. Mr. Monaco argues that if the drafters had intended to include "upstream guarantees" in the definition of "Senior Indebtedness," they would have done so expressly, just as they did elsewhere in the definition. And if the drafters had intended to include the 1993 Note Guarantees and the Subsidiary Guarantors in Article Three, they would have done so expressly, just as they did throughout Article Sixteen. The Commentaries The Commentaries were published in 1971 as the third step in the "Corporate Debt Financing Project" of the American Bar Foundation, with the first two steps focusing on "Model Debenture Indenture Provisions." The purpose of the Commentaries, Mr. Monaco explains, is not only to comment on the Model Provisions but also to present material which will be of assistance to lawyers and their clients in negotiating and preparing indenture provisions of the types customarily subject to negotiation. Mr. Monaco points out that the 1994/96 Parties' interpretations consistently conflict with the model provisions and comments provided in the Commentaries. Mr. Monaco contends that the 1994/96 Parties do not cite a single case, treatise, or other commentary in support of their statement that indebtedness for money borrowed somehow includes guarantees in respect of money borrowed by others. The Commentaries provide that it is important to clarify by definition the types of liabilities, which are to be comprehended by the defined term "Debt". Debt for money borrowed is invariably included. However, in the absence of specific language in the covenant or in the definitions, there might be some question as to the applicability of the covenants to liabilities like assumptions or guaranties of indebtedness of other persons, Mr. Monaco says. To the extent that any of the 1994/96 Parties' interpretations is still "possible," Law Debenture and Liverpool assert that the applicable rules of contract interpretation, the overwhelming case authority, the Commentaries and the 1993 Indenture itself require any ambiguities to be construed in favor of the 1993 Noteholders. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945-7000) LAIDLAW INT'L: Moody's Rates Proposed $600 Million Debt at Ba2 -------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of Laidlaw International Inc. senior implied to Ba2 from B1. In a related action, Moody's assigned Ba2 ratings to the company's proposed $300 million Term Loan and $300 million Revolving Credit facility. The rating outlook is stable. This completes the ratings review opened on December 22, 2004. The ratings reflect the company's: * successful sale of its healthcare businesses for $818 million; * its substantially lower balance sheet once cash proceeds from the healthcare sale are used to repay existing debt; and * the leadership position of Laidlaw in the school bus transit segment. The ability of management to be more focused on the operational management of its core school bus operations, which Moody's believes to be the company's strongest and most stable business line, also supports the rating. The ratings are balanced by: * uncertainty about the level of cash flow from Greyhound Inc., the company's next largest business unit, which is now included as a guarantor of the company's debt; * the inclusion of the Greyhound leases in calculating adjusted debt; * the sustainability of earnings from the paratransit operations; and * the potential for substantially increased capital spending at the school bus operation over time. The stable outlook reflects: * the predictability of cash flow from the contractual nature of Laidlaw's Educational Services units; * Moody's expectations that Laidlaw will be able to generate sufficient amounts of free cash flow over the near term from its three core business units (Educational Services, Greyhound, and Transit Services) to amply cover debt service and maintain solid credit metrics; and * conservative financial policies to keep debt levels low. The ratings upgrade takes into account the meaningful improvements in credit profile that have resulted from the sale of the healthcare units and the reduction in debt. However, the ratings are somewhat constrained from further upward revision by Moody's concerns about the long-term sustainability of cash flow that could be derived from the Greyhound and, to a lesser degree, Transit Services business segments without meaningful capital investment in each of those units. Moody's believes that Laidlaw is following a sensible strategic approach with respect to Greyhound, by harvesting cash from the still-profitable aspects of a declining market segment, foregoing growth while reducing capital investment in this business. However, a potential ratings upgrade would require substantial improvement in credit fundamentals coinciding with growth in and diversification of the company's revenue base, which Moody's does not anticipate from Laidlaw over the next few years. The ratings or outlook may be pressured down if the competitive nature of the company's core markets were to change resulting in lower market share or margin reduction, or if the company were to increase debt levels to fund large acquisitions, unexpectedly high CAPEX levels or unanticipated pension plan contributions, or for any aggressive share repurchase or equity distribution program, such that free cash flow falls below 15% of debt or adjusted debt exceeds 3 times EBITDAR. In Moody's view, Laidlaw's sale of its AMR ambulance and EmCare emergency room management businesses addressed two major areas of concern. First, the sale reduced volatility in Laidlaw's cash flows. Historically, the cash flows of both these health care units, while large operations, have been unpredictable in terms of stable cash flow generation and receivables collection, owing to the nature of the business as well as legislative changes. Second, the company reduced the high level of debt relative to the company's revenue base. While the health care units contributed about $1.6 billion of revenue, the units only generated about $120 million of EBITDA and required about $30 to $40 million in annual CAPEX. Promptly following completion of the February 2005 sale, Laidlaw reduced debt by about one-half, repaying $574 million of a term loan due 2009. The considerably reduced debt level, combined with the greater predictability of cash flow support the two-notch senior implied rating upgrade. As Laidlaw intends to repay its costly senior unsecured note with the balance of the sale proceeds and proceeds from the Term Loan, Moody's notes that the ultimate result will be a transformational restructuring of Laidlaw's debt. Moody's estimates pro forma leverage, including Greyhound operations, of about 2.0 times lease-adjusted debt-to-EBITDAR (LTM February 2005), versus a level of about 2.9 times LTM February 2005 EBITDAR, prior to the sale of the medical businesses and completion of all re-financing transactions. With $404 million of 10.75% Laidlaw notes and $150 million of Greyhound's 11.5% notes (not rated by Moody's) proposed to be retired in the proposed refinancing, EBIT-to-interest improves from about 2 times to pro forma 8 times, while pro forma free cash flow is a robust 20% of the $312 million of debt outstanding once all transactions are completed. This debt level represents only about 10% of Laidlaw's revenue base. Somewhat offsetting the more conservative financial structure and more focused operating strategy is Moody's continued concern about the prospects for growth and profitability at Greyhound, particularly since Greyhound is now a restructured subsidiary and a guarantor of all of Laidlaw's debt. Moody's notes strides in improving Greyhound's performance, including the rationalization of route structures with a moratorium on new bus orders (leased or purchased), which has produced a recent trend of lower operating costs and a more focused marketing strategy. This, in Moody's opinion, should result in improved financial results at Greyhound over the near term. However, as long-haul intra-city passenger bus operations is likely to continue to steadily decline, Moody's is concerned over Greyhound's ability to generate stable operating cash flow streams. As such, it will be important that Greyhound demonstrates the ability to maintain market share and pricing levels in its core routes going forward, without substantial increases in maintenance expenses or having to step up levels of new bus expenditures or leases. The Ba2 rating assigned to the proposed $600 million of Credit Facilities is at the same as the senior implied rating, reflects the fact that these Credit Facilities are expected comprise a substantial majority of the company's debt. These Credit Facilities are guaranteed by all subsidiaries of Laidlaw, including Greyhound. Moody's estimates asset coverage of all of the company's debt, including the new unsecured Credit Facilities, to be substantial, which is factored into the senior implied rating. Laidlaw reported total assets of $3.2 billion as of February 2005, net of the sale of the health care units. The largest component of this is PP&E (about $1.44 billion), which is comprised primarily of vehicles. The company also has sizeable balances of accounts receivable ($345 million), insurance collateral ($375 million) and deferred income tax assets ($313 million) on its balance sheet. Against the $600 million total commitment under this facility, Moody's believes that the company's asset base would provide substantial implied coverage even under a distressed sale scenario. The rating on the company's 10.75% senior unsecured notes, to the extent that any amounts remain outstanding following completion of the company's Tender Offer, has only been raised one notch, to B1. The rating of the 10.75% senior unsecured notes is now two notches below the senior implied rating, reflecting their junior claim behind the existing and future senior debt facilities. The notching on these notes also reflects the elimination of all covenant protection currently provided to bondholders under the existing indenture, under terms prescribed by the tender process. The Speculative Grade Liquidity Rating of SGL-2 continues to reflect Moody's assessment of Laidlaw's good liquidity position. Although cash balances will reduce from almost $300 million as of February 2005 to about $13 million upon close, Moody's expects the company's operating cash flow from its businesses will more than adequately cover near term CAPEX and debt service requirements, with little likelihood that the company will have to draw substantially on its revolving credit facility. The SGL rating also reflects the size ($300 million) of the Revolving Credit facility. This facility will be entirely undrawn upon close, and, after an estimated $110 million in letters of credit required over the next 12 months, provides an average of an additional $190 million of liquidity to Laidlaw for any unexpected cash shortfalls, which is important considering the seasonality of the company's Educational Services business segment. This facility is governed by certain restrictive financial covenants, maximum leverage and minimum fixed charge coverage in particular, of which Laidlaw is estimated to have ample cushion upon close of the re-financing transactions. These ratings have been assigned: * $300 million senior bank revolving credit facility due 2010, Ba2; and * $300 million senior term loan due 2010, Ba2. These rating has been confirmed: * Speculative Grade Liquidity Rating of SGL-2. These ratings have been upgraded: * 10.75% senior unsecured notes to B1 from B2; * Senior secured revolving credit facility due 2008, to Ba2 from Ba3; * Senior implied rating, to Ba2 from B1; and * Senior unsecured issuer rating to Ba3 from B2. These rating has been withdrawn: * Senior secured term loan B due 2009, formerly rated Ba3 Laidlaw International, Inc., headquartered in Naperville, Ill., is the leading private provider of school bus services in the US and Canada and para-transit services in the US. The company maintains a fleet of 40,000 vehicles for use in this service, with contracts in 38 states and six provinces of Canada. In addition, the company is the 100% owner of Greyhound Inc., North America's leading provider of inter-city passenger bus services. LAIDLAW INT'L: Soliciting Consents to Amend 10.75% Senior Notes --------------------------------------------------------------- Laidlaw International, Inc. (NYSE:LI) commenced a cash tender offer and consent solicitation for its outstanding $403.5 million aggregate principal amount of 10.75% Senior Notes due 2011. The tender offer is scheduled to expire at 5 p.m. New York City time on June 29, 2005, unless extended. The consent solicitation is scheduled to expire at 5 p.m. New York City time on June 15, 2005, unless extended. The tender offer is being made upon the terms, and subject to the conditions, set forth in the Offer to Purchase and Consent Solicitation dated June 1, 2005, and related Consent and Letter of Transmittal, which more fully set forth the terms of the tender offer and consent solicitation. Holders may withdraw their tenders prior to 5 p.m. New York City time on June 15, 2005, but not thereafter, except as may be required by law or as may be extended under the Offer to Purchase. The total consideration per $1,000 principal amount of Notes validly tendered and not withdrawn prior to the Consent Date will be based on the present value on the Initial Payment Date of $1,053.75 (the amount payable on June 15, 2007, which is the date that the Notes may first be redeemed by Laidlaw), and the present value of interest that would be payable on, or accrue from, the last interest payment date until June 15, 2007, in each case, determined based on a fixed spread of 75 basis points over the yield at 2 p.m. New York City time on June 15, 2005, unless extended, of the 4.375% U.S. Treasury Notes due May 15, 2007. The Initial Payment Date will occur after the Consent Date, promptly following satisfaction of the financing condition, which is expected to occur on June 23, 2005. In connection with the tender offer, Laidlaw is soliciting consents to certain proposed amendments to eliminate substantially all of the restrictive covenants and certain events of default in the indenture governing the Notes. Laidlaw is offering to make a consent payment of $20.00 per $1,000 principal amount of Notes to holders who validly tender their Notes and deliver their consents at or prior to the Consent Date. The purchase price for the Notes will be announced by news release promptly after its determination. Consent Solicitation Holders tendering Notes will be required to consent to proposed amendments to the indenture governing the Notes, which will eliminate substantially all of the affirmative and restrictive covenants and certain events of default and related provisions contained in the indenture. Adoption of the proposed amendments requires the consent of at least a majority of the outstanding principal amount of the Notes. The consummation of the tender offer and consent solicitation is subject to the conditions set forth in the Offer to Purchase, including the receipt of consents of Noteholders representing the majority in aggregate principal amount of the Notes and is conditioned on Laidlaw obtaining the financing necessary to fund the tender offer and consent solicitation. The tender offer will expire at 5:00 p.m. New York City time on June 29, 2005, unless the offer is extended or terminated by Laidlaw. Laidlaw may, subject to certain restrictions, amend, extend or terminate the offer and consent solicitation at any time in its sole discretion without making any payments with respect thereto. Tendered Notes may not be withdrawn and consents may not be revoked after June 15, 2005, except in limited circumstances. Laidlaw has engaged Citigroup Global Markets Inc. and UBS Securities LLC as dealer managers for the tender offer and solicitation agents for the consent solicitation. Questions regarding the tender offer and consent solicitation may be directed to Citigroup at (800) 558-3745 or (212) 723-6106 or UBS at (888) 722-9555 x 4210 or (203) 719-4210. Requests for documentation should be directed to D.F. King & Company at (800) 431-9645 or (212) 269-5550, the information agent for the tender offer and consent solicitation. This announcement is for informational purposes only and is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of a consent with respect to any of the Notes. The tender offer is being made solely by means of the Offer to Purchase. Headquartered in Arlington, Texas, Laidlaw, Inc., now known as Laidlaw International, Inc. -- http://www.laidlaw.com/-- is North America's #1 bus operator. Laidlaw's school buses transport more than 2 million students daily, and its Transit and Tour Services division provides daily city transportation through more than 200 contracts in the US and Canada. Laidlaw filed for chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No. 01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtors. Laidlaw International emerged from bankruptcy on June 23, 2003. * * * As reported in the Troubled Company Reporter on Apr. 14, 2005, Standard & Poor's Ratings Services affirmed its ratings on Greyhound Lines Inc., including the 'CCC+' corporate credit rating. At the same time, the outlook is revised to positive from developing. "The outlook change reflects Greyhound's successful resolution of the default judgment pending against it and the potential for a higher rating if the company's restructuring actions are successful in improving operating performance and credit protection measures," said Standard & Poor's credit analyst Lisa Jenkins. Ratings are currently constrained by competitive market conditions and the company's high debt leverage. Greyhound is owned by Laidlaw International Inc. (BB/Watch Pos/--). Laidlaw does not guarantee Greyhound's debt and its financial support of Greyhound is currently limited to just $15 million. LTX CORP: Inks New $60 Million Term Loan with Silicon Valley ------------------------------------------------------------ LTX Corporation (Nasdaq: LTXX) secured a 5-year, $60 million Term Loan from Silicon Valley Bank, the primary subsidiary of SVB Financial Group (Nasdaq: SIVB). "Silicon Valley Bank has been a valuable financial partner for LTX. They have worked consistently for the last fifteen years to understand our business strategy and market," said Mark Gallenberger, chief financial officer, LTX Corporation. "This loan agreement enhances LTX's financial position and enables us to continue building LTX's market share and Fusion family of products." "It is Silicon Valley Bank's mission to help technology and life science companies of all sizes prosper and we are pleased to continue to support LTX Corporation's growth through this new financing," said Irina Case, senior relationship manager, Silicon Valley Bank. "LTX represents our portfolio of large, publicly- traded clients that require the diverse financial services we customize for companies large and small." About Silicon Valley Bank Silicon Valley Bank -- http://www.svb.com/-- provides diversified financial services to emerging growth and mature companies in the technology, life science and private equity markets, as well as the premium wine industry. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients' success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves clients around the world through 27 domestic offices and two international subsidiaries in the U.K. and India. About LTX Corporation LTX Corporation -- http://www.ltx.com/-- (Nasdaq: LTXX) is a leading supplier of test solutions for the global semiconductor industry. Fusion, LTX's patented, scalable, single-platform test system, uses innovative technology to provide high performance, cost-effective testing of system-on-a-chip, mixed signal, RF, digital and analog integrated circuits. Fusion addresses semiconductor manufacturers' economic and performance requirements today, while enabling their technology roadmap of tomorrow. * * * As reported in the Troubled Company Reporter on March 9, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Westwood, Massachusetts-based LTX Corporation to 'B-' from 'B', and its subordinated debt rating to 'CCC' from 'CCC+', based on expectations for lower earnings and cash flow for the April 2005 quarter. The outlook remains negative. "The downgrade also reflects increasing concerns that the company's use of cash will strain liquidity, in light of the August 2006 maturity of $150 million," said Standard & Poor's credit analyst Lucy Patricola. MM&G ASSOCIATES: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: MM&G Associates, Inc. 454 East Broadway Boulevard Jefferson City, Tennessee 37760-2903 Bankruptcy Case No.: 05-27131 Type of Business: The Debtor owns the Atlas Cement plant in Penn Hills, Pennsylvania. Chapter 11 Petition Date: June 2, 2005 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: David W. Ross, Esq. Babst, Calland, Clements & Zomnir, P.C. Two Gateway Center, 8th Floor Pittsburgh, Pennsylvania 15222 Tel: (412) 394-5400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eckert Seamans Cherin & Legal services $10,996 Mellot, LLC USX Tower 600 Grant Street, 44th Floor Pittsburgh, PA Territ & Associates Surveyor $5,000 10925 Kelso Drive North Huntington, PA 15642 MAGRUDER COLOR: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Magruder Color Company, Inc. dba Radiant Color Company dba Aztech dba Magruder Dispersions 1029 Newark Avenue Elizabeth, New Jersey 07208 Bankruptcy Case No.: 05-2834 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Magruder Dry Color Company, LLC 05-28355 Lucent Color, LLC 05-28360 Graphic Vehicles, Inc. 05-28375 Type of Business: The Debtors manufacture basic pigment. The Debtors also supply quality products to the ink, paint, and plastics industries. Products include organic pigments supplied as dry color, press cake and flushed color dispersions, specialty varnishes, acrylic chip color concentrates, liquid dispersions, and polyolefinic concentrates. See http://www.magruder.com/ Chapter 11 Petition Date: June 2, 2005 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Bruce D. Buechler, Esq. Lowenstein Sandler PC 65 Livingston Avenue Roseland, New Jersey 07068 Tel: (973) 597-2308 Fax: (973) 597-2400 Estimated Assets Estimated Debts ---------------- --------------- Magruder Color $10 Million to $10 Million to Company, Inc. $50 Million $50 Million Magruder Dry $0 to $50,000 $10 Million to Color Company, LLC $50 Million Lucent Color, LLC $100,000 to $10 Million to $500,000 $50 Million Graphic Vehicles, Inc. $500,000 to $10 Million to $1 Million $50 Million Consolidated List of Debtors' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ North Metal & Chemical Company $735,600 Attn: Mr. Fred Fay P.O. Box 1904 609 East King Street York, PA 17405 Wolff & Samson $294,853 Attn: Mr. Daniel Schwartz, Partner 1 Boland Drive, NJ 07052 Essential Fine Ingredients $280,617 Attn: Mr. Harold Kroez, President One Channel Drive P.O. Box 468 Port Washington, NY 11050 Quimetal