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/raid1/www/Hosts/bankrupt/TCR_Public/050920.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 20, 2005, Vol. 9, No. 223 Headlines 1301 CP AUSTIN: Files First Amended Plan & Disclosure Statement A&E FAMILY: Judge Curley Dismisses Chapter 11 Case A&J AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors ABRAXAS PETROLEUM: Increase Capital Spending Budget to $32 Million ACCIDENT & INJURY: Wants Continued Access to Cash Collateral ACTIVANT SOLUTIONS: Completes $215-Mil Acquisition of Prophet 21 ACURA PHARMACEUTICALS: Lenders Commit $500,000 Bridge Funding ADJUNTAS READY: Case Summary & 13 Largest Unsecured Creditors AMHERST TECHNOLOGIES: Files Schedules of Assets and Liabilities ANCHOR GLASS: Summary of Debtors' Statement of Financial Affairs ANCHOR GLASS: Panel Objects to $15MM DIP Financing Provisions ANCHOR GLASS: RTS Seeks Replacement Lien for Merchandise Delivered ANICOM INC: Judge Sonderby Confirms Amended Plan of Liquidation ANIXTER INC: Fitch Shaves Sr. Unsecured Debt Rating 1 Notch to BB+ ARTURO PEREZ: List of 20 Largest Unsecured Creditors ARVINMERITOR INC: Bondholders Tender $252.5 Million of Old Notes ASARCO LLC: Court Rules Chevron is a Merchant, Not a Utility ASARCO LLC: Court Okays Hawley as Counsel for Coeur d'Alene Suit ASARCO LLC: Salt River Wants Adequate Security Deposit for $8.4MM ATA AIRLINES: Inks Tentative Labor Pact with Cockpit Crewmembers BEARINGPOINT INC: Says Bondholder's Default Claims are Bogus BROOKFIELD PROPERTIES: Renewing Issuer Bid for Another Year BUEHLER FODS: Has Until October 31 to File Chapter 11 Plan BURKHARD SCHEPER: Case Summary & 20 Largest Unsecured Creditors CABIN JOHN: Case Summary & 20 Largest Unsecured Creditors CANWEST GLOBAL: Subsidiary Amends Tender Offer's Purchase Price CATHOLIC CHURCH: Professionals Directed to Make Full Disclosure CHESAPEAKE ENERGY: Moody's Upgrades Preferred Stock Rating to B2 CHURCH & DWIGHT: Buying P&G's SpinBrush Business for $105 Million CLEARWATER TIMBER: List of 50 Largest Unsecured Creditors COEUR D'ALENE MINES: Nets $36 Million from Common Stock Offering COMFORCE CORP: Chairman and CEO to Repurchase Up to 260,000 Shares CONTRACTOR TECHNOLOGY: Files Schedules of Assets and Liabilities CUMMINS INC: Moody's Raises Sr. Unsec. Debt Rating to Ba1 from Ba2 DANA CORP: Moody's Reviews Ba2 Corporate Family & Debt Rating DELTA AIR: Wants Court Nod on Davis Polk Retention as Lead Counsel DELTA AIR: Wants to Assume & Amend American Express Agreements DELTA AIR: Fitch Places ETCs and EETCs on Rating Watch Negative DOE RUN RESOURCES: Reports $178.98-Mil Equity Deficit at July 31 DURANGO GEORGIA: St. Marys Submits $15 Million Stalking Horse Bid EAGLEPICHER HOLDINGS: Wants to Modify Mexican Credit Agreement ENRON CORP: Inks Settlement Pact Resolving TPL Guaranty Claims ENRON CORP: Wants Court Nod on BP Oil, et al., Settlement Pact FIRST UNION: Poor Collateral Performance Cues Fitch to Junk Rating FOAMEX INTERNATIONAL: Files for Chapter 11 Protection in Delaware FOAMEX INTERNATIONAL: Case Summary & 25 Largest Unsec. Creditors FORD MOTOR: CAW Members Favor Ford Canada's Tentative Labor Pact GEO GROUP: Completes $75 Million Sr. Secured Credit Facility GMAC COMMERCIAL: Fitch Affirms BB Rating on $12.2MM Class F Certs. HOLLINGER INT'L: Settles Class Action Suit with Clients for $31.8M HIGH VOLTAGE: Affiliates Must File Proofs of Claim by Sept. 30 INTERSTATE BAKERIES: Can Walk Away from 25 Real Property Leases JAG MEDIA: Inks Non-Binding Merger LOI with Cryptometrics JERRY HUGGINS: Case Summary & 11 Largest Unsecured Creditors JILLIAN'S ENT: Court Okays Partnership Interest Sale to Tango KAISER GROUP: Reaches Agreement in Principle to Settle Class Claim KI HOLDINGS: Moody's Reviews $203 Million Notes' Junk Rating KOPPERS INC: Moody's Reviews B2 Senior Secured Notes Rating MAGRUDER COLOR: Walks Away from 19 Contracts & Leases MAGRUDER COLOR: Wants Exclusive Period Extended to December 29 MAGRUDER COLOR: Wants to Retain Daley-Hodkin Corp. as Auctioneer MEDCO HEALTH: Moody's Rates $500 Million Credit Facility at Ba1 MEDICALCV INC: Balance Sheet Upside-Down by $14 Mil at July 31 MEI LLC: Andrew D. Thomas Approved as Local Counsel MEI LLC: Has Until Nov. 30 to Make Lease-Related Decisions MEI LLC: MAK Energy Wants Case Converted or Dismissed NBTY INC: Prices $200 Million 7-1/8% Sr. Sub. Debt Offering NEW VISUAL CORP: Losses & Deficit Trigger Going Concern Doubt NORTHWEST AIRLINES: Nasdaq Common Stock Trading Halts on Sept. 26 NORTHWEST AIRLINES: Fitch Places EETCs on Rating Watch Negative PACIFIC KAAFA: Voluntary Chapter 11 Case Summary PATHMARK STORES: Posts $5.1 Million Net Loss in Second Quarter PAUL DAPONTES: Case Summary & List of 18 Unsecured Creditors POLARIS NETWORKS: Wants More Time to Draft Consensual Plan POLYAIR INTER: Lenders Extend Loan Agreement Until Feb. 28 PORTRAIT CORP: Barry Feld to Resign as CEO, Chairman & President PREMIER AUTOMAX: Case Summary & 8 Largest Unsecured Creditors PROXIM CORP: Wants to Assume & Assign Sublease to Terabeam RED TAIL: Voluntary Chapter 11 Case Summary ROGERS COMMS: Pricing Tender Offer for 10.625% Senior Sec. Notes RUFUS INC: Creditors Have Until Nov. 16 to File Proofs of Claim RUFUS INC: Court OKs Logan and Company as Claims & Noticing Agent RUSH RODEO: List of 12 Largest Unsecured Creditors RUSSELL-STANLEY: Creditors' Proofs of Claims Are Due By Sept. 23 S-TRAN HOLDINGS: Argues Chapter 7 Not in Creditors Best Interests S-TRAN HOLDINGS: Wants Taylor & Martin to Auction Motor Vehicles S-TRAN HOLDINGS: Wants to Employ BDO Seidman as Tax Advisor SAINT VINCENTS: Says No to Paying Nurses' Pension & Benefit Claims SAINT VINCENTS: Settles Utility Dispute with NewEnergy SAMSONITE CORP: Equity Deficit Narrows to $38.22 Mil at July 31 SCHOTT ALARM: List of 14 Largest Unsecured Creditors SCOTT DESERT: Files Schedules of Assets and Liabilities SCOTT DESERT: List of 3 Largest Unsecured Creditors SCOTT DESERT: U.S. Trustee Unable to Organize Committee SELECT MEDICAL: Inks Private Offering for $175 Mil. of Sr. Notes SOLUTIA INC: U.S. Labor Unions Okay New Collective Labor Pacts SR TELECOM: To Appeal Nasdaq Delisting Notice TIMKEN CO: Inks New Four-Year Labor Pact with Steelworkers TRANSITIONS BOOKPLACE: Case Summary & 20 Largest Unsec. Creditors TRIM TRENDS: Wants Plan-Filing Period Stretched to Dec. 14 UAL CORP: IRS Seeks $114 Million in Back Taxes UAL CORP: Wants Court to Approve GECAS Sale/Leaseback Deal UNISYS CORP: Bondholders Tender $339.8 Million of 8-1/8% Notes USGEN NEW ENGLAND: Wants Court to Nix Carlile Enterprises' Claim VIDEOCOM SATELLITE: Voluntary Chapter 11 Case Summary VIDEOTRON LTEE: Closes $175 Million Senior Debt Offering WESTERN WATER: Wants to Sell Assets to Colorado Water for $14.3MM WORLDCOM INC: Court Approves $702,755 Platinum Settlement Pact WORLDCOM INC: Court Orders $1.6 MM Funds Deposited Into Account XYBERNAUT CORP: Panel Taps Linowes and Blocher as Local Counsel XYBERNAUT CORP: Panel Taps Parente Randolph as Financial Advisors YUKOS OIL: Gets Moscow Court Nod to Decrease Claim to RUB388-Bil. YUKOS OIL: Moscow Ct. Rejects Yukos' Call to Freeze 76.79% Shares * Large Companies with Insolvent Balance Sheets ********* 1301 CP AUSTIN: Files First Amended Plan & Disclosure Statement --------------------------------------------------------------- 1301 CP Austin, Ltd. filed an Amended Plan of Reorganization and an accompanying Disclosure Statement explaining the Amended Plan in the U.S. Bankruptcy Court for the Western District of Texas on Sept. 12, 2005. Asset Sale The Debtor tells the court that it intends to sell its assets through an open auction process and complete an orderly chapter 11 liquidation. The Debtor's assets consists of: * real property; * improvements; * buildings; * attachments; * fixtures and appurtances; and * all personal property. The Debtor discloses that Newco -- tentatively to be named Crossing Place Austin L.P. -- has submitted a Term Sheet outlining an Offer to buy all assets of the Debtor. Newco has agreed to purchase the assets for $17.5 million, the Debtor says. The Debtor tells the court that $15.9 million of the purchase price covers payment for all the assets of the estate while the remaining $1.6 million covers payment for the tenant-leased furniture from MA Furniture. Under the Plan, only the amount allocated for assets of the estate will be distributed to creditors. Treatment of Claims Secured Tax Claims is the only Unimpaired Claim, totaling approximately $370,560, which will be paid in full. Impaired Claims consist of: 1) Secured Claim of the U.S. Dept. of Housing and Urban Development, totaling approximately $31,163,626. The Debtor tells the Court that the value of HUD's collateral is estimated at $17,500,000. The HUD Claim will be paid in full after payment of: * Secured Tax Claim; and * General Unsecured Claims. The Debtor further says that should the proceeds of the Asset sale be insufficient to pay the HUD Claim in full, the remaining balance will become a Deficiency Claim of HUD. 2) General Unsecured Claims, totaling approximately $117,000, will receive 90% of their allowed claims. The plan delivers nothing to: * Deficiency Claim of HUD; * Subordinated Unsecured Claims of Insiders; and * Equity Interest Holders. The Court has scheduled a confirmation hearing on Oct. 24, 2005, at 1:30 p.m., in Austin, Tex. 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. A&E FAMILY: Judge Curley Dismisses Chapter 11 Case -------------------------------------------------- The Hon. Sarah Sharer Curley of the U.S. Bankruptcy Court for the District of Arizona dismissed A&E Family Investment, LLC's chapter 11 case on Sept. 16, 2005. Judge Curley dismissed the case because the Debtor failed to file a list of creditors in the proper format as required by Local Bankruptcy Rule 1007-1. Judge Curley also ordered that the Court won't consider a motion for reinstatement of the case unless all fees are paid in full and all required documents are filed. Headquartered in Paradise Valley, Arizona, A&E Family Investment filed for chapter 11 protection on Aug. 31, 2005 (Bankr. D. Ariz. Case No. 05-16331). Lyndon B. Steimel, Esq., at the Law Office of Lyndon B. Steimel, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million. A&J AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: A&J Automotive Group, Inc. dba DJ Foreign Automotive Sales 1460 South Missouri Avenue Clearwater, Florida 33756 Bankruptcy Case No.: 05-18965 Type of Business: The Debtor is a used motor vehicle dealer. Chapter 11 Petition Date: September 19, 2005 Court: Middle District of Florida (Tampa) Debtor's Counsel: Daniel J. Herman, Esq. Pecarek & Herman, Chartered 200 Clearwater Largo Road, South, Suite 1 Largo, Florida 33770 Tel: (727) 584-8161 Fax: (727) 586-5813 Estimated Assets: $50,000 to $100,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Joan L. Fitterling $1,300,000 358 Bahia Vista Drive Indian Rocks Beach, FL 33785 Progress Energy Additional lighting $220,000 P.O. Box 33199 contract St. Petersburg, FL 33733-8199 American Express Acct: $50,000 P.O. Box 7863 xxxxxxxxxxxz1003 Fort Lauderdale, FL Acct: 33329-7804 xxxxxxxxxx1001 St. Petersburg Times $50,000 490 1st Avenue South St. Petersburg, FL 33701 World Pac $20,000 Advanta Platinum Business $15,000 Card American Express Act: $15,000 xxxxxxxxxxx1000 Acct: xxxxxxxxxxx1018 ASE Platinum $12,500 Aetna US Healthcare $10,000 Kotakis Auto Body $10,000 Compass Bank/Commercial $7,500 Billing Federal Express $6,000 Revenue Services Dailey & Tsagaris $5,000 Joseph Tomacic $5,000 Bobby's Transport $4,500 Car Quest $4,000 Kelly Blue Book $3,000 Nextel Communications $3,000 Wurth USA, Inc. $3,000 AT&T $2,500 ABRAXAS PETROLEUM: Increase Capital Spending Budget to $32 Million ------------------------------------------------------------------ Abraxas Petroleum Corporation's (AMEX:ABP) Board of Directors approved an expanded capital expenditure budget of $32 million for 2005 and provided an operational update. The $10 million increase over the initial capital expenditure budget of $22 million will be allocated predominantly to Wyoming and the Oates SW Field area in West Texas and will be funded out of cash flow and availability under the Company's credit facility. The Company's operational results have positively impacted our total net production, which currently exceeds 21.5 MMcfepd and represents a 41% increase over 2nd quarter average. In the Oates SW Field area, the La Escalera #2 is cleaning up after a frac treatment, following delays in obtaining service equipment. In addition, re-entry operations have commenced on an initial Woodford test on the recently acquired Hudgins Ranch. In Brooks Draw, Wyoming, the Red Tail Hawk #1, reached a total depth of 9,130' and production casing was set after encountering encouraging oil shows in multiple zones. The Prairie Falcon #2 and the Red Tail Hawk #1 currently await completion equipment. The Bald Eagle #1 is drilling below 5,800'. Abraxas owns a 100% working interest in all five of the abovementioned wells. "We are extremely pleased that our current net production exceeds our exit rate guidance for the year, and we have several wells currently awaiting completion. Even though we continue to find ourselves in a tightening environment in terms of available rigs and related services, we are optimistic about our ability to achieve our expanded $32 million capital program. As these wells are successfully completed, we anticipate a continually growing production profile throughout 2005 and into 2006", commented Bob Watson, President and CEO. In connection with the appointment of Paul A. Powell, Jr., to Abraxas' Board of Directors, 45,000 options have been awarded to Mr. Powell at a price of $4.59 per share. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploitation and production company with operations in Texas and Wyoming. As of June 30, 2005, Abraxas Petroleum's equity deficit narrowed to $43,244,000 from a $53,464,000 deficit at Dec. 31, 2004. ACCIDENT & INJURY: Wants Continued Access to Cash Collateral ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, previously entered an order allowing Accident & Injury Pain Centers, Inc., and its debtor-affiliates to use Comerica Bank and Northeast National Bank's cash collateral until Sept. 30, 2005. The Debtors now ask the Court to extend their access to the lenders' cash collateral until November 30, 2005. Without continued access to the encumbered cash, the Debtors won't be able to stabilize their operations and pay their employees. Comerica Bank asserts a first priority lien on Accident & Injury's accounts receivable, pledged to secure repayment of a $2.2 million line of credit. Comerica also asserts a first priority lien on equipment securing repayment of $718,000 of equipment loans. The Debtors believe that the Banks won't balk at their request. To provide the lenders with adequate protection required under 11 U.S.C. Sec. 363 for any diminution in the value of their collateral, the Debtors proposes to grant Comerica and Northeast replacement liens to the same extent, validity and priority as the prepetition lien. Headquartered in Dallas, Texas, Accident & Injury Pain Centers, Inc. -- http://www.accinj.com/-- operates clinics that treat patients with highly advanced therapy equipment and techniques. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2005 (Bankr. N.D. Tex. Case No. 05-31688) after the U.S. District Court for the Northern District of Texas ruled against them in the civil suit commenced by Allstate Insurance Company, et al. Glenn A. Portman, Esq., at Bennett, Weston & LaJone, P.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of $10 million to $50 million. ACTIVANT SOLUTIONS: Completes $215-Mil Acquisition of Prophet 21 ---------------------------------------------------------------- Activant Solutions Inc(TM) has completed its acquisition of Prophet 21(R) Inc. and is moving forward with the integration of the two companies. With the addition of Prophet 21, Activant solidifies its position as a leading technology provider to the wholesale distribution segment. Activant is a premier business management solutions provider to the wholesale distribution, hardware and home center, automotive aftermarket and lumber and building materials vertical markets serving over 23,000 customer locations. Company contact information will remain the same, and Prophet 21's offices will remain open and fully operational. As reported in the Troubled Company Reporter on Aug. 22, 2005, the aggregate purchase price is approximately $215 million, subject to certain adjustments. About Prophet 21 Prophet 21, Inc. -- http://www.p21.com/-- develops technology solutions and services for the wholesale distribution vertical market that are designed to help distributors increase sales, improve customer service, and reduce operating costs. Founded in 1967, Prophet 21 continues to expand and enhance both its products and customer base. Prophet 21 CommerceCenter - the popular enterprise software solution for distributors - combines the power of SQL Server and the familiarity of the Windows(R) operating system in a solution designed especially for distributors. Trading Partner Connect, a leading Internet trading network for distributors, expedites sourcing, expands geographic reach, and streamlines transactions between distributors and manufacturers. Prophet 21 Professional Services include support, consulting, and educational programs designed to give distributors the maximum return on their technology investment. About Activant Solutions Activant Solutions Inc. -- http://www.activant.com/-- is a technology provider of vertical ERP solutions servicing the automotive aftermarket, hardware and home center, wholesale trade, and lumber and building materials industry segments. Over 20,000 wholesale, retail and manufacturing customer locations use Activant to help drive new levels of business performance. With proven experience and success, Activant is fast becoming an industry standard for companies seeking competitive advantage through stronger customer integration. * * * As reported in the Troubled Company Reporter on Aug. 22, 2005, Moody's Investors Service has placed these ratings of the Activant Solutions Inc. under review for possible downgrade. * B2 rating on $120 million senior unsecured notes, due 2010 * B2 rating on $157 million (face value) senior unsecured notes due 2011; and * B1 Corporate Family Rating As reported in the Troubled Company Reporter on Mar. 2, 2005, Standard & Poor's Ratings Services assigned its 'B+' debt rating to Austin, Texas-based Activant Solutions Inc.'s proposed $120 million senior unsecured floating rate notes. At the same time, Standard & Poor's affirmed its 'B+' corporate credit and senior unsecured debt ratings. The proposed floating rate notes are rated the same as the corporate credit rating, because of the minimal amount of secured debt, a $15 million revolving credit facility, in the capital structure. Proceeds from the proposed floating rate notes will primarily be used to fund the acquisition of Speedware Corporation, which was announced in January 2005. S&P says the outlook is stable. ACURA PHARMACEUTICALS: Lenders Commit $500,000 Bridge Funding ------------------------------------------------------------- Acura Pharmaceuticals, Inc. (OTCBB:ACUR) secured $500,000 under a term Loan Agreement with: * Essex Woodlands Health Ventures V, L.P., * Care Capital Investments II, L.P., * Care Capital Offshore Investments II,L.P., * Galen Partners III, L.P., * Galen Partners International III, L.P., and * Galen Employee Fund III, L.P. The Loan, is secured by a lien on all assets of the Company and its subsidiaries (senior to all other Company debt), bears an annual interest rate of 10% and matures June 1, 2006. This funding will allow the Company to continue pursuing collaboration agreements with strategically focused pharmaceutical company partners for the development and commercialization of products incorporating the Company's proprietary abuse deterrent technology and to seek more permanent funding from third parties. Bankruptcy Warning The Company estimates that its current cash reserves, including the net proceeds from the Loan, will fund continued development of the Aversion Technology and related operating expenses through October 2005. To continue operating, the Company must raise additional financing or enter into appropriate collaboration agreements with third parties providing for cash payments to the Company. No assurance can be given that the Company will be successful in obtaining any such financing or in securing collaborative agreements with third parties on acceptable terms, if at all, or if secured, that such financing or collaborative agreements will provide for payments to the Company sufficient to continue funding operations. In the absence of the financing or third-party collaborative agreements, the Company will be required to scale back or terminate operations and/or seek protection under applicable bankruptcy laws. Acura Pharmaceuticals, Inc. -- http://www.acurapharm.com/-- together with its subsidiaries, is an emerging pharmaceutical technology development company specializing in proprietary opioid abuse deterrent formulation technology. At June 30, 2005, Acura Pharmaceuticals' balance sheet showed a $3,569,000 stockholders' deficit, compared to a $1,085,000 deficit at Dec. 31, 2004. ADJUNTAS READY: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Adjuntas Ready Mix, Inc. Carr. 123 Km. 35.8 Bo. Garzas #56 Adjuntas, Puerto Rico 00601 Bankruptcy Case No.: 05-08920 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Felix Arias Carbonell & Janet Guzman Lopez 05-08906 Bloques Adjuntas, Inc. 05-08923 Type of