Industrial, S.A. $276,575 Attn: Mr. Alfredo Claro Los Yacimientos 1301 Santiago, Chile Pacific Coast Enterprise, Inc. $266,434 Attn: Mr. Michael Wang 9555 West Sam Houston Parkway, Suite 425 Houston, TX 77099 Amerada Hess Corporation $210,410 Attn: Ms. Joanne Cozzo P.O. Box 11508 Newark, NJ 07101-4508 Chem-Met Company $172,626 K. Patel Dye Chem Ind. Pvt., Ltd. $135,800 Hebei Xingyu Chemical Factory $128,000 TCC Chem Company Ltd. $124,802 Allegheny Color Corporation $122,871 Biddle Sawyer Corporation $116,181 Lawter International, Inc. $110,531 Univar USA, Inc. $102,890 Uhlich Color Company, Inc. $100,085 Meadwestvaco Corporation $98,952 Lenape Industries, Inc. $96,895 Kearny Steel Container $96,653 Omni Specialty Corporation $96,088 Sun Chemical Corporation $91,411 MAJOR CONTRACTING: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Major Contracting, Inc. 20008 Sherwood Street Detroit, Michigan 48234-2925 Bankruptcy Case No.: 05-57847 Chapter 11 Petition Date: June 2, 2005 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Kenneth M. Schneider, Esq. 645 Griswold, Suite 3900 Detroit, Michigan 48226 Tel: (313) 237-0850 Total Assets: Unknown Total Debts: Unknown The Debtor's List of its 20 Largest Unsecured Creditors was not available at press time. MARSULEX INC: Moody's Affirms $60.7M Sr. Subord. Notes' B2 Rating ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Marsulex Inc., a provider of industrial services including outsourced environmental compliance solutions to businesses in Canada and the United States. The affirmation reflects: * Marsulex's solid business fundamentals with established long term contracts (generally two to seventeen years in length); * improved capital expenditures profile and sequential cash flow generation; and * the initiation of earnings realization from a major project. The latter refers to the company's completion of plant construction in September 2003 for the Syncrude project at Fort McMurray Alberta, Canada and the ramp- up of earnings from this project realized in the company's first quarter ended March 31, 2005. These ratings were affirmed: * B2 subordinated debt rating for 9.625% US denominated $60.7 million senior subordinated notes due 2008; and * Ba3 Senior Implied rating. The ratings outlook is stable. The ratings reflect the company's: * strong competitive position within its key focus areas; * long standing customer relationships in excess of 30 years; and * sizeable growth opportunities with the Syncrude project and the Montreal expansion project. The Syncrude project started generating fee income in January 2005 and is expected to add CAD 7.5 million in EBITDA per year over the 15 year life of the project. The expansion at the Montreal plant is underway and is expected to increase the capacity of the facility by 50% and extend the service agreement to 2015 from 2010. The ratings also benefit from the barriers to entry for the majority of the company's business created by: * the need for significant capital investment; * Marsulex's leading position for 40% of its revenues; and * the close proximity of the company's plants with its customers. However, Marsulex's ratings are constrained by the significant amount of financial leverage. For the twelve months ended March 31, 2005, the ratio of total Debt to EBITDA (adjusted to add back the CAD 4.3 million in one time cash charge during the fourth quarter of 2004 associated with the senior management change) was approximately 3.4 times. Moody's believes the company's coverage of interest is weak for its rating category based on the ratio of EBITDA less capital expenditures to interest of approximately 1.18 for the twelve months ended March 31, 2005. In addition, Moody's anticipates that the company may need to borrow over the near term to finance long term project growth initiatives. Furthermore free cash flow historically has been hindered by the sizeable capital expenditures required during the early periods of new projects. While free cash flow in 2004 was a positive CAD 10.6 million, 9.3% of debt, Moody's expects free cash flow in 2005 to be depressed due to the sizeable amount of capital expenditures required for the Montreal expansion, which is expected to come online in 2006. The ratings are further limited by the company's significant exposure to changes in commodity prices (roughly 40% of 2004 revenues), which is somewhat mitigated by the structure of the chemical contracts. The company's liquidity profile while, limited by the lack of a committed external credit facility, is sufficient to fund any seasonal working capital needs and maintenance capital expenditures with cash on hand of CAD 27 million as of March 31, 2005. Liquidity also benefits from the limited amount of near term debt maturities of CAD 1.6 million. The B2 rating on the U.S. denominated $60.7 million senior subordinated 9.625% bonds reflects their subordinated position in the capital structure to CAD 40 million of a secured long-term loan incurred in June 2003 to finance the Syncrude project. Moody's expects coverage under the senior subordinated notes to be sufficient and expects a full recovery in a distress going concern or liquidation scenario. Marsulex's stable outlook reflects cushion in the company's operating profile to absorb any modest adverse economic conditions. The ratings outlook could benefit from: * the sustained improvement of free cash flow generation in excess of 15% of total debt; * reduction in leverage; and * increased percentage of contracted fee based earnings, which in 2004 was approximately 59% of EBITDA. Conversely the ratings could be pressured by the inability of the company to return to positive free cash flow in 2006 and sustainable free cash flow to debt of at least 10% in the forward years, as well as any material debt funded acquisitions. METROPCS INC: Sr. Notes Offer Cues S&P to Withdraw Junk Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services has withdrawn its CCC/Negative/-- corporate credit and senior unsecured debt ratings of privately owned, Dallas, Texas-based wireless carrier MetroPCS Inc. following the completion of the company's previously announced tender offer relating to its $150 million 10.75% senior notes due 2011 for $1,192.72 for each $1,000 principal amount of notes outstanding. "While the tender included a provision for eliminating restrictive covenants and default provisions in the note indenture, the tender was not considered a distressed exchange given that the company was repurchasing the notes above par," said Standard & Poor's credit analyst Allyn Arden. Standard & Poor's corporate credit and senior unsecured ratings on MetroPCS were lowered to CCC from CCC+ in March 2005 because of the company's ongoing failure to file financial statements with the SEC, a requirement under the note indenture, and the need to obtain multiple waivers from its note holders. METROPOLITAN MORTGAGE: Asset Decline Cues Fitch to Lower Ratings ---------------------------------------------------------------- Fitch Ratings has affirmed and taken rating action on these Metropolitan Mortgage & Securities issues: Series 1998-B -- Class X affirmed at 'AAA'; -- Class M1 upgraded to 'AAA' from 'AA'; -- Class M2 affirmed at 'A'; -- Class B1 downgraded to 'B-' from 'B'; -- Class B2 remains at 'C'. The affirmation on $6,805,499 of the above classes reflect credit enhancement consistent with future loss expectations. The negative rating action on class B1 is the result of poor collateral performance and the deterioration of asset quality beyond original expectations, and affects $5,833,284, of outstanding certificates. The overcollateralization amount for series 1998-B has been completely depleted as of November 2003. Therefore, the only credit enhancement available for class B1 is the $846,796 outstanding balance of class B2. Class B2 had started taking principal write-downs in November 2003, with write- downs currently aggregating at $1,097,632. The three month average monthly gross excess spread is $15,516, which is not enough to cover the three month average monthly gross loss of $91,677. The upgrade on $8,963,569 of the above classes is due to the growth within credit enhancement (CE), comprising subordination and OC relative to future loss expectations. The CE level for class M1 has increased by more than six times original enhancement levels at the closing date (Nov. 24, 1998). Class M1 currently benefits from 60% subordination (originally 9%). Series 1998-B, with 12% of original collateral remaining, is a mixed asset transaction. As of the September distribution, 91% of the collateral is residential mortgages, and 9% is commercial, including restaurant, retail property, vacant land, and mixed use property. Currently, 8% of the mortgage pool has MI down to 80% loan to value, which will serve to somewhat mitigate the overall loss numbers. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/. MID-STATE RACEWAY: TrackPower Shareholders to Vote on Acquisition ----------------------------------------------------------------- TrackPower, Inc. (OTCBB:TPWR) intends to hold a shareholders meeting as soon as possible to obtain approval on various proposals. Management has begun working on the necessary preliminary documents to deliver to the Securities and Exchange Commission in order to hold a meeting later during calendar 2005. The Company has several proposals requiring shareholder approval including: -- The acquisition of Tioga Downs racetrack, -- The acquisition of Vernon Downs racetrack, and; -- Renaming the Company Liberty Racing and Gaming Inc. The Tioga Downs property is currently owned by Tioga Downs Racetrack LLC, which is a joint venture of Asolare II LLC (Asolare) and Southern Tier Acquisitions LLC (Southern Tier). John Simmonds and Kenneth Adelberg, directors of TrackPower, are shareholders of Asolare. Southern Tier is solely owned by Jeffrey Gural. The directors have determined that due to the non-arm's length nature of the proposed transaction between TrackPower and Asolare, it will be necessary to obtain shareholder's consent to proceed with the transaction. The Vernon Downs property is currently owned by Mid-State Raceway, Inc., and it is intended that the property will be acquired by TrackPower. The Company has agreed in principle that the Vernon Downs property should become a cornerstone of the new Company however the specific terms and conditions of an acquisition have not yet been completed. The directors are of the opinion that if negotiations result in a mutually acceptable proposal, the transaction will have to be approved by the shareholders of the Company. As part of the evolution of the Company, the directors have decided to change the name of the Company from TrackPower, Inc., to Liberty Racing and Gaming, Inc. The name change is intended to better reflect the direction of the Company in the future. The Company will have two main sources of revenue arising from horseracing wagering and video lottery terminal (VLT) gaming. Subsequent to year-end, the Company has raised approximately $827,000 through equity private placements and has advanced approximately $710,000 to fund either the development of Tioga Downs or provide debtor in possession (DIP) financing to Vernon Downs. The Company's contributions have been matched by funding provided by Southern Tier Acquisitions LLC. As previously announced, Mr. Edward M. Tracy has been appointed CEO of the TrackPower and will be directing the affairs of the Company effective immediately. On May 26, 2005, Mr. Tracy was also appointed a director of TrackPower. Mr. Gary N. Hokkanen has also been appointed Chief Financial Officer of the Company effective May 26, 2005. Mr. Hokkanen serves as CFO of Wireless Age Communications, Inc., and Azonic Corporation. Mr. Hokkanen will be primarily responsible for public company financial reporting, assisting in the preparation of the necessary proxy material for the shareholders meeting and generally supporting Mr. Tracy as the Company begins to grow. Effective immediately, the Company is also reactivating its Web site at http://www.trackpower.com/and will refresh information as required over the next several weeks. Ed Tracy, CEO of TrackPower commented, "There are several good opportunities in this sector at the current moment and financial markets are excited about gaming in general. We believe that we can bring a number of parties together to capitalize on these opportunities and create shareholder value. We have identified two initial acquisition targets that will form a base. From that base we believe we can move quickly to consolidate other racing and gaming assets. We look forward to announcing other opportunities as they present themselves." The principals of Tioga Downs Racetrack are currently the DIP lenders and the lead bidders to purchase the assets. The company plans to complete the 2005 race season, post bankruptcy, and complete the VLT facility. About TrackPower, Inc. TrackPower, upon completion of this transaction will own Tioga Downs. Tioga Downs is located in Nichols, N.Y. on the new Interstate 86 between Binghamton and Corning. Tioga Downs is situated on 130 acres and was home to a state-sanctioned Quarter Horse racetrack. This facility is being redeveloped into a harness track and a 750-machine VLT casino. About Vernon Downs Headquartered in Vernon, New York, Mid-State Raceway, Inc., dba Vernon Downs -- http://www.vernondowns.com/-- operates a racetrack, restaurant and gaming resort. The Company and its debtor-affiliate filed for chapter 11 protection on August 11, 2004 (Bankr. N.D.N.Y. Case No. 04-65746). Lee E. Woodard, Esq., at Harris Beach LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection, they listed estimated debts of $10 million to $50 million but did not disclose its assets. MIRANT CORP: $2.35 Billion Exit Financing Proposal Draws Fire ------------------------------------------------------------- On May 12, 2005, Mirant Corporation and its debtor-affiliates made a major step toward emergence from Chapter 11 protection by obtaining a commitment letter, from: 1. J.P. Morgan Securities Inc., 2. J.P. Morgan Chase Bank, N.A., 3. Deutsche Bank Securities Inc., 4. Deutsche Bank Trust Company Americas, 5. Deutsche Bank AG Cayman Islands Branch, and 6. Goldman Sachs Credit Partners L.P. A full-text copy of the Commitment Letter and other related financing documents is available at no cost at: http://bankrupt.com/misc/Commitment_Letter.pdf The $2.35 billion Commitment Letter is allocated among: (a) a senior secured revolving credit facility for $1 billion; (b) a term facility for $500 million; and (c) a bridge facility for $850 million. Under a Fee Letter, JPMorgan Chase Bank, Goldman Sachs Credit Partners and Deutsche Bank Trust are entitled to the payment of certain fees as consideration for the agreements and commitments under the Commitment Letter. The aggregate fees payable will depend on whether the financing closes, the length of time until closing, the ultimate size of the facilities after giving effect to any reduction in the Credit Facilities and the timing or any refinancing of the Bridge Facility of any reduction. The Debtors will not incur any fees under the Fee Letter unless there is a Closing, other than the commitment fee in respect of the Bridge Facility of 0.375% of the commitment amount of the facility. The fees and expenses associated with the Credit Facilities include customary commitment, underwriting, arrangement, administration and fronting fees. The Fee Letter also contemplates a modest "tail" on the payment of commitment fees. The Debtors agree to pay to the Commitment Parties $15,000,000, in the event that after entry into the Fee Letter, the Debtors: -- confirm a plan of reorganization that is materially different from the Plan described in the Commitment Letter; and -- consummate any Alternate Transaction in connection with the alternate plan without engaging the Commitment Parties to provide, arrange, place or underwrite the Alternate Transaction. The Debtors sought the Court's permission to file the Fee Letter under seal, and to keep confidential the Fee Letter indefinitely -- not to be deemed unsealed 60 days after the final disposition of the Debtors' bankruptcy proceedings. Court Allows Sealed Filing of Fee Letter Judge Lynn permits the Debtors to file the Fee Letter under seal, and to keep the Fee Letter confidential indefinitely. The Fee Letter will not be unsealed 60 days after the final disposition of the Debtors' bankruptcy proceedings. The Court will convene a hearing to consider approval of the Debtors' Exit Financing Motion on June 1, 2005, at 10:30 a.m. Equity Committee Wants Seal Order Vacated Section 107(b) of the Bankruptcy Code compels a bankruptcy court, on request of a party-in-interest, to "protect an entity with respect to a trade secret or confidential research, development, or commercial information; or protect a person with respect to scandalous or defamatory matter contained in a paper filed in a case under this title." According to Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., in Austin, Texas, the Fee Letter does not meet any of these criteria. The Seal Motion stated that the "Debtors seek to file the Fee Letter under seal because the Fee Letter contains certain terms relating to pricing alternatives, which if disclosed publicly, would substantially impair the Debtors' ability to achieve the best terms available from the marketplace." Mr. Taube contends that Section 107(b) does not contain a provision allowing for the sealing of a document to protect a debtor's ability to achieve the best terms available from the marketplace. The Official Committee of Equity Security Holders, therefore, asks Judge Lynn to vacate the Seal Order and direct public disclosure of the Fee Letter. Objections to Exit Financing Motion (A) MAGi Committee The Official Committee of Unsecured Creditors of Mirant Americas Generation, LLC, sought and obtained Judge Lynn's permission to file its objection to the Debtors' Exit Financing Motion under seal. (B) MirMA Landlords and U.S. Bank The MirMA Landlords and U.S. Bank National Association, as pass- through and lease-indenture trustee, seek clarification that Mirant Mid-Atlantic, LLC, Mirant Potomac River, LLC, and Mirant Peaker, LLC, and their leases are unaffected by the proposed Exit Financing. While the Debtors assert that "no breach, impairment or encumbrance in respect of MirMA is contemplated," Phillip L. Lamberson, Esq., at Winstead Sechrest & Minick P.C., in Dallas, Texas, tells the Court that the Exit Financing documents are ambiguous with respect to Mirant Potomac River's and Mirant Peaker's facilities. "Potomac River and Peaker are obligors under certain notes to MirMA, and obligated as well under a capital contribution agreement," Mr. Lamberson relates. "The Leases contain certain covenants respecting Potomac River and Peaker and their obligations in respect of the Leases." Mr. Lamberson notes that the Debtors' request excludes MirMA and its subsidiaries as obligors. Mirant Potomac River and Mirant Peaker are proposed to be transferred to MirMA under the Debtors' First Amended Plan. The MirMA Landlords and the Trustee ask the Court to deny the Debtors' Exit Financing Motion to the extent that the proposed Exit Financing would: (1) obligate MirMA or its subsidiaries; (2) encumber any assets of MirMA or its subsidiaries; (3) be inconsistent with, or cause any of the Debtors to violate, any covenant of the Leases. (C) MAGi Bondholders "The exit financing is premature at this time," Jeffrey W. Hurt, Esq., at Hurt & Lilly, LLP, in Dallas, Texas, tells the Court, on behalf of the Ad Hoc Committee of Bondholders of Mirant Americas Generation, LLC. The Debtors should first work to resolve the numerous issues surrounding the structure of the Plan instead of rushing to seek approval of the Exit Financing Motion and saddling the estate with an obligation to pay the $15 Million Penalty Fee, Mr. Hurt suggests. The Plan is likely to change significantly, Mr. Hurt says, pointing out that numerous objections to the Plan and Disclosure Statement have been filed. Additionally, the Plan is based on critical assumptions about the value of the Debtors, which are still being litigated. The Debtors, according to Mr. Hurt, have not provided any argument or evidence that financing will not be available at a later date from the Commitment Parties or other lenders. The Debtors have failed to adequately describe critical features of the Exit Facility, thus depriving the Court and parties-in- interest of the ability to properly evaluate its effect on the Debtors, Mr. Hurt adds. The Exit Financing Motion implies that the additional borrowings would be used to finance a cash-payout of the Short-term Noteholders in the event that the Short-term Noteholders do not receive debt securities. However, the Exit Financing Motion does not specify whether the additional funds in fact would be used only in that event and for that purpose. Furthermore, the Exit Financing Motion, which summarily states that "the Debtors" will pay the $15 Million Penalty Fee, does not disclose whether the funds would be distributed from one or multiple bankruptcy estates and, in the latter case, how that payment obligation would be distributed. Without that information, Mr. Hurst says, the Court and parties- in-interest cannot meaningfully evaluate the Exit Facility. (D) New York The State of New York asks the Court deny the Debtors' Exit Financing Motion until the State and other parties are heard on their objections to the Amended Disclosure Statement and Plan. Maureen F. Leary, Esq., Assistant Attorney General of the New York State Department of Law, contends that the Debtors' Exit Financing Motion failed to adequately specify the provisions of the Exit Financing Agreement that will affect certain Debtors, including the New York Debtors. Consequently, the question of whether the Exit Financing Agreement is in the best interest of all Debtors, including the New York Debtors, cannot be answered, Ms. Leary notes. The State also objects to the Debtors' filing under seal of the "Fee Agreement Letter." According to Ms. Leary, the Debtors made no showing that the Fee Agreement Letter qualifies as a document that should be sealed under the rigorous standard Section 107 of the Bankruptcy Code. Moreover, the State and other governmental entities are not represented by the Committees appointed in the case and are prejudiced in not having access to the Fee Agreement Letter so that the full import of the motion and the Exit Financing Agreement can be understood. The State joins in the Equity Committee's request to vacate the order sealing the Fee Agreement Letter. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Gets Court Approval on Nine Settlement Agreements -------------------------------------------------------------- Mirant Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Northern District of Texas' approval of nine settlement agreements entered into with various entities, thereby resolving certain claims asserted against them. Debtors Claim No. Claimant ------ --------- -------- Mirant Corp., 7586 San Francisco Bay Regional Mirant Potrero, 7587 Water Quality Control Mirant Delta, LLC 7588 Board Mirant Corp., 7583 Massachusetts Department Mirant Kendall, LLC, 7584 of Environmental Mirant Canal, LLC 7585 Protection Mirant Corp., 6594 Burns & McDonnell Mirant Sugar Creek LLC, 6616 Engineering Company, Mirant Zeeland Inc. Mirant Corp. 7265 Gil Wisniak, on behalf of 7811 himself and all persons who had purchased the MAG Bonds Mirant Potrero, LLC, 7522-7525 California Department of Mirant Delta, LLC 7630,7631 Toxic Substances 7631 Control Mirant Corp., 6217,6692 Gas Transmission MAEM 7915,7916, Northwest, Corporation 7917 Mirant Corp. 2173 NSTAR Gas Company, 2174 Cambridge Electric 6259 Light Company, Commonwealth Electric Company, Boston Edison Company, NSTAR Steam Corporation Mirant Corp. 47 Arena Operations, LLC, successor-in-interest to Turner Arena Operations, Inc. Mirant Corp., 4608 Edison Mission Energy, and Mirant EcoElectrica 4609 EME del Caribe Investments I, Ltd., 4610 Puerto Rico Power 4611 Investments, Ltd. 4612 A. San Francisco Bay Settlement The San Francisco Regional Water Quality Control Board is a governmental entity in the State of California that regulates water quality pursuant to state environmental laws and certain provisions of the California Health and Safety Code. On January 13, 2004, the SF Water Board filed Claim Nos. 7586, 7587 and 7588 due to alleged groundwater contamination at the Mirant power plants in Potrero and Pittsburg. The Debtors objected to the Claims since they were filed late, and on the ground that Mirant Corp. is not the owner or operator of both plants. Additionally, Mirant asserted that the SF Water Board has not alleged a basis for holding it, as parent, liable for any claims that might be sustained as to Potrero or Delta. The parties agree that the three claims are withdrawn. B. Massachusetts Settlement Agreement On January 13, 2004, Massachusetts Department of Environmental Protection filed Claim Nos. 7583, 7584 and 7585 against Mirant Corporation, Mirant Kendall, LLC and Mirant Canal, LLC. Massachusetts asserts, among other things, that the Debtors have liability to it under the Massachusetts Oil and Hazardous Material Release Prevention and Response Act, G.L. c. 21E and 310 C.M.R. Section 40.0000. et seq., as a result of certain activities at the Kendall Facility and the Canal Facility. The Debtors are allegedly liable for a release of oil and hazardous material at the Kendall Facility, and the manufacturing, processing, or otherwise use of toxic or hazardous substances at the Canal Facility. The Debtors objected to the Claims asserting, among others, that the claims were filed late. After negotiations, the parties agreed that Claim No. 7584 against Mirant Kendall is allowed for $26,650. Claim No. 7585 against Mirant Canal is allowed for $14,800. Claim No. 7583 asserted against Mirant Corp. is disallowed. C. Burns & McDonnell Engineering Company, Inc. In March 2001, Mirant Zeeland entered into an agreement with Burns in connection with the Zeeland Power Plant. Mirant Sugar Creek also entered into an agreement with Burns in connection with the Sugar Creek Combined Cycle Power Plant on May 10, 2002. Burns filed Claim No. 6616 for $584,949 against Mirant Zeeland and Claim No. 6594 for $12,133,576 against Mirant Sugar Creek. The Claims are alleged secured claims based on Burn's recorded mechanic's lien for certain damages suffered under the Agreements. The Debtors sought disallowance of the Claims. Mirant Sugar Creek asserted that Claim No. 6594 should be reclassified as a general unsecured claim, and disallowed because Burns failed to provide documentation in support of the Sugar Creek Claim. Mirant Zeeland, on the other hand, asserted that Claim No. 6616 should be reclassified as a secured claim to the extent of its $13,645 lien and as an unsecured claim for any remaining amounts on the ground that the amount of the claim exceeded the amount of its lien. The Debtors also want the Court to disallow Burns' Zeeland Claim for $34,845 for alleged construction services. As a result of arm's-length negotiations, the parties agreed, among others, that Claim Nos. 6594 and 6616 are allowed as fully secured claims for $3.2 million and $550,000 for all purposes and will be paid in cash by Mirant to Burns on or before the Debtors' plan confirmation date. D. Wisniak, et al. Settlement Agreement On June 11, 2003, Gil Wisniak filed a class action on behalf of himself and all persons who had purchased the bonds of Mirant Americas Generation, LLC, in 2002. The Action styled Gil Wisniak v. Mirant Americas Generation, LLC, et al., Civil Action No. 2003-CV-71095, was lodged in the Superior Court of Fulton County, Georgia. On July 22, 2003, the action was removed to the United States District Court for the Northern District of Georgia, Atlanta Division and designated as Civil Action No. 1:03-CV-2049. In the complaint, Mr. Wisniak alleged claims for violations of Sections 11 and 15 of the Securities Act of 1933. The defendants include MAGi, Richard J. Pershing, J. William Holden III, Stephen G. Gillis, S. Marce Fuller, and Raymond D. Hill. On November 19, 2003, the Bankruptcy Court stayed the Litigation, barely a month after the District Court administratively closed the Litigation. Mr. Wisniak filed Claim No. 7265 in his individual capacity and Claim No. 7811 on behalf of himself and a putative class for liability arising out of the Litigation. The Debtors commenced negotiations with the Claimants and reached a compromise. The parties agreed, among others, that: a. The Defendants will pay $2,250,000 in principal amount that will be placed in an interest bearing escrow account; b. An unsecured claim for $2 million will be allowed; and c. In the event that the Class Members who choose to opt out of the Settlement own more than 1%, in the aggregate, of the total number of MAGi Bonds purchased, the Defendants will have the option to withdraw from the Settlement. E. California Department of Toxic Substances Control The California Department of Toxic Substances Control is a governmental entity in the State of California that is responsible for enforcing state environmental laws. Pursuant to the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Department can seek recovery of its response costs from responsible parties. In January 2004, the Department filed six proofs of claim against Mirant Delta and Mirant Potrero, relating to potential environmental response costs, hazardous waste fees, and penalties, among others. The Debtors investigated the Claims and subsequently entered into negotiations with the Department. The parties agreed that Claim Nos. 7522 and 7523 are allowed as general unsecured claims against Mirant Delta. Claim Nos. 7524 and 7525 are allowed as general unsecured claims against Mirant Potrero. Claim Nos. 7630 and 7631 are withdrawn. G. Gas Transmission Northwest Corporation Settlement Agreement GTN Corporation filed Claim Nos. 6217, 6692, 7915, 7916 and 7917. GTN asserts liability for breach of contract against Mirant Americas Energy Marketing, and an unsecured claim for $53,123,400 in rejection damages plus all costs and fees. Claim No. 7917 asserts liability for $32,843,000 based on a Guarantee Agreement. The Debtors objected to the GTN Claims. To avoid the cost of litigation, the Debtors and GTN agreed to settle. Judge Lynn accordingly approves the parties' Settlement Agreement. GTN will therefore have a final present value allowed claim against MAEM equal to $25,000,000, and another $25,000,000 against Mirant based on the Guarantee, subject to reduction by the value of any consideration paid or distributed to GTN from MAEM on the Allowed Claim. GTN will retain the Guarantee Claim for any amount that remains unsatisfied. Claim Nos. 6217, 6692 and 7915 are withdrawn. The claim amount for Claim No. 7916 and 7917 are deemed modified and amended. Judge Lynn also rules that the Order approving the Settlement Agreement will impact the claims asserted by Credit Suisse First Boston, as agent, and Wachovia Bank, N.A., only to the extent of otherwise applicable non-bankruptcy law. H. Arena Operations Settlement Agreement On May 2, 2000, Mirant Corp. and Arena Operations, LLC, successor-in-interest to Turner Arena Operations, Inc., entered into a Suite License Agreement. The License Agreement was deemed rejected on September 15, 2003. On September 11, 2003, Turner Arena filed Claim No. 47, a general unsecured proof of claim against Mirant for $1,447,924 for the unpaid fees under the License Agreement. Mirant agrees that Turner is the holder of an unsecured claim against Mirant's estates. The parties agreed that Turner Arena's successor-in-interest will have an allowed general unsecured claim for $500,000 against Mirant Corp. I. Edison Mission Energy Settlement Agreement Mirant sought to obtain the controlling interest in EcoElectrica L.P., whose principal asset was a 540-megawatt electric generation facility in Puerto Rico in 2001. The acquisition was pursuant to two separate, but cross-contingent, stock purchase agreements. Mirant terminated the stock purchase agreements because certain closing conditions had not been satisfied or waived as of December 31, 2001. Edison Mission contended that Mirant was not entitled to terminate the stock purchase agreements. On March 8, 2002, Edison Mission filed a complaint for damages for breach of contract against Mirant in the Superior Court of the State of California, County of Orange -- Edison Mission Energy, et al. v. Mirant Corp., et al., Case No. 02CC00059. Edison Mission amended the Complaint asserting claims for breach of contract, fraud, conspiracy to defraud, and negligent misrepresentation. On October 29, 2003, Edison Mission filed Claim Nos. 4608, 4609, 4610, 4611, 4612, and 4613. The Debtors objected to the proofs of claim. On November 22, 2004, venue of the Claims and Objection was transferred to the United States Bankruptcy Court for the Southern District of New York before Judge Arthur J. Gonzalez in In re Enron Corp., Case No. 01-160304. On January 3, 2005, Mirant asked the Texas Bankruptcy Court to estimate the Claims. Subsequently, the parties informed the Bankruptcy Courts that they have reached an agreement in principle with respect to the Claims. As a result, Judge Lynn stayed all further proceedings relating to the Estimation Application. The substantive part of the Settlement Agreement provides that Claim No. 4612 will be allowed as a prepetition general unsecured claim against Mirant Corp. for $7,000,000. Claim Nos. 4608, 4609, 4610, 4611 and 4613 will be disallowed in their entirety. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Bayerische Opposes Substantive Consolidation --------------------------------------------------------- Bayerische Hypo-und Vereinsbank AG holds a claim for not less than $222.9 million against Mirant Americas Energy Marketing, LP, which is unconditionally guaranteed by Mirant Corporation. Bayerische Hypo-und's claims against MAEM and Mirant arise under a series of related agreements that effectuated a prepaid forward commodity transaction with MAEM. The transaction closed on October 11, 2001, after more than six months of careful negotiation among the parties. Jack R. Bird, Esq., at Bergman & Bird, L.L.P., in Dallas, Texas, believes that MAEM cannot be substantively consolidated with Mirant. Consolidation cannot be imposed to alter the contractual rights of objecting creditors where the parties understood that they were dealing with separate companies, prepetition rights are clear, MAEM itself warranted the validity and enforceability of its contractual obligations, and its assets and liabilities are not hopelessly entangled, Mr. Bird contends. Mr. Bird adds that the Debtors' disclosures regarding substantive consolidation lack the necessary information required under Section 1125 of the Bankruptcy Code. In attempting to eviscerate more than $600 million of claims against Mirant's affiliates, Mr. Bird says, the Disclosure Statement addresses substantive consolidation in a mere 3 pages of cursory discussion. "The Debtors' failure to elaborate is a fatal flaw because there is no way that either creditors can vote on or the Court can approve the Plan without further disclosure." Mr. Bird points out that the proposed substantive consolidation will impermissibly strip Bayerische Hypo-und of its fundamental and substantive right to recover from both of its contractual counterparties -- MAEM and Mirant. In essence, Mr. Bird contends that substantive consolidation cannot be used to reduce Bayerische Hypo-und's direct claims against MAEM and Mirant to a single recovery, because: a. MAEM and Mirant are not substantially identical; b. MAEM and Mirant are not hopelessly commingled -- the Debtors can and should provide a reasonable estimate of MAEM's inter-company assets and liabilities; c. The Debtors, both before and after Bayerische Hypo-und entered into its transaction with MAEM and Mirant, repeatedly assured investors through their public filings that MAEM was a separate and independent entity conducting commercial transactions; d. Bayerische Hypo-und relied on the separate credit of MAEM and Mirant as evidenced by, among other things, the structure of the prepaid forward commodity transaction and the separate and express representations and warranties of MAEM and Mirant; e. Bayerische Hypo-und will be severely prejudiced by the proposed substantive consolidation because it will reduce its recovery by millions of dollars; and f. The Debtors' proposed substantive consolidation is inequitable and violates Sections 1122 and 1129 of the Bankruptcy Code. Mr. Bird notes that there is an alternative to the Debtors' Plan -- compensate Bayerische Hypo-und in additional New Mirant Common Stock, cash or even preferred shares for its claim against MAEM, allowing the Debtors to move forward with their Plan without severely prejudicing Bayerische Hypo-und. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) MONADNOCK VIEW: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Monadnock View Holdings, LLC P.O. Box 682 Peterborough, New Hampshire 03458 Bankruptcy Case No.: 05-12250 Type of Business: The Debtor operates a restaurant and a spring water transfer station. Chapter 11 Petition Date: June 2, 2005 Court: District of New Hampshire Live Database (Manchester) Judge: Mark W. Vaughn Debtor's Counsel: Grenville Clark, Esq. Gray, Wendell & Clark, PC The Center of NH 650 Elm Street Manchester, New Hampshire 03101 Tel: (603) 625-4100 Fax: (603) 625-4154 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. MOUNT SINAI: Moody'a Affirms $664 Million Bond Rating at Ba1 ------------------------------------------------------------ Moody's Investors Service has affirmed its Ba1 rating assigned to Mount Sinai-NYU Medical Center Health System's outstanding Series 2000 bonds ($664 million outstanding). The outlook has been revised to stable from negative. The affirmation is in conjunction with annual surveillance, receipt of audited fiscal year 2004 financial statements and discussions with management at Mount Sinai Hospital and NYU Medical Center. The rating is based on financial performance and balance sheet measures of the system that stabilized in fiscal year 2004 after a multi-year decline and individual strategies put into place by the two AMCs that are anticipated to result in improved financial profiles for each AMC. Currently, the strategic initiatives and group dynamics of the obligated group are geared towards an eventual separation and operating even more independently from each other (see legal discussion below). The outlook has been revised to stable from negative as we believe the system is demonstrating that it has stabilized its operations and implemented initiatives to stem the large losses that have plagued the system since its formation. The obligated group is comprised of: * Mount Sinai Hospital, * NYU Medical Center, and * Hospital for Joint Diseases. LEGALS: The obligated group includes both Mount Sinai Hospital and NYU Medical Centers/HJD, who are jointly and severally liable for the total Series 2000 debt. Each obligated group member has additional debt that is outside of the obligated group and not jointly secured. Bondholders should be aware that the system is revising certain MTI covenants in conjunction with the remarketing of its Series B and C bonds ($120 million) and a portion of its Series A bonds ($50 million) to broaden the options for a withdrawal from the obligated group. By purchasing the remarketed bonds, it will be assumed that these bondholders consent to the changes to these covenants. It is also assumed that once approval by 51% of bondholders is attained, that the changes will be deemed to be legally amended and that DASNY will consent to the changes to the MTI. These changes are being included in the remarketing agreements: 1) a withdrawal from the obligated group would be permitted only if that entity's pro rata debt is repaid in full (currently no member of the OG can withdraw from it); 2) withdrawal is permitted if the rating for the remaining OG members is not downgraded when one member leaves the OG; and 3) the debt service coverage for the remaining OG members for each of the last two years (based on audited financial statements) is not less than 1.25 times and either 1.50 times for the remaining members if such withdrawal had occurred at the beginning of the 12 month period or the ratio of long term debt to capital is not greater that it would have been had the withdrawal not occurred, or net assets of the OG is not less than 60% of the net assets of the OG at the end of the fiscal year immediately preceding the withdrawal of that member from the OG. A change to the loan agreement has also been proposed that would allow DASNY to release the mortgage of the member leaving the obligated group once that member's pro rata debt is repaid. This change would also be effective with 51% approval of bondholders. Swaps MSU is not party to any swaps. NYUMC is party to a floating to fixed rate swap with HSBC Bank USA, NA in the notional amount of $54.5 million that expires in 2008. Fiscal 2004's Deficit Greatly Improved From 2003 The system completed another year of deficit operating financial performance (fiscal year ending December 31, 2004); however the $52.2 million operating loss was significantly improved from the $91.3 million operating loss incurred in fiscal 2003 which significantly missed the budgeted 2003 loss levels (Moody's excludes one time nonrecurring items from revenue). The 2004 operating deficit on total operating revenue of $1.93 billion resulted in operating cashflow of $95.5 million (69.5% increase over 2003 levels) resulting in an improved operating cashflow margin of 5.0%, and improved MADS coverage of 2.05 times from 1.56 times (Moody's included investment income normalized at 6%). The system's debt increased by $67.5 million in 2003 with the addition of a working capital loan, construction loan and accounts receivable financing. As a result, the system remains leveraged as evidenced by its above average debt-to-cashflow of 9.1 times and cash to debt of 48% but we do note that these indicators are improved from the prior year and halt the spiraling downward trend. The improved financial performance was particularly evident at Mount Sinai which decreased its 2003 deficit from $82.1 million to $45.3 million through disciplined expense controls, major revenue cycle improvement that increased top line revenue including the benefits derived from improved contract terms realized through determined negotiations. Increased volume (admissions were up 4% to 49,725 admissions) and acuity were also key contributors to the turnaround. A change in the culture at MSH to one of accountability, new personnel in the finance and billing departments and adherence to productivity improvement benchmarks can be credited with the significant improvement at that campus. Moody's believes the controls and financial oversight now evident have been effective as the turnover in financial leadership was detrimental to establishing a pattern of budgeting consistency and confidence in meeting budget expectations. The new volume has created capacity issues but growth is still anticipated from targeted physician recruitments and strengthened affiliations with its affiliated hospitals. Controlling the growth of expenses to below revenue growth remains the critical factor to the maintaining the improved performance going forward. MSH also restructured its accounts receivable lending program during 2004, replacing GMAC with an improved accounts receivable lending agreement ($400,000 annual savings expected) with General Electric Capital Corporation. NYUMC reduced its deficit from $11.3 million in 2003 to $7.8 million in 2004 and is anticipating a 1% positive operating margin in 2005 following improved contract negotiations that concluded in 2004 for its eight largest contracts (93% of managed care revenue) which included rate increases that are expected to generate $44 million of improved revenue over the 3 year contract terms. Cap Gemini is helping with revenue cycle initiatives that in conjunction with length of stay reductions and performance management are anticipated to keep NYUMC on an improving financial trend. Balance Sheet Improved In 2004 With Performance And Asset Sales Cash increased during 2004 by $87.5 million at the system, largely due to the $59.5 million gain on the sale of real estate (1200 Fifth Avenue) by MSH and favorable reduction in days in accounts receivables at both AMCs. Total cash at fiscal year end 2004 of $351.2 million equates to an improved 69 days from 56 days but is still light for a system of this size (Moody's excludes alternative investments from unrestricted cash due to the limited immediate access to these funds). MSH holds the majority of the system's cash although all of it is available for total system obligations. 