Business: The Debtor is a cement manufacturer and distributor. Chapter 11 Petition Date: September 16, 2005 Court: District of Puerto Rico (Old San Juan) Debtors' Counsel: Jose Raul Cancio Bigas, Esq. 134 Mayaguez Street Hato Rey, Puerto Rico 00919 Tel: (787) 763-1940 Estimated Assets Estimated Debts ---------------- --------------- Adjuntas Ready Mix, Inc. $1 Million to $1 Million to $10 Million $10 Million Felix Arias Carbonell & $1 Million to $1 Million to Janet Guzman Lopez $10 Million $10 Million Bloques Adjuntas, Inc. $1 Million to $1 Million to $10 Million $10 Million A. Adjuntas Ready Mix, Inc.'s 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Antilles Cement Corp. Supplies $160,000 P.O. Box 192261 San Juan, PR 00919 Puerto Rican Cement Supplies $375,000 P.O. Box 364487 San Juan, PR O0936-4487 American Petroleum Co. Supplies $11,500 P.O. Box 2529 Toa Baja, PR 00951-2663 B. Felix Arias Carbonell & Janet Guzman Lopez's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Glidden Co., Inc. Supplies $65,000 c/o LCDO, Pedro V. Pedrosa Gonzalez 58 Esteban Padilla Street Bayamon, PR 00959 Ford Motor Credit 1999 Loan (Purchase of $30,075 c/o LCDO, Jaime Ruiz Saldana motor vehicle) P.O. Box 364189 San Juan, PR 00936-4189 Sherwin Williams Judgment entered on $28,859 c/o LCDO, (Case No. CD 03-0608) Efrain Gonzalez Ortiz Banco Cooperativo Plaza 623 Ponce De Leon Avenue, Suite 605-B San Juan, PR 00917-4820 Professional Research and Loan (Banco Santander) $27,202 Community Services, Inc. C.A.A. Inc. Services (PRTC) $22,858 Popular Auto Loan $5,239 CRESCA Corp. Loan $3,087 Verizon Wireless March 2003 services $1,968 C. Bloques Adjuntas, Inc.'s 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Puerto Rican Cement Supplies $375,000 P.O. Box 364487 San Juan, PR 00936-4487 American Petroleum Co. Supplies $11,500 P.O. Box 2529 Toa Baja, PR 00951-2663 AMHERST TECHNOLOGIES: Files Schedules of Assets and Liabilities --------------------------------------------------------------- Amherst Technologies, LLC, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of New Hampshire, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property C. Property Claimed as Exempt D. Creditors Holding $39,365,736 Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims ----------- ----------- Total $0 $39,365,736 Headquartered in Merrimack, New Hampshire, Amherst Technologies, LLC -- http://www.amherst1.com/-- offers enterprise class solutions including wired and wireless networking, server and storage optimization implementations, document management solutions, IT lifecycle solutions, Microsoft solutions, physical security and surveillance and complex configured systems. The Company and its debtor-affiliates filed for chapter 11 protection on July 20, 2005 (Bankr. D. N.H. Case No. 05-12831). Daniel W. Sklar, Esq., at Nixon Peabody LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they estimated assets and debts of $10 million to $50 million. ANCHOR GLASS: Summary of Debtors' Statement of Financial Affairs ---------------------------------------------------------------- Mark S. Burgess, chief executive officer of Anchor Glass Container Corporation, reports that during the two years immediately preceding the calendar year up to the Petition Date, the Debtor earned income from the operation of its business: Period Amount ------ ------ 01/01/05 - 08/07/05 $444,996,000 Fiscal Year Ended 12/31/04 746,858,000 Fiscal Year Ended 12/31/03 709,943,000 Anchor Glass also earned revenues from sources other than from the operation of its business during the two years immediately preceding the Petition Date: Period Amount ------ ------ 01/01/05 - 08/07/05 $3,370,000 Fiscal Year ended 12/31/04 3,576,000 Fiscal Year ended 12/31/03 400,000 Within 90 days preceding its bankruptcy filing, Anchor Glass made payments, on loans, installment purchases of goods or services and other debts to various creditors, including: Creditor Amount -------- ------ American Electric Power $1,866,181 Anthem Blue Cross Blue Shield 6,826,490 BL Intermodal LLC 1,445,872 BP Energy Company 2,132,399 Buske Distribution Services 1,355,883 Centerpoint Energy Services, Inc. 1,720,584 City of Warner Robins 3,167,931 FMC Wyoming Corporation 1,783,829 Geary Energy, LLC 1,489,386 General Electric 1,226,819 Georgia Power Company 1,033,767 GMP and Employers Pension Plan 1,580,066 International Paper 1,327,542 Jacksonville Electric Authority 1,134,715 Major Transport 1,189,525 Modern Transportation 1,147,489 Noble Energy Marketing, Inc. 5,160,638 Northern States Power Company 1,208,872 OCI Chemical Corporation 9,556,686 Packaging Dimensions, Inc. 1,603,308 Pepco Energy Services, Inc. 1,094,884 Refco LLC 2,017,690 RTS Packaging LLC 1,015,960 South Jersey Gas Company 3,575,473 Strategic Materials, Inc. 1,102,893 Swift Transportation Company, Inc. 1,281,537 Temple-Inland 2,797,426 The Vanguard Group 2,714,039 UGI Energy Services, Inc. 2,455,215 Ultra Logistics 4,587,034 Unimin Corporation 3,504,918 Within one year immediately preceding the Petition Date, Anchor Glass made payments to or for the benefit of creditors who are or were insiders, including: Insider Amount ------- ------ Asen, Joel $69,500 Burgess, Mark 210,195 Campbell, Darrin 326,173 Chapman, James 194,441 Deneau, Richard 275,086 Erb, Roger 179,078 Kabaker, Richard 166,207 Kerrigan, Stephen 79,582 Price, Timothy 6,250 Reno, Peter 241,064 Schumacher, Alan 202,390 Anchor Glass was a party, within one year immediately preceding the bankruptcy filing, to 26 lawsuits and administrative proceedings. Sixteen cases are pending while the Debtor has settled six. Others are withdrawn, consolidated or closed. The Debtor paid four firms, which it retained for consultation concerning debt consolidation, relief under the bankruptcy law or preparation of a petition in bankruptcy within one year immediately preceding the Petition Date: Cahill Gordon & Reindel $50,000 Carlton Fields $300,000 Houlihan Lokey Howard & Zukin $150,000 Akin Gump Strauss Hauer & Feld LLP $100,000 Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Panel Objects to $15MM DIP Financing Provisions ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Anchor Glass Container Corporation disputes the cross-collateralization provisions contemplated in the $15 million interim financing agreement between the Debtor and Wells Fargo Bank, N.A. As reported in the Troubled Company Reporter, Anchor Glass Container Corporation obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to access postpetition advances and other financial accommodations on an interim basis from Well Fargo Bank. The Committee also objects to the Wells Fargo Financing to the extent it purports to grant superpriority liens for the benefit of prepetition obligations. The Committee objects to the over- extensive grant of a superpriority status to Wells Fargo for any amounts beyond that are actually needed to operate, pending approval of a permanent postpetition financing. To the extent that any superpriority administrative expense claim is granted, the Committee insists it should share pari passu with the Debtor's trade vendors selling on credit. The Committee also disputes the provision that permits Wells Fargo and the Purchasers to have a lien on avoidance actions. Marcy E. Kurtz, Esq., at Bracewell & Guiliani LLP, in Dallas, Texas, explains that the causes of action may be the only method of recovery for unsecured creditors in the event that the estate is or becomes administratively insolvent. The causes of action are simply not assignable. Additionally, the granting of liens on avoidance action recoveries is extraordinary relief that may not be approved by the Court absent compelling circumstances. The Debtor has failed to show any compelling circumstances that would support the granting of the liens. The Debtor has not shown that the financing is necessary under Section 364(c) or (d) of the Bankruptcy Code, Ms. Kurtz says. The Debtor also has not shown that the Wells Fargo Financing is the best deal available. The Debtor has not identified any third party or non-insider purchasers that it solicited for alternate interim financing on any terms. Given Wells Fargo's insider status, the Debtor has not shown that negotiations were at arm's-length Ms. Kurtz points out. The Debtor should show that even if the credit is necessary, the superpriority concessions, covenants, releases, fees and indemnification provisions contained in the Wells Fargo Financing were obtained fairly. The Committee also believes that the $500,000 professional carve out is unrealistically low and illusory. The exclusions on the list of excluded professional fees from the carve out are too broad. The Committee complains of the manner in which the carve out is proposed to be paid. By adding the "carve out" to the principal amount of the Purchaser Obligations, and by providing that the carve out will not be deemed to subordinate the Agent's and Purchasers' liens to any other postpetition lien, the carve out provision has done nothing more than to create an addition to the Purchaser Obligation on which the Debtor will have to pay interest, which may increase any Commitment Fees or prepayment fees and which will not have priority over the Agent or the Noteholders. The carve out provision also risks double dipping by the Agent and the Purchasers. The Committee objects to any of the Debtor's releases of Wells Fargo and the Noteholders to the extent the releases are binding on the Committee. The Committee finds the proposed releases as being overly broad and against the best interest of the estate. The Committee also finds the proposed Maturity Date 45 days too short, and interest rates contained in the Term Sheet unreasonably high. The Committee further finds the default triggers are unduly broad and overreaching. They also place the Debtor, the Committee and the Court in a Catch-22 position in which the parties cannot satisfactorily fulfill their respective fiduciary and legal duties to the estate without risking the loss of the Debtor's reorganization, and put the Agent and the insider Purchasers in a dictatorial position -- a creditor with veto power -- over the future of the case and any plan proposed by the Debtor. The Committee also objects to any provision that would prevent the Debtor or any other party-in-interest from pursuing alternative interim or permanent postpetition financing. The Court extends the Interim Financing Order and reschedules the Final Hearing to consider the Debtor's request to September 27, 2005, at 2:00 p.m. A full-text copy of the Term Sheet is available at no charge at: http://bankrupt.com/misc/wellsfargotermsheet.pdf Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: RTS Seeks Replacement Lien for Merchandise Delivered ------------------------------------------------------------------ RTS Packaging LLC, a seller of cardboard partitions to Anchor Glass Container Corp., asks the U.S. Bankruptcy Court for the Middle District of Florida to affirm its right to reclamation and grant a replacement lien with respect to certain goods ordered by the Debtor. Alternatively, RTS asks the Court to direct the Debtor to immediately pay $160,304 as an expense of administration to RTS. Ron C. Bingham, Esq., at Thompson, O'Brien, Kemp & Nasuti, PC, in Norcross, Georgia, informs the Court that before the Petition Date, the Debtor ordered from RTS certain goods and merchandise totaling $160,304. Mr. Bingham contends that RTS did not know of the Debtor's insolvency when RTS shipped the Goods to the Debtor. RTS demanded reclamation of the Goods. However, despite the demand, the Debtor has failed or has refused to return the RTS Goods and RTS also did not receive any payment. Mr. Bingham argues that, under Section 2-702 of the Uniform Commercial Code, as adopted by the State of Florida, RTS is entitled to reclaim any RTS Goods in the Debtor's possession. Under the U.C.C., RTS is also entitled to a replacement lien or an administrative expense claim for the price of the RTS Goods, which the Debtor sold or disposed of and which cannot be accounted for. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANICOM INC: Judge Sonderby Confirms Amended Plan of Liquidation --------------------------------------------------------------- The Honorable Susan Pierson Sonderby of the U. S. Bankruptcy Court for the Northern District of Illinois confirmed the Amended Plan of Orderly Liquidation filed by the Official Committee of Unsecured Creditors of Anicom, Inc., and its debtor-affiliate, TW Communications Corp. Judge Sonderby confirmed the Amended Plan on Sept. 14, 2005. Treatment of Claims and Summary of Plan As previously reported in the Troubled Company Reporter on Aug. 25, 2005, the Class 1 Lenders' Claim, which is estimated at $12.9 million, consists of the claim held by the agent and the lenders under the Lender's Credit Facility and Cash Collateral Order. On the Effective Date, the agent will be entitled to continue to: (i) collect and liquidate the Lenders' collateral; and (ii) receive periodic cash payments representing the portion of the preference recoveries allocable to the Lenders pursuant to a joint recovery agreement, with the proceeds to be applied against the Lender's Claim. General unsecured creditors, holding an aggregate of $48.5 million in allowed claims, will receive their pro rata share of available cash on the Effective Date. The Committee estimates that each holder of an allowed unsecured claim will receive a 23.86% cash distribution under the Plan. Penalty claimholders, holding an aggregate of $36 million of allowed claims, will not receive anything under the Plan. Equity interests will be cancelled on the Effective Date. The Plan will be funded by all of the Debtors' assets not comprising the Lenders' collateral, including D&O recoveries, preference recoveries, and the PwC recoveries allocable to the estate. Initial distributions will be made on the Effective Date. The Plan contemplates periodic supplemental distributions to holders of allowed claims as funds become available. On the Effective Date, the Plan Administrator, William A. Brandt, Jr., of Development Specialists, Inc., will serve in this capacity until his resignation or discharge in accordance with the Plan and the Plan Administration Agreement. Judge Sonderby orders that: 1) on the Effective Date, all property of TW Communications will be merged with the property of Anicom Inc., all obligations of TW Communications will deemed one obligation of Anicom and each claim filed against TW will be deemed a single claim against Anicom; 2) on the Effective Date, the members of the board of directors of TW Communications will be deemed to have resigned, TW will be merged with Anicom Inc., and the chapter 11 case of TW will be closed, and all proceedings commenced in TW's chapter 11 case will be brought or commenced in Anicom's chapter 11 case; 3) pursuant to Section 1145 of the Bankruptcy Code, the issuance of any securities under the Plan, including one share of new Anicom common stock, $0.01 per value per share, to be issued to the Plan Administrator pursuant to Section 5.6 of the Plan will be exempt from the registration requirements of Section 5 of the Securities Act and any federal, state and local laws requiring the registration of licensing of an issuer, underwriter, broker or dealer of securities; 4) the property of the Estates will not be revested in the Debtors on or after the Effective Date, but will remain property of the Estates until distributed to Holders of Allowed Claims in accordance with the provisions of the confirmed Plan, the Plan Administrator Agreement and the Court's Confirmation Order; and 5) the Court's confirmation order will not be subject to any stay pursuant to Bankruptcy Rule 3020(e) and the order's provisions are non-severable and mutually dependent. A full-text copy of the Debtors' Plan and Disclosure Statement filed by the Creditors' Committee is available for a fee at: http://www.researcharchives.com/bin/download?id=050824041058 Headquartered in Rosemont, Illinois, Anicom, Inc., and TW Communications Corp., filed for chapter 11 protection on Jan. 5, 2001 (Bankr. N.D. Ill. Case No. 01-00485). Gary R. Underwood, Esq., in St. Louis, Missouri, Harold P. Margulies, Esq., in Los Angeles, California, and John R. Weiss, Esq., at Katten Muchin Rosenman LLP, represent the Debtors in their bankruptcy proceedings. When the Debtors filed for protection from their creditors, they listed $348.4 million in total assets and $206.1 million in total debts. The Court confirmed the Amended Liquidation Plan filed by the Unsecured Creditors Committee on Sept. 14, 2005. ANIXTER INC: Fitch Shaves Sr. Unsecured Debt Rating 1 Notch to BB+ ------------------------------------------------------------------ Fitch Ratings has lowered Anixter Inc.'s senior unsecured debt to 'BB+' from 'BBB-' and Anixter International Inc.'s approximately $150 million accreted value of 3.25% zero coupon convertible senior notes due 2033 to 'BB-' from 'BB+'. Fitch has also assigned a 'BB+' rating to Anixter's bank credit facility. The Rating Outlook is Stable. Approximately $485 million of debt is affected by Fitch's action. The downgrade reflects the special dividend announcement and Fitch's belief that this transaction, Anixter's second special dividend in the past two years, represents management's increased comfort with both shareholder-friendly actions and higher debt levels. On Sept. 15, 2005, Anixter's Board of Directors declared the payment of a special dividend of $4.00 per common share, or approximately $150 million. The special dividend is payable on Oct. 31, 2005, to shareholders of record on Oct. 14, 2005. Fitch expects this special dividend payment will be primarily debt-financed and result in Anixter having less financial flexibility and credit metrics not reflective of an investment grade company. While near-term liquidity will be strained, the Stable Rating Outlook reflects Fitch's expectation that Anixter will reduce all-time high debt levels from ongoing modest free cash flow, even with revenue growth approaching 10%. Rating concerns center on the thin operating margins associated with the distribution industry, ongoing pricing pressures in certain markets related to industry wide excess capacity, and significant working capital investments necessary to reach longer term growth targets. In addition, Fitch believes integration and execution risks remain for the company to make recent acquisitions successful. Positively, Anixter's ratings continue to be supported by the company's leading market position, diverse portfolio of products and customers, significant scope and global reach, and the information technology distributors' working capital operating model, where the company can generate cash from working capital during a downturn or at mid-single-digit growth rates. Pro forma the payment of the special dividend, which Fitch expects will be primarily debt-financed, and completion of the Infast Group plc acquisition in the current quarter, Anixter's liquidity is sufficient to meet near-term debt obligations despite significantly reduced cash levels for the near term. Nonetheless, Fitch expects Anixter to generate cash mostly from working capital during the second half of 2005, due to seasonally lower sales growth. While Fitch expects the company to access various non-U.S. credit facilities to fund these aforementioned transactions, liquidity continues to be supported by a $225 million accounts receivable securitization program expiring Sept. 30, 2005 (of which approximately $110 million was outstanding), and $275 million five-year senior unsecured revolving credit facility expiring June 18, 2009 (of which, due to financial covenants, approximately $188 million was permitted to be borrowed as of July 1, 2005). As a result, Fitch estimates pro forma total debt-to-operating EBITDA will exceed 3.0 times (x), a historical high for the company, while leverage adjusted for rental expense may exceed 4.0x. Although Fitch expects these metrics to improve over the intermediate term from a combination of debt reduction and higher profitability, mainly due to the integration of Infast and continued growth of Anixter's OEM fasteners business, management's actions indicate that the company is comfortable operating at pro forma metrics. Any further shareholder-friendly transactions or significant debt-financed acquisitions could result in further negative rating actions. Total debt at July 1, 2005, was approximately $485 million and consisted primarily of Anixter's $200 million 6% senior unsecured notes due 2015, Anixter International's approximately $150 million accreted value of 3.25% zero coupon convertible senior notes due 2033, and the aforementioned borrowings under Anixter's accounts receivable securitization program and credit facilities. The Holding Company's zero coupon convertible senior notes are not guaranteed by Anixter and are structurally subordinated to Anixter's debt. ARTURO PEREZ: List of 20 Largest Unsecured Creditors ---------------------------------------------------- Arturo & Josefina Perez, d/b/a Beach House Grill, released a list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ SBA $428,000 10737 Gateway West, Suite 320 El Paso, TX 79935 Wells Fargo Bank $48,851 Department 757 Denver, CO 80271-0757 Wells Fargo Bank $44,329 Department 757 Denver, CO 80271-0757 Arturo Medina $40,000 Aviva Life Insurance $36,100 Wells Fargo Bank $29,995 Bank One $25,000 Espe Frey $25,000 Internal Revenue Service $24,877 Capital One Bank $18,670 El Paso Employee's Federal Credit Union $17,544 Wells Fargo $15,717 Angelina Granados $15,000 MBNA America $14,870 Wells Fargo $14,386 GECU $12,500 Capital Savings