2005 Financial Performance Anticipated To Improve Management's goal for the system is to break even from operations in 2005. MSH is budgeting similar results for 2005 compared to 2004 performance although the expectation is for improved performance from last year's results. Increasing labor costs and a payer mix that is heavily weighted toward Medicare and Medicaid (62% of gross revenue) will temper the gains expected from: * the volume increases, * service line developments in oncology, * rehabilitation, * cardiology and neurology, and * strengthened affiliation relationships. Through March 31, 2005 (1Q05), MSH is reporting a $785,000 operating gain compared to an $8.9 million operating deficit in the comparable 2004 period. A 3% increase in volume and increased acuity are key drivers of this material improvement in performance. NYUH is also demonstrating an improved financial trend, recording an operating profit of $1.2 million through March 31, 2005 compared to a $2.5 million operating deficit for the first quarter of fiscal 2004, aided by volume and acuity increases and improved payer rates. Initiative Underway To Continue Financial Trend The turnaround plans begun in 2004 have identified several key areas of focus that will increase patient revenue and cashflow and we believe the individualized strategic plans of MSH and NYUMC indicate continued movement toward dissolving the merger between these two academic medical centers. Cardiology has been identified as a service line that could be expanded at MSH and additional catheterization labs have been added to maintain the growth now being experienced in this important service line. Similarly, improving relationships with voluntary physicians who have admitting privileges but do not use MSH regularly and a new clinical relationship with North General Hospital for tertiary services are expected to result in new admissions to MSH over time. Revenue cycle improvements continue and improved contracting arrangements with payers are expected to generate improved revenue at MSH over the intermediate term. Early results are promising and similar efforts are also being directed at supply chain opportunities. NYUMC management has been equally busy identifying ways to improve the financial health of that institution. A reduction of 90 FTEs mid-year and implementation of revenue initiatives (including renegotiated managed care contracts) and other expense reductions have been identified to return NYUMC to profitability. NYUMC opened a new ambulatory cancer center at the end of fiscal 2003 and new volume is already being generated there. A full asset merger with Hospital for Joint Diseases is underway which may deflect the potential 15% reduction in revenue to HJD if legislation regarding admission criteria for inpatient rehabilitation facilities is passed and improve the coordination (and retention of revenue) of orthopedic business between the two facilities. NYU and NYU Downtown Hospital have agreed to separate rather than for NYU Downtown to continue as an affiliate hospital. The sale of a parking lot for $84 million will provide NYU Downtown with the funds needed to repay a note due to NYUMC (approximately $13 million) although the terms and timing of this have not been completed. We believe that initiatives under way, coupled with volume growth and improved financial positions, could get the obligated group closer to the ultimate goal of separating into two distinct legal borrowers. We are relying on the relatively new CFO at MSH, renewed focus on data driven management decisions and inherent benefits of one management team responsible for the hospital and medical school at MSH to continue reducing the losses at MSH which have a disproportionate effect on the system's overall financial performance. Similarly, the initiatives underway at NYUMC to stabilize its operations are equally important to demonstrating overall stability and the potential to return to investment grade. Key Facts: (Based on audited financial results of the system dated December 31, 2004) * Admissions: 94,618 admissions * Total operating revenue: $1.93 billion * Net revenue available for debt service: $133.8 million (Moody's normalizes investment income at 6%) * Total unrestricted cash: $351.2 million * Total debt outstanding: $726.2 million (includes short term debt) * Operating cashflow margin: 5.4% * Cash-to-debt: 48.4% * Debt-to-cashflow: 8.18 times * Days cash on hand: 68.6 days * Maximum annual debt service: $60.9 million * Maximum annual debt service coverage with actual investment income as reported: 2.03 times * Maximum adjusted annual debt service coverage with investment income normalized at 6%: 2.20 times NORVERGENCE INC: State Court Dismisses Unfair Trade Practices Suit ------------------------------------------------------------------ In a case with national ramifications, the Honorable Russell A. Cole Jr., a State of Florida Circuit Judge in Tallahassee, Florida, rejected a lawsuit filed by the State that accused twelve national finance companies of violating the Florida Deceptive and Unfair Trade Practices Act. Albert F. Tellechea, the Akerman Senterfitt shareholder in charge of the case for Popular Leasing U.S.A., Inc., a subsidiary of Banco Popular North America, explained that Judge Cole's ruling upholds three of the four pillars relied on by the commercial equipment leasing sector: -- the unconditional obligation to pay or "hell or high water" clause; -- the waiver of defenses and warranties clause; and -- the law and forum selection clause. "An adverse ruling would have had a chilling effect on the secondary financing market and increased the amount businesses would pay for new leases in Florida," Mr. Tellechea explained. "This is the first definitive ruling in the country involving the leasing companies as defendants that deals squarely with the equipment leases sold to third parties." Mr. Tellechea also stated that Judge Cole's ruling was significant because the Attorney Generals in other states had been monitoring the outcome of this case. The case arose out of the sale of discounted phone services to businesses throughout the United States by NorVergence. NorVergence leased telephone equipment to these businesses. After the equipment leases were signed, NorVergence sold and assigned only the payment stream but none of its obligations and warranties (these remained with NorVergence) to: -- Commerce Commercial Leasing, LLC; -- Court Square Leasing Corp.; -- Dolphin Capital Corp.; -- IFC Credit Corp.; -- National City Commercial Capital Corp.; -- Irwin Business Finance; -- Patriot Leasing Co., Inc.; -- Liberty Bank Leasing, -- Popular Leasing U.S.A., Inc.; -- Preferred Capital LLC; and -- Sterling National Bank; most of which are subsidiaries of large national banks. Different from the other defendants, Wells Fargo Financial Leasing, Inc. contracted directly with the Florida businesses. Patriot Leasing Co., Inc. and Wells Fargo settled with Florida and were not covered by Judge Cole's dismissal. In June 2004, NorVergence filed bankruptcy in New Jersey and ceased phone service. The leased telephone equipment remained with its customers. After the bankruptcy filing, the State of Florida filed the now dismissed law suit seeking to invalidate the leases purchased by the ten remaining defendants, have them disgorge all the payments received, and impose treble damages and penalties and attorneys' fees and costs. The complaint asked the Court to rule that three major clauses in the lease agreements signed by NorVergence's customers made these leases unconscionable and contrary to public policy. In dismissing the case with prejudice, Judge Cole ruled that the three clauses attacked by the State were specifically authorized by the laws of the State of Florida and therefore not unconscionable or contrary to public policy. The Court also ruled that because the defendants are regulated by federal and state agencies, Florida's unfair trade practices law does not apply to them. The Court found the equipment leases in question were not consumer leases. "NorVergence's clients voluntarily signed contracts that clearly spelled out these terms and their obligations," said Mr. Tellechea. "The defendant equipment finance companies that purchased these contracts from NorVergence are entitled to rely on the written word and representations contained in the contracts. Without those protections, the secondary equipment financing market would dry up or interest rates would soar to compensate for the higher risk." According to Mr. Tellechea, the value of the contracts Popular Leasing is seeking to enforce amounts to approximately $3 million in Florida and $30 million nationally. The other defendants covered by Judge Cole's ruling have an estimated $250 million in equipment lease payments at risk nationally. At the time of its bankruptcy, NorVergence still had in its possession a portfolio of equipment leases amounting to $50 million not sold to third parties. The Akerman Senterfitt team of shareholders representing all the defendant finance companies was composed of Bruce Culpepper in Tallahassee and Albert F. Tellechea and William C. Turner in Orlando. Judge Cole's dismissal with prejudice means that the State cannot file another amended complaint. With more than 400 attorneys, Akerman Senterfitt -- http://www.akerman.com/-- has offices in Orlando, Miami, Fort Lauderdale, Tampa, Jacksonville, West Palm Beach, Tallahassee and Washington, D.C. The firm represents private and public companies, governmental entities, educational establishments and high net-worth individuals in a wide range of practice areas. Headquartered in Newark, New Jersey, NorVergence, Inc., is a reseller of wireless telecommunications services. The Company filed a chapter 11 petition on June 30, 2004 (Bankr. D. N.J. 04-32079). The Court converted the Debtor's chapter 11 case to a chapter 7 proceeding at the behest of the Company's creditors. Popular Leasing USA, Inc., OFC Capital, a Division of ALFA Financial Corp., and Partners Equity Capital Company, LLC, asserted total claims amounting to $1.3 million. Inez M. Markovich, Esq., and Peter J. Deeb, Esq., at Frey, Petrakis, Deeb, Blum, Briggs et al., represents the Petitioners in their restructuring efforts. NorVergence closed its stores located at 550 and 570 Broad St. and laid off all of its employees. This followed 1,300 firings earlier in July 2004. NUNET INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: NuNet, Inc. dba NuNet Fiber Technologies 7535 Windsor Drive, Suite A305 Allentown, Pennsylvania 18195 Bankruptcy Case No.: 05-21633 Type of Business: The Debtor provides Internet dial-up access, web hosting, full e-mail service, bandwidth connections and customer service. NuNet Fiber Technologies is NuNet's latest and most advanced division, providing state-of-the art, fiber- optic TV entertainment, high-speed Internet access, and telephone services. See http://www.nunetfiber.com/ Chapter 11 Petition Date: March 24, 2005 Court: Eastern District of Pennsylvania (Reading) Judge: Thomas M. Twardowski Debtor's Counsel: Aris J. Karalis, Esq. Robert W. Seitzer, Esq. Ciardi, Maschmeyer & Karalis, P.C. 1900 Spruce Street Philadelphia, Pennsylvania 19103 Tel: (215) 546-4500 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Magpage $1,197,296 c/o John J. Quinn, III, Esquire Potter, Anderson & Corroon LLP P.O. Box 951 Wilmington, DE 19899-0951 Intergrafix $978,189 c/o David Glassberg, Esquire Glassberg & Klemow 81 North Laurel Street Hazleton, PA 18201 Adelphia Business Solutions $400,437 401 City Line Avenue, Suite 509, 5th Floor Bala Cynwyd, PA 19004 Communications Consulting Services, Inc. $305,632 RR3, Box 3249-A Factoryville, PA 18419 D&L Realty $254,818 c/o Brice C. Paul, Esquire Nogi, Applleton, Weinberger & Wren, P.C. 415 Wyoming Avenue Scranton, PA 18503 John Keown $165,111 AT&T $106,780 XO Communications $130,063 NOLN $100,000 Broadwing Telecom, Inc. $88,676 Sprint $80,717 RSA Partners $74,000 MCI Worldcom Comm., Inc. $53,407 Broughal & DeVito, LLP $48,534 Lucent Technology/Ascend Communications $37,550 Covad Communications Co. $25,329 CTSI $21,369 Verizon Cabs $21,100 NovaStor Corporation $20,000 Bell Atlantic Directory Services $19,999 OWENS CORNING: Selling Texas Asphalt Unit to Pelican for $3.15M --------------------------------------------------------------- Owens Corning and its debtor-affiliates seek the U.S. Bankruptcy Court for the District of Delaware's permission to sell 4.836 acres of land and a manufacturing facility located in Channelview, Texas, pursuant to an Asset Purchase Agreement entered into with Pelican Refining Company, LLC. Jeremy W. Ryan, Esq., at Saul Ewing, LLP, in Wilmington, Delaware, relates that in 2004, the Debtors re-assessed the assets utilized in their asphalt business. As a result of that re-assessment, the Debtors developed and implemented a program to improve utilization and reduce freight costs. Under the program, capacity utilization would be improved and freight costs reduced by targeting freestanding asphalt manufacturing facilities for closure, in favor of facilities co-located with Owens Corning's shingle manufacturing facilities. The Channelview Facility was among the freestanding facilities closed in 2004 that were marketed for sale. According to Mr. Ryan, the Debtors solicited over 40 potential purchasers for their interest in the Channelview Facility. After completion of due diligence and competitive negotiations, Pelican Refining's proposal was selected as the highest and best offer. The principal terms of the Asset Purchase Agreement are: Purchase Price: $3,150,000 cash Assets to be Sold: Real property on which the Facility is located and personal property in the Facility. Represenations: Other than the environmental representations, Owens Corning's representations are to be in effect for one year after Closing. Environmental representations are in effect for three years subsequent to Closing. Owens Corning's indemnification obligations in the event of a breach of its representations are capped at $500,000 for non-environmental representations and $1,000,000 for environmental representations. Closing Conditions: At Closing, Pelican Refining will execute a non-compete agreement that will prohibit it from competing with Owens Corning in the asphalt roofing products industry within a 750-mile radius of the Facility for three years subsequent to Closing. Closing Date: the later of July 1, 2005, or five business days after the Bankruptcy Court approves the Purchase Agreement. Mr. Ryan relates that the Channelview Independent School District and Harris County/City of Houston have asserted claims for $200,000 on account of allegedly unpaid taxes owed with respect of the Debtors' real and personal property in the Taxing Authorities' jurisdiction. The Taxing Authorities have asserted that their claims are secured by liens against the Facility. Mr. Ryan notes that the Debtors are in the process of reconciling the asserted claims against their books and records to determine the proper amount of property taxes owing. The Debtors believe that the sale of the Facility is in the exercise of their sound business judgment and the purchase price of the Facility represents a fair and reasonable value for the Facility. Channelview ISD Objects Channelview ISD is a subdivision of the State of Texas authorized to levy and assess ad valorem taxes on the value of property located within its taxing jurisdiction as of January 1 of each tax year. Yolanda M. Humphrey, Esq., at Perdue, Brandon, Fielder, Collins & Mott, L.L.P., in Houston, Texas, asserts that Channelview ISD holds a secured claim for the year 2000 prepetition ad valorem property taxes amounting to $24,716 against the Channelview Facility. According to Ms. Humphrey, the claim is secured by prior perfected continuing enforceable tax liens on the Debtors' property as provided by Sections 32.01 and 32.05(b) of the Texas Property Tax Code. Channelview ISD objects to the Debtors' request because the Debtors seek to sell certain assets -- which are encumbered by its secured tax liens -- free and clear of all liens and interests. The Debtors, Ms. Humphrey alleges, seek to extinguish Channelview ISD's secured tax liens. Ms. Humphrey further asserts that as a first priority secured lien, Channelview ISD's lien for all taxes must be paid at the Closing. Thus, Channelview ISD asks the Court to direct the Debtors to pay its secured tax liens at Closing and to approve the retention of their 2005 ad valorem tax liens as adequate protection for those secured tax liens. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring efforts. At Sept. 30, 2004, the Company's balance sheet shows $7.5 billion in assets and a $4.2 billion stockholders' deficit. The company reported $132 million of net income in the nine-month period ending Sept. 30, 2004. (Owens Corning Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARKVIEW APARTMENTS: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Parkview Apartments Non-Profit Housing 596 Hamilton Street Ypsilanti, Michigan 48197 Bankruptcy Case No.: 05-57708 Chapter 11 Petition Date: June 1, 2005 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Frederick L. McDonald, Esq. Hamiton, McDonald & Carter, PLLC 2750 South State Street Ann Arbor, Michigan 48104 Tel: (734) 769-8750 Total Assets: Unknown Total Debts: Unknown The Debtor's List of its 20 Largest Unsecured Creditors was not available at press time. PETROVIC CONSTRUCTION: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Petrovic Construction Company Inc. 24225 Riverside Drive Channahon, Illinois 60410 Bankruptcy Case No.: 05-21942 Type of Business: The Debtor is a contractor. Chapter 11 Petition Date: June 2, 2005 Court: Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: Gregory K. Stern, Esq. Gregory K. Stern, P.C. 53 West Jackson Boulevard, Suite 1442 Chicago, Illinois 60604 Tel: (312) 427-1558 Fax: (312) 427-1289 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mid American Water, Inc. Trade Credit $237,624 1500 East Mountain Aurora, IL 60505 Internal Revenue Service Taxes $217,736 Mail Stop 5010 CHI 230 South Dearborn Street Chicago, IL 60604 Metropolitan Industries, Inc. Trade Credit $130,151 37 Forestwood Drive Romeoville, IL 60446 Terra Cotta Truck Service, Inc. Trade Credit $72,877 P.O. Box 1502 Rockford, IL 61110-0002 Material Service Trade Credit $68,810 222 North LaSalle Street Chicago, IL 60601-1090 Northwind Concrete Products Trade Credit $68,239 Company 4633 Prairie Hill Road South Beloit, IL 61080 Laborers Pension & Welfare Employee Benefits $67,767 Funds 33367 Treasury Center Chicago, IL 60694-3300 Hill Concrete Products Trade Credit $62,405 P.O. Box 157 Hazel Crest, IL 60429 Heritage FS, Inc. Trade Credit $59,978 P.O. Box 339 Gilman, IL 60938 Brandolino Construction Trade Credit $51,118 Company, Inc. 26140 Airport Road Minooka, IL 60447 J. Lucas & Sons, Inc. Trade Credit $45,200 805 Richard Street P.O. Box 907 Joliet, IL 60434 Midwest Operating Engineers Benefit Fund $38,069 Fringe Benefit Funds (Local 150) 6150 Joliet Road Countryside, IL 60525-3994 Joliet Sand & Gravel Company Trade Credit $37,643 1250 Larkin Avenue Elgin, IL 60123 US Pipe & Foundry Company Trade Credit $33,125 98056 Collections Center Drive Chicago, IL 60693-8056 Procision Boring, Inc. Trade Credit $32,325 P.O. Box 69 Elk Grove Village, IL 60009 K & R Electric Construction Trade Credit $28,168 P.O. Box 729 New Lenox, IL 60451 Vulcan Construction Materials Trade Credit $27,459 Company 747 East 22nd Street, Suite 200 Lombard, IL 60148 Roland Machinery Company Trade Credit $26,465 NW 7899 P.O. Box 1450 Minneapolis, MN 55485-7899 East Jordan Iron Works, Inc. Trade Credit $26,109 Department 59601 P.O. Box 67000 Detroit, MI 48267-0978 State of Illinois Taxes Disputed $25,637 Department of Employment Security 401 South State Street Chicago, IL 60605 PNM RESOURCES: SEC Approves TNP Enterprises Acquisition ------------------------------------------------------- The U.S. Securities and Exchange Commission approved on June 1, 2005, PNM Resources' (NYSE: PNM) acquisition of Fort Worth-based TNP Enterprises -- the final regulatory approval needed to complete the transaction. Officials of both companies are expected to finalize the acquisition within the next three business days. In July 2004, PNM Resources reported a proposed $1.024 billion acquisition of TNP Enterprises and its subsidiaries, Texas-New Mexico Power and First Choice Power. TNMP serves 49,000 electric customers in southern New Mexico and 207,000 transmission and distribution customers in Texas. First Choice Power is a competitive retail electric provider in Texas, serving an additional 56,000 electric customers. The acquisition is expected to generate at least $40 million in annual pre-tax savings through the refinancing of high-cost TNP debt and preferred stock, and $10 million of annual pre-tax synergy savings. About PNM Resources PNM Resources -- http://www.pnmresources.com/-- is an energy holding company based in Albuquerque, New Mexico. PNM, the utility subsidiary of PNM Resources, serves about 471,000 natural gas customers and 413,000 electric customers in New Mexico. The company also sells power on the wholesale market in the Western U.S. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. * * * As reported in the Troubled Company Reporter on March 8, 2005, Moody's Investors Service has assigned a rating of Baa3 to PNM Resources, Inc.'s (PNMR) $400 million five-year unsecured bank credit facility. Moody's also assigned prospective ratings of (P)Baa3 and (P)Ba2 for PNM Resources' shelf registration for the issuance of senior unsecured debt and preferred stock. This is the first time that Moody's has assigned ratings to PNM Resources. PRESIDENT CASINOS: Asset Sales Prompt Financial Filing Delay ------------------------------------------------------------ Despite President Casinos, Inc.'s diligent efforts, completion of the Company's Annual Report for the year ended February 28, 2005 has been delayed due to the timing of recent developments relating to the Company's pending voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. As a result of the sale of President Casinos' Biloxi, Mississippi operations on April 15, 2005, and the anticipated sale of its St. Louis, Missouri operations, the Company anticipates that the consolidated financial statements included in its Annual Report for the year ended February 28, 2005 will reflect a reclassification of President Casinos' operating subsidiaries' results of operations to discontinued operations. Accordingly, no operating revenues will be included in income or loss from continuing operations for each of the three fiscal years ended February 28, 2005. In light of the Company's sale of its Biloxi, Mississippi operations, President Casinos anticipates that its consolidated statement of operations for the year ended the February 28, 2005 will reflect net income attributable to recognition of certain deferred tax assets and the recognition of gains from restructuring certain debt instruments pursuant to its reorganization plan. President Casinos, Inc., owns and operates a dockside gaming facility in downtown St. Louis, Missouri, north of the Gateway Arch. At Nov. 30, 2004, President Casinos' balance sheet showed a $54,412,000 stockholders' deficit, compared to a $52,349,000 deficit at Feb. 29, 2004. PRESTWICK CHASE: Robert J. Rock Approved as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York gave Prestwick Chase, Inc., permission to employ Robert J. Rock, Esq., as its general bankruptcy counsel. Mr. Rock will: a) assist and advise the Debtor of its duties and obligations as a debtor-in-possession in the continued operation and management of its business and property; and b) provide all other legal services to the Debtor that are necessary and appropriate for the proper administration of its estate under chapter 11. Mr. Rock discloses that he received a $20,000 retainer. Mr. Rock charges $195 per hour for his services. To the best of the Debtors' knowledge, Mr. Rock is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Saratoga Springs, New York, Prestwick Chase, Inc. -- http://www.prestwickchase.com/-- offers senior housing and independent living as an alternative to home ownership. The Company filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. PRESTWICK CHASE: APC Partners Objects to Use of Cash Collateral --------------------------------------------------------------- APC Partners II, LLC, asks the U.S. Bankruptcy Court for the Northern District of New York to enter an order prohibiting Prestwick Chase, Inc., from using its Cash Collateral securing repayment of pre-petition obligations pursuant to 11 U.S.C. Section 363(c)(2), and to enter an order lifting the automatic stay to allow it to foreclose on equity interests pledged by shareholders to secure repayment of the loan. APC Partners is a secured creditor of the Debtor by virtue of its assignment of certain loan documents delivered by the Debtor and others to Ballston Spa National Bank. The loan documents are: a) a Promissory Note dated Dec. 1, 2001, in the original principal amount of $3,500,000 b) an assignment of Rents, dated June 30, 1999, and recorded on March 6, 2003, in Volume 01639, Page 00433 at the Saratoga County Clerk's Office; and c) numerous other loan documents, including Mortgages, Mortgage Consolidation and Extension Agreements, a Forbearance Agreement and Personal Guarantees. APC Partners tells the Court that on March 4, 2005, it obtained a judgment against the Debtor and its primary shareholder, Frederick J. McNeary in the New York State Supreme Court, County of Saratoga in the amount of $4,214,174. Request to Prohibit Use of Cash Collateral & Lift the Automatic Stay Because APC Partners has an interest in its cash collateral by virtue of its Assignment of Rents, it wrote a letter dated March 14, 2005, informing the Debtor's initial bankruptcy counsel of that interest and that APC Partners has not consented to the Debtor's use of its cash collateral. Since that letter was written and despite APC Partners counsel's oral inquiry to the Debtor's initial bankruptcy counsel and successor bankruptcy counsel, the Debtor has not submitted any official proposal for the use of the cash collateral. Consequently, APC Partners believes it is entitled to prohibit the Debtor from using the cash collateral as adequate protection of its interest pursuant to 11 U.S.C. Section 361. APC Partners also asks the Bankruptcy Court to recognize its State Court judgment and allow immediate enforcement and execution of that judgment against Mr. McNeary's equity interest in the Debtor because it believes that he is using the Debtor's cash flow to pay for non-corporate debts. APC Partners explains that if it can execute on Mr. McNeary's stock interest in the Debtor, it can gain majority ownership of the Debtor and successfully reorganize the Debtor's debt structure. The Court will convene a hearing today, Monday, June 6, 2005, at 1:00 p.m., to consider the merits of APC Partners' request. Headquartered in Saratoga Springs, New York, Prestwick Chase, Inc. -- http://www.prestwickchase.com/-- offers senior housing and independent living as an alternative to home ownership. The Company filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Robert J. Rock, Esq., at Albany, New York, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. RAMP CORP: Files for Chapter 11 Protection in S.D. New York ----------------------------------------------------------- Ramp Corporation filed for chapter 11 protection in the United States Bankruptcy Court for the Southern District of New York in Manhattan on June 2, 2005. The Debtor is named as a defendant to five lawsuits commenced by: -- Minicucci and Prufeta; -- Mark Lerner; -- Warshaw Burstein Cohen; -- SLG Graybar Sublease LLC; and -- e-Healthcare Solutions. Approximately 550 investors hold 15,299,365 of the Company's outstanding common shares as of record date. The Debtor estimates $240,000 of additional operating expenses following the commencement of the chapter 11 petition and expects a $400,000 loss of operations for a thirty-day period following the petition. Auditor Resignation On May 21, 2005, BDO Seidman informed the Company of its resignation as its independent registered accounting firm, and advised the Company that its audit reports with respect to the years ended Dec. 31, 2004, and 2003, could not be relied upon. BDO Seidman did not specifically indicate reasons for its resignation. The Company's audit committee has not discussed with BDO Seidman the matters concerning their resignation. As a result, the Company notified the AMEX of its inability to timely file its Form 10-Q for the quarter ended March 31, 2005. AMEX rules require timely filing of all SEC periodic reports of a company's securities to remain listed. The Company is working to complete and file the March 31 10-Q as soon as possible in order to comply with AMEX rules. Default The Company's failure to file its 10-Q report constitutes an event of default under securities purchase agreements that it entered into in January and March 2005. As a result of such default, the holders of debentures issued under these agreements may declare the total amount issued to become due and payable. The Company's payment of such outstanding principal amount would have a material adverse effect upon the Company's financial condition. In addition, as a result of the Company's failure to timely file the March 31, 2005 10-Q, the Company will be ineligible for at least one year to register its securities with the SEC under Form S-3. This could potentially lead the Company to owe monthly liquidated damages based on outstanding principal amount provided under these securities purchase agreements from May 18, 2005, until such registration statement is filed, and for the period from Aug. 11, 2005, until such registration statement is declared effective. The Company's payment of such penalty would have a material adverse effect on the Company's financial condition. Delisting On May 26, 2005, the American Stock Exchange advised the Company that as a result of its failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as well as the defective status of the Company's Annual Reports on Form 10-K for the years ended Dec. 31, 2004, and Dec. 31, 2003, (resulting from the Company's former auditors informing the Company that the audit reports in respect thereof can no longer be relied upon), the Company is in violation of Sections 134, 1101 and 1003(d) of the continued listing standards set forth in Part 10 of the AMEX Company Guide. The letter stated that the Company must submit a revised plan of compliance by June 2, 2005, advising AMEX of the action it has taken, or will take, that would bring the Company into compliance, by no later than July 11, 2005, with the aforementioned Sections of the AMEX Company Guide. The letter further advised that the Company may be subject to delisting proceedings from AMEX if it does not submit a plan or submits a plan that is not accepted by AMEX. In addition, the letter indicated that if the Company is not in compliance with Sections 134, 1101 and 1003(d) of the AMEX Company Guide by July 11, 2005 or does not make progress consistent with the plan during the plan period, the AMEX staff will initiate delisting proceedings as appropriate. Furthermore, the letter stated that if the Company regains compliance with the aforementioned Sections of the AMEX Company Guide by July 11, 2005, it will remain subject to the requirements set forth in the AMEX letter to the Company dated December 16, 2004. The letter indicated that within five days of the date thereof, the Company would become subject to the indicators ".BC" and ".LF" to denote its noncompliance with the AMEX continued listing standards. Ramp Corporation -- http://www.Ramp.com/-- through its wholly owned HealthRamp subsidiary, develops and markets the CareGiver and CarePoint suite of technologies. CareGiver enables long term care facility staff to easily place orders for drugs, treatments and supplies from a wireless handheld PDA or desktop web browser. CarePoint enables electronic prescribing, lab orders and results, Internet-based communication, data integration, and transaction processing over a handheld device or browser, at the point-of- care. HealthRamp's products enable communication of value-added healthcare information among physician offices, pharmacies, hospitals, pharmacy benefit managers, health management organizations, pharmaceutical companies and health insurance companies. The Company filed for chapter 11 protection on June 2, 2005 (Bankr. S.D.N.Y. Case No. 05-14006). Howard Karasik, Esq., at Sherman, Citron & Karasik, P.C., represents the Debtor in its restructuring efforts. As of May 31, 2005, the Debtor reported $6 million in total assets and $13 million in total debts. RAMP CORPORATION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ramp Corporation fka Medix Resources 33 Maiden Lane, Fifth Floor New York, New York 10038 Bankruptcy Case No.: 05-14006 Type of Business: The Debtor, Ramp Corporation, through its wholly owned subsidiary, HealthRamp, develops and markets the CareGiver and CarePoint suite of technologies. CareGiver allows long-term care facility staff to easily place orders for drugs, treatments and supplies from a wireless handheld PDA or desktop Web browser. CarePoint allows electronic prescribing, lab orders and results, Internet-based communication, data integration, and transaction processing over a handheld device or browser, at the point-of-care. See http://www.ramp.com/ Chapter 11 Petition Date: June 2, 2005 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Howard Karasik, Esq. Sherman, Citron & Karasik, P.C. 152 West 57th Street New York, New York 10019 Tel: (212) 582-7800 Fax: (212) 582-5354 Financial Condition as of May 31, 2005: Total Assets: $6,000,000 Total Debts: $13,000,000 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ DKR Soundshore Oasis Holding Fund Ltd. $1,682,439 c/o DKR Capital Partners L.P. 1281 East Main Street Stamford, CT 06902 Attn: Daniel Saks Harborview Master Fund LP $1,261,829 Harbor House Waterfront Drive P.O. Box 972 Road Town Tortola, British Virgin Islands Attn: Richard Rosenblum Double U Master Fund LP $1,279,171 Harbor House Waterfront Drive P.O. Box 972 Road Town Tortola, British Virgin Islands Attn: David Sims Platinum Partners Value Arbitrage Fund LP $752,293 152 West 57th Street, 54th Floor New York, NY 10019 Attn: Mark Nordlight Alpha Capital AG $624,586 Pradafant 7 Furstentums 9490 Vaduz, Liechtenstein Attn: Conrad Ackerman Troutman Sanders LLP $603,483 405 Lexington New York, NY 10019 Attn: John Stowe Harbor Healthcare Consultants, LLC $468,660 7491 West Oakland Park Boulevard Tamarac, FL 33319-4989 Warshaw Burstein Cohen & Kah, LLP $366,000 555 Fifth Avenue, 11th Floor New York, NY 10017 Attn: Kathleen Jenson Ellis International Ltd. $291,473 20 East Sunrise Highway, Suite 302 Valley Stream, NY 11581 Attn: Wilhelm Ungar Olshan Grundman Frome Rosenzwe $243,000 Darryl Cohen $231,000 Olive Cox Sleeper Trust $221,213 Mark Lerner $203,000 IBM Hosting, L/R & ATL Accounts $177,660 SL Green Management, LLC $170,413 BDO Seidman, LLP $170,010 Clinton Group, Inc. $156,001 Briarwood Investments Ltd. $132,673 Lowenstein Sandler PC $115,000 American Express Credit Card $77,594 RAMP CORP: Faces Possible Delisting Due to Reporting Delays ----------------------------------------------------------- Ramp Corporation (Amex:RCO) received a letter from the American Stock Exchange advising the Company that as a result of its failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, as well as the defective status of the Company's Annual Reports on Form 10-K for the years ended December 31, 2004, and December 31, 2003 (resulting from the Company's former auditors informing the Company that the audit reports in respect thereof can no longer be relied upon), the Company is in violation of Sections 134, 1101 and 1003(d) of the continued listing standards set forth in Part 10 of the AMEX Company Guide. The letter stated that the Company must submit a revised plan of compliance by June 2, 2005, advising AMEX of the action it has taken, or will take, that would bring the Company into compliance, by no later than July 11, 2005, with the aforementioned Sections of the AMEX Company Guide. The letter further advised that the Company may be subject to delisting proceedings from AMEX if it does not submit a plan or submits a plan that is not accepted by AMEX. In addition, the letter indicated that if the Company is not in compliance with Sections 134, 1101 and 1003(d) of the AMEX Company Guide by July 11, 2005 or does not make progress consistent with the plan during the plan period, the AMEX staff will initiate delisting proceedings as appropriate. Furthermore, the letter stated that if the Company regains compliance with the aforementioned Sections of the AMEX Company Guide by July 11, 2005, it will remain subject to the requirements set forth in the AMEX letter to the Company dated December 16, 2004. The letter indicated that within five days of the date thereof, the company would become subject to the indicators ".BC" and ".LF" to denote its noncompliance with the AMEX continued listing standards. The letter also requested the Company to provide, by June 2, 2005, certain information and documentation relating to the resignation of its independent auditor, the resignation of its Chairman, President and Chief Executive Officer, Andrew Brown, an event of default under the Company's January and March securities purchase agreements, and the initiation by the Company's Board of Directors of an investigation into certain actions taken by Mr. Brown. Auditor Resignation As reported in the Troubled Company Reporter on May 30, 2005, BDO Seidman informed the Company of its resignation as the Company's independent registered accounting firm, and advised the Company that its audit reports with respect to the years ended Dec. 31, 2004, and 2003, could not be relied upon. BDO Seidman did not specifically indicate reasons for its resignation. The Company's audit committee has not discussed with BDO Seidman the matters concerning their resignation. As a result, the Company notified the AMEX of its inability to timely file its Form 10-Q for the quarter ended March 31, 2005. AMEX rules require timely filing of all SEC periodic reports of a company's securities to remain listed. The Company is working to complete and file the March 31 10-Q as soon as possible in order to comply with AMEX rules. Default The Company's failure to file its 10-Q report constitutes an event of default under securities purchase agreements that it entered into in January and March 2005. As a result of such default, the holders of debentures issued under these agreements may declare the total amount issued to become due and payable. The Company's payment of such outstanding principal amount would have a material adverse effect upon the Company's financial condition. In addition, as a result of the Company's failure to timely file the March 31, 2005 10-Q, the Company will be ineligible for at least one year to register its securities with the SEC under Form S-3. This could potentially lead the Company to owe monthly liquidated damages based on outstanding principal amount provided under these securities purchase agreements from May 18, 2005, until such registration statement is filed, and for the period from Aug. 11, 2005, until such registration statement is declared effective. The Company's payment of such penalty would have a material adverse effect on the Company's financial condition. About the Company Ramp Corporation -- http://www.Ramp.com/-- through its wholly owned HealthRamp subsidiary, develops and markets the CareGiver and CarePoint suite of technologies. CareGiver enables long term care facility staff to easily place orders for drugs, treatments and supplies from a wireless handheld PDA or desktop web browser. CarePoint enables electronic prescribing, lab orders and results, Internet-based communication, data integration, and transaction processing over a handheld device or browser, at the point-of- care. HealthRamp's products enable communication of value-added healthcare information among physician offices, pharmacies, hospitals, pharmacy benefit managers, health management organizations, pharmaceutical companies and health insurance companies. * * * As reported in the Troubled Company Reporter on Apr. 12, 2005, BDO Seidman, LLP, expressed substantial doubt about Ramp Corporation's ability to continue as a going concern after it completed an audit of the company's financial statements for the fiscal year ended Dec. 31, 2004. The Company's independent auditors issued the going concern qualification due to the Company's recurring operating losses. The Company has had a going concern opinion each year for the past 3 years. "The Company has incurred operating losses for the past several years, the majority of which are related to the development of the Company's healthcare connectivity technology and related marketing efforts," Ramp disclosed in its Annual Report. "These losses have produced operating cash flow deficiencies, and negative working capital." At Dec. 31, 2004, Ramp Corporation's balance sheet showed a $3,229,000 stockholders' deficit, compared to $5,997,000 of positive equity at Dec. 31, 2003. RECYCLED PAPERBOARD: Taps Keen to Dispose of Property in 363 Sale ----------------------------------------------------------------- Recycled Paperboard, Inc. retained Keen Realty, LLC, to market the company's 209,975+/- square foot industrial facility set on 5.54+/- acres in Clifton, N.J. for higher and better offers, pursuant to Section 363 of the U.S. Bankruptcy Code. Keen Realty is a real estate firm specializing in selling excess assets and restructuring real estate and lease portfolios. "The property is currently under contract for $3.5 million subject to higher and better offers," said Mike Matlat, Keen Realty's Vice President. "We expect there to be a tremendous amount of interest in this property, as it is located just off of the main thoroughfare of Route 21 in Clifton providing easy access to all major highways. Additionally, investors and developers will be all over this property because of the endless possibilities," Matlat added. The building is one and three-story and consists of 209,975+/- square feet set on 5.54+/- acres. The building contains approximately 5,970 square feet of office space and 204,005+/- square feet of warehouse/production space. Ceiling heights range from 8' in the office areas and are as high as 35' in the warehouse areas. The facility includes approximately 10 loading doors of both grade level and drive-in quality. About Keen Realty For over 22 years, Keen Consultants has had extensive experience solving complex problems and evaluating and selling real estate, leases and businesses. Keen Consultants, a leader in identifying strategic investors and partners for businesses, has consulted with thousands of clients nationwide, evaluated and disposed of over 225,000,000 square feet of properties and repositioned nearly 13,000 properties across the country. Recent clients include: Spiegel/Eddie Bauer, Arthur Andersen, Service Merchandise, Warnaco, Cable & Wireless, Fleming, Pillowtex, Parmalat, FOL Liquidation Trust (former Fruit of the Loom facilities) and financial institutions like JP Morgan Chase and CIBC. Headquartered in Clifton, New Jersey, Recycled Paperboard Inc., manufactures recycled mixed paper and newspaper to make index, tag & bristol, and blanks. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. D.N.J. Case No. 04-47475). David L. Bruck, Esq., at Greenbaum, Rowe, Smith & Davis LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $17,800,000 and total debts of $41,316,455. SECURITY CAPITAL: Has Until June 30 to File Financial Statements ---------------------------------------------------------------- Security Capital Corporation (AMEX: SCC) received a letter from the American Stock Exchange, citing the Company's lack of compliance with the AMEX's continued listing standards and accepting the Company's plan to regain compliance with the AMEX's continued listing standards by June 30, 2005, which the Company delivered to the AMEX on May 18, 2005. AMEX advised the Company that it is not in compliance with the AMEX's continued listing standards because the Company failed to timely file its Form 10-K for the fiscal year ended Dec. 31, 2004 and its Form 10-Q for the quarter ended March 31, 2005, as required pursuant to Section 1101 of the AMEX Company Guide. The May 23, 2005, AMEX letter noted that the Company's failure to timely file the 2004 Form 10-K and the First Quarter Form 10-Q is a material violation of the Company's listing agreement with the AMEX and, therefore, pursuant to Section 1003(d) of the Company Guide, the Company's securities are subject to suspension and delisting from the AMEX. In addition, the Company is subject to the procedures and requirements of Section 1009 of the Company Guide. The AMEX's letter notified the Company that the AMEX determined that the Plan makes a reasonable demonstration of the Company's ability to regain compliance with the AMEX's continued listing standards by June 30, 2005. If the Company does not regain compliance by June 30, 2005, or otherwise make progress consistent with the Plan, the AMEX will initiate delisting proceedings, as appropriate. As previously announced, the Plan provides, among other things, that the Company will retain a new independent registered public accounting firm to replace Ernst & Young LLP, the Company's principal accountant by May 31, 2005, and file the 2004 Form 10-K and the First Quarter Form 10-Q by May 31, 2005 and June 30, 2005, respectively. According to the AMEX's letter, beginning within five days of the AMEX's letter, the Company will be included in a list of issuers who are not in compliance with the AMEX's continued listing standards, which is posted daily on http://www.amex.com/ In addition, until such time that the Company regains compliance with the AMEX's continued listing standards, the AMEX will use the indicator ".LF" in the financial status indicator fields in the Consolidated Quote System and Consolidated Quote Systems Low Speed and High Speed Tapes to denote the Company's non compliance. Delisting The Company continues to work diligently to finalize the 2004 Form 10-K, but anticipates that the 2004 Form 10-K will not be filed by the May 31, 2005 extended due date. The Company also anticipates that the First Quarter Form 10-Q will not be filed by the June 30, 2005 extended due date. The Company currently believes that it will file the 2004 Form 10-K and the First Quarter Form 10-Q by June 17, 2005, and July 29, 2005, respectively. As required pursuant to the AMEX's letter, the Company will continue to provide the AMEX with updates to its Plan. As a result of such further delayed filings, however, it is possible that the AMEX may initiate delisting proceedings with respect to the Company's securities. The Company also announced that, due to the late filing of the 2004 Form 10-K, it will be unable to timely file by amendment to its Form 8-K, filed April 6, 2005, the financial statements relating to the acquisition of Managed Care Holdings Corporation. As disclosed