Bank $11,532 Bank One Visa-Chase $10,910 Isela Briones $10,000 Texas Gas Service $7,000 Headquartered in El Paso, Texas, Arturo & Josefina Perez, d/b/a Beach House Grill, filed for chapter 11 protection on Aug. 23, 2005 (Bankr. W.D. Tex. Case No. 05-31968). Sidney J. Diamond, Esq., at Sidney J. Diamond, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million to $10 million. ARVINMERITOR INC: Bondholders Tender $252.5 Million of Old Notes ---------------------------------------------------------------- ArvinMeritor, Inc. (NYSE: ARM) disclosed the expiration of the early participation period in connection with its offer to exchange a new series of Senior Notes due Sept. 15, 2015, for up to $350 million of its outstanding $499 million 6.80 percent Senior Notes due Feb. 15, 2009, and $150 million 7.125 percent Senior Notes due March 15, 2009. The early participation period, which was originally due to expire on Sept. 14, 2005, had been extended to 5 p.m. (ET), on Sept. 16. As of 5 p.m. (ET) on Sept. 16, 2005, approximately $252.5 million aggregate principal amount of outstanding Senior Notes had been validly tendered for exchange, including $193.9 million of the 6.80 percent Notes and $58.6 million of the 7.125 percent Notes. The total exchange price for the Notes is based upon a fixed- spread pricing formula and will be calculated at 2 p.m. (ET) on Sept. 26, 2005. Holders of the Old Notes who validly tendered by the early participation date and have not validly withdrawn their tenders will receive an early participation payment as described in the offering memorandum and letter of transmittal. The exchange offer is scheduled to expire at midnight on Sept. 28, 2005, unless extended. The exchange offer is limited to holders of the Old Notes that have certified certain matters to the company, including their status as "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act of 1933. An offering memorandum dated Aug. 31, 2005 was distributed to Eligible Holders and is available to Eligible Holders through the information agent, Global Bondholder Services Corporation at (866) 470- 4200 or (212) 430-3774. The New Notes have not been registered under the Securities Act or any state securities laws. Therefore, the New Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. Headquartered in Troy, Mich., ArvinMeritor, Inc. -- http://www.arvinmeritor.com/-- is a premier $8 billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and related aftermarkets. The Company employs approximately 31,000 people at more than 120 manufacturing facilities in 25 countries. * * * As reported in the Troubled Company Reporter on Sept. 6, 2005, Fitch Ratings has affirmed the senior unsecured 'BB+' rating and Stable Outlook of ArvinMeritor, Inc. The company has announced an exchange tender offer for up to $300 million in face amount of its $499 million 6.8% notes due 2009 and its $150 million 7-1/8% notes also due 2009. Fitch has assigned an indicative rating of 'BB+' and a Stable Outlook to the new issue. The new debt would mature in 2015 and has not yet been priced. On Sept. 4, 2005, Standard & Poor's Ratings Services assigned its 'BB' rating to ArvinMeritor Inc.'s proposed $300 million senior unsecured notes due September 15, 2015. At the same time, S&P affirmed all other long-term ratings on the company and related entities. Total consolidated debt at June 30, 2005, stood at about $1.5 billion. As reported in the Troubled Company Reporter on Sept. 2, 2005, Moody's Investors Service assigned a Ba2 rating to approximately $300 million of new unsecured notes maturing in 2015 which ArvinMeritor, Inc. intends to issue under an exchange offer to existing holders of two debt obligations. The exchange offer will be for up to $300 million par value split, based on amounts tendered, between the 7.125% senior unsecured notes maturing in March 2009 ($150 million total) and the 6.80% senior unsecured notes maturing in February 2009 (total $499 million). The Ba2 rating is level with the current Corporate Family and Senior Unsecured ratings. ASARCO LLC: Court Rules Chevron is a Merchant, Not a Utility ------------------------------------------------------------ As reported in the Troubled Company Reporter on Aug. 30, 2005, ASARCO LLC and its debtor-affiliates want to prevent Utility Companies from terminating services or requiring additional deposits in connection with their provision of services. Rhett G. Campbell, Esq., at Thompson & Knight LLP, in Houston, Texas, informs the U.S. Bankruptcy Court for the Southern District of Texas that Chevron Natural Gas, a division of Chevron U.S.A. Inc., is not a utility but rather a forward contract merchant entitled to the protection of Section 556 of the Bankruptcy Code. Before the Petition Date, Chevron and the Debtor had entered into a Base Contract for Sale and Purchase of Natural Gas dated April 1, 2003, by which Chevron agreed to deliver natural gas to the Debtor. Pursuant to the terms of the contract and Tex. Bus. Com. Code section 2.702(a), the Debtor was prepaying for the gas prior to delivery. Section 556 expressly provides that a forward contract may not be "stayed, avoided or otherwise limited by operation of any provision of this title or by order of a court in any proceeding under [the Bankruptcy Code]." The Utility Order seeks to modify Chevron's contractual rights with respect to payment and dispute resolution pursuant to the provision of Section 366, Mr. Campbell points out. That action is expressly forbidden by the provision of Section 556. Accordingly, Chevron asks the Court to modify the Utility Order to delete Chevron from the list of Utility Companies or to provide that the Order does not apply to Chevron. Court's Ruling The Court modifies the Utility Order to delete Chevron Natural Gas from the list of Utility Companies. Pending a determination of the status of ASARCO's contract with Chevron as a "forward contract," and the status of Chevron as a "forward contract merchant," the Debtor's prepayment obligations for the delivery period from April 1, 2005, to March 31, 2007, remain in full force and effect. Nothing constitutes a modification of the Base Contract for Sale and Purchase of Natural Gas dated April 1, 2003, between Chevron and ASARCO, or the assumption of the Base Gas Sale Contract by the Debtor or a waiver of Chevron's rights pursuant to Section 556 of the Bankruptcy Code to terminate or liquidate the Contract. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Court Okays Hawley as Counsel for Coeur d'Alene Suit ---------------------------------------------------------------- In 1983, the Environmental Protection Agency first listed a 21- square mile area surrounding the Bunker Hill Smelter Complex on the National Priorities List, as the Bunker Hill Mining and Metallurgical Complex within the Coeur d'Alene River Basin in Northing, Idaho. In 1998, the EPA announced that it would extend its superfund remedial authorities outside the Bunker Hill Mining and Metallurgical Complex. The Superfund site now covers over 800 square miles, encompassing the headwaters of the south fork of the Coeur d'Alene River. The Coeur d'Alene River Basin had been one of the cost-productive silver and lead mining areas in the United States. From the late 1800's through the 20th Century, there had been more than 100 mines or processing operations producing lead, silver and zinc and other metals in the Coeur d'Alene River Basin. The Coeur d'Alene Mining Complex produced over 140 million tons of ore during the first century of operation. As a result of the mining, processing and smelting of a huge volume of ore, there was a widespread discharge of tailings into the Coeur d'Alene River and its tributaries until 1968. Smelting operations discharged quantities of sulfur dioxide, lead, and other metals. The EPA has designated the Coeur d'Alene River Basin as a mining mega site, in terms of the Comprehensive Environmental Response, Compensation and Liability Act. After a six-month trial in 2001, the EPA, ASARCO, and Hecla Mining Company litigated the issue of their liability under CERCLA. On Sept. 3, 2003, the U.S. District Court for the District of Idaho held that ASARCO was responsible for contributing 22% of the tailings deposited in the South Fork of the Coeur d'Alene River, while Hecla Mining was responsible for 31%. Hecla Mining and ASARCO are the only remaining defendants in the litigation. The EPA Claims In September 2002, the EPA finally published a Record of Decision for the Superfund site in the Coeur d'Alene River Basin, and since then, the EPA and other government agencies have been preparing and determining their damages for response costs and natural resource damages. At this time, the EPA claims: -- $100,000,000 for past response costs -- $380,000,000 for future response costs, covering the next 30 years; and -- $90,000,000 in attorneys' fees. The Natural Resource Trustees, which include the Coeur d'Alene Tribe, U.S. Fish and Wildlife Service, and The U.S. Forest Service, asserted $1,000,000,000 in damages to the natural resources. A trial on the damages is set to commence on January 17, 2006, and proceed for four and a half months. The U.S. Government has moved to reopen discovery on all of ASARCO's experts. There are several pending motions for summary judgment, and the cut-off date for filing motions is Sept. 15, 2005. The case involves many issues of first impression under CERCLA in terms of the calculation and proof of damages. The current total damage claim is $1,500,000,000. According to James R. Prince, Esq., at Baker Botts, LLP, in Dallas, Texas, the U.S. Government is anticipated to dispute whether ASARCO's liability will be limited to 22%. The Idaho federal court stayed the litigation as to ASARCO, with the right of the parties to move to lift the stay for good cause shown, for entry of any stipulation or order, or for any purpose required to obtain a final determination after the stay is lifted. The Idaho federal court further ordered the parties to submit status reports within 10 days after the date of the order regarding their recommendations to the court as to how the matter will proceed to effectively allocate judicial resources. Hawley Troxell to Continue Representation in Coeur d'Alene Litigation Mr. Prince informs the Court that ASARCO employed Hawley Troxell Ennis & Hawley, LLP, in September 2003 to represent the company in the Coeur d'Alene Litigation. In this regard, ASARCO has asked Hawley Troxell to continue its representation in the Coeur d'Alene Litigation as special counsel after the Petition Date. As a result of that prior engagement, ASARCO believes that the firm is uniquely familiar with the company and its environmental liabilities. Mr. Prince also notes that it is impossible for the Debtor to obtain alternative counsel at this late juncture. Within the 90-day period preceding ASARCO's Petition Date, Hawley Troxell received $41,891 from ASARCO as payment for prepetition professional services rendered and expenses incurred by the firm. The firm also has a general unsecured claim against ASARCO for approximately $98,067, for prepetition services rendered for which it did not receive payment. Gary D. Babbit, Esq., a partner at Hawley Troxell, assures the Court that the firm does not have any relationship with ASARCO that would preclude the firm's ability to represent the Debtor as special litigation counsel. Moreover, Hawley Troxell does not represent any other party-in-interest in connection with any of the matters for which it is being retained as special counsel. The firm will be paid in accordance with its ordinary and customary hourly rates in effect on the date the services are tendered. Hawley Troxell will also be reimbursed for actual and necessary out-of-pocket expenses incurred. The firm's current standard hourly rates are: Professional Hourly Rates ------------ ------------ Primary Attorneys $130 to $255 Paraprofessionals $60 to $110 Hawley Troxell's invoices will be paid on an interim basis in an amount not to exceed $40,000 per month. Since Hawley Troxell has been working on matters related to the Coeur d'Alene litigation before its bankruptcy, ASARCO asks the Court to approve the employment of the firm retroactive to the Petition Date. Court's Ruling Judge Schmidt approves ASARCO's Application. If Hawley Troxell's invoice for any month exceeds $40,000, the amount by which the invoice exceeds the cap will rollover to the next months until paid in full. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Salt River Wants Adequate Security Deposit for $8.4MM ----------------------------------------------------------------- Salt River Project Agricultural Improvement and Power District is an agricultural improvement district and an integrated electric utility. Under the Arizona Constitution and A.R.S. Title 48, SRP is a political subdivision of the State of Arizona governed and regulated by a duly elected board. SRP provides electricity to more than 2 million people in a 2,900-square mile territory located in and around the metropolitan Phoenix area, plus mine loads in an adjacent 2,400-square mile area in Gila and Pina counties. ASARCO, LLC, is located within SRP's service territory. SRP generates, transmits, and distributes electric services to ASARCO, even after the Petition Date. Matthew A. Rosenstein, Esq., in Corpus Christi, Texas, relates that ASARCO is SRP's largest customer and, based on pre-strike mining demand, typically uses $115,000 daily in SRP-furnished electricity. ASARCO owes SRP a prepetition debt exceeding $3.1 million. Mr. Rosenstein recounts that in late 2001 and early 2002, SRP initially required that ASARCO provide a $6.5 million deposit. However, upon ASARCO's request and claim that it could not provide the deposit and also pay other creditors, SRP permitted the security deposit to be provided by Deeds of Trust on land in Southern Arizona. According to Mr. Rosenstein, the basis for SRP's deposit requests to ASARCO is the SRP Credit Policy. The Credit Policy is based on guidelines set forth in its Rules and Regulations, which are the equivalent of a tariff and are approved by its regulatory board of directors. The Board is publicly elected and is SRP's regulatory body. Under SRP's billing cycle, ASARCO could receive 60 days of unpaid service before the service could be terminated for a postpetition payment default. Mr. Rosenstein tells the Court that when ASARCO filed for bankruptcy, 40 days of service was unpaid and outstanding. In 2005, based on its review of ASARCO's increased electrical usage at its mining facilities, SRP required and billed ASARCO an $8,391,182 security deposit. The same amount was demanded by SRP after the Petition Date. The amount represents ASARCO's anticipated two-high consecutive months' usage and is the same amount requested within the prepetition period. That demand was consistent with the SRP Credit Policy and took into account the risk of exposure that SRP would not be paid for 60 days' service. Mr. Rosenstein says that ASARCO has failed and refused to offer any postpetition security deposit. Mr. Rosenstein notes that since the Petition Date, ASARCO has sought approval to pay the prepetition claims of various alleged "critical vendors," for an amount exceeding $3.1 million. Although the amounts to be paid to the "critical vendors" will be significant, ASARCO has not sought authority to pay SRP's large prepetition claims. Because ASARCO is SRP's largest customer, ASARCO's failure to make timely postpetition payment will cause irreparable harm and injury to SRP, for which there exists no adequate remedy at law, Mr. Rosenstein says. The restraining order entered by the Court prohibits SRP from discontinuing or refusing service on account of any unpaid prepetition charges. However, the restraining order also provides that any utility company may file a motion for determination of adequate assurance of payment. Section 366(b) of the U.S. Bankruptcy Code provides that "[the] utility may alter, refuse, or discontinue service if neither the trustee nor the debtor within 20 days after the date of the order for relief, furnishes adequate assurance of payment, in the form of a deposit or other security, for service after such date. On request of a party in interest and after notice and a hearing, the court may order reasonable modification of the amount of the deposit or other security necessary to provide adequate assurance of payment." Accordingly, SRP asks the U.S. Bankruptcy Court for the Southern District of Texas to: (a) terminate the Restraining Order as to SRP; (b) require ASARCO to immediately post an adequate security deposit in the form of cash or irrevocable letter of credit for $8,391,182; and (c) permit SRP to cut electrical power services to ASARCO without further Court order in the event ASARCO either fails to provide an adequate security deposit or to make timely payment of any of its electrical power service bills from SRP. If SRP's request is denied, other circumstances pertaining to ASARCO's business, like the employee strike, may seriously jeopardize ASARCO's ability to make payment or even timely payment, Mr. Rosenstein says. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: Inks Tentative Labor Pact with Cockpit Crewmembers ---------------------------------------------------------------- ATA Airlines, Inc. (Pink Sheets:ATAHQ) reached a tentative agreement with its cockpit crewmembers, represented by the Air Line Pilots Association, for a revised three-year collective bargaining agreement. As part of the agreement, the cockpit crewmembers will receive stock options to purchase common shares of the reorganized ATA Holdings Corp, in exchange for wage, benefit and work rule concessions. The tentative agreement is subject to a ratification vote of the cockpit crewmembers in the next two weeks. "I am extremely pleased and grateful that everyone stayed committed to the negotiation process and worked through several difficult issues to reach this agreement," said ATA President and CEO John Denison. "If ratified, this new agreement will make it possible for ATA to continue on the path towards a successful emergence from bankruptcy by year-end 2005 or early 2006. The spirit of teamwork exhibited by our cockpit crewmembers in reaching this tentative agreement bodes well for the future of our Company. Our cockpit crewmembers are taking a positive step toward sharing the benefits of what we ultimately believe will be a company with an attractive equity stock valuation." ATA has stated publicly that it is seeking an additional $100 million capital infusion in order to complete a successful restructuring. According to ATA Senior Vice President of Labor Relations Richard Meyer, finalizing this consensual agreement with its cockpit crewmembers will allow investors to see ATA as a much stronger and stable Company. "Once ratified, we believe this will enhance ATA's ability to attract the capital necessary to reorganize," said Mr. Meyer. "By making these sacrifices, our cockpit crewmembers will help to secure a better future for themselves and their fellow employees. The Company appreciates their contribution." Short-term wage concessions were already in effect through Sept. 30, 2005 -- under an agreement between ATA and ALPA signed in June 2005. Since that time, negotiations have continued with the goal of achieving long-term wage and productivity concessions. Yesterday's announcement means ATA and ALPA are approaching the successful conclusion of those efforts. On Sept. 17, 2005, ATA ALPA Master Executive Council members approved forwarding the tentative agreement to cockpit crewmembers for ratification. Cockpit crewmembers will begin voting on ratification early next week with a targeted conclusion to the vote of Sept. 30, 2005. If ratified, the new contract will be effective Oct. 1, 2005 and become amendable on Sept. 30, 2008. 