in the April 6 Form 8-K, the Company is required to file such financial statements within 75 days after March 31, 2005. The Company currently expects to file the amendment to the April 6 Form 8-K by June 27, 2005. In addition, the Company says it will not be able to retain an independent registered public accounting firm to replace Ernst & Young LLP until immediately following the filing of the 2004 Form 10-K. The Company's two reportable segments are employer cost containment and health services, and educational services. The employer cost containment and health services segment consists of WC Holdings, Inc., which provides services to employers and their employees primarily relating to industrial health and safety, industrial medical care, workers' compensation insurance and the direct and indirect costs associated therewith. The educational segment consists of Primrose Holdings, Inc., which is engaged in the franchising of educational child care centers, with related activities in real estate consulting and site selection services in the Southeast and Southwest. About the Company Security Capital Corporation operates as a holding company and participates in the management of its subsidiaries, WC Holdings, Primrose Holdings Inc. and Pumpkin Masters Holdings Inc. WC is an 80%-owned subsidiary that provides cost-containment services relative to direct and indirect costs of corporations and their employees primarily relating to industrial health and safety, industrial medical care and workers' compensation insurance. WC's activities are primarily centered in California, Ohio, Virginia, Maryland and, to a lesser extent, in other Middle Atlantic states, Indiana and Washington. Primrose is a 98.5%- owned subsidiary involved in the franchising of educational childcare centers. Primrose schools are located throughout the United States, except in the Northeast and Northwest. Pumpkin is a wholly owned subsidiary engaged in the business of designing and distributing Halloween-oriented pumpkin carving kits and related accessories. SENIOR CHOICE: Taps Thorp Reed as Bankruptcy Counsel ---------------------------------------------------- Senior Choice, Inc., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for permission to retain Thorp Reed & Armstrong, LLP, as counsel. Thorp Reed is expected to: a) advise the Debtor with respect to its powers and duties as debtor-in-possession in the continued management and operation of its business property; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; c) take all necessary action to protect and preserve the Debtor's estates; d) prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtor's estates; e) take any necessary action on behalf of the Debtor to obtain approval of a disclosure statement and confirmation of the Debtor's plan of reorganization; and f) perform all other necessary legal services and provide all other necessary legal advise to the Debtor in connection with the chapter 11 case. Kimberly Luff Wakim, Esq., a partner at Thorp Reed, discloses her Firm's professionals' hourly billing rates: Designation Hourly Rate ----------- ----------- Partners $200 - $415 Associates $150 - $230 Legal Assistants $ 85 - $155 Law Clerks $110 Project Assistants $ 40 - $ 75 To the best of the Debtor's knowledge, Thorp Reed doesn't hold any interest materially adverse to the Debtor and its estate. Headquartered in Philadelphia, Pennsylvania, Senior Choice, Inc., is a multi-campus provider of personal care and nursing services to the elderly. The Debtor operates three facilities: (i) The Atrium, a Choice Community, located in Johnstown, Pennsylvania, (ii) Beacon Manor, a Choice Community, located in Indiana, Pennsylvania, and (iii) The Patriot, a Choice Community, located in Somerset, Pennsylvania. The Company filed for chapter 11 protection on June 1, 2005 (Bankr. W.D. Pa. Case No. 05-71227). When the Debtor filed for protection from its creditors, it estimated $50 million in assets and debts. SENIOR CHOICE: Wants Access to Bondholders' Cash Collateral ----------------------------------------------------------- Senior Choice, Inc., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to use cash collateral securing repayment of bonds issued in 1996. First National Trust Company, serves as the successor Trustee under the Bond Indenture. The Debtor tells the Court it needs immediate access to cash, deposit accounts or other cash equivalents to finance its ordinary and necessary operating expenses. Without the use of cash collateral, the Debtor says it can't continue to operate its business and propose a plan of reorganization. Court records show that the Debtor didn't file a budget governing the use of the cash collateral. To protect the interest of the bondholders, the Debtor proposes to grant replacement liens in its postpetition property of the same nature, extent and priority as the Trustee had in the collateral prior to the bankruptcy filing. Prepetition Indebtedness The Debtor operates three facilities: i) The Atrium, a Choice Community, located in Johnstown, Pennsylvania, ii) Beacon Manor, a Choice Community, located in Indiana, Pennsylvania, iii) The Patriot, a Choice Community, located in Somerset, Pennsylvania. To finance its acquisition of Patriot Manor and Atrium nursing care facilities, the Debtor issued Series 1996A Bonds in the principal amount of $13,690,000 and Series 1996B Bonds in the principal amount of $740,000. BT Management Trust Company acted as Trustee under the Trust Indenture. The Debtor financed the purchase of the Beacon Manor facility through the issuance of First Mortgage Revenue Bond, Series 1996C in the principal amount of $9,845,000 and Series 1996D in the principal amount of $545,000. The Trustee holds all mortgages to the three properties. As of the petition date, the Series 1996A and Series 1996C Bonds have an aggregate outstanding balance of $22,455,000. The Series 1996B and Series 1996D have been paid in full. Headquartered in Philadelphia, Pennsylvania, Senior Choice, Inc., is a multi-campus provider of personal care and nursing services to the elderly. The Company filed for chapter 11 protection on June 1, 2005 (Bankr. W.D. Pa. Case No. 05-71227). Patrick W. Carothers, Esq., at Thorp Reed Armstrong LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $50 million in assets and debts. SILGAN HOLDINGS: Moody's Rates Proposed $1 Bil. Facility at Ba3 --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Silgan Holdings Inc.'s proposed $1 billion senior secured credit facility and concurrently affirmed the company's other ratings (including the Ba3 senior implied rating). Moody's actions reflect the continued strong performance of each of Silgan's businesses despite challenges from high raw material (e.g. tinplate steel and plastic resins) and energy costs as well as increased competition -- notably in plastics. The ratings acknowledge Silgan's solid and consistent cash flow, which is expected to continue to reduce financial leverage and to bolster enterprise value throughout the intermediate term. The positive ratings outlook expresses the expectation of further improvement during the near term in cash flow leverage (free cash flow to debt adjusted to include pension and postretirement medical liabilities) to a sustainable level of over 15% (over 12% when free cash flow is adjusted to include dividends). Achievement of these hurdles could result in an upgrade of the ratings. However, the ratings outlook is sensitive to changes in business strategy, such as meaningful international expansion, that might be debt funded or require attention away from core operations. While Moody's expectations remain favorable, any prolonged softness in credit statistics could result in a change of the ratings outlook to stable. Proceeds from the proposed senior secured facility are intended to: * refinance the existing credit facility (rated Ba3 and prospectively withdrawn for the discussed refinancing); * to finance working capital and general corporate purposes; and * to pay related fees. Silgan's proposed facility consists of a $450 million revolver, at least $325 million term A loans, and up to $225 million term B loans. Moody's has prospectively withdrawn the ratings of the existing $1 billion credit facility The Ba3 rating assigned to the proposed reflects the priority position in the capital structure and the expectation of collateral coverage under a distress scenario. The facility accounts for the preponderance of total debt and therefore precludes notching above the Ba3 senior implied rating. Outstandings are to be secured by a first priority perfected lien on assets and stock of Silgan and the guarantor subsidiaries, subject to defined exemptions. Guarantees by each borrower, Silgan, and each existing or newly created or acquired subsidiary of Silgan shall provide an unconditional guaranty of all amounts owed under the proposed credit facility. Financial covenants are expected to address maximum leverage, minimum interest coverage, and maximum capital expenditures. The credit facility rating also incorporates the benefits from this early refinancing, which include improved interest rates, extended debt maturities, and proposed term amortization that is acceptable relative to free cash flow. Proposed amortization for 2005 and 2006 totals $2.25 million, consisting only of term B mandatory amortization. There is none required on term A loans for those periods. During 2007 and 2008, total amortization jumps to approximately $51 million, consisting of $48.75 million due in each year for the term A loans plus $2.25 million for the term B loans, respectively. The affirmation of the B1 rating for the existing senior subordinated notes reflects the contractual and structural subordination to a sizable amount of senior liabilities at Silgan and at its operating subsidiaries, respectively. The company's maintenance of strong enterprise value continues to support the expectation of full recovery under a distress scenario. Moody's took these ratings actions: -- assigned Ba3 to the proposed $1 billion senior secured credit facility; -- affirmed B1 rating for the $200 million 6.75% senior subordinated notes, due 2013, no guarantee from the operating subsidiaries; and -- affirmed B1 senior unsecured issuer rating (non-guaranteed exposure). Headquartered in Stamford, Connecticut, Silgan Holdings Inc. is a leading North American manufacturer of metal and plastic consumer goods packaging products used in numerous industries including: * food, * personal care, * healthcare, * pharmaceutical, * automotive, * agricultural, and * chemical products. For the twelve months ended March 31, 2005, consolidated net revenue was approximately $2.4 billion. SIRVA INC: Amends Receivable Sales Agreement with GECC & CIT ------------------------------------------------------------ SIRVA, Inc. (NYSE: SIR), through certain subsidiaries, entered into a second amendment to its Amended and Restated Receivables Sale Agreement with General Electric Capital Corporation, The CIT Group/Business Credit, Inc., and LaSalle Bank National Association. The amendment took effect on May 31, 2005. As previously disclosed, an affiliate of LaSalle sold all of the issued and outstanding stock of Executive Relocation to a subsidiary of SIRVA in December 2004. Affiliates of LaSalle and GECC are lenders on SIRVA's credit agreement, and may continue in the future to provide funding to SIRVA and its affiliates. Among other things, the amendment revised the definition of "Eligible Receivables" and the maximum permitted Default Ratio that would trigger a Termination Event. The Maximum Permitted Default Ratio for any calendar month is: Maximum Permitted Month Default Ratio -------------------- ----------------- April 2005 20% May 2005 20% June 2005 17.5% July 2005 - October 2005 15% November 2005 20% December 2005 20% January - April of each year thereafter 20% May - October of each year thereafter 15% November and December of each year thereafter 20% SIRVA RELOCATION CREDIT, LLC, as Seller, SIRVA RELOCATION LLC and EXECUTIVE RELOCATION CORPORATION, GENERAL ELECTRIC CAPITAL CORPORATION, THE CIT GROUP/BUSINESS CREDIT, INC. and LASALLE BANK NATIONAL ASSOCIATION, as Purchasers, under a SECOND AMENDMENT TO AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT dated as of May 31, 2005, arranged by LaSalle, as Agent. SIRVA, Inc. -- http://www.sirva.com/-- is a leader in providing relocation solutions to a well-established and diverse customer base around the world. The company is the leading global provider that can handle all aspects of relocations end-to-end within its own network, including home purchase and home sale services, household goods moving, mortgage services and insurance. SIRVA conducts more than 365,000 relocations per year, transferring corporate and government employees and moving individual consumers. The company operates in more than 40 countries with approximately 7,500 employees and an extensive network of agents and other service providers. SIRVA's well-recognized brands include Allied, northAmerican, Global, and SIRVA Relocation in North America; Pickfords, Huet, Kungsholms, ADAM, Majortrans, Allied Arthur Pierre, Rettenmayer, and Allied Varekamp in Europe; and Allied Pickfords in the Asia Pacific region. * * * As reported in the Troubled Company Reporter on March 17, 2005, Standard & Poor's Ratings Services placed its ratings on SIRVA Inc., including the 'BB' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement follows SIRVA's announcement: -- that charges related to its insurance and European businesses will be higher than previously anticipated; -- that its year-end financial statement will be delayed; and -- that it will incur significant expenses in 2005 to address financial control weaknesses. "The CreditWatch placement reflects SIRVA's disclosure of additional extraordinary charges, significant costs related to improved financial control to be incurred in 2005, and recent earnings pressure, which will likely delay anticipated improvements in earnings and cash flow," said Standard & Poor's credit analyst Kenneth L. Farer. TELESYSTEM INT'L: Completes $3.5 Billion Asset Sale to Vodafone --------------------------------------------------------------- Telesystem International Wireless Corporation N.V., a wholly owned subsidiary of Telesystem International Wireless Inc., completed the sale of its interests in ClearWave N.V. to Vodafone International Holdings B.V., a wholly owned subsidiary of Vodafone Group Plc, for a cash consideration of approximately US$3.5 billion. These proceeds along with other net cash at TIW are intended to be distributed to its shareholders pursuant to a court-supervised Plan of Arrangement approved by shareholders at a special meeting held on May 19, 2005. About Vodafone Vodafone -- http://www.vodafone.com/-- is the world's leading mobile telecommunications company with operations in 26 countries across 5 continents with 416 million customers and 152 million proportionate customers worldwide as at December 31, 2004. About Vodafone International Holdings B.V. Vodafone International Holdings B.V. is an indirectly wholly-owned subsidiary of Vodafone, incorporated in the Netherlands. It acts as a holding company within the Vodafone Group and currently holds interests in a number of Vodafone subsidiaries. About the Company Telesystem International Wireless Inc. (B+/Watch Pos/--) -- http://www.tiw.com/-- is a leading provider of wireless voice, data and short messaging services in Central and Eastern Europe with over 6.1 million subscribers. TIW operates in Romania through MobiFon S.A. under the brand name Connex and in the Czech Republic through Oskar Mobil a.s. under the brand name Oskar. * * * As reported in the Troubled Company Reporter on June 3, 2005, Standard & Poor's Ratings Services withdrew its ratings on Telesystem International Wireless Inc. on the completion of the sale (through interim holding company Clearwave N.V.) of its two operating subsidiaries, Mobifon Holdings B.V. and Oskar Holdings N.V., to Vodafone. The cash consideration for the sale was about US$3.5 billion, which constitutes TIW's only remaining material asset. TIW will now proceed with completion of its court supervised plan of arrangement, which involves the liquidation of TIW, including the implementation of a claims process and the distribution of net cash to shareholders, the cancellation of its common shares, final distribution, and ultimately the dissolution of the company. TIW has no debt outstanding and no material liabilities. TELESYSTEM INT'L: Common Shares Continue Trading on TSX ------------------------------------------------------- Telesystem International Wireless Inc. disclosed that its common shares will continue to be listed on the Toronto Stock Exchange until shortly after the Company declares and pays the first distribution to its shareholders under its plan of arrangement. The Company has received conditional approval for the listing of its common shares on the TSX Venture Exchange once its securities cease to be listed on the TSX. TIW is currently in discussions with the NASDAQ with regards to the continuing listing requirements of its common shares on that market. About the Company Telesystem International Wireless Inc. (B+/Watch Pos/--) -- http://www.tiw.com/-- is a leading provider of wireless voice, data and short messaging services in Central and Eastern Europe with over 6.1 million subscribers. TIW operates in Romania through MobiFon S.A. under the brand name Connex and in the Czech Republic through Oskar Mobil a.s. under the brand name Oskar. * * * As reported in the Troubled Company Reporter on June 3, 2005, Standard & Poor's Ratings Services withdrew its ratings on Telesystem International Wireless Inc. on the completion of the sale (through interim holding company Clearwave N.V.) of its two operating subsidiaries, Mobifon Holdings B.V. and Oskar Holdings N.V., to Vodafone. The cash consideration for the sale was about US$3.5 billion, which constitutes TIW's only remaining material asset. TIW will now proceed with completion of its court supervised plan of arrangement, which involves the liquidation of TIW, including the implementation of a claims process and the distribution of net cash to shareholders, the cancellation of its common shares, final distribution, and ultimately the dissolution of the company. TIW has no debt outstanding and no material liabilities. TELESYSTEM INT'L: Gets Final Court Nod on Plan of Arrangement ------------------------------------------------------------- The Superior Court for the District of Montreal, Province of Quebec, has issued a final order approving Telesystem International Wireless Inc.'s (TSX:TIW) (NASDAQ:TIWI) Plan of Arrangement under the Canada Business Corporations Act. As previously announced, TIW shareholders approved the arrangement at a meeting held on May 19, 2005. TIW will operate under a court supervised Plan of Arrangement to complete the transaction with Vodafone announced on March 15, 2005, proceed with its liquidation, including the implementation of a claims process and the distribution of net cash to shareholders, cancel its common shares and proceed with its final distribution and be dissolved. As part of the Plan of Arrangement, TIW will seek, under the supervision of the Court, the expeditious identification and resolution of claims as of May 20, 2005 against the Company in order to accelerate distributions to shareholders. A claims bar date has been set at July 8, 2005. The Court has appointed KPMG Inc. as monitor to perform the duties provided in the claims identification process approved by the Court, including the identification and valuation of claims, and the reporting to the Court and the Company on the claims received and as to any further steps required for dealing with such claims. About the Company Telesystem International Wireless Inc. (B+/Watch Pos/--) -- http://www.tiw.com/-- is a leading provider of wireless voice, data and short messaging services in Central and Eastern Europe with over 6.1 million subscribers. TIW operates in Romania through MobiFon S.A. under the brand name Connex and in the Czech Republic through Oskar Mobil a.s. under the brand name Oskar. * * * As reported in the Troubled Company Reporter on June 3, 2005, Standard & Poor's Ratings Services withdrew its ratings on Telesystem International Wireless Inc. on the completion of the sale (through interim holding company Clearwave N.V.) of its two operating subsidiaries, Mobifon Holdings B.V. and Oskar Holdings N.V., to Vodafone. The cash consideration for the sale was about US$3.5 billion, which constitutes TIW's only remaining material asset. TIW will now proceed with completion of its court supervised plan of arrangement, which involves the liquidation of TIW, including the implementation of a claims process and the distribution of net cash to shareholders, the cancellation of its common shares, final distribution, and ultimately the dissolution of the company. TIW has no debt outstanding and no material liabilities. TRAVELCENTERS: S&P Rates Proposed $805 Mil. Credit Facility at BB ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to TravelCenters of America Inc.'s proposed $805 million senior secured credit facility, comprised of a $125 million revolving credit facility due 2008 and a $680 million term loan due 2011. A recovery rating of '1' was also assigned to this facility, indicating a high expectation for full (100%) recovery of principal in the event of a default. At the same time, Standard & Poor's affirmed its existing ratings, including its 'BB-' corporate credit rating, on Westlake, Ohio- based TravelCenters. The outlook is negative. "The rating and outlook affirmation reflects Standard & Poor's expectations that credit protection measures remain somewhat weak for the rating pro forma for the refinancing of the existing bank loan and subordinated notes," said Standard & Poor's credit analyst Ana Lai. The ratings on the proposed credit facility are based on a review of preliminary documentation. TravelCenters will use proceeds of the proposed term loan to refinance its existing $475 million term loan and its $190 million subordinated notes due 2009. The company owns, operates, and franchises 159 full-service truck stops in 40 states and Ontario, Canada. The ratings on TravelCenters reflect the company's high debt leverage, participation in the competitive truck stop industry, the volatility of diesel fuel prices, and marginal growth prospects for the industry. TRAVELCENTERS OF AMERICA: Launches Cash Tender Offer for Sr. Notes ------------------------------------------------------------------ TravelCenters of America, Inc., commenced a cash tender offer and consent solicitation for any and all of the $190,000,000 aggregate outstanding principal amount of its 12-3/4% senior subordinated notes due May 1, 2009. The tender offer and consent solicitation are subject to the terms and conditions set forth in the Company's Offer to Purchase and Consent Solicitation Statement dated June 2, 2005. The consent solicitation will expire at 5:00 p.m., New York City time, on June 15, 2005, unless extended. The tender offer will expire at 12:00 midnight, New York City time, on June 29, 2005, unless extended. Holders tendering their Notes will be required to consent to certain proposed amendments to the Notes and to the indenture governing the Notes, which will eliminate substantially all of the restrictive covenants, certain events of default and certain other related provisions from the indenture governing the Notes. The tender offer and consent solicitation are conditioned on: (1) the consummation of the refinancing of the Company's credit facilities; and (2) the receipt of consents from holders of at least 50% of the outstanding principal amount of the Notes, among other conditions. Holders may not tender their Notes without also delivering consents or deliver consents without also tendering their Notes. The total consideration to be paid for each $1,000 principal amount of Notes validly tendered prior to the Consent Date will be a price equal to: (i) the present value, determined in accordance with standard market practice, on a date promptly following the Expiration Date, of $1,063.75 per $1,000 principal amount of the Notes on the earliest redemption date, November 1, 2005, and all future interest payments payable up to the earliest redemption date, determined on the basis of a yield to the earliest redemption date equal to the sum of: (x) the yield on the 1-5/8% (1.625%) U.S. Treasury Note due Oct. 31, 2005, as calculated by the Dealer Managers and Solicitation Agents in accordance with standard market practice, based on the bid price of such reference security as of 2:00 p.m., New York City time, on the second business day immediately preceding the Expiration Date, as displayed on the Bloomberg Government Pricing Monitor on "Page PX3" or any recognized quotation source selected by the Dealer Managers and Solicitation Agents in their sole discretion, plus: (y) 50 basis points, minus: (ii) accrued and unpaid interest on such $1,000 principal amount to, but not including, the date of payment. All holders whose Notes are accepted for purchase will also be paid accrued and unpaid interest. In the event that any Notes are accepted for purchase pursuant to the tender offer and consent solicitation and the proposed amendments to the indenture become operative, the Company will make a consent payment of $30.00 per $1,000 principal amount of the Notes for which consents have been validly delivered on or prior to the Consent Date. The Consent Payment is included in Total Consideration. Holders who validly tender their Notes after the Consent Date but prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration, which equals the Total Consideration less the Consent Payment. The Company may amend, extend or terminate the tender offer and consent solicitation at any time. J.P. Morgan Securities Inc. and Lehman Brothers Inc. are the Dealer Managers and Solicitation Agents for the tender offer and the consent solicitation. The depositary and information agent is D.F. King & Co., Inc. Questions or requests for assistance may be directed to J.P. Morgan Securities Inc. (telephone: (212) 834-3424 (collect) or (866) 834-4666 (toll free)) or to Lehman Brothers Inc. (telephone: (212) 528-7581 (collect) or (800) 438-3242 (toll free)). Requests for documentation may be directed to D.F. King & Co., Inc., the Information Agent (telephone: (212) 269-5550 (for banks and brokers only) and (800) 488-8075 (for all others toll free)). About TravelCenters of America TravelCenters of America -- http://www.tatravelcenters.com/-- headquartered in Westlake, Ohio, is the largest network of full- service travel centers and heavy truck repair facilities in North America. The Company has more than 11,500 employees at 159 locations in 40 states and Canada. With more than 30 years of experience, TravelCenters of America has established itself as a leader in serving professional drivers and motorists alike. * * * TravelCenters of America's 12-3/4% senior subordinated notes due 2009 carry Moody's Investors Service's Caa1 rating and Standard & Poor's 'B' rating. U.S. ENERGY: Completes $18.8 Mil. Rocky Mountain Sale to Enterra ---------------------------------------------------------------- U.S. Energy Corp. (Nasdaq: USEG) and its majority-owned subsidiary, Crested Corp., (OTC Bulletin Board: CBAG) d/b/a USECC closed the agreement to sell their natural gas subsidiary, Rocky Mountain Gas, Inc., and RMG's subsidiary RMG I, LLC, to Enterra Energy Trust (Nasdaq: EENC; TSX: ENT.UN) (Enterra) for $18.8 million in cash and stock. The agreement closed on June 1, 2005. The $3.3 million in debt with Petrobridge Investment Management of Houston, Texas, which remained at RMG, has been refinanced and is no longer a USECC obligation. Enterra paid for the acquisition with $500,000 cash, $5,234,000 in freely tradable trust units and $14 million in exchangeable shares which are restricted for sale and will be exchanged for freely tradable trust units on June 1, 2006. USECC received $18.8 million for its percentage of RMG. USECC formed Rocky Mountain Gas, Inc. in 1999 to take advantage of the growing coal bed methane (CBM) play in the Powder River Basin of Wyoming and Montana. Enterra has acquired all of the stock of RMG and will retain certain employees and RMG's office in Gillette, Wyoming. RMG's properties produced 728,051 mcf of CBM in 2004. RMG established significant leaseholds in the Oyster Ridge area of southwestern Wyoming and in the Powder River Basin of Wyoming and southeastern Montana. By mutual consent, the sale agreement excludes RMG's equity interest in Pinnacle Gas Resources, Inc., which has been assigned to USEG and CBAG. USEG owns 70% of CBAG. Mark J. Larsen, former president of RMG, said, "We are pleased to have concluded this transaction with Enterra, a highly respected oil and gas entity. I firmly believe that the consideration we have received through our equity ownership in Enterra will be of great value to the USEG and CBAG shareholders. This transaction came at an opportune time. It has allowed us to improve our liquidity, and at our discretion, to add value to our other significant natural resource assets. It also allows us to remain in the gas, oil and CBM arenas through an equity position in both Enterra and Pinnacle." U.S. Energy President Keith G. Larsen added, "USEG management has stated that we, as a company, are moving 'back to our future,' back to the mining and milling of molybdenum, uranium and gold commodities upon which this company was founded. Prices for uranium, vanadium and molybdenum are at their highest levels in decades. Gold has also been trading at over $400 per ounce. USECC has significant holdings in uranium and gold and expects to receive a 'world class' molybdenum asset from Phelps Dodge in the near future," he added. The consummation of the RMG transaction is expected to provide USEG with the opportunity to: (1) complete the retirement of $3.0 million of USEG debt ($500,000 paid on June 1, 2005 and the $2,500,000 balance over 10 months); (2) initiate exploration and development of uranium properties in Wyoming and Utah. Primary among them are mines at Sheep Mountain, in south central Wyoming, and more than 12,000 acres of uranium lode mining claims in central and southeastern Utah. Many of the Utah claims show evidence of extensive vanadium mineralization, as well as uranium; (3) continue changing the status of the Shootaring Canyon Uranium Mill from reclamation to operational; and (4) initiate the evaluation of the Mt. Emmons (Colorado) molybdenum property that USECC anticipates receiving from Phelps Dodge Corporation before year's end. About U.S. Energy Corp U.S. Energy Corp. and its majority owned subsidiary, Crested Corp. are engaged in a joint venture to conduct various business operations as USECC. Through their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited., U.S. Moly Corp and USECC, they own interests or properties prospective for gold, uranium, vanadium and molybdenum. Going Concern Doubt U.S. Energy Corp. and Crested Corp., d/b/a USECC reported that that their independent auditor, Epstein, Weber & Conover, PLC of Scottsdale, Ariz., has issued a going concern opinion qualifying the financial statements of both companies for the year ended December 31, 2004. This is consistent with the qualified opinions issued by Grant Thornton for the year ended December 31, 2003, the seven months ended December 31, 2002, and the (former) fiscal year ended May 31, 2002. U.S. MICROBICS: Recurring Losses Trigger Going Concern Doubt ------------------------------------------------------------ Russell Bedford Stefanou Mirchandani LLP, expressed substantial doubt about U.S. Microbics, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Sep. 30, 2004. The auditing firm points to the Company's recurring losses from operations and working capital deficiency. U.S. Microbics incurred a net loss of $1,378,249 and $763,714, for the six months, and three months ended March 31, 2005, had negative cash flows from operations of $979,491 for the six months ended March 31, 2005 compared to a net loss of $1,788,933, and $820,897 for the six months, and three months ended March 31, 2004, and had negative cash flows from operations of $521,772 for the six months ended March 31, 2004. The Company is expecting the revenues for the year ended September 30, 2005, to be more than the prior fiscal year due primarily to a remediation contract in Mexico. In order to continue implementing the Company's strategic plan, the Company is planning on raising up to $2,000,000 in equity financing and an additional $2,000,000 from a private placement through its subsidiary Sub Surface Waste Management of Delaware, Inc., during the second and third quarters of fiscal 2005. The funds are targeted primarily for funding contract costs, expansion of the marketing effort and for the acquisition of companies that will increase revenues, cash flow and profits. There can be no assurance that the Company or SSWM will be able to raise such capital on acceptable terms. Failure to obtain such capital or generate such revenues would have an adverse impact on the Company's financial position and results of operations and ability to continue as a going concern. The Company believes that it may generate sufficient cash to continue its operations through September 30, 2005, and anticipates that cash generated from planned private placements and projected revenues for consulting and during the next three quarters of fiscal 2005 will enable it to fulfill cash needs through fiscal 2005 operations. Although financing efforts are continuing, there can be no assurance that additional private or public financing, including debt or equity financing, will be available as needed, or, if available, on terms favorable to the Company. Any additional equity financing may be dilutive to shareholders and such additional equity securities may have rights, preferences or privileges that are senior to those of the Company's existing common or preferred stock. Furthermore, debt financing, if available, may require payment of interest and may involve restrictive covenants that could impose limitations on the operating flexibility of the Company. The failure of the Company to successfully obtain additional future funding may jeopardize the Company's ability to continue its business and operations. About the Company U.S. Microbics, Inc., is a business development and holding company that acquires, develops and deploys innovative environmental technologies for soil, groundwater and carbon remediation, air pollution reduction, modular drinking water systems and agriculture enhancement. For more information on the company visit the website at http://bugsatwork.com/ At Mar. 31, 2005, U.S. Microbics, Inc.'s balance sheet showed a $5,972,467 stockholders' deficit, compared to a $5,223,835 deficit at Sep. 30, 2004. US AIRWAYS: Wants Exclusive Plan Period Stretched to June 30 ------------------------------------------------------------ US Airways, Inc., and its debtor-affiliates ask Judge Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia to extend their exclusive period for filing a plan of reorganization to June 30, 2005, and their exclusive period for soliciting acceptances of that plan to October 31, 2005. According to Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, the merger agreement with America West Holdings Corporation will form the basis of a plan of reorganization. The Debtors hope to file that plan and accompanying disclosure statement no later than June 30, 2005. The extensions are consistent with the timeline contemplated in the Debtors' merger with America West. Mr. Leitch tells Judge Mitchell that the extensions will provide a buffer for any contingencies that may arise. The extra time will allow the Debtors to obtain input from the other major stakeholders. Since the next hearing is not until June 23, 2005, the Debtors also ask the Court for a bridge order to avoid violating the previous grant of exclusivity. * * * Judge Mitchell extends the Debtors' Exclusive Periods on an interim basis until the time as the Court enters a final order with respect to the Debtors' request. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 94; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORP: Says Settlement Data Won't Predict Asbestos Liability --------------------------------------------------------------- USG Corporation tells Judges Fitzgerald and Conti that its asbestos claimants' desire to focus solely on personal injury claims settlement history is misguided. USG says the Official Committee of Asbestos Claimants' belief that there's a long history of trials testing the Debtors' defenses to asbestos claims is flawed. "To the contrary," USG says, "more than 99% of U.S. Gypsum's claims history consists of settlements. The majority of settlements were for less than $1,000 (after adjusting earlier settlement amounts upward for inflation). This is less than a single day of attorney time. Ninety-percent of U.S. Gypsum's settlements were for $5,000 or less. At these values, U.S. Gypsum was economically better off settling the most baseless claim rather than litigating the actual claim merits and value. This economic reality lead U.S. Gypsum to join, and remain for over a decade in, the Asbestos Claims Facility and the Center for Claims Resolution. These claim settlement 'values' can provide no information as to claim validity." The asbestos claimants are urging the bankruptcy court to estimate USG's asbestos-related liability following the methodologies deployed in the Eagle-Picher and Owens Corning cases. In those cases, estimation was based solely on claims settlement history. USG says that's the wrong way to estimate liability in its cases. "While the claimants present the method as monolithic and easily applied," USG says, "[i]t is neither. Rather than being a straightforward mathematical exercise, settlement history has been applied to different asbestos bankruptcies in significantly different ways for purposes of estimation." USG reminds the judges that Dr. Mark Peterson's pre-bankruptcy settlement valuation method was used recently in Owens Corning's chapter 11 cases, and over-estimated Owens Corning's liability by more than $4 billion. See Owens Corning v. Credit Suisse First Boston, 322 B.R. 719, 721, 725 (D. Del. 2005). USG doesn't want to see that result in its chapter 11 cases. USG does not dispute that it has asbestos-related liability. USG wants to pay what's really owed to claimants who have really been injured. USG doesn't want to see a 524(g) trust established under a chapter 11 plan used to pay $1,000 to anybody who mails in a claim form. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at Jones Day represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. VENTURE HOLDINGS: Committee to Prosecute Adversary Proceedings -------------------------------------------------------------- Venture Holdings Company, LLC, its debtor-affiliates and the Official Committee of Unsecured Creditors appointed in their chapter 11 cases ask the Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan to make the Committee the sole plaintiff in lawsuits pending against: Adversary Proceeding Number Target Defendant ---------- ---------------- 05-4972 Larry J. Winget, Sr., 03-5359 Deluxe Pattern Acquisition Corp. 03-5358 Harper Properties of Clinton Township Ltd. 03-5357 Venture Automotive Corp. 03-5356 Venture Sales & Engineering Corp. 04-4125 Carroll Shelby, et al. 04-4373 Larry J. Winget, Sr., et al. 05-4969 M&M Flor Through Systems, LLC 05-4968 Linden Creek Real Estate, LLC 05-4966 Mast Services, LLC 05-4964 Millard Design Australia Pty. Ltd. 05-4963 Venco Management Canada, Ltd. The Committee is comprised of these holders of significant trade claims, 11% Senior Notes due 2007, 9.5% Senior Notes due 2005, 12% Senior Subordinated Notes due 2009, and the Indenture Trustee for the Noteholders: * AIG Global Investment Corp. * E.I. du Pont de Nemours and Company * Eaton Vance CDO II Limited * Findlay Industries * Mr. Gabriel Elias * The Huntington National Bank * Multimatic, Inc. * Rohm and Haas Automotive Coatings and * Solvay Engineered Polymers. The Debtors' creditors are the real parties with an economic stake in the outcome of these lawsuits, the Debtors and the Committee tell Judge Tucker, making the substitution appropriate. Based in Fraser, Michigan, Venture Holdings Company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor-affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). As of March 31, 2002, the Debtors had total assets of $1,459,834,000 and total debts of $1,382,369,000. Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Karaczynski, Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Creditors' Committee. VERIFONE HOLDINGS: Apr. 30 Balance Sheet Upside Down by $120 Mil. ----------------------------------------------------------------- In its first earnings report as a public company, VeriFone Holdings, Inc. (NYSE: PAY) reported financial results for the three months ended April 30, 2005. Net revenues, for the three months ended April 30, 2005, were $117.9 million, an increase of 32% over net revenues of $89.5 million for the comparable period of 2004. The increase was driven by a 68% increase in net revenues from VeriFone's international business and a 16% increase in net revenues from its North America business. VeriFone's acquisition of GO Software, which closed on March 1, 2005, contributed 1% of net revenues for the three months ended April 30, 2005. Systems Solutions net revenues rose 34% versus the prior year while Services net revenues rose 14%. Net income, under generally accepted accounting principles, for the three months ended April 30, 2005 was $8.8 million, compared to $1.1 million, for the second quarter of 2004. Net Income as Adjusted, which excludes non-cash amortization of purchased intangibles and debt issuance costs, as well as the interest on debt retired out of VeriFone's IPO proceeds, for the three months ended April 30, 2005 was $12.3 million, compared to $6.2 million, for the comparable period of 2004. Douglas G. Bergeron, Chairman and Chief Executive Officer stated, "Our business continued to exhibit strong growth in the fiscal 2005 second quarter. In North America, the ongoing upgrade cycle has been driven by the migration from dial-up to IP and the expanding need for PIN-based debit solutions. In Western Europe, growth continued to be fueled by enhanced EMV security standards and IP and wireless communications. Emerging markets demand was strong across the board." "VeriFone's industry leading certification and product portfolio, brand, global scale and substantial investment in research and development has enabled us to fully participate in industry growth," continued Bergeron. "We are extremely pleased with our second quarter results." About the Company VeriFone Holdings, Inc. (NYSE: PAY) -- http://www.verifone.com/-- is a global leader in secure electronic payment technologies, provides expertise, solutions and services for today with a migration strategy for tomorrow. VeriFone delivers solutions that add value to the point of sale, resulting in improved merchant retention and the generation of new sources of revenue for its partners and customers. VeriFone solutions are specifically designed to meet the needs of vertical markets including financial, retail, petroleum, government and healthcare. At Apr. 30, 2005, VeriFone Holdings, Inc.'s balance sheet showed a $120,436,000 stockholders' deficit, compared to a $135,387,000 deficit at Oct. 31, 2004. WILD ABOUT HARRY'S: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Wild About Harry's, Inc. 3113 Knox Street Dallas, Texas 75205 Bankruptcy Case No.: 05-36078 Type of Business: The Debtor operates restaurants that serve frozen custards and hotdogs. See http://www.wildaboutharrys.com/ Chapter 11 Petition Date: June 2, 2005 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Gregory M. Bair, Esq. Mark C. Alfieri, Esq. The Curtis Law Firm, PC 901 Main Street, Suite 6515 Dallas, Texas 75202 Tel: (214) 752-2222 Fax: (214) 752-0709 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Foodservice Trade Debt $132,000 Attn: Kaye Hennington P.O. Box 843202 Dallas, TX 75284-3202 I-Dine Rewards Network Credit Card $70,819 11900 Biscayne Boulevard Factor Miami, FL 33181 Internal Revenue Service Taxes $65,000 Attn: Evelyn Meyer 75-2771664 4050 Alpha Road Dallas, TX 75244 Advanced Restaraunt Finance Credit Card $60,899 3 Waters Park Drive, Suite 231 Factor San Mateo, CA 94403 Hughes & Luce, LLP Trade Debt $54,485 Attn: Renee Adame 1717 Main Street, Suite 2800 Dallas, TX 75201 Little Pederson & Fankhouser $33,263 Attn: Bob Pettey 901 Main Street, Suite 4110 Dallas, TX 75202 Advance Me Factor Loan $30,000 600 Town Park Lane, Suite 500 Against Credit Kennesaw, GA 30144 Cards Los Leones - Bill Lyons Fixture Loan & $28,000 430 East Commerce Trade Debt San Antonio, TX 78205 State Comptroller Sale Tax $25,000 Attn: Salena Thomas 111 East 17th Street Austin, TX 78774 Meadowvale, Inc. Trade Debt $19,600 Attn: Steve Steinwart 106 East Beaver Yorkville, IL 60560-1703 Herbelin & Company Trade Debt $19,493 Attn: J. Herbelin 325 North St. Paul, Suite 600 Dallas, TX 75201 Lane-Link Group Trade Debt $19,000 Attn: D. Lane 205 East Interstate 30 P.O. Box 2499 Rockwall, TX 75087 TXU Energy Electric Service $13,098 P.O. Box 100001 Dallas, TX 75310-0001 JR Black Properties Lease $10,827 Attn: Lauri Miller 7632 Campbell Road #308 Dallas, TX 75248 J.B. Bickford Trade Debt $8,295 P.O. Box 20630 Oklahoma City, OK 73156 Almcoe Ice Machine Service Trade Debt $6,828 4050 Crest Hill Road Dallas, TX 75227 David Childs Taxes $3,583 Tax Assessor & Collector County of Dallas P.O. Box 139033 Dallas, TX 75313-9033 Hutchinson & Gray, LLC Trade Debt $2,500 2425 North Central Expressway Suite 530 Richardson, TX 75080 Muzak $1,056 P.O. Box 673020 Dallas, TX 75287-3020 Dunhill Partners Lease Unknown Attn: Steve Hagara 3100 Monticello Dallas, TX 75205 WORLDCOM INC: Balks at Donald Hewitt's Motion to Lift Stay ---------------------------------------------------------- Dan Shaked, Esq., at Shaked & Posner, in New York, relates that on August 6, 2001, Donald Hewitt, on behalf of himself and all other similarly situated individuals, commenced an action in the United States District Court for the Southern District of Mississippi against SkyTel Corp. and MCI WorldCom, alleging job racial discrimination and retaliation pursuant to Title VII of the Civil Rights Act of 1964. The Mississippi Court dismissed the class claim in February 2002 because Mr. Hewitt failed to respond. Mr. Hewitt's individual allegations remained. Based on lost wages totaling $200,000 and the potential punitive damages for retaliation by WorldCom, Inc. and its debtor-affiliates, Mr. Hewitt asserts that he may be entitled to an award in excess of $1 million. Due to the Debtors' bankruptcy filing, the Mississippi Action was stayed. Mr. Hewitt filed Claim No. 30907 for $10,047,000, which purportedly represents $47,000 of asserted compensatory damages and $10,000,000 of alleged punitive damages. By this motion, Mr. Hewitt asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow him to pursue recovery for his prepetition claim against the Debtors and their insurance carrier in the Mississippi Court. Mr. Shaked asserts that Mr. Hewitt's request is warranted for these reasons: (a) Permitting Mr. Hewitt to prosecute his claim in the Mississippi Court will result in a complete resolution of his claim against the Debtors. (b) The resolution of Mr. Hewitt's claim is not necessary to effectuate the Debtors' reorganization, but will only result in a liquidation of the claim. (c) Mr. Hewitt assumes, but is not certain, whether the Debtors' insurer has or will assume full or partial responsibility for defending the action or for payment of the contingent claim. (d) Mr. Hewitt's request will in no way prejudice the interests of the Debtors' other creditors. The Plan of Reorganization is already in effect and the rate of distribution for allowed claims has been set. Whether Mr. Hewitt's claim is liquidated at $1 or $10 million will not affect the distribution for other creditors. (e) Based on its involvement and familiarity with the case, the Mississippi Court is well-positioned to resolve the legal and factual issues fully and more expeditiously than the Bankruptcy Court. (f) Failure to vacate the automatic stay and removing the case to the Bankruptcy Court will mean that the parties and the Bankruptcy Court will have to duplicate their efforts all over again, wasting valuable time and money. Debtors Object The automatic stay terminated upon the discharge of the Debtors, no later than the Effective Date of the Plan on April 20, 2004, Mark A. Shaiken, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, relates. The stay was replaced by a Section 524(a)(2) permanent injunction. Thus, Mr. Shaiken says, Mr. Hewitt would have to obtain relief from the effect and operation of the Confirmation Order, not relief from the automatic stay. Even if the automatic stay were still in place, Mr. Shaiken tells the Court that Mr. Hewitt's request does not satisfy the standard to lift the stay: (a) The Mississippi Action has not proceeded. No discovery has been taken, no case management or scheduling order has been entered, it does not appear the initial disclosures have been made pursuant to Rule 26 of the Federal Rules of Civil Procedure. Nothing, other than Mr. Hewitt's default with respect to the class claim issues, has occurred. (b) The resolution of the amount the Debtors owe to Mr. Hewitt is a core proceeding under Section 157(b)(2)(B) & (C) and is necessary to determine how much the Debtors will pay to Mr. Hewitt under the Plan. (c) There is nothing unique about the Mississippi Court's expertise that would qualify it as a specialized tribunal. The New York Bankruptcy Court is equally qualified and capable as the Mississippi Court to decide the issues presented in the Action. (d) The Debtors would be harmed by the resolution of the Claim Objection in the Mississippi Court. If claim objections are to be resolved in forums other than the Bankruptcy Court, the Debtors and their creditors will be prejudiced by the added cost and difficulty in obtaining claim objection resolutions in many forums. (e) The resolution of the Mississippi Action will not necessarily resolve and finally liquidate the amount of Mr. Hewitt's claim in the bankruptcy cases. The only way to resolve all of the issues presented by the Claim is in context of the Claim Objection in the Bankruptcy Court. Thus, the Debtors ask Judge Gonzalez to deny Mr. Hewitt's request and permit the issues with respect to the Claim to be resolved in the Bankruptcy Court. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Alvarez & Marsal Hires Chuck Bedsole as Managing Director ------------------------------------------------------------ Alvarez & Marsal, a global professional services firm, announced that Embree C. "Chuck" Bedsole, a seasoned executive with expertise in hospitality, tourism and real estate projects in the U.S., Europe and Latin America, has joined the firm's Real Estate Advisory Services Group as a managing director. He is based in the firm's Dallas office. Mr. Bedsole has substantial domestic and international experience with a variety of hospitality properties including hotels, mixed- use resort developments, hotel condominiums, interval ownership, all-inclusive resorts, and marinas. He also has significant experience with residential, commercial and industrial projects in Latin America. Prior to joining A&M, Mr. Bedsole served as a practice leader in the Hospitality & Leisure group of PricewaterhouseCoopers LLP and for seven years as the practice leader for Latin America in Ernst & Young LLP's Real Estate Advisory Services Group. Before that, he was director of development for Jack Tar Village Resorts, Inc. and was responsible for new resort development and acquisition in Latin America and the Caribbean. "Since forming A&M's Real Estate Advisory Services group nearly two years ago, we have attracted a highly sophisticated team of 40 veteran professionals with deep and diverse backgrounds," said Biff McGuire, an A&M managing director and head of the firm's Real Estate Advisory Services group. "Chuck's broad experience working with scores of hospitality and leisure companies strengthens our impressive roster of talent and industry-specific expertise. In addition, his extensive understanding of the Latin America market is an ideal complement to the restructuring practice we have established in Sao Paolo, Brazil." Mr. Bedsole earned a bachelor's degree in business administration from the University of Texas at Austin and is fluent in Spanish and conversant in Portuguese. He is a member of the US-Mexico Chamber of Commerce, the International Advisory Committee of the Greater Dallas Chamber and the Urban Land Institute. He is also a frequent speaker at key industry conferences on lodging and real estate development in the US and Latin America and has authored numerous articles for industry publications. About Alvarez & Marsal Alvarez & Marsal (A&M) is a leading global professional services firm with expertise in guiding companies and public sector entities through complex financial, operational and organizational challenges. Employing a unique hands-on approach, A&M works closely with clients to improve performance, identify and resolve problems and unlock value for stakeholders. Founded in 1983, Alvarez & Marsal draws on a strong operational heritage in providing services including turnaround management consulting, crisis and interim management, performance improvement, creditor advisory, financial advisory, dispute analysis and forensics, tax advisory, real estate advisory and business consulting. A network of 400 seasoned professionals in locations across the US, Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. For more information, visit http://www.alvarezandmarsal.com. * Construction Litigators Join Sheppard Mullin in San Francisco --------------------------------------------------------------- Sheppard, Mullin, Richter & Hampton LLP welcomes the arrival of two attorneys in its San Francisco office: Edward Lozowicki and Mathew Troughton. Both lawyers join Sheppard Mullin's Construction Litigation practice group from Coudert Brothers in San Francisco, Mr. Lozowicki as a partner and Mr. Troughton as special counsel. Mr. Lozowicki has more than thirty years of experience in complex commercial contract litigation; construction law and litigation; and energy/public utility law and related litigation and regulatory proceedings. He has tried numerous cases before federal and state courts, juries, arbitrators, and administrative agencies. In the construction industry, he represents contractors, subcontractors, owners and developers in claims and litigation on diverse private and public projects, such as high- rise buildings, freeways, bridges, hospitals, power plants and high-end condominiums. In the energy industry, Mr. Lozowicki represents independent energy companies and industrial users in litigation of power purchase agreements, fuel contracts and other contract disputes, and regulatory proceedings before the California Public Utilities Commission. Mr. Lozowicki's project experience includes highways, bridges and military installations; nuclear, geothermal, hydroelectric, fossil and cogeneration power plants; gas pipeline and power transmission lines; prisons, hospitals, schools and other institutional structures; refineries, chemical and industrial plants; high-rise office and condominium projects; undersea tunnels, ship-building and missile projects. Mr. Troughton has represented clients on numerous disputes concerning public hospital, bridge and school projects, power plant and transmission line projects and office and manufacturing complex projects. His technology practice experience includes cases for patent and trademark infringement, false advertising and related antitrust issues. Guy Halgren, firm chair, said, "We are very pleased to welcome Ed and Mat, who bring decades of litigation experience to the firm. Their substantial background in construction law and litigation will dovetail well with the San Francisco office's real estate practice and the growth of the firm's Construction practice group." "Ed and Mat are skilled practitioners whose particular experience in representing clients in the construction sector is a natural compliment to Sheppard Mullin," said Betsy McDaniel, managing partner of the firm's San Francisco office. "Their arrival further strengthens the firm's real estate practice, with Ed being the second partner who specializes in the industry to join the San Francisco office in the past month." Commented Mr. Lozowicki, "It is a great pleasure to join Sheppard Mullin. I am excited about practicing with a top-notch firm, and look forward to reuniting with several partners in the San Francisco office with whom I practiced with at a prior firm." Mr. Lozowicki earned his law degree from Santa Clara University School of Law in 1969 and an AB from St. Joseph's College in 1966. Mr. Troughton earned his law degree, magna cum laude, from Santa Clara University School of Law in 1990 and a BA from University of California at Berkeley in 1987. About Sheppard, Mullin, Richter & Hampton LLP Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with 430 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate and Securities; Entertainment and Media; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. The firm was founded in 1927. * BOND PRICING: For the week of May 30 - June 3, 2005 ----------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- AAIPharma Inc. 11.000% 04/01/10 48 ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 5 Adelphia Comm. 6.000% 02/15/06 5 Aetna Industries 11.875% 10/01/06 7 Allegiance Tel. 11.750% 02/15/08 25 Allegiance Tel. 12.875% 05/15/08 1 Allied Holdings 8.625% 10/01/07 40 Amer. Color Graph. 10.000% 06/15/10 66 Amer. Plumbing 11.625% 10/15/08 14 Amer. Restaurant 11.500% 11/01/06 61 Amer. Tissue Inc. 12.500% 07/15/06 2 American Airline 7.377% 05/23/19 70 American Airline 7.379% 05/23/16 69 American Airline 8.839% 01/02/17 73 American Airline 8.800% 09/16/15 74 American Airline 10.180% 01/02/13 69 American Airline 10.600% 03/04/09 66 American Airline 10.680% 03/04/13 65 AMR Corp. 9.200% 01/30/12 70 AMR Corp. 9.750% 08/15/21 68 AMR Corp. 9.800% 10/01/21 63 AMR Corp. 9.880% 06/15/20 63 AMR Corp. 10.000% 04/15/21 63 AMR Corp. 10.125% 06/01/21 68 AMR Corp. 10.150% 05/15/20 60 AMR Corp. 10.200% 03/15/20 70 AMR Corp. 10.400% 03/15/11 62 AMR Corp. 10.450% 11/15/11 63 Anadigics 5.000% 10/15/09 69 Apple South Inc. 9.750% 06/01/06 6 Archibald Candy 10.000% 11/01/07 2 AT Home Corp. 0.525% 12/28/18 24 AT Home Corp. 4.750% 12/15/06 29 ATA Holdings 12.125% 06/15/10 42 ATA Holdings 13.000% 02/01/09 42 Atlantic Coast 6.000% 02/15/34 15 Atlas Air Inc. 8.770% 01/02/11 29 Autocam Corp. 10.875% 06/15/14 51 Bank New England 8.750% 04/01/99 9 Bank New England 9.500% 02/15/96 8 BBN Corp. 6.000% 04/01/12 0 Broadband Tech. 5.000% 05/15/01 0 Burlington Northern 3.200% 01/01/45 63 Burlington Inds. 7.250% 08/01/27 4 Calpine Corp. 4.000% 12/26/06 73 Calpine Corp. 4.750% 11/15/23 61 Calpine Corp. 7.750% 04/15/09 58 Calpine Corp. 7.875% 04/01/08 60 Calpine Corp. 8.500% 07/15/10 72 Calpine Corp. 8.500% 02/15/11 60 Calpine Corp. 8.625% 08/15/10 59 Calpine Corp. 8.750% 07/15/07 61 Calpine Corp. 8.750% 07/15/13 70 Calpine Corp. 9.875% 12/01/11 72 Charter Comm Hld. 8.625% 04/01/09 75 Charter Comm Hld. 9.625% 11/15/09 74 Charter Comm Hld. 10.000% 05/15/11 72 Charter Comm Hld. 10.250% 01/15/10 74 Charter Comm Hld. 11.125% 01/15/11 75 Charter Comm Inc. 5.875% 11/16/09 62 Chic East ILL RR 5.000% 01/01/54 55 Coeur D'Alene 1.250% 01/15/24 72 Collins & Aikman 10.750% 12/31/11 44 Comcast Corp. 2.000% 10/15/29 43 Comdisco Inc. 7.230% 08/16/01 0 Comprehens Care 7.500% 04/15/10 0 Continental Airlines 7.461% 04/01/13 73 Covad Communication 3.000% 03/15/24 73 Cray Research 6.125% 02/01/11 43 Curagen Corp. 4.000% 02/15/11 64 Delta Air Lines 2.875% 02/18/24 31 Delta Air Lines 7.299% 09/18/06 56 Delta Air Lines 7.711% 09/18/11 51 Delta Air Lines 7.779% 01/02/12 50 Delta Air Lines 7.900% 12/15/09 37 Delta Air Lines 7.920% 11/18/10 52 Delta Air Lines 8.000% 06/03/23 41 Delta Air Lines 8.300% 12/15/29 28 Delta Air Lines 8.540% 01/02/07 45 Delta Air Lines 8.540% 01/02/07 33 Delta Air Lines 9.000% 05/15/16 28 Delta Air Lines 9.200% 09/23/14 41 Delta Air Lines 9.250% 03/15/22 27 Delta Air Lines 9.300% 01/02/10 68 Delta Air Lines 9.300% 01/02/11 32 Delta Air Lines 9.320% 01/02/09 42 Delta Air Lines 9.480% 06/05/06 66 Delta Air Lines 9.750% 05/15/21 29 Delta Air Lines 10.000% 08/15/08 42 Delta Air Lines 10.000% 06/01/10 36 Delta Air Lines 10.000% 06/18/13 50 Delta Air Lines 10.000% 12/05/14 35 Delta Air Lines 10.060% 01/02/16 50 Delta Air Lines 10.125% 05/15/10 32 Delta Air Lines 10.140% 08/26/12 47 Delta Air Lines 10.375% 02/01/11 38 Delta Air Lines 10.375% 12/15/22 33 Delta Air Lines 10.430% 01/02/11 53 Delta Air Lines 10.500% 04/30/16 45 Delta Air Lines 10.790% 09/26/13 36 Delta Air Lines 10.790% 09/26/13 37 Delta Air Lines 10.790% 03/26/14 30 Delta Air Lines 10.790% 03/26/14 37 Delphi Auto System 7.125% 05/01/29 70 Delphi Corp. 6.500% 08/15/13 74 Delphi Trust II 6.197% 11/15/33 41 Diva Systems 12.625% 03/01/08 0 Dura Operating 9.000% 05/01/09 74 Dura Operating 9.000% 05/01/09 69 DVI Inc. 9.875% 02/01/04 8 Dyersburg Corp. 9.750% 09/01/07 0 Eagle-Picher Inc. 9.750% 09/01/13 68 Eagle Food Center 11.000% 04/15/05 0 Emergent Group 10.750% 09/15/04 0 Epic Resorts LLC 13.000% 06/15/05 2 Evergreen Intl. Avi. 12.000% 05/15/10 70 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 42 Fedders North Am. 9.875% 03/01/14 61 Federal-Mogul Co. 7.375% 01/15/06 24 Federal-Mogul Co. 7.500% 01/15/09 23 Federal-Mogul Co. 8.120% 03/06/03 28 Federal-Mogul Co. 8.160% 03/06/03 20 Federal-Mogul Co. 8.250% 03/03/05 28 Federal-Mogul Co. 8.370% 11/15/01 20 Federal-Mogul Co. 8.370% 11/15/01 28 Federal-Mogul Co. 8.460% 10/27/02 28 Federal-Mogul Co. 8.800% 04/15/07 23 Fibermark Inc. 10.750% 04/15/11 65 Finova Group 7.500% 11/15/09 43 Firstworld Comm 13.000% 04/15/08 1 Foamex L.P. 9.875% 06/15/07 53 Fruit of the Loom 8.875% 04/15/06 0 GMAC 5.250% 01/15/14 74 GMAC 5.350% 01/15/14 74 GMAC 5.850% 06/15/13 71 GMAC 5.900% 01/15/19 69 GMAC 5.900% 01/15/19 73 GMAC 5.900% 02/15/19 73 GMAC 5.900% 10/15/19 65 GMAC 6.000% 02/15/19 74 GMAC 6.000% 02/15/19 70 GMAC 6.000% 02/15/19 70 GMAC 6.000% 03/15/19 73 GMAC 6.000% 03/15/19 70 GMAC 6.000% 03/15/19 71 GMAC 6.000% 03/15/19 71 GMAC 6.000% 03/15/19 70 GMAC 6.000% 04/15/19 73 GMAC 6.000% 09/15/19 69 GMAC 6.000% 09/15/19 74 GMAC 6.050% 08/15/19 71 GMAC 6.050% 08/15/19 68 GMAC 6.050% 10/15/19 72 GMAC 6.100% 09/15/19 70 GMAC 6.125% 10/15/19 66 GMAC 6.150% 08/15/19 72 GMAC 6.150% 09/15/19 72 GMAC 6.150% 10/15/19 71 GMAC 6.200% 04/15/19 72 GMAC 6.250% 12/15/18 73 GMAC 6.250% 01/15/19 72 GMAC 6.250% 04/15/19 71 GMAC 6.250% 05/15/19 73 GMAC 6.250% 07/15/19 75 GMAC 6.300% 08/15/19 70 GMAC 6.350% 04/15/19 73 GMAC 6.350% 07/15/19 73 GMAC 6.400% 11/15/19 73 GMAC 6.500% 12/15/18 69 GMAC 6.500% 01/15/20 74 GMAC 6.500% 02/15/20 72 GMAC 6.600% 08/15/16 73 GMAC 6.650% 02/15/20 74 GMAC 6.800% 10/15/18 73 GMAC 6.850% 05/15/18 74 GMAC 7.000% 09/15/21 73 GMAC 7.000% 06/15/22 72 GMAC 7.150% 01/15/25 75 GMAC 7.150% 03/15/25 72 Golden Books Pub 10.750% 12/31/04 0 Golden Northwest 12.000% 12/15/06 10 Graftech Int'l 1.625% 01/15/24 64 GST Network Funding 10.500% 05/01/08 0 Gulf States STL 13.500% 04/15/03 0 HNG Internorth. 9.625% 03/15/06 31 Holley Perf. Prod. 12.250% 09/15/04 0 Icon Health & Fit 11.250% 04/01/12 74 Icos Corp. 2.000% 07/01/23 73 Idine Rewards 3.250% 10/15/23 74 Imperial Credit 9.875% 01/15/07 0 Impsat Fiber 6.000% 03/15/11 64 Inland Fiber 9.625% 11/15/07 48 Integrated Elec. Sv 9.375% 02/01/09 60 Intermet Corp. 9.750% 06/15/09 47 Intermune Inc. 0.250% 03/01/11 73 Iridium LLC/CAP 10.875% 07/15/05 15 Iridium LLC/CAP 11.250% 07/15/05 15 Iridium LLC/CAP 13.000% 07/15/05 14 Iridium LLC/CAP 14.000% 07/15/05 14 Jordan Industries 10.375% 08/01/07 50 Kaiser Aluminum & Chem. 12.750% 02/01/03 10 Kellstorm Inds 5.750% 10/15/02 0 Key Plastics 10.250% 03/15/07 1 Kmart Corp. 6.000% 01/01/08 12 Kmart Corp. 8.990% 07/05/10 73 Kmart Corp. 9.350% 01/02/20 26 Kmart Funding 8.800% 07/01/10 75 Kulicke & Soffa 0.500% 11/30/08 68 Lehman Bros. Holding 7.500% 09/03/05 32 Level 3 Comm. Inc. 2.875% 07/15/10 51 Level 3 Comm. Inc. 6.000% 09/15/09 54 Level 3 Comm. Inc. 6.000% 03/15/10 51 Liberty Media 3.750% 02/15/30 60 Liberty Media 4.000% 11/15/29 62 Lukens Inc. 7.625% 08/01/04 0 LTV Corp. 8.200% 09/15/07 0 Metaldyne Corp. 11.000% 06/15/12 73 Metamor Worldwide 2.940% 08/15/04 1 Mississippi Chem. 7.250% 11/15/17 4 Molten Metal Tec 5.500% 05/01/06 0 Motels of Amer. 12.000% 04/15/04 35 Muzak LLC 9.875% 03/15/09 44 MSX Intl. Inc. 11.375% 01/15/08 60 Natl Steel Corp. 8.375% 08/01/06 0 North Atl Trading 9.250% 03/01/12 72 Northern Pacific Railway 3.000% 01/01/47 64 Northwest Airlines 7.626% 04/01/10 69 Northwest Airlines 7.875% 03/15/08 55 Northwest Airlines 8.070% 01/02/15 53 Northwest Airlines 8.130% 02/01/14 51 Northwest Airlines 8.700% 03/15/07 60 Northwest Airlines 8.970% 01/02/15 62 Northwest Airlines 9.875% 03/15/07 63 Northwest Airlines 10.000% 02/01/09 52 Northwest Airlines 10.500% 04/01/09 72 Northwest Steel & Wir. 9.500% 06/15/01 0 Nutritional Src. 10.125% 08/01/09 70 NWA Trust 9.360% 03/10/06 75 NWA Trust 11.300% 12/21/12 67 Oakwood Homes 7.875% 03/01/04 17 Oakwood Homes 8.125% 03/01/09 24 Oscient Pharm 3.500% 04/15/11 74 O'Sullivan Ind. 13.375% 10/15/09 37 Orion Network 12.500% 01/15/07 54 Outboard Marine 9.125% 04/15/17 0 Pegasus Satellite 9.625% 10/15/05 59 Pegasus Satellite 9.750% 12/01/06 60 Pegasus Satellite 12.375% 08/01/06 56 Pegasus Satellite 12.500% 08/01/07 56 Pegasus Satellite 13.500% 03/01/07 0 Pen Holdings Inc. 9.875% 06/15/08 62 Penn Traffic Co. 11.000% 06/29/09 46 Piedmont Aviat 9.900% 11/08/06 8 Piedmont Aviat 10.000% 11/08/12 0 Pixelworks Inc. 1.750% 05/15/24 73 Polaroid Corp. 6.750% 01/15/02 1 Polaroid Corp. 7.250% 01/15/07 2 Polaroid Corp. 11.500% 02/15/06 0 Portola Packaging 8.250% 02/01/12 64 Primedex Health 11.500% 06/30/08 50 Primus Telecom 3.750% 09/15/10 26 Primus Telecom 5.750% 02/15/07 33 Primus Telecom 8.000% 01/15/14 52 Primus Telecom 12.750% 10/15/09 46 Psinet Inc 10.000% 02/15/05 0 Psinet Inc 11.500% 11/01/08 0 Railworks Corp. 11.500% 04/15/09 0 Radnor Holdings 11.000% 03/15/10 73 RDM Sports Group 8.000% 08/15/03 0 Read-Rite Corp. 6.500% 09/01/04 56 Reliance Group Holdings 9.000% 11/15/00 18 Reliance Group Holdings 9.750% 11/15/03 4 Rite Aid Corp. 7.700% 02/15/27 74 RJ Tower Corp. 12.000% 06/01/13 59 Salton Inc. 10.750% 12/15/05 45 Salton Inc. 12.250% 04/15/08 44 Scotia Pac Co. 6.550% 01/20/07 64 Scotia Pac Co. 7.110% 01/20/14 68 Scotia Pac Co. 7.710% 01/20/14 75 Solectron Corp. 0.500% 02/15/34 71 Specialty Paperb. 9.375% 10/15/06 69 Syratech Corp. 11.000% 04/15/07 30 Tekni-Plex Inc. 12.750% 06/15/10 67 Tops Appliance 6.500% 11/30/03 0 Tower Automotive 5.750% 05/15/24 21 Trans Mfg Oper 11.250% 05/01/09 50 Triton PCS Inc. 8.750% 11/15/11 68 Triton PCS Inc. 9.375% 02/01/11 69 Tropical SportsW 11.000% 06/15/08 35 Twin Labs Inc. 10.250% 05/15/06 14 United Air Lines 6.831% 09/01/08 18 United Air Lines 6.932% 09/01/11 54 United Air Lines 7.270% 01/30/13 41 United Air Lines 7.762% 10/01/05 10 United Air Lines 7.811% 10/01/09 44 United Air Lines 8.030% 07/01/11 26 United Air Lines 8.250% 04/26/08 20 United Air Lines 8.390% 01/21/11 54 United Air Lines 8.700% 10/07/08 51 United Air Lines 9.000% 12/15/03 9 United Air Lines 9.020% 04/19/12 32 United Air Lines 9.060% 09/26/14 45 United Air Lines 9.125% 01/15/12 9 United Air Lines 9.200% 03/22/08 45 United Air Lines 9.210% 01/21/17 53 United Air Lines 9.300% 03/22/08 38 United Air Lines 9.350% 04/07/16 51 United Air Lines 9.560% 10/19/18 37 United Air Lines 9.750% 08/15/21 8 United Air Lines 10.110% 01/05/06 44 United Air Lines 10.110% 02/19/06 44 United Air Lines 10.125% 03/22/15 45 United Air Lines 10.250% 07/15/21 9 United Air Lines 10.360% 11/13/12 54 United Air Lines 10.670% 05/01/04 9 United Air Lines 11.210% 05/01/14 5 Univ. Health Services 0.426% 06/23/20 67 United Homes Inc. 11.000% 03/15/05 0 Uromed Corp. 6.000% 10/15/03 0 US Air Inc. 10.250% 01/15/07 5 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.680% 06/27/08 6 US Air Inc. 10.900% 01/01/08 3 US Airways Inc. 7.960% 01/20/18 48 Utstarcom 0.875% 03/01/08 65 Venture Hldgs 9.500% 07/01/05 0 Venture Hldgs 11.000% 06/01/07 0 WCI Steel Inc. 10.000% 12/01/04 69 Werner Holdings 10.000% 11/15/07 74 Westpoint Stevens 7.875% 06/15/05 0 Westpoint Stevens 7.875% 06/15/08 0 Wheeling-Pitt St. 6.000% 08/01/10 71 Winn-Dixie Store 8.875% 04/01/08 50 Winsloew Furniture 12.750% 08/15/07 28 Winstar Comm 14.000% 10/15/05 1 Winstar Comm Inc. 10.000% 03/15/08 0 World Access Inc. 13.250% 01/15/08 6 Xerox Corp. 0.570% 04/21/18 47 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., and Peter A. Chapman, Editors. Copyright 2005. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***