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. BEARINGPOINT INC: Says Bondholder's Default Claims are Bogus ------------------------------------------------------------ BearingPoint, Inc. (NYSE: BE), one of the world's largest management consulting and systems integration firms, received purported notices of default from law firms claiming to represent certain holders of: -- the $200 million Series B Convertible Subordinated Debentures, and -- the $250 million Series A Convertible Subordinated Debentures, issued by the Company in December 2004 and January 2005. The law firms essentially assert that the Company is in default because it has failed to make certain Securities and Exchange Commission filings in a timely fashion. The law firms asserted that, as a result of the Company's failure to timely file with the SEC its 2004 Annual Report on Form 10-K and its Quarterly Reports on Forms 10-Q for the first and second quarters of 2005, the Company is in default under the Indenture dated as of December 22, 2004, between the Company, as issuer, and The Bank of New York, as Trustee, relating to the Series B Debentures and the Series A Debentures. The notice of default demands that the Company cure the purported default within 60 days from the receipt of the notice of default. In response to these claims, BearingPoint said: "We believe these notices are invalid and completely without merit. It is our view that there is no requirement in the Series A and Series B Debentures for BearingPoint to file its annual and quarterly reports within the deadlines set forth in the SEC's rules and regulations." Financial Filing Status The Company believes it will file its Forms 10-Q for the first and second quarters of 2005 after completion of its 2004 financial statements and related filings. However, as previously disclosed, the Company believes that it will not file its Form 10-Q for the third quarter of 2005 in a timely fashion due. At this time, due to the volume of work and review involved, the Company believes that a reasonable time frame for completion of the process is the latter part of October. However, the Company recognizes that additional issues may arise during completion of the financial statements, and that this could delay completion of the process during the October time frame. The Company previously indicated that it expected to complete its 2004 financial statements and related SEC filings by the end of summer in September, with the Company's Forms 10-Q for the first and second quarters of 2005 to be filed concurrently or shortly thereafter. As reported in the Troubled Company Reporter on July 22, 2005, the Audit Committee, advised by a special counsel, is investigating issues concerning its internal control over financial reporting and prior period adjustments, including alleged deficiencies relating to the Company's OneGlobe financial reporting system, which has been implemented in the Company's North America operations, including an additional issue with respect to accurate reporting of contract revenues entered into the system in the second quarter of fiscal 2004. This matter, and other issues also being examined by the Audit Committee, were raised, in part, by a non-executive employee communication. The staff of the Securities and Exchange Commission's Division of Enforcement has been advised of the Audit Committee investigation. SEC Probe The Securities and Exchange Commission has issued a formal order of investigation in the previously disclosed informal investigation. The Company believes that the subject matter of the formal investigation is substantially the same as the subject matter of the previously disclosed informal investigation. The Company continues to cooperate with the SEC investigation. Material Weaknesses In a Form 8-K filing dated March 17, 2005, filed with the SEC, the Company identified a number of control deficiencies, especially in the areas of: -- contract revenue and accounts receivable; -- expenditures and accounts payable; -- payroll operations; -- the financial statement close process; -- leases and fixed assets; and -- the control environment in certain non-U.S. subsidiaries. "We expect that most of these deficiencies will be classified as material weaknesses and others may be classified as significant deficiencies that in the aggregate may constitute material weaknesses," the Company said in its regulatory filing. "It also is possible that additional material weaknesses will be identified as we complete our assessment process. We are now evaluating what changes in internal control over financial reporting should be implemented in order to fully address these material weaknesses and other control deficiencies." As a result of the identification of these material weaknesses, management's assessment will conclude that the Company's internal control over financial reporting is ineffective. "We expect that our independent registered public accountants will issue an adverse opinion on the effectiveness of our internal control over financial reporting," the Company said in its current report. Possible Financial Adjustments In addition, the Company preliminarily identified certain items that will probably require adjustments to prior period financial statements. These adjustments will affect various quarters in fiscal year 2004 and may affect the results of operations in previous years, though the exact amount of the adjustments and the periods to which they relate have not been determined. The nature and approximate amounts of the more significant adjustments that have been identified based solely on procedures performed to date are: -- write-downs relating to contract revenues resulting from inaccurate entries of approximately $10-$12 million that were made by a foreign operation and that are under investigation; -- charges relating to employee tax equalization issues; and -- charges arising from detailed engagement contract reviews. "Also, we have determined that there has been an impairment of goodwill as of Dec. 31, 2004, with respect to operations in its Europe, the Middle East and Africa segment and will record a non- cash fourth quarter charge," the Company said. As of Sept. 30, 2004, the goodwill for the EMEA segment was $802.7 million. "The amount of the charge, cannot be reasonably estimated at this time. However, it will likely have a substantial impact on our results of operations for FY04," the Company added. BearingPoint, Inc. (NYSE: BE) -- http://www.BearingPoint.com/ -- is one of the world's largest management consulting, systems integration and managed services firms serving government agencies, Global 2000 companies, medium-sized businesses and other organizations. We provide business and technology strategy, systems design, architecture, applications implementation, network infrastructure, systems integration and managed services. Our service offerings are designed to help our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis. Based in McLean, Va., BearingPoint has been named by Fortune as one of America's Most Admired Companies in the computer and data services sector. * * * As reported in the Troubled Company Reporter on Apr. 26, 2005, Standard & Poor's Ratings Services ratings on McLean, Virginia- based BearingPoint Inc. ('B-' corporate credit rating) remain on CreditWatch, where they were placed March 18, 2005; however, the implications have been revised to developing from negative. "The CreditWatch revision reflects the additional near-term liquidity provided by the $200 million aggregate principal amount of 5% convertible senior subordinated debentures issued by the company today," explained Standard & Poor's credit analyst Phil Schrank. BearingPoint intends to use net proceeds from the offering to cash collateralize or replace letters of credit under its existing credit facility, as well as to support future letter of credit or surety bond requirements, to pay related expenses of the offering, and for general corporate purposes. BROOKFIELD PROPERTIES: Renewing Issuer Bid for Another Year ----------------------------------------------------------- Brookfield Properties Corporation (BPO: NYSE/TSX) informed the Toronto Stock Exchange of its intention to renew its existing normal course issuer bid for a further one-year period. Brookfield stated that at times its common shares trade in price ranges that do not fully reflect their value. As a result, from time to time, acquiring common shares represents an attractive and a desirable use of available funds. The notice provides that Brookfield may, during the twelve month period commencing Sept. 15, 2005, and ending Sept. 14, 2006, purchase on the Toronto Stock Exchange and the New York Stock Exchange up to 11,604,531 common shares, representing approximately 5% of the issued and outstanding common shares of the company. At Sept. 9, 2005, there were 232,090,615 common shares issued and outstanding and 114,958,596 common shares in the public float. In addition, Brookfield has 6,312,000 Class A redeemable voting shares outstanding. The price to be paid for the shares will be the market price at the time of purchase. The actual number of shares to be purchased and the timing of such purchases will be determined by Brookfield, and all shares will be purchased on the open market or such other means as approved by the Toronto Stock Exchange and the New York Stock Exchange. All shares purchased by Brookfield under this bid will be promptly cancelled. As at Sept. 9, 2005, Brookfield acquired 2,213,100 common shares at an average price of US$26.13 per share under its existing normal course issuer bid, which commenced on Sept. 15, 2004 and ends on Sept. 14, 2005. Listed on both the New York and Toronto Stock Exchanges under the symbol BPO, Brookfield Properties Corporation -- http://www.brookfieldproperties.com/-- owns, develops and manages premier North American office properties. The Brookfield portfolio comprises 47 commercial properties and development sites totaling 46 million square feet, including landmark properties such as the World Financial Center in New York City and BCE Place in Toronto. * * * As reported in the Troubled Company Reporter on Oct. 6, 2004, Standard & Poor's Ratings Services assigned its 'P-3(High)' Canadian national scale and 'BB+' global scale preferred share ratings to Brookfield Properties Corp.'s C$150 million -- with an underwriter's option of up to an additional C$50 million -- 5.20% cumulative class AAA redeemable preferred shares, series K. At the same time, Standard & Poor's affirmed its ratings outstanding on the company, including the 'BBB' long-term issuer credit rating. The outlook is stable. BUEHLER FODS: Has Until October 31 to File Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana extended Buehler Foods, Inc., and its debtor-affiliates' time within which they alone can file a chapter 11 plan. The Debtors have until Oct. 31, 2005, to resolve the differences with their major creditors without costly litigation in order to draft a consensual plan. The Court also gave Buehler until December 30 to solicit acceptances from their creditors. Headquartered in Jasper, Indiana, Buehler Foods, Inc., owns and operates grocery stores under the BUY LOW and Save-A-Lot banners in Illinois, Indiana, and Kentucky, North Carolina, and Virginia. The company also sells gas at about a dozen locations. In 2004 Buehler Foods acquired 16 Winn-Dixie stores in Louisville, Kentucky, and renamed them Buehler's Markets. Founded in 1940, the company is still run by the Buehler family. The Company, along with its three affiliates, filed for chapter 11 protection on May 5, 2005 (Bankr. S.D. Ind. Case No. 05-70961). Jerald I. Ancel, Esq., at Sommer Barnard Attorneys, PC, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $10 million to $50 million and debts of $50 million to $100 million. BURKHARD SCHEPER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Burkhard & Patricia Lou Scheper 513 Skyland Drive Columbia, South Carolina 29210 Bankruptcy Case No.: 05-10551 Chapter 11 Petition Date: September 16, 2005 Court: District of South Carolina (Columbia) Judge: Wm. Thurmond Bishop Debtor's Counsel: Gene Trotter, Esq. Trotter & Maxfield 1701 Richland Street Columbia, South Carolina 29201 Tel: (803) 799-6000 Total Assets: $251,970 Total Debts: $1,149,410 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BB and T Guarantor on business $240,000 P.O. Box 58002 loan Charlotte, NC 28258 MBNA Credit Card $35,492 P.O. Box 15137 Wilmington, DE 19886 Bank of America 1st Mort 1512 $29,030 P.O Box 17646 Campbell Street Baltimore, MD 21297 Net Bank 1st Mort 311 $47,700 Eastview Drive Value of security: $20,000 Chase Bank VISA Credit card $25,310 Bank of America Credit card $19,769 BB&T Business loan $17,851 ABN-AMRO 1st Mort 225 $28,750 Railroad Avenue Value of security: $18,000 Key Bank Credit card $8,304 USAA Credit Card Svs. Revolving charge $7,119 US Bancorp Business equipment $7,005 City of Baltimore Water bill, demolition $7,000 Bank of America Credit card $5,987 Bellsouth Advertising Advertising $5,504 Eastman Kodak Co. Credit card $5,237 Ilford Imaging USA Credit card $4,974 CIT Technology Business equipment $4,947 American Express Gold Credit card $4,859 Amex Gold Revolving charge $4,859 Jemco Display Credit card purchases $3,704 CABIN JOHN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Cabin John Inc. 208 Bank Street Chesapeake City, Maryland 21915 Bankruptcy Case No.: 05-31384 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Canal House, Inc. 05-31386 Domenic John Della Barba 05-31182 Chapter 11 Petition Date: September 19, 2005 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtors' Counsel: Howard M. Heneson, Esq. Howard M. Heneson, P.A. 810 Glen Eagles Court, Suite 301 Towson, Maryland 21286 Tel: (410) 494-8388 Fax: (410) 494-8389 --- and --- Marc Robert Kivitz, Esq. 201 North Charles Street, Suite 1330 Baltimore, Maryland 21202 Tel: (410) 625-2300 Estimated Assets Estimated Debts ---------------- --------------- Cabin John Inc. $1 Million to $1 Million to $10 Million $10 Million Canal House, Inc. $1 Million to $1 Million $10 Million $10 Million Domenic John Della Barba $1 Million to $1 Million to $10 Million $10 Million A. Canal House Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Southern States Judgment $117,500 c/o Kevin Olszewski 5 South Hickory Avenue Bel Air, MD 21014 Cecil County Treasurer's Property tax $109,823 Office 129 East Main Street Elkton, MD 21921 Sue Armstrong Loan $94,000 645 Highland Terrace Holmes, PA 19043 Blank Rome, LLP Trade debt $93,325 Delaware County Vending Advance $75,000 I-Dine Restaurant Group, Inc. Trade debt $57,333 Haly Oil Company Oil service $34,826 U.S. Foodservice Trade debt $32,601 RJ Antz Loan $15,000 Vans Trade debt $11,540 Sysco Trade debt $10,380 Coventry Health Care Health insurance $7,562 Delmarva Power Utility $6,832 State Auto Insurance Insurance $5,781 Alger Oil Judgment $4,196 Fockler & Fockler Liquor license $2,790 BFI/Allied Waste Refuse services $2,625 Rendered P&G Industries Trade debt $2,420 Clear Channel Broadcasting, Advertisement $1,750 Inc. Verizon Utility $1,395 CANWEST GLOBAL: Subsidiary Amends Tender Offer's Purchase Price --------------------------------------------------------------- CanWest MediaWorks Inc., a wholly owned subsidiary of CanWest Global Communications Corp., amended the purchase price in its cash tender offer for its 7-5/8% Senior Unsecured Notes due 2013. This series of debt securities has an outstanding principal amount outstanding of US$200 million (CDN$238 million). The purchase price for CanWest's 10-5/8% Senior Subordinated Notes due 2011 will remain as originally announced by CanWest on Sept. 8, 2005. CanWest also disclosed that holders of a majority in aggregate principal amount of the 2013 Notes have indicated their intention to tender their 2013 Notes in the tender offers as amended. The amended purchase price for the 2013 Notes will be a "fixed spread" price determined on Oct. 6, 2005, calculated using a yield equal to a fixed spread of 50 basis points plus the yield to maturity of the 2.625% U.S. Treasury Note due May 15, 2008. The purchase price for the 2013 Notes will no longer be a composite price that includes an "equity claw- back" price component. As a result of this amendment, all holders who validly tender their 2013 Notes prior to the early tender premium deadline will receive 100% of the "fixed spread price" (as that term is used in the Offers to Purchase and Consent Solicitations Statement dated Sept. 8, 2005, that CanWest distributed to holders of the notes) for their 2013 Notes that are accepted for purchase. Holders who validly tender their 2013 Notes after the early tender premium deadline will receive the fixed spread price minus an early tender premium of US$30.00 per US$1,000 principal amount of 2013 Notes that are accepted. All other terms and conditions of the tender offers and consent solicitations with respect to the notes described above remain the same. For both offers, the early tender premium deadline for the consent solicitations is 5:00 p.m. Eastern Daylight Time (EDT) on Sept. 21, 2005 and the expiration time is midnight EDT, on Oct. 12, 2005. Holders may withdraw their tenders of notes prior to 5:00 p.m. EDT on Sept. 21, 2005. All of these dates are subject to extension at CanWest's election. The tender offers and consent solicitations are made solely by the Offers to Purchase and Consent Solicitations Statement dated Sept. 8, 2005, the related letter of transmittal and consent, and any amendments or supplements thereto. The offers are subject to certain conditions, which include the tender of a set minimum amount of notes of each series and the successful creation and Canadian initial public offering of CanWest MediaWorks Income Fund. CanWest has retained Citigroup Global Markets Inc. to serve as dealer manager for the tender offers and consent solicitations. Global Bondholder Services Corporation is serving as the depositary and information agent for the tender offers and consent solicitations. Requests for documents relating to the tender offers and consent solicitations may be directed to Global Bondholder Services Corporation by telephone at 1-866 470-4500 (toll free) or 1-212 430-3774 or in writing at 65 Broadway, Suite 74, New York, NY, 10006. Questions regarding the tender offers and consent solicitations may be directed to Citigroup Global Markets Inc., Liability Management Group, at 1-800-558-3745 (toll free) or 1- 212-723-6106 (collect). CanWest MediaWorks Inc. is a wholly owned subsidiary of CanWest Global Communications Corp. (NYSE: CWG; TSX: CGS.SV and CGS.NV) -- http://www.canwestglobal.com/-- an international media company. CanWest, Canada's largest publisher of daily newspapers, owns, operates and/or holds substantial interests in newspapers, conventional television, out-of-home advertising, specialty cable channels, radio networks and web sites in Canada, New Zealand, Australia, and the Republic of Ireland. * * * CanWest Global's 7-5/8% senior notes due 2013 carry Moody's Investors Service's Ba3 rating and Standard and Poor's B- rating. CATHOLIC CHURCH: Professionals Directed to Make Full Disclosure --------------------------------------------------------------- Judge Perris directs these firms to file supplemental statements pursuant to Rule 2014 of the Federal Rules of Bankruptcy Procedure to disclose whether any of their members or employees working on Portland's Chapter 11 case are members of the defendant classes: * Tonkon Torp, LLP, * Greene & Markley, P.C., KPMG, LLP, and * Mesirow Financial Consulting, Inc. Judge Perris also orders these entities to disclose in their 2014 Statements whether any of the individual members or employees of their firms involved in the Archdiocese's Chapter 11 case are members of the defendant classes: -- Any accountants or financial advisors applying to be appointed in the future; and -- Any appraisers, brokers, or sales agents who may testify as to value of estate assets. In the event that the individuals working on the Chapter 11 case are replaced or assisted by other individuals not currently working on the case, Judge Perris says the Professionals have a continuing duty to file updated 2014 Statements to disclose whether the individuals are members of the defendant classes. As previously reported in the Troubled Company Reporter on August 23, 2005, Paul E. DuFresne asked the U.S. Bankruptcy Court for the District of Oregon to order all entities which have previously filed statements pursuant to Rule 2014 of the Federal Rules of Bankruptcy Procedure to file revised statements that explicitly disclose whether or not the filing entity is a member of either or both of the Defendant classes. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHESAPEAKE ENERGY: Moody's Upgrades Preferred Stock Rating to B2 ---------------------------------------------------------------- Moody's upgraded to Ba2 from Ba3 Chesapeake Energy's senior unsecured note and Corporate Family Ratings, to B2 from B3 its preferred stock rating, and confirmed its SGL-2 liquidity rating. The rating outlook has been positive and is now stable. The upgrade is largely driven by: * the accumulated scale and strengths of CHK's operating and asset profile relative to its ratings and partly by its recent $301 million common equity offering; * conversion of $161 million in convertible preferred stock to common since May 2005 ($116 million this quarter); and * $345 million convertible preferred stock issue. The 2 new issues refinanced acquisition bank debt, increased cash, and reduced net leverage. The price outlook remains supportive of underlying credit accretion from reinvestment of flush cash flow on visible drilling inventory. Scale, diversification, production visibility, the leveraged operating margin (after roughly $120 million of annualized capitalized G&A and interest expense) and price outlooks, cash flow cover of sustaining capital, liquidity, and underlying capacity to reduce debt if it slowed its acquisition pace are together acceptable, relative to the new ratings, in spite of CHK's continuing equity calculus to carry high leverage on proven developed (PD) reserves. Enterprise value is now in the $17 billion range. Year-end 2005 results will permit a deeper review of the degree of true underlying progress, to which the stable outlook may be sensitive. Results of heavy 2005 internal reinvestment results and the components and quality of CHK's reserve portfolio progression will be evaluated with year-end FAS 69 disclosures and other sources. Leveraged acquisitions in the meantime, without adequate de-leveraging cash flow or common equity in sight, could pose further risk to the outlook or the ratings. Historically high expected prices add a degree of risk mitigation, though much of that is consumed too by elevated leverage on PD reserves and aggressive full-priced up-cycle acquisitions often containing low proportions of current production, and historically high proportions of capital spending needs and drilling, completion, and performance risk before acquisition prices can be rationalized by results. Still, capital at risk in CHK's well over $2 billion internal capital spending budget is diversified across many onshore basins, plays and play types, several of which have early stage potential for material growth but not with out attendant risk. Important support comes from: 1) the risk mitigation benefit of CHK's accumulated comparatively large onshore reserve and production scale; 2) relatively high degree of onshore basin diversification; 3) learning curve, oilfield service, and cost benefits of comparatively concentrated operations in 4 of those basins in the Mid-continent, enabling competitive unit full-cycle economics; 4) a relatively durable production base as indicated by a roughly 7.5 year PD reserve life and very large diversified drilling inventory. A core rating restraint remains a corporate finance strategy employing a high proportion of convertible preferred funding in lieu of more common equity funding of acquisitions, especially in light of CHK's long series of aggressive acquisitions that also complicate the task of assessing organic performance. This is partly mitigated by CHK's history of pursuing conversion of convertibles to common equity rather than tendering for them in exchange for cash or debt securities. CHK's 103% rise in equity valuation so far this year also puts more of its convertibles in the money. Nevertheless, during CHK's last three years of rapid, highly capital intensive, acquisition-driven growth, at a time of record oil and gas prices and sector equity valuations, Moody's has been concerned that CHK's relative equity performance, coupled with its equity strategy and shareholder objectives, have not been sufficient for CHK to justify issuing more common equity acquisition funding. Still, CHK is one of the three largest speculative grade exploration and production firms in Moody's rated universe and by far the firm pursuing the most rapid acquisition driven growth, with its inherent risks, in the speculative grade exploration and production sector. While there is no assurance that a firm in rapid growth mode will not overreach, underlying organic numbers so far indicate satisfactory fallback support for bondholders if CHK had to adjust course. Moody's notes however that the ratings would not support material equity buybacks in the absence of an ongoing reduction in leverage. The ratings are demonstratively restrained by adjusted leverage on PD reserves, which is above ranges Moody's targets for a Ba2 Corporate Family Rating. Net debt is a bit lower. A small amount of debt could also notionally be allocated to its non-E&P activity to further marginally reduce net leverage on PD reserves. The ratings are also restrained by acquisition price and performance risk inherent to CHK's drive for step-change growth and captures of key acreage in basins and plays CHK deems important. CHK is perhaps the foremost advocate of up-cycle growth and acreage captures at a time of sector transition and historic acquisition multiples on PD reserves, current daily production and, for probable and possible reserves. For 2005, Moody's anticipates actual 2005 GAAP EBITDA in the $2.4 billion range, gross interest expense of roughly $285 million to $290 million including: * approximately $70 million of capitalized interest; * preferred dividends of roughly $38 million; * capital spending of roughly $2 billion (excluding $1.8 billion of acquisitions so far this year); and * almost $60 million in common dividends. For 2006, Moody's anticipates GAAP EBITDA from existing properties in the $2.6 billion to $2.85 billion range, depending principally on prices and operating cost inflation. In that scenario, Moody's would anticipate roughly $2.2 billion to $2.4 billion of capital spending, roughly $49 million of preferred and a bit over $65 million of common dividends, and roughly $290 million of interest expense (including approximately $75 million of capitalized interest expense). Moody's marks CHK's pro-forma net unadjusted debt leverage on pro- forma PD reserves at roughly $6.67/BOE of PD reserves; net Lease Adjusted Debt of $6.90/BOE of PD reserves; and even higher leverage as measured by our core leverage test, which includes net Lease Adjusted Debt plus 50% of Preferred Stock, divided by PD reserves, to render fully adjusted leverage of $7.80/BOE of PD reserves. These metrics would be somewhat lower if a small portion of debt was notionally allocated to CHK's significant non- E&P activity. Conventional debt-to-capital leverage is in the 50% range. Based on CHK's internal engineering, Moody's estimates pro-forma PD reserves to be roughly 621 mmboe and total reserves to be roughly 994 mmboe. Pro-forma production is in the range of 216,000 BOE per day. Par value of pro-forma debt is approximately $4.343 billion, pro-forma preferred stock is approximately $1.140 billion, and capitalized operating leases approximate $140 million. At this juncture, prior to year-end 2005 FAS 69 data, CHK's pro- forma full-cycle costs appear to be running in the $24/BOE range, with an upward bias due to expected much higher 2005 organic unit finding and development costs and acquisition costs across the sector. Unit production costs approximate $6.33/BOE, G&A expense (including capitalized G&A) approximates $1.90/BOE, pro-forma gross interest and preferred dividends approximates $4.60/BOE, and pro-forma three year average all-sources reinvestment costs appear to be in the $11/BOE range with a distinct upward bias when updated for year-end 2005 organic reinvestment results. While Moody's expects CHK to fully spend discretionary cash flow and expects no internal debt reduction, the rating agency also notes that reinvestment of historically high cash flows could drive material organic reserve and production growth. Though Moody's is mindful of rising finding and development costs and rig day rate and oilfield service inflation, CHK appears to continue show adequately competitive unleveraged and leveraged unit full cycle costs, resulting in competitive Unleveraged and Leverage Full Cycle Ratios at expected prices. In the current price environment, CHK's margins and costs are driving a healthy Leveraged Full-Cycle Ratio of somewhat over 250%, indicating sound coverage of interest, preferred dividends, and sustaining capex with ample cushion to fund substantial growth capital spending or to absorb price and underperformance risk. Moody's views leveraged full-cycle ratios exceeding 200% to be quite sound but not robust relative to the leading exploration and production firms. To update Moody's view on CHK's unit full-cycle economics, its year-end 2005 reserve replacement, reserve replacement components, reserve replacement cost, reserve replacement cost components, and organic sequential quarter production trends would need to confirm, within reason, the operating profile indicated by its publicly released internal engineering report as of June 30, 2005 as well as its production guidance. Moody's confidence in CHK's year-end engineering would increase if was conducted by one third party engineering firm rather than the current six and if a lower percentage (now 26%) of reserves was internally engineered. CHK's could firm if not improve upon the stable outlook by: * reducing lease-adjusted leverage on PD reserves; * generating sound year-end 2005 organic reserve replacement and organic and all-sources reserve replacement costs; * maintaining forward momentum on organic production gains overall; * roughly achieving its drilling and production objectives on acquired properties, demonstrating sound acquisition evaluation; and * funding new acquisitions with suitable levels of common equity. However, given the equity market's notation of volume per share and capital employed per share metrics, CHK may face resistance to issuing sufficient common equity funding for acquisitions to reduce leverage while still in rapid acquisition mode. CHK's drilling inventory spans a wide range of high cost/high impact and lower cost/lower risk locations, at deep, medium, and shallow geologic depths, and across a wide range of conventional reservoir and unconventional resource plays. Its high impact locations tend to target deeper, more challenging, complex geology and the unconventional plays will take time to assess their proportional contribution to growth. While Moody's notes that a very high proportion of its announced drilling locations are in unconventional resource plays still under evaluation, CHK nevertheless still has a large diversified inventory that it can exploit over a wide range of price environments. In its third quarter 2005 acquisitions, CHK paid: * a full $74,545/boe per daily unit of acquired production; * a high $14.24/boe for proven reserves; * an extremely high $47.70/boe of PD reserves; and * roughly $16/boe of proven reserves fully loaded for future development capital spending. Subsequent drilling and completion results and costs on the high proportions of proven undeveloped and probable locations contained in those properties will determine if CHK achieves its desired acquisition economics. Chesapeake Energy Corporation is headquartered in Oklahoma City, Oklahoma. CHURCH & DWIGHT: Buying P&G's SpinBrush Business for $105 Million ----------------------------------------------------------------- Church & Dwight Co., Inc (NYSE:CHD) has entered into a definitive agreement to purchase the SpinBrush toothbrush business from The Procter & Gamble Company. Church & Dwight will pay $75 million in cash at closing, plus an inventory settlement amount following the business transfer and additional cash payments of up to $30 million based on the near-term performance of the business. The transaction is expected to be completed in the fourth quarter of 2005. The transaction and its terms are subject to review and approval by regulatory authorities such as the FTC and the European Commission. SpinBrush is a leader in the battery-powered segment of the toothbrush category with a range of product offerings for both adults and children. Sales of the business for the year ended June 30, 2005 were $110 million, over 80% of which were in the in the U.S. and Canada. "This acquisition provides us with an attractive brand in the toothbrush segment and strengthens our strategically important oral care business. The proven cleaning efficacy of power brushing enhances our position as a provider of serious oral care products," commented James Craigie, President and CEO of Church & Dwight. Church & Dwight markets Arm & Hammer(R) toothpaste in the U.S. and several other countries. Following a voluntary recall of certain SpinBrush products in March 2005, Procter & Gamble is currently launching several new products that are designed to improve cleaning benefits, operational performance and ergonomics. Mr. Craigie added, "We believe that the current product line is well-positioned for growth as manual toothbrush users convert to power brushing." Church & Dwight Co., Inc. manufactures and markets a wide range of personal care, household and specialty products, under the ARM & HAMMER brand name and other well-known trademarks. In addition to Arm & Hammer toothpaste, the Company's oral care portfolio includes the Mentadentr brand of toothpaste and toothbrushes, and Close-upr, Aimr and Pepsodentr toothpastes, all of which are sold in the U.S. and Canada, and the Pearl Drops(R) brand of tooth polish which is primarily sold in Europe. * * * As reported in the Troubled Company Reporter on, Dec.13, 2004, Standard & Poor's Ratings Services assigned a 'B+' debt rating to Church & Dwight Company Inc.'s $175 million senior subordinated notes due 2012. In addition, Standard & Poor's affirmed its ratings on Princeton, New Jersey-based Church & Dwight, including its 'BB' corporate credit rating. Approximately $853 million of pro forma debt is outstanding. As reported in the Troubled Company Reporter on, Dec. 10, 2004, Moody's Investors Service assigned a Ba3 rating to the $175 million senior subordinated notes to be issued by Church & Dwight, Inc. Existing senior unsecured and senior subordinated debt ratings have been upgraded by one notch, to Ba2 and Ba3, respectively. In addition, CHD's Ba2 senior implied and senior secured debt ratings were affirmed and the ratings outlook was revised to positive from stable. CLEARWATER TIMBER: List of 50 Largest Unsecured Creditors --------------------------------------------------------- Clearwater Timber Resources, LLC released a list of its 50 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ David Lynn Grimes $121,273 P.O. Box 115 Green Bank, WV 24944 WV Workers Compensation Commission $109,024 P.O. Box 921 Charleston, WV 25323-0921 Reckart Equipment Company, Inc. $70,627 P.O. Box 216 Beverly, WV 26253 Newlons International Sales, LLC $52,211 Woodford Oil Company $49,790 Hess Oil Company $39,840 David Grimes $36,658 AFCO $27,251 Marlington Electric Company, Inc. $26,890 Marsh Beverage $26,133 Internal Revenue Service $16,593 Pioneer Machinery LLC $14,949 Dixons Truck Stop $13,674 Leslie Equipment Company $12,324 Sam Black Quick Stop $9,644 Glotfelty Enterprises, Inc. $6,804 Mitchell Chevrolet $6,747 Morgan Auto Parts $5,287 Capital One, FSB $4,894 Greenbrier Valley Solid Waste $4,421 David R. Dingus, CPA $4,225 Shenandoah Industrial Rubber Co. $3,800 WV State Tax Department $3,413 Beckley Oil Company $3,394 CitiCapital $3,188 Master Service Mid-Atlantic $2,486 Glades Building Supply, Inc. $2,381 Bostic Oil Company $1,759 Dell Financial Services $1,635 American Express $1,628 Cellular One $1,507 Rupert Oil $1,334 Boxley Aggregates of WV, LLC $1,329 Mountain International Trucks, Inc. $1,222 WV Bureau of Employment Programs $1,212 Jackson Kelly, PLLC $1,162 Guttman Oil Company $1,107 MetalWorks, Inc. $911 Viking Office Products $800 Superior Industrial Laundries, Inc. $778 Valley Supply Company $767 Johnson Simmerman & Broughton, LC $700 Frontier $648 Beckley Welding Supply, Inc. $525 AT&T $520 Southern States Marlinton Coop, Inc. $520 Internal Revenue Service $415 American Red Cross $144 R. Mike Mullens & Assoc., L.C. $125 J.J. Keller & Associates, Inc. $119 Headquartered in Green Bank, West Virginia, Clearwater Timber Resources LLC, -- http://www.frontierfirewood.com/-- sells seasoned firewood in various sizes. The Company filed for chapter 11 protection on Aug. 18, 2005 (Bankr. N.D. W.Va. Case No. 05- 03563). Judy L. Shanholtz, Esq., at McNeer, Highland, McMunn & Varner, L.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million to $10 million. COEUR D'ALENE MINES: Nets $36 Million from Common Stock Offering ---------------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE, TSX:CDM) has priced the sale of 9,863,014 shares of its common stock pursuant to an existing shelf registration as filed with the U.S. Securities and Exchange Commission, resulting in net proceeds of $36 million, before offering expenses. The company intends to use the net proceeds of the offering to fund its previously announced purchase from Perilya Limited (ASX:PEM) of the silver contained at the Broken Hill Mine in Australia. Deutsche Bank Securities Inc. acted as sole bookrunning manager for the stock sale. A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?191 Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile, Bolivia and Australia. * * * As reported in the Troubled Company Reporter on Oct. 4, 2004, Standard & Poor's Ratings Services affirmed its 'B-' corporate credit and senior unsecured debt ratings on Coeur D'Alene Mines Corporation and removed the ratings from CreditWatch, where they were placed on June 1, 2004, with positive implications. S&P said the outlook is stable. Coeur D'Alene, an Idaho-based silver and gold mining company, currently has about $180 million in debt. COMFORCE CORP: Chairman and CEO to Repurchase Up to 260,000 Shares ------------------------------------------------------------------ COMFORCE Corporation (Amex: CFS) reported that John Fanning, its Chairman and CEO, has adopted a stock purchase plan under the SEC's Rule 10b-18 to purchase up to 260,000 shares of COMFORCE's common stock over a six-month period commencing after the Company's release of results for the third quarter, which is expected to be on or about November 3, 2005. At the same time, the Company announced that it has repurchased $2.6 million principal amount of its 12% Senior Notes using available funds under its revolving credit facility. Including this recent repurchase, the Company has repurchased $11.6 million of Senior Notes in 2005 and, since June 30, 2000, the Company has reduced its public debt from $138.8 million to $52.8 million. This has enabled COMFORCE to reduce its annual interest expense by approximately $9.2 million. John Fanning, Chairman and Chief Executive Officer of COMFORCE, commented, "The purchase of shares that I will be making reflects my confidence in the long-term future of COMFORCE, and I am pleased to be able to demonstrate that confidence in the Company through open market purchases of our stock. We are also pleased to announce the further reduction of our high interest rate debt through the repurchase of our Senior Notes and we remain committed to further improving our balance sheet." Separately, COMFORCE announced that its previously disclosed agreement with a medical facility in Southern California to manage its staffing services program of approximately $70.0 million will be not be continued. John Fanning stated, "We are disappointed for the necessity of discontinuing this relationship; however it is our belief that the facility's expectations were unrealistic. We are, however, pleased to report that we are experiencing increasing demand for our RightSourcing Vendor Management Services and expect to replace this business over the next two quarters. Further, we remain fully committed to growing this part of our business." COMFORCE Corporation -- http://www.comforce.com/-- provides specialty staffing, consulting and outsourcing services primarily to Fortune 1000 companies and other large employers. The Company operates in three business segments - Human Capital Management Services, Staff Augmentation, and Financial Outsourcing Services. The Human Capital Management Services segment provides consulting services for managing the contingent workforce through its PRO Unlimited subsidiary. The Staff Augmentation segment provides Healthcare Support Services, including RightSourcing Vendor Management Services and Nurse Staffing Services, Technical Services, Information Technology (IT), Telecom, and Other Staffing Services. The Financial Outsourcing Services segment provides payroll, funding and outsourcing services to independent consulting and staffing companies. COMFORCE has 38 offices nationwide. * * * At June 26, 2005, COMFORCE Corporation's balance sheet showed a $29,183,000 stockholders' deficit, compared to a $29,835,000 deficit at Dec. 26, 2004. CONTRACTOR TECHNOLOGY: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Contractor Technology, Ltd., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Southern District of Texas disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $1,475,000 B. Personal Property $18,750,000 to $62,766,000 C. Property Claimed As Exempt D. Creditor Holding Unknown Secured Claim E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Unknown Nonpriority Claims G. Executory Contracts and Unexpired Leases H. Codebtors I. Current Income of Individual Debtor(s) J. Current Expenditures of Individual Debtor(s) ----------- ----------- Total $20,225,000 to Unknown $64,241,000 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). When the Debtor filed for protection from its creditors, it estimated assets and debts from $20,225,000 to $64,241,000. On June 23, 2005, the Honorable Marvin Isgur converted the Debtor's Chapter 11 bankruptcy case to a Chapter 7 liquidation proceeding and Ronald J. Sommers is appointed as the Debtor's chapter 7 Trustee. CUMMINS INC: Moody's Raises Sr. Unsec. Debt Rating to Ba1 from Ba2 ------------------------------------------------------------------ Moody's Investors Service raised its rating of Cummins Inc.'s debt securities (senior unsecured to Ba1 from Ba2), and also affirmed the company's Ba1 corporate family rating and SGL-1 speculative grade liquidity rating. The rating outlook is changed to positive from stable. The Ba1 corporate family rating reflects: * Cummins' solidly competitive position in the global medium and heavy-duty truck engine markets; and * the recent improvement in the company's credit metrics. This improvement has been driven by the success of Cummins' restructuring initiatives and the strong rebound in North American truck engine demand. These strengths, however, are balanced against the ongoing cyclicality of the global engine market. The upgrade of the senior unsecured rating to Ba1 (equivalent to the Ba1 corporate family rating) recognizes: * that Cummins' $650 million revolving credit facility is unsecured; * the company's previous $385 million credit facility was collateralized by a security interest in substantially all of Cummins' assets and had contributed to the notching differential between the corporate family rating and the senior unsecured rating. Moody's recognizes that outstandings under the credit facility benefit from upstream guarantees from subsidiaries that have considerable assets and earnings. However, the rating agency believes that the degree of structural subordination created by these guarantees is likely to be modest, and consequently does not warrant a notching differential of the senior unsecured debt rating relative to the corporate family rating. If fully utilized, the facility would represent approximately 20% of Cummins' total debt (adjusted for leases and unfunded pensions). However, Moody's expect utilization to be minimal due to Cummins strong cash generation. The SGL-1 rating reflects the company's strong liquidity position that is characterized by: 1) free cash generation that should exceed $400 million during the next twelve months; 2) cash and security balances of over $450 million; 3) the availability of a committed $650 million credit facility that matures in 2009 and that is currently unutilized except for $116 million in letters of credit; 4) a $200 million committed receivable sale facility that matures in 2007; and 5) the ample headroom under the covenant provisions of the credit facility and the receivable sale facility. The positive outlook reflects Moody's expectations that Cummins' debt protection measures will continue to improve as a result of: * the increasing competitiveness and diversification of its operating units; * the strong demand in all of its key markets; and * the prudent financial policies being embraced by management. These financial policies include plans for further debt reductions. The key risk that Cummins will continue to face is the cyclicality in its core truck engine and power generation markets. This cyclicality could be exacerbated by a fall-off in North American engine demand during 2007 as a result of the introduction of more stringent emissions regulations. Nevertheless, Cummins' should be able to weather future cyclical downturns much better than in the past due to: * its growing competitiveness in the truck engine market; * expanding diversification; * an improving balance sheet; and * a commitment to maintain ample liquidity. Despite the severe 2000 to 2003 cyclical downturn in many of Cummins' markets, the company continued to successfully pursue a number of operational initiatives that Moody's believes are helping to build a more robust and sustainable business model. These initiatives include: * establishing long-term supply contracts with major heavy-duty truck manufactures; * successfully introducing its emissions-compliant engine technology during 2001; * increasing the investment in its power generation, components, and distribution businesses; * expanding its international footprint so that non-US operations generate approximately half of total revenues; and * continuing to build a portfolio of successful international engine joint ventures. Cummins is now benefiting from a strong global rebound in demand in all four of its business units: * engines, * power generation, * components, and * distribution. Moody's expects that demand in these areas will remain strong through 2006. As a result of Cummins' operational initiatives and the recovery in its markets, the company's financial performance and credit metrics have improved markedly. Between FYE December 2003 and the LTM to June 2005, key metrics have shown these improvements: * operating margin expanded from 1.5% to 6.7%; * free cash generation grew from break even to a positive $326 million; * interest coverage increased from 1.2x to 4.3x; * free cash flow to debt rose from 0% to 13.5%; and * debt-to-EBITDA declined from 4.3x to 2.2x. Moreover, as Cummins' operational and financial profile has improved, the company has committed itself to further strengthening its balance sheet. During the first quarter of 2005 the company repaid its 6.45%, $225 million notes that were due in March 2005. This brought its ratio of debt to capital to the high end of its targeted 35% to 45% range. Cummins expects to make further debt reductions that will take it to the low end of this range. Factors which could contribute to an improvement in Cummins' rating include the company's remaining on track for delivering further improvement in its credit metrics for fiscal 2005 and 2006. Metrics which would be supportive of a higher rating include: * free cash flow exceeding $400 million; * operating margin approximating 7%; * interest coverage of about 5.0x (including joint venture dividends as a component of EBIT); and * debt to EBITDA of less than 2.0x. A continued commitment to further debt reductions would be an additional positive. Along with these financial benchmarks, a higher rating would have to be supported by a business model that is less vulnerable to future downturns. Factors which might result in pressure on the company's outlook include a moderation in the pace of operational and financial improvement that is delivered during the balance of 2005 and into early 2006, or a retreat from the company's state objective of further reducing debt and strengthening its balance sheet. Cummins Inc., headquartered in Columbus, Indiana, is a leading producer and distributor of: * engines, * power generation systems, and * engine-related components. DANA CORP: Moody's Reviews Ba2 Corporate Family & Debt Rating ------------------------------------------------------------- Moody's Investors Service has placed the ratings of Dana Corporation and Dana Credit Corporation under review for possible downgrade. The action follows the company's announcement of: * a significant downward revision in its guidance for 2005 full year earnings; * a possible requirement for a substantial valuation allowance against its U.S. deferred tax assets; * the potential re-statement of its second quarter financial statements; and * the impact the reduced earnings guidance and any required deferred tax allowance may have on certain financial covenants under its multi-year bank credit facility. The company's earnings expectations have been adversely affected by higher raw material and energy costs which are now anticipated to be above earlier assumptions. In addition, its Commercial Vehicle segment has been unable to achieve targeted cost reductions and manufacturing efficiencies. Furthermore, reduced light vehicle production volume has affected results at its Automotive Systems business. Ratings placed under review: Dana Corporation: * Corporate Family, Ba2 * Senior Unsecured, Ba2 Dana Credit Corporation: * Senior Unsecured medium term notes supported by Dana, Ba2 Ratings lowered: Dana Corporation: * Speculative Grade Liquidity to SGL-3 from SGL-2 Dana has announced a revision to its 2005 full-year earnings guidance to a range of $90-$105 million from $196-$219 million, a reduction of 53% from the midpoint of the respective ranges (the ranges are prior to any gains or losses on divestitures and asset sales or other unusual items). For the first half of 2005 Dana reported net income, exclusive of unusual items and prior to any restatement, of $71 million. Based on the revised full year guidance, the company's earnings during the second half of the year will show a significant deterioration from prior expectations. At June 30, 2005 the company's deferred tax asset was approximately $740 million. Any write down of the asset would not have a cash impact, but would affect reported GAAP earnings and book net worth, which was roughly $2,358 million at the same date. The review will focus on: * the impact of prospective lower earnings and cash flow to Dana's credit metrics; and * the actions that the company will take to correct these shortfalls. The review will also consider: * the implications for Dana's liquidity profile of reduced cash flow and potentially narrowed headroom under financial covenants; * potential implications for existing debt holders of actions necessary to achieve covenant waivers or amendments if needed; and * the significance of internal control matters, if any, that may arise from the investigations undertaken by the company and its auditors into the matters leading to a potential re- statement. In addition, the review will consider any changes in strategy or the timing of strategic actions which may be considered by management and how these may affect the risk profile of Dana. The SGL-3 rating represents adequate liquidity over the next twelve months. At June 30 the company had approximately $666 million of cash on its consolidated balance sheet. This amount continues to exceed scheduled maturities and amounts required for cash collateral for letters of credit and surety bonds ($71 million at June 30) as well as minimal operating balances for foreign and domestic operations. Cash flow from operations is anticipated to be weaker than prior expectations and does have seasonal variations driven by OEM production schedules. External liquidity is provided by the company's $400 million revolving credit which is committed until March 2010, subject to covenant compliance, and a $275 million accounts receivable securitization facility which requires annual renewal. As reported by the company, the compliance with the financial covenants under the bank credit facility (next measured at September 30) is under review and any non-compliance could affect amounts available. Dana has initiated discussions with its banks in this regard. At June 30 the company had $175 million borrowed under the revolver and $110 million outstanding under the accounts receivable program. Financial covenants include: * net senior debt/tangible net worth (maximum of 1.1:1); * EBITDA less capex/Interest (minimum of 1.25 times at September 30 but rising to 2.25 times at December 31, and 2.5 times thereafter); and * net senior debt/EBITDA (maximum 3.25 times at September 30, 2.75 times at December 31, and 2.5 times thereafter). The accounts receivable securitization facility could be terminated by its providers if Dana's credit ratings are lowered below Ba3 by Moody's and BB- by Standard & Poors. The bank credit facility is currently unsecured and provides some flexibility for alternate liquidity arrangements. Dana Corporation, headquartered in Toledo, Ohio, is a global leader in the engineering, manufacture and distribution of products and services for the: * automotive, * engine, * heavy truck, * off-highway, * industrial, and * leasing markets. Dana Credit Corporation is a wholly owned leasing and finance subsidiary of Dana Corporation which is in the process of being liquidated. Dana had sales of $9.1 billion in 2004 and employs 46,000 people in 28 countries. DELTA AIR: Wants Court Nod on Davis Polk Retention as Lead Counsel ------------------------------------------------------------------ Delta Air Lines Inc. and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's permission to employ Davis Polk & Wardwell as their attorneys in their Chapter 11 cases. Edward H. Bastian, executive vice president and chief financial officer of Delta Air Lines, Inc., relates that the Debtors have selected Davis Polk because of the firm's extensive experience and knowledge in both corporate transactional work and, in particular, its recognized expertise in bankruptcy and restructuring, and other areas. Davis Polk has been actively involved in a wide variety of major Chapter 11 cases. Mr. Bastian notes that Davis Polk is also familiar with the Debtors' businesses and financial affairs. The firm has provided advice to the Debtors on a range of issues for over 20 years, in areas including aircraft leasing, credit and capital markets transactions, mergers and acquisitions and litigation. In March 2004, the Debtors engaged Davis Polk to assist and advise them with respect to formulating, evaluating, and implementing various restructuring, reorganization and other strategic alternatives. Most recently, the firm assisted and advised the Debtors in connection with the preparation for, and commencement of, their Chapter 11 cases. Under its engagement with the Debtors, Davis Polk agrees to: (a) take necessary or appropriate actions to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (b) prepare on the Debtors' behalf, necessary or appropriate motions, applications, answers, orders, reports and other papers in connection with the administration of the Debtors' estates; (c) provide advice, representation, and preparation of necessary documentation and pleadings regarding debt restructuring, statutory bankruptcy issues, postpetition financing, securities laws, real estate, employee benefits, environmental, business and commercial litigation, tax, aircraft financing, and, as applicable, asset dispositions; (d) counsel the Debtors with regard to their rights and obligations as debtors-in-possession, and their powers and duties in the continued management and operation of their businesses and properties; (e) take necessary or appropriate actions in connection with a plan or plans of reorganization and related disclosure statements and all related documents, and further actions that may be required in connection with the administration of the Debtors' estates; and (f) act as general bankruptcy counsel for the Debtors and perform all other necessary or appropriate legal services in connection with the Debtors' Chapter 11 cases. Davis Polk will be paid at their usual hourly rates: Professional Hourly Rate ------------ ----------- partners $495 to $785 counsel $495 to $785 associates $195 to $475 paraprofessionals $70 to $220 staff $70 to $220 The Debtors will reimburse Davis Polk for actual and necessary expenses incurred. During the 12-month period prior to the Petition Date, Davis Polk received from the Debtors $15,215,436. The parties established retainer balances beginning June 2004. As of the Petition Date, Davis Polk held a retainer equal to $3 million minus the amount of its final prepetition invoice. John Fouhey, Esq., a partner at the Firm, assures the Court that Davis Polk and its professionals: (a) are not creditors, equity security holders or insiders of the Debtors, except in de minimis ways; (b) are not and were not investment bankers for any outstanding security of the Debtors; (c) have not been, within three years before the Petition Date, investment bankers for a security of the Debtors, or an attorney for an investment banker in connection with the offer, sale, or issuance of a security of the Debtors; (d) are not and were not, within two years before the Petition Date, a director, officer, or employee of the Debtors or any investment banker; and (e) do not have an interest materially adverse to the interest of the Debtors' estates or of any class of creditors or equity security holders. Mr. Fouhey, however, discloses that Davis Polk has represented or transacted with, among others, these potential parties-in- interest who together with their affiliates comprised greater than 1% of the firm's revenues during the year ended December 31, 2004: -- Comcast Corporation, -- Bank of America, -- Philip Morris Capital Corporation, -- Credit Suisse Leasing, -- The Royal Bank of Scotland, PLC, -- JPMorgan Chase & Co., -- Citigroup Inc., -- Morgan Stanley, -- Deutsche Bank Aktiengesellschaft, -- Deloitte & Touche LLP, and -- Travelers, formerly known as St. Paul Travelers, and -- ABN AMRO Bank, N.V. Mr. Fouhey believes that Davis Polk is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). The firm will conduct an ongoing review to ensure that no disqualifying circumstances have arisen. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.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 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Wants to Assume & Amend American Express Agreements -------------------------------------------------------------- Pursuant to Section 365(a) of the Bankruptcy Code, Delta Air Lines Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve the amendment and assumption of their agreements with American Express Travel Related Services Company, Inc. A. Card Service Agreement Pursuant to an Airline Card Service Agreement, dated as of January 1, 2001, Amex cardmembers are permitted to charge goods and services on their Amex cards, including goods and services yet to be performed by Delta. Amex is entitled to reimbursement from Delta for payments made to Delta for charges and Cardmembers are entitled to credits, and Amex is entitled to recoup, offset and deduct in the ordinary course of business the amount of those reimbursements and credits from sums otherwise payable to Delta. In addition, Amex is entitled to withhold payments owed by Amex to Delta to protect its financial exposure with respect to the Agreement upon the occurrence of certain conditions. Because a majority of transactions involving the Amex Card are processed electronically, the Debtors normally receive payment from Amex on a timely and regular basis. In 2004, sales on Amex Cards accounted for approximately $6.11 billion, or 45%, of Delta's total credit card sales. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, contends that the Debtors' reorganization efforts will be impeded without the revenues currently received pursuant to the Card Service Agreement. B. Co-Branded Card Agreement and the MR Agreement Under a Delta American Express Co-Branded Credit Card Program Agreement, dated as of January 1, 2001, the Debtors granted Amex and its affiliates the sole right to issue Amex Cards branded with the Delta logo under the Delta/American Express SkyMiles Credit Card Program. Under the Co-Branded Program, holders of Co-Branded Cards earn frequent flier miles under the Debtors' frequent flier program for every dollar charged using the Co-Branded Card. The Co- Branded Cardholder can then redeem the Miles for travel with the Debtors and certain other companies that participate in the SkyMiles Program. Pursuant to a Membership Rewards Agreement, dated as of Jan. 1, 2001, the Debtors participate in the American Express Membership Rewards Program, a loyalty program run by Amex. Under the Membership Rewards Program, Amex awards points to Program members for the use of certain Amex Cards other than the Co-Branded Card. Members can redeem the points for various awards issued by Amex and other participants in the Program. Amex pays the Debtors hundreds of millions of dollars annually pursuant to the Co-Branded Card Agreement and the MR Agreement. Mr. Huebner asserts that the two Agreements provide a substantial net benefit to the Debtors' business and are an important component of the Debtors' branding and customer loyalty initiatives. Failure to maintain these arrangements, and the revenue they provide, could seriously hamper the Debtors' reorganization efforts, he says. C. Purchasing Card Agreement and Corporate Card Agreement Pursuant to a Corporate Purchasing Card Account Agreement, and a Multinational Corporate Card Account Agreement, both dated December 1, 2002, Amex issues commercial card products, which enable the Debtors' employees to charge business-related travel and entertainment expenses, and allow the Debtors to procure goods and services from third-party vendors. According to Mr. Huebner, the commercial card accounts are important to the Debtors' cash management and accounting functions. These cards are deeply embedded in the Debtors' daily operations and are used to purchase, among other things, spare engine parts and other maintenance needs, often on an emergency basis. "Loss of the cards would seriously disrupt the Debtors' daily operations and inconvenience customers." D. Crown Room Club Agreement and Super Premium Card Partner Agreement Pursuant to a Crown Room Club Agreement, dated as of January 1, 2003, the Debtors provide access to Delta Crown Room clubs to holders of certain Amex Cards. Amex pays Delta a fixed fee for each visit, as provided in the Crown Room Club Agreement. Pursuant to a Super Premium Card Partner Agreement, dated as of May 10, 1999, the Debtors extend privileges accorded under the Gold Medallion level of the SkyMiles Program to holders of super premium Amex Cards. Amex pays the Debtors a set fee for each holder of those Amex Cards enrolled as a Gold Medallion level participant in the SkyMiles Program. The Crown Room Club Agreement and the Super Premium Card Partner Agreement result in significant revenue for the Debtors and increase brand loyalty, Mr. Huebner tells the Court. Amendments to Agreements Beginning November 2004, the Debtors and Amex entered into transactions that are part of a complex consensual restructuring of Delta's financial affairs. According to Mr. Huebner, Amex paid $500 million to Delta as an advance payment for the purchase price of Miles to be purchased by Amex in the future pursuant to a supplement to the Co-Branded Card Agreement, and the supplement to the MR Agreement, each dated as of November 30, 2004. Delta's subsidiaries executed guaranties of Delta's Obligations in favor of Amex for the benefit of Amex and American Express Bank, F.S.B. In addition, Delta, Delta Loyalty Management Services, LLC, and the Guarantors granted to Amex liens, offset rights, recoupment rights, and security interests in certain of their assets as security for their Obligations to Amex pursuant to various security agreements. Amex also received the right to award a significant number of additional Miles to Cardholders at the Debtors' expense. In connection with a $630 million Credit Agreement, dated November 30, 2004, between the Debtors and General Electric Capital Corporation, the Debtors submitted two groups of assets as collateral: (a) substantially all of the assets of Delta Loyalty Management Services, LLC, related to the Co-Branded Card Agreement and the MR Agreement or the SkyMiles Program, including without limitation, payment Co-Branded intangibles and rights under the Co-Branded Card Agreement and the MR Agreement, and (b) all right, title and interest of Delta in the Co-Branded Card Agreement and the MR Agreement and the Card Service Agreement. Pursuant to an Intercreditor Agreement, Amex and GECC agreed that: (i) in and with respect to the SkyMiles Collateral, Amex would have senior and prior lien priority with respect to the Advance Payment Transaction and the Card Service Agreement, and GECC as Collateral Agent would have junior and subordinate lien priority with respect to the Pre-Petition Credit Facility, and (ii) in and with respect to the Pre-Petition Credit Facility Collateral, GECC as Collateral Agent would have senior and prior lien priority with respect to the Pre-Petition Credit Facility, and Amex would have junior and subordinate lien priority with respect to the Advance Payment Transaction. Pursuant to the Supplements and the Intercreditor Agreement, Amex agreed that it would consensually subordinate its junior and subordinate interests in the Pre-Petition Credit Facility Collateral by an agreed-upon sum subject to certain conditions, including the Debtors' assumption of the Co-Branded Card Agreement and the MR Agreement and the Card Service Agreement. On September 9, 2005, Amex began establishing a special cash reserve by withholding payments it owed to Delta under the Card Service Agreement. After negotiations, American Express Bank, F.S.B., Delta and DLMS entered into a Modification Agreement, dated September 15, 2005, pursuant to which, Amex agrees to: (i) suspend withholding payments into the Special Cash Reserve under the Card Service Agreement after Sept. 21, 2005, and recommence the funding of the Special Cash Reserve up to $350 million in the aggregate only if an order has not become final and non-appealable by October 11, 2005, (ii) release the entire amount of the Special Cash Reserve upon the satisfaction of certain specified conditions, including the order becoming final and non-appealable, and (iii) amend the trigger events giving rise to its rights to establish cash reserves under the Card Service Agreement pursuant to the Chapter 11 Addendum to the Card Service Agreement. Pursuant to the Modification Agreement, Amex has also irrevocably agreed to subordinate all of its liens in certain substantial collateral to a secured debtor-in-possession financing facility with, among others, GECC in an amount not to exceed $1.7 billion. Mr. Huebner tells the Court that the Debtors' ability to obtain the DIP Facility is greatly facilitated by Amex's consent to subordinate all of its liens in certain substantial collateral, and Amex's agreement to so consent is contingent upon the entry of the Order and the interim authorization of the Amex DIP Loan. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.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 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Fitch Places ETCs and EETCs on Rating Watch Negative --------------------------------------------------------------- Fitch Ratings has placed two Equipment Trust Certificate (ETC) and four enhanced equipment trust certificate (EETC) transactions on Rating Watch Negative. The Rating Watch Negative reflects the bankruptcy filing of Delta Air Lines, Fitch's subsequent downgrade of Delta's issuer default rating to 'D', as well as the outlook for the aircraft that support the ETC and EETC transactions. During the first 60 days of its bankruptcy, Delta is not required to make payments to support its ETC, EETC and other aircraft financings. According to U.S. Bankruptcy Law, Delta must determine whether it will resume payments or permanently stop payments during the 60-day period. Renegotiations of payments could also occur. Permanent stoppage of payments would trigger a return of the aircraft collateral. Interest and principal on the ETCs and EETCs are paid every six months. Only one of the six ETCs/EETCs below has missed a payment, Delta Air Lines 1992 ETC. The four EETCs have liquidity facilities sufficient to pay interest on the rated classes for three payment periods, while the two ETCs do not. While it is difficult to determine which payments Delta will continue, renegotiate, or stop permanently, Fitch expects that as part of its bankruptcy Delta will likely downsize its fleet and eliminate non-core aircraft. If aircraft are returned, the ETC/EETC holders will look to sell or lease the aircraft. The ratings placed on Rating Watch Negative are: E-EETC transaction Delta Air Lines European Enhanced Equipment Trust Certificates, series 2001-2 -- Class A 'BBB-'; -- Class B 'CCC'. EETC transactions Delta Air Lines pass-through certificates, series 2000-1 -- Class A-1 'B'; -- Class A-2 'B'; -- Class B 'CCC'; -- Class C 'CC'. Delta Air Lines pass-through certificates, series 2001-1 -- Class A-1 'B'; -- Class A-2 'B'; -- Class B 'CCC'; -- Class C 'CC'. Delta Air Lines pass-through certificates, series 2002-1 -- Class C 'CCC'. ETC transactions Delta Air Lines equipment trust certificates, series 1992 -- Class B2 'CC'. Delta Air Lines equipment trust certificates, series 1993 -- Class A2 'CC'. DOE RUN RESOURCES: Reports $178.98-Mil Equity Deficit at July 31 ---------------------------------------------------------------- The Doe Run Resources Corporation delivered its quarterly report on Form 10-Q for the quarter ending July 31, 2005, to the Securities and Exchange Commission on September 14, 2005. The Company reported a $10,332,000 net income on $257,109,000 of net revenues for the quarter ending July 31, 2005. At July 31, 2005, the Company's balance sheet shows $481,824,000 in total assets and a $178,981,000 stockholders deficit. Gross margin on sales decreased from $33.5 million in the 2004 quarter to $29.2 million in the 2005 quarter and increased from $65.8 million in the 2004 period to $94.9 million in the 2005 period. Selling, general and administrative costs increased $4.3 million in the 2005 quarter over the 2004 quarter and $10.3 million in the 2005 period over the 2004 period. Other operating expenses decreased $0.1 million from the 2004 quarter to the 2005 quarter and increased $1 million from the 2004 period to the 2005 period. KPMG LLP issued unqualified opinions on the Company's 2002, 2003 and 2004 audited financial statements but expressed substantial doubt about the Company's and Doe Run Peru's ability to continue as going concerns due to net capital deficiencies, substantial debt service requirements, and significant capital requirements under environmental commitments. On July 27, 2004, the Company decided to replace KPMG. The Company hired Crowe Chizek and Company LLC on August 25, 2004. A full-text copy of Doe Run's latest quarterly report is available at no charge at http://ResearchArchives.com/t/s?192 The Doe Run Corporation is one of the world's leading providers of premium lead and associated metals and services. DURANGO GEORGIA: St. Marys Submits $15 Million Stalking Horse Bid ----------------------------------------------------------------- Sept. 19 /PRNewswire/ St. Marys Redevelopment Group, LLC, submitted a stalking horse bid to acquire the assets held by the Bankruptcy Estate of Durango Georgia Paper Company in order to redevelop the site of the former Durango Paper Mill in St. Marys, Georgia, into a mixed-use development. St. Marys is a sister company of RealtiCorp, a Greenville, South Carolina commercial real estate development firm. A "stalking horse bidder" in a bankruptcy case agrees to offer a bid that sets a floor price for other bids at a subsequent auction to be conducted by the Trustee. The stalking horse bidder is allowed to submit higher bids at the auction, along with the other bidders. In addition, the stalking horse bidder is allowed to recover its costs if it is ultimately outbid. As part of the stalking horse bid, St. Marys proposes to pay to the Trustee a percentage of revenues produced from the property's redevelopment, either via a joint venture agreement with the Trustee or a similar revenue sharing agreement. Under the terms of this bid, the Bankruptcy Estate would receive $15 million in cash at closing, plus 18.5 percent of all future gross revenues from development sales and from sale of the equipment out of the closed paper mill. "This is an extraordinary site with views that are unmatched in the area," stated J.B. Holeman, project manager for St. Marys Redevelopment Group. "We believe that what we are proposing will be a perfect fit for the city of St. Marys and the surrounding area. Our plans for the 700-acre site presently include 1,100 residential units, a hotel and several restaurants," he added. The development may also contain a marina. Anthony Schnelling, the court-appointed Trustee for the Durango estate, commented, "This stalking horse bid is materially higher and better than the other offers." Mr. Schnelling observed that as Trustee, he is charged with selecting the "highest and best" bid that is submitted, and that the highest bid might not necessarily be the best. "I have a fiduciary responsibility to Durango's creditors to provide them with a maximum recovery on their claims against the Bankruptcy Estate. In making this determination, I plan to be very sensitive to the impact that this decision will not only have on the creditors, but also on the citizens of St. Marys and the surrounding area." A court-supervised auction to determine the ultimate owner of the assets of the Durango estate will be held on Dec. 6, 2005. Headquartered in St. Mary's, Georgia, Durango Georgia -- http://www.durangopaper.com/-- was a nationally recognized bleached board and kraft paper producer in the U.S. offering coast-to-coast and international service. On Oct. 29. 2002, Durango's creditors filed an involuntary chapter 7 petition against it and the Company consented to the petition. The Company filed for chapter 11 relief on Nov. 20, 2002 (Bankr. S.D. Ga. Case No. 02-21669). George H. Mccallum, Esq., at Stone & Baxter, LLP, Kate D. Strain, Esq., at Hunter, Maclean, Exley & Dunn, PC, and Neil P. Olack, Esq., at Duane Morris LLP, represent the Debtor in its restructuring efforts. Bridge Associates, LLC, was appointed as Trustee in the Case under the terms of a Plan of Liquidation approved by creditors and confirmed by the Bankruptcy Court in June 2004. EAGLEPICHER HOLDINGS: Wants to Modify Mexican Credit Agreement -------------------------------------------------------------- EaglePicher Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Ohio, Western Division, for authority to amend the terms of the "Second Amended and Restated Running Account Line of Credit Agreement" between EaglePicher Automotive, Inc., and EPTEC S.A. De C.V., a non-debtor affiliate. EP Automotive provides a $20 million revolving unsecured line of credit to EPTEC pursuant to the agreement. Interest from the credit agreement is payable to EP Automotive on an annual basis. Under Mexican tax law, EPTEC is required to remit an "interest payable tax" to the government equal to 15% of its unpaid yearly interest. EP Automotive and EPTEC want to amend the agreement so that interest will be payable every three years, as opposed to the current annual payment. Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey LLP, tells the Bankruptcy Court that the proposed modification will enable EPTEC to lawfully avoid certain taxes and penalties that might be assessed against it by the Mexican government. Mr. Lerner adds that the amendment will not alter the amount or timing of principal payments due under the loan or the amount of interest payable under the loan. EPTEC reports that it is obliged to pay Interest Payable Tax totaling $154,000, plus a $34,000 penalty, for 2003 and $171,000 for 2004 due to its non-payment of interest to EP Automotive. In addition, the Mexican government will assess penalties for the 2004 tax year if EPTEC fails to pay the 2004 Interest Payable Tax this month. A copy of the credit agreement is available for a fee at: http://www.researcharchives.com/bin/download?id=050919203907 Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P. represents the Debtors. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. ENRON CORP: Inks Settlement Pact Resolving TPL Guaranty Claims -------------------------------------------------------------- Enron Capital & Trade Resources Limited, an affiliate of Enron Corp., and Teesside Power Limited are parties to a Power Purchase Agreement, dated June 26, 1991, as amended. Enrici Power Marketing Limited, an affiliate of Enron, and TPL are parties to a Power Purchase Agreement dated June 26, 1991, as amended. On Nov. 29, 2001, ECTRL was placed into administration in the United Kingdom. In connection with its subsidiaries' obligations under the PPAs, Enron issued guaranties in favor of TPL: Issue Date Subsidiary ---------- ---------- 06/26/1991 Enrici 06/26/1991 Enron Power (U.K.) Limited. 12/31/1998 Enron Europe Limited. 06/21/2000 ECTRL On October 11, 2002, TPL filed Claim No. 10784 as a general unsecured claim against Enron for GBP597,357,687, equivalent to $849,263,424, plus contingent unliquidated amounts based on the ECTRL Guaranty. TPL filed contingent and unliquidated claims against the Debtors on account of the other guaranties. TPL asserts Claim Nos. 10781, 10782 and 10783 with respect to the Enrici, EPL and EEL Guaranties. The Reorganized Debtors objected to the Claims. After arm's-length negotiations, the Reorganized Debtors and TPL agree that: (i) the ECTRL Guaranty Claim will be allowed as a Class 4 general unsecured claim against Enron for $610,509,800; (ii) the Enrici Guaranty Claim will be allowed as a Class 4 general unsecured claim against Enron for $297,210,478; (iii) the EPL Guaranty Claim and EEL Guaranty Claim will be disallowed and expunged with prejudice; (iv) the amounts of the Allowed Enrici Guaranty Claim and the Allowed ECTRL Guaranty Claim include $1,192,840 and $5,823,625, respectively, for Value Added Tax liability under the PPAs based on supplies by TPL to ECTRL and Enrici under the PPAs. TPL will be entitled to an increased Class 4 general unsecured claim in the event that HM Revenue and Customs determines within 2 years from the date of the Settlement that TPL's VAT liability under the PPAs is greater than the amounts set forth; and (v) they will mutually release one another from all liabilities in connection with the Guaranties. Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, the Reorganized Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement agreement with TPL. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Wants Court Nod on BP Oil, et al., Settlement Pact -------------------------------------------------------------- Wilbur F. Foster, Jr., Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, relates that, prior to the Petition Date, Enron Corporation and its debtor-affiliates were parties to various confirmations, swap agreements, commodities contracts, master agreements and forward contracts with: -- BP Oil International Ltd., -- BP Chemicals Ltd., -- BP Shipping Ltd., BP Gas Marketing Ltd., -- BP Singapore Pte. Ltd., and -- Veba Oil Supply & Trading. The BP Parties filed claims in connection with the Contracts: Claim No. Claimant Debtor Amount Asserted --------- -------- ------ --------------- 10602 BPOI ECTRIC $6,828,884 10603 BPC ECTRIC $503,410 10604 BPS ECTRIC $133,300 10605 BPGM ECTRIC $9,961 10606 BPGM Enron $9,960,860 10608 BPOI Enron $6,828,884 10610 Veba Enron $931,320 10611 Veba ECTRIC $931,320 10612 BPOI ENA $272,000 10607 BP ECTRIC SG$638,195 The Parties have settled their disputes and agree that: (a) the BP Parties will pay the Reorganized Debtors the payments due under the Contracts as agreed to by the Parties; (b) Claim Nos. 10605 and 10606 will be allowed for $8,000,000 each; (c) all claims filed by BP Parties in connection with the Contracts, but not including the Allowed Claims, will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged; and (d) the Parties will exchange a mutual release of all claims related to the Contracts; (e) all liabilities scheduled by the Reorganized Debtors in favor of the BP Parties in connection with the Contracts will be deemed irrevocably withdrawn and expunged. Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, the Reorganized Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement with the BP Parties. Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. Enron filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Confirmed Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service, Inc., 15/945-7000) FIRST UNION: Poor Collateral Performance Cues Fitch to Junk Rating ------------------------------------------------------------------ Fitch Ratings has downgraded these First Union Home Equity Loan Trust, series 1997-2 issue: -- Class B to 'C' from 'CCC'. All of the mortgages in the aforementioned transaction consist of fixed-rate and balloon mortgages extended to subprime borrowers. The downgrade, affecting approximately $14.91 million of outstanding certificates, is a result of the poor performance of the collateral. Insufficient credit enhancement on the certificate has resulted in principal reductions of the bond balance. Currently, the deal has approximately $1.86 million in foreclosure and real estate owned and may sustain future losses. The pool factor (i.e. current mortgage loans outstanding as a percentage of the initial pool) for this deal is 6% and is 95 months seasoned. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/ FOAMEX INTERNATIONAL: Files for Chapter 11 Protection in Delaware ----------------------------------------------------------------- Foamex International Inc. (NASDAQ: FMXI) and certain of its subsidiaries filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Yesterday's filings, the Debtors say, do not affect its foreign operations. Foamex will use chapter 11 to implement its restructuring initiatives, which are designed to restore the Company to long- term financial health, while continuing to operate in the normal course of business. Foamex will seek to emerge expeditiously from chapter 11, and it anticipates that its day-to-day operations will continue as usual without interruption during the chapter 11 process. DIP Financing The Debtors are seeking Bankruptcy Court approval of up to $240 million in revolving credit debtor-in-possession financing arranged by Bank of America, N.A. as agent. The proposed DIP financing, combined with the Company's cash flow from operations, is expected to provide the Company with sufficient liquidity to meet its post-petition operating expenses in the ordinary course of its business. With these funding sources, the Company will be in a position to pay certain pre-petition obligations, including those owing to certain critical suppliers and employees, subject to Bankruptcy Court approval. Foamex has also received a commitment from Bank of America for exit financing upon the Company's emergence from chapter 11. Agreement in Principle on Proposed Plan The Company, which has been in active negotiations with its key creditors, also disclosed an agreement in principle with certain members of an ad hoc committee that collectively hold a majority of the Company's Senior Secured Notes on the key terms of a proposed reorganization plan. The agreement in principle would provide for a significant deleveraging of the Company's balance sheet and result in improvements to the Company's capital structure and profitability. As part of this process, the Debtors voluntarily filed for chapter 11 protection, allowing them to expedite and complete their reorganization while operating without disruption. Pursuant to the agreement in principle, the Company would eliminate approximately $523 million of outstanding bond indebtedness which, in turn, would result in annual interest savings of $54 million. Specifically, holders of the Company's Senior Secured Notes would convert their debt into 100% of the equity of the reorganized Company, subject to dilution. If unsecured creditors (to the extent their claims are not otherwise treated as critical supplier claims or paid through assumption of their contracts during the case) and the holders of Foamex's Senior Subordinated Notes vote to accept the reorganization plan, then they will receive, on a pro rata basis, warrants to purchase between 5% and 10% of the equity of the reorganized Company, depending on the ultimate allowed amount of general unsecured claims. Under the agreement in principle, there would be no recovery for holders of equity interests in the Company. "We believe this plan represents the best opportunity for Foamex to restructure its debt in an effective and timely manner," said Tom Chorman, President and Chief Executive Officer. "The chapter 11 process will allow Foamex to gain immediate liquidity and continue operating without interruption, while giving us the opportunity we need to restructure our balance sheet, strengthen our business performance and create long-term value." Mr. Chorman added, "We expect to emerge from this process as quickly as possible with a more appropriate capital structure that will allow us to be a healthier, more competitive company. We greatly appreciate the ongoing support of our long-term lenders, senior debt holders, customers, suppliers and employees. Their continued backing has been, and will continue to be, an integral factor in our success." First Day Motions In addition to seeking Bankruptcy Court approval of DIP financing, Foamex has filed a variety of typical "first day" motions in the Bankruptcy Court seeking authority to pay certain pre-petition amounts owed to its employees, critical suppliers, customers and others. These "first day" motions are intended to ensure that the Company transitions seamlessly into chapter 11 and that such key groups remain unaffected to the greatest extent possible by the chapter 11 filing. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. FOAMEX INTERNATIONAL: Case Summary & 25 Largest Unsec. Creditors ---------------------------------------------------------------- Lead Debtor: Foamex International Inc. 1000 Columbia Avenue Linwood, Pennsylvania 19061 Bankruptcy Case No.: 05-12685 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- FMXI, Inc. 05-12686 Foamex L.P. 05-12687 Foamex Capital Corporation 05-12688 Foamex Carpet Cushion LLC 05-12689 Foamex Asia, Inc. 05-12690 Foamex Latin America, Inc. 05-12691 Foamex Mexico, Inc. 05-12692 Foamex Mexico II, Inc. 05-12693 Type of Business: Foamex is the largest manufacturer of flexible polyurethane and advanced polymer foam products in North America. Foamex manufactures comfort cushioning for bedding, furniture, carpet cushion and automotive markets as well as technical foams for diverse applications in industrial, consumer, electronics and transportation industries. See http://www.foamex.com/ Chapter 11 Petition Date: September 19, 2005 Court: District of Delaware Judge: Peter J. Walsh Debtors' Lead Counsel: Paul, Weiss, Rifkind, Wharton & Garrison LLP Debtors' Local Counsel: Pauline K. Morgan, Esq. Young, Conaway, Stargatt & Taylor 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Debtors' Financial Advisor: Miller Buckfire & Co. LLC Debtors' Auditor & Accountant: KPMG LLP Debtors' Claims And Noticing Agent: Bankruptcy Services LLC Financial Condition as of July 3, 2005: Total Assets: $620,826,000 Total Debts: $744,757,000 Consolidated List of Debtors' 25 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank N.A. 10-3/4% Senior $300,000,000 Corporate Trust Services Secured Notes 100 Wall Street, Suite 1600 New York, NY 10005 Attn: James E. Murphy Vice President Fax: (212) 514-6841 The Bank of New York Senior $200,085,000 101 Barclay Street Subordinated 21st Floor West Notes (2 Tranches) New York, NY 10286 Fax: (212) 815-5915 Dow Chemical Trade Debt $20,513,344 2030 Dow Center Midland, MI 48674 Attn: Don Marquette Tel: (856) 802-9465 Fax: (989) 636-2705 Lyondell Chemical Worldwide Contract $16,620,973 1221 McKinney Street Houston, TX 77010 Attn: Larry Schubert Tel: (713) 309-4960 Fax: (713) 951-1602 Bayer Corporation Contract $14,047,029 100 Bayer Road Pittsburgh, PA 15205 Attn: Bob Kirk Tel: (412) 777-2560 Fax: (412) 777-7760 Shell Chemical Co. Contract $7,525,634 P.O. Box 2463 Houston, TX 77252-2463 Attn: Jean Claude Vandichel Tel: (713) 241-4965 Fax: (713) 241-3809 BASF Corporation Trade Debt $4,030,256 1609 Biddle Avenue Wyandotte, MI 48192 Attn: Larry Berkowski Tel: (734) 324-5485 Fax: (734) 324-5452 Huntsman Polyurethanes Contract $2,723,096 10003 Woodloch Forest Drive The Woodlands, TX 77380 Attn: Greg Geaman Tel: (281) 719-4822 Fax: (713) 235-6416 Milliken & Company Trade Debt $1,262,232 920 Milliken Road Spartanburg, SC 29303 Attn: Denis Golden Tel: (212) 819-4586 Fax: (212) 819-4279 American Express Travel Contract $1,200,000 Related Services Company, Inc. Travel Group Service Center 20022 North 31st Avenue Mail Code 080315 Phoenix, AZ 85027 Attn: Renee Celinski Tel: (609) 844-7770 Fax: (623) 492-1777 Kawashima Textile USA Inc. Trade Debt $1,061,233 412 Groves Street Lugoff, SC 29078 Attn: Cris Cowger Vice President Tel: (803) 421-0033 Fax: (803) 421-0039 EDS Corporation Contract $1,056,750 H1-5E-85 5400 Legacy Drive Plano, TX 75024 Attn: Dale Hoeshell Client Executive Tel: (972) 605-5103 Fax: (972) 605-6508 Mesilla Valley Transportation Contract $898,506 3530 West Picocho Los Cruces, NM 88001 Attn: Royal Jones Tel: (505) 541-4252 Fax: (505) 524-2835 Inolex Chemical Co. Contract $894,672 Jackson & Swanson Streets Philadelphia, PA 19148 Attn: Mike Chiarlone, Jr. Tel: (215) 271-0800 ext. 227 Fax: (215) 271-2621 Goldschmidt Chemical Corp. Trade Debt $714,928 914 East Randolph Road Hopewell, VA 23860 Attn: J.W. Witherspoon Market Manager Tel: (704) 544-0230 Fax: (704) 544-0240 Maverick Inc. Contract $663,328 5817 Tree Line Drive Madison, WI 53711 Attn: Chris Peterson Tel: (608) 227-0223 Fax: (608) 227-0224 Great Lakes Chemical Corp. Contract $531,680 P.O. Box 2200 West Lafayette, IN 47906 Attn: Vice President, Marketing Tel: (704) 894-0781 Fax: (704) 894-0162 Gulbrandsen Manufacturing Trade Debt $461,916 183 Gulbrandsen Road Orangeburg, SC 29116 Attn: Donald Gulbrandsen Tel: (908) 735-5458 ext. 108 Fax: (908) 735-6971 GE Silicones Trade Debt $441,155 318-24 Fourth Avenue South Charleston, WV 25303 Attn: David Simpson Account Executive Tel: (704) 545-7250 Fax: (704) 545-2475 Crowley Chemical Company Trade Debt $370,386 261 Madison Avenue, 14th Floor New York, NY 10016 Attn: Christopher Montensen Tel: (212) 682-1200 Fax: (212) 953-3487 Knight Transportation Contract $365,598 5601 West Buckeye Road Phoenix, AZ 85043 Attn: Keith Knight Tel: (602) 606-6457 Fax: (714) 685-6606 NBS Trucking Contract $353,997 P.O. Box 39 Custer City, PA 16725 Attn: Jim Rychik Tel: (814) 362-2076 Fax: (814) 362-6472 Advanced Foam Recycling Inc. Trade Debt $285,373 P.O. Box 822022 North Richland Hills, TX 76182 Tel: (817) 834-7662 Fax: (817) 834-2676 Albermarle Corporation Trade Debt $278,232 108 Interlachen Court Avondale, PA 19311 Tel: (610) 268-0232 Fax: (610) 268-3025 AM & Associates Trade Debt $252,096 602 North Cypress Street Orange, CA 92867-6604 Tel: (714) 744-1100 Fax: (714) 744-9865 FORD MOTOR: CAW Members Favor Ford Canada's Tentative Labor Pact ---------------------------------------------------------------- CAW members who work at Ford Canada have voted overwhelmingly in favor of a new three-year collective agreement. Thousands of Ford workers attended ratification meetings Saturday, Sept. 17, and Sunday, Sept. 18, in locations across Ontario. Ford production workers voted 94.9% per cent in favor, while skilled trades voted 95.5%. CAW president Buzz Hargrove said the strong support for the agreement shows that the vast majority of union members believe the CAW has negotiated a good agreement in a tough environment. "We had to negotiate solutions to some very tough problems with Ford in this bargaining," said Buzz Hargrove, CAW President, noting the closure of the Windsor castings plant and the phase-out of the V6 engine at Essex engine and the loss of an estimated 1100 jobs over the term of the agreement. "Instead of solely resisting change, we've put the focus on managing change in a compassionate way. We negotiated generous severance provisions, and hope to offset all job losses through early retirement and preferential hiring at other locations," Mr. Hargrove added. "Our members trusted their union to defend their interests as best we could through the coming restructuring, and these strong ratification votes prove that trust was well- deserved." Mr. Hargrove said that other companies could learn a lesson from how the CAW and Ford dealt with the restructuring issue. "The company was honest and frank with us, and together we were able to address those challenges in a manner that clearly satisfied our members." At DaimlerChrysler intense negotiations continue as expiry of the current settlement approaches at 11:59 p.m. Tuesday, Sept. 20. The CAW/DaimlerChrysler bargaining committees have been working hard to settle outstanding issues, including those involving work organization and job security. FORD 2005 Ratification Results Yes No Total % --------------------------- Production & Office 4130 220 4350 94.9% --------------------------- Trades 1013 48 1061 95.5% --------------------------- Total 5143 268 5411 95.0% --------------------------- Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Aug. 25, 2005, Moody's Investors Service lowered the ratings of Ford Motor Company, senior unsecured to Ba1 from Baa3, and assigned a Ba1 Corporate Family Rating and an SGL-1 speculative grade liquidity rating. Moody's also lowered the ratings of Ford Motor Credit Company, senior unsecured to Baa3 from Baa2, and short-term rating to Prime-3 from Prime-2. The rating outlook for both companies is negative. As reported in the Troubled Company Reporter on July 22, 2005, Fitch Ratings has downgraded the senior unsecured debt of Ford, Ford Credit and various affiliates to 'BBB-' from 'BBB'. Ratings on the Capital Trust II securities have been downgraded to 'BB' from 'BB+'. Fitch has also affirmed the 'F2' commercial paper ratings. Additionally, Fitch has lowered the ratings of Hertz have to 'BBB-' from 'BBB' and remain on Rating Watch Evolving. GEO GROUP: Completes $75 Million Sr. Secured Credit Facility ------------------------------------------------------------ The GEO Group, Inc. (NYSE: GGI) completed the amendment to its senior secured credit facility, consisting of a $75 million, 6-year term-loan bearing interest at LIBOR plus 2.00%, and a $100 million, 5-year revolving credit facility bearing interest at LIBOR plus 2.00%. GEO plans to use the borrowings under the Senior Credit Facility to fund general corporate purposes and to finance GEO's proposed acquisition of Correctional Services Corporation for approximately $62 million plus deal-related costs. The acquisition of CSC is expected to close in the beginning of the fourth quarter of 2005 subject to certain closing conditions contained in the merger agreement. The Senior Credit Facility was underwritten by BNP Paribas. The GEO Group, Inc. delivers correctional and detention management, health and mental health, and other diversified services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, and Canada managing 42 facilities with a total design capacity of approximately 38,500 beds. * * * As reported in the Troubled Company Reporter on July 22, 2005, Moody's Investors Service affirmed The GEO Group, Inc.'s Ba3 Corporate Family Rating (previously called the Senior Implied Rating), Ba3 Senior Secured Credit Facility, and B1 Senior Unsecured Notes. According to Moody's, this rating affirmation reflects GEO Group's plan to acquire Correctional Services Corporation, another corrections company, using cash and debt. The transaction will further consolidate the private corrections industry, a plus for GEO Group. Moreover, while GEO Group's credit profile will be modestly weakened by the leveraged purchase of CSC, the greater sector leadership provided by the transaction, and some operating cost savings, are counterbalances, and over the intermediate term Moody's expects GEO Group to reduce its leverage. Moody's said the rating outlook remains stable. GMAC COMMERCIAL: Fitch Affirms BB Rating on $12.2MM Class F Certs. ------------------------------------------------------------------ Fitch Ratings upgrades these classes of GMAC Commercial Mortgage Securities, Inc., mortgage pass-through certificates, series 2002- FL-1: -- $19.7 million class C to 'AAA' from 'AA'; -- $20.9 million class D to 'AA' from 'BBB'; -- $9.8 million class E to 'BBB' from 'BBB-'. These class is affirmed and removed from Rating Watch Negative: -- $12.2 million class F at 'BB'. This class is affirmed: -- Interest-only class X at 'AAA'. The upgrades reflect increased credit support from the Atrium Office loan payoff and curtailments since Fitch's last rating actions. The transaction has paid down $398 million, or 86% since issuance. Class F was originally placed on RWN due to concerns with the Infomart loan. In May 2005, the loan was transferred to the Special Servicer which has indicated an October 2005 resolution with no loss to the trust debt. The Infomart loan (85.3% of the trust) is secured by a Class 'A' office building totaling 1.2 million square feet in Dallas, TX. Collateral is both traditional office (55%) and telecom space (45%). A hard lockbox, in place since November 2003, sweeps monthly rents. After transfer, the special servicer selected to pursue a note sale and reports receiving numerous bids from qualified buyers. The master servicer indicated two loan curtailments, totaling approximately $742,000, occurred since transfer. Based on July 2005 leases in place and year-end 2004 operations, the Fitch net cash flow declined 26.2% from issuance. The Fitch debt service coverage ratio for the trust was 1.20 times (x) compared to 1.55x at issuance. As of July 2005, occupancy was 76% compared to 91% at issuance. The Stevens-Arnold Building (10.5%) is secured by a 100,026 sf office, research, and development building located in Milpitas, CA. The building is master leased to a single tenant, Artesyn Technologies, Inc., on a triple net lease. Artesyn will vacate at lease expiration in December 2005, which is prior to the loan's final maturity in July 2006. Asking rents are well below Artesyn's current rent per square foot. Although Fitch is concerned with the loan, a cash flow sweep implemented in March 2003 has reduced the whole loan by 29% since issuance. Additionally, whole loan debt psf of $120.59 and trust debt of $65.66 are well below recent sales psf for similar product in the San Jose market. The two remaining loans, 505 and 525 Northbelt Atrium Buildings (4.2%) are cross-collateralized and secured by 156,635 sf of office space in Houston, TX. In January of 2003 the issuance loan balance on the 505 loan was reduced by approximately 10% when the loan failed a DSCR performance test. No further reductions are expected to occur. Based on July 2005 LIP and YE 2004 operations, the Fitch NCF has declined 2.0% from issuance. Fitch DSCR for the trust was 1.62x compared to 1.66x at issuance. As of July 2005, the weighted average occupancy was 75.0% compared to 70.6% at issuance. HOLLINGER INT'L: Settles Class Action Suit with Clients for $31.8M ------------------------------------------------------------------ Attorneys for advertising customers of the Chicago Sun-Times and two of its sister newspapers have reached a tentative global settlement with Hollinger International, Inc. (NYSE: HLR - News), parent company of the publications, which together with earlier settlements provide advertisers with aggregate benefits of $31.8 million in cash and additional advertising. The original class action complaint was filed following the Sun-Times' voluntary reporting of its circulation problems and was later consolidated with 11 other class action lawsuits filed in Cook County and other courts. The plaintiffs alleged that the Hollinger-owned newspapers inflated their published circulation numbers in order to charge higher advertising rates. Attorneys for both parties have filed a joint motion to approve the proposed settlement, which would compensate advertisers for damage claims related to the exaggerated circulation figures. The settlement has been approved by the court subject to a fairness hearing in January 2006. The settlement was the result of a six-month mediation conducted by former federal Judge Abner J. Mikva, who served as the court's appointed mediator. Michael B. Hyman, co-lead counsel for the class and a principal in the Chicago law firm of Much Shelist, said, "Plaintiffs contended that the newspapers' inflation of their circulation numbers caused our clients to pay more for advertising than they would have paid if the circulation numbers had been accurately reported." Class counsel conducted extensive discovery involving review of tens of thousands of documents and depositions of several high-level Sun-Times personnel, including Publisher John Cruickshank and Vice President of Advertising Heather McKie. By court order, the Sun-Times was able to negotiate settlements during the pendency of the litigation with nearly 400 of its largest advertisers for an aggregate consideration in cash and enhanced advertising benefits of $16.8 million. When coupled with the proposed settlement with the remaining advertisers of $15 million in cash and advertising benefits, the plaintiffs will receive an aggregate total benefit of $31.8 million. The Sun- Times is responsible for paying all costs associated with the administration of the settlement, including publication of notice, mailed notice and distribution of benefits to the class. The Sun-Times has also agreed to pay an additional sum to cover the fees and expenses of the class counsel up to a total of $5.575 million, which represents less than 15% of the aggregate benefits of the settlement. None of these costs will reduce the benefit to the advertiser class. Burton I. Weinstein, co-lead counsel for the advertiser class and a partner in the Chicago law firm of Baskin, Server, Berke & Weinstein, stated, "This settlement truly benefits all parties. Members of the class are being fairly compensated for the overstatement of circulation figures, which occurred over several years and only came to light after John Cruickshank's revelation of this practice. Plaintiffs are satisfied with the efforts of the Sun-Times and its sister publications to put in place checks and balances to prevent this from reoccurring." Hollinger International Inc. is a newspaper publisher whose assets include The Chicago Sun-Times and a large number of community newspapers in the Chicago area as well as in Canada. * * * As reported in the Troubled Company Reporter on August 6, 2004, Moody's Investors Service changed the rating outlook on Hollinger International Publishing, Inc., to positive from stable and has withdrawn other ratings. Ratings withdrawn: * $45 million Senior Secured Revolving Credit Facility, due 2008 -- Ba2 * $210 million Term Loan "B", due 2009 -- Ba2 * $300 million of 9% Senior Unsecured Notes, due 2010 -- B2 Ratings confirmed: * Senior Implied rating -- Ba3 * Issuer rating -- B2 Moody's says the outlook is changed to positive. HIGH VOLTAGE: Affiliates Must File Proofs of Claim by Sept. 30 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, set Sept. 30, 2005, as the deadline for each current and former non-debtor subsidiary and affiliate owed money by High Voltage Engineering Corporation and its debtor-affiliates, on account of claims arising prior to Feb. 8, 2005, to file formal written proofs of claim. Non-debtor subsidiaries and affiliates must send their claim forms by mail to chapter 11 Trustee Stephen Gray's claims and noticing agent at: High Voltage Engineering Corp., Claims Center c/o The Trumbull Group LLC P.O. Box 721 Windsor, CT 06095-0721 Or by hand-delivery or overnight courier at: High Voltage Engineering Corp. Claims Center c/o The Trumbull Group LLC 4 Griffin Road North Windsor, CT 06095 Non-debtor subsidiaries and affiliates with unpaid claims from the Debtors' 2004 chapter 11 cases are required to file their claims in the Debtors' new chapter 11 cases. 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, 2005 (Bankr. Mass. Case No. 05-10787). S. Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and Douglas B. Rosner, Esq., at Goulston & Storrs, represent 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 was appointed chapter 11 Trustee in February 2005. John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate, Hall & Stewart LLP represents the chapter 11 Trustee. INTERSTATE BAKERIES: Can Walk Away from 25 Real Property Leases --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri gave Interstate Bakeries Corporation and its debtor-affiliates permission to reject 24 non-residential real property leases effective as of Aug. 24, 2005, to reduce postpetition administrative costs: Landlord Address of Leased Premise Lease Date -------- ------------------------- ---------- Alfred Santos 9477 Telegraph Road, 10/15/1986 Pico Rivera, California Batavia Big N Store #2, Batavia Big N 07/18/1995 Plaza Associates Plaza, Batavia, New York Covina Industrial 1600 W San Bernardino Road 04/01/1984 Park Covina, California Chuong Kha 14535 East Temple Avenue, 10/20/1992 La Puente, California Crestar Bank 7816 Peppers Ferry Blvd., 06/07/1994 Radford, Virginia Dallas Eubanks 1415 Cumberland Falls, 02/01/1999 Corbin, Kentucky Earl & Myrna Keystone Restyling Building, 01/08/1996 Pilling 2525 Old Route 15, Suite #2, New Columbia, Pennsylvania Edward D. Berger 1887 Hooper Avenue, 10/05/1987 Reality, Inc. Toms River, New Jersey Frank Amendola 2444 Military Road, 08/15/2002 Niagra Falls, New York Gene or Lynda 1011 Carter Street, 04/01/1985 Simonton Vidalia, Louisiana Herbert Sartin, 142 Pennsylvania, 11/22/1999 S&S Realty Wilkes Barre, Pennsylvania Herbert E. Weiner 443 East First Avenue, 03/01/1983 Roselle, New Jersey Lyell-Mt. Read Lyell-MT Read Plaza, 05/08/1998 Shopping Center, Rochester, New York LLC Jerry A. Pierce 7507 Chapman Highway, 06/10/1999 Knoxville, Tennessee Larry E. Edwards 7575 Carollton Pike, 07/03/2002 Galax, Virginia Linda R. Poole 238 East Lee Street, 07/17/1995 Marion, Virginia Martin & Eubank, 2430 Center Point Road, 05/04/1989 Co. Birmingham, Alabama Palmdale Towne 2260 E Palmdale, 10/07/1991 Square Associates Palmdale, California Rack Service Co., 232 Stanley, 06/01/1982 Inc. Monroe, Louisiana Russell Barcelona 14890 Old Hammond Highway, 10/07/1991 Baton Rouge, Louisiana Stanley Behrens 606 Arbor Vitae Avenue, 06/06/2003 Living Trust Inglewood, California Soraya Ghamaty 3353 Sandrock Road, 06/26/1991 Azimi San Diego, California The Grody Company 540-44 New Park Avenue, 09/01/1993 W. Hartford, Connecticut The Quorum 6601 Hillsborough, 10/31/1996 Building, LLC/Quail Raleigh, North Carolina Properties, Inc. The Court also gave the Debtors permission to reject their real property lease with Moss & Co. at 15640 Roscoe Boulevard, in Van Nuys, California, effective as of Aug. 30, 2005. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, 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 $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) JAG MEDIA: Inks Non-Binding Merger LOI with Cryptometrics --------------------------------------------------------- JAG Media Holdings, Inc., entered into a non-binding letter of intent with Cryptometrics, Inc., pursuant to which the Company and Cryptometrics would enter into a merger agreement under which Cryptometrics would merge with a newly created subsidiary of the Company. In consideration of the merger, the stockholders of Cryptometrics would acquire shares of common stock, par value $0.00001 per share, of the Company, which shares would, upon issuance, represent 88% of the outstanding Company Common Stock, in exchange for all of the issued and outstanding capital stock of Cryptometrics. The shares of Common Stock to be received by the stockholders of Cryptometrics would be registered under the U.S. Securities Act of 1933, as amended. The existing public shareholders of the Company will experience significant dilution from the issuance of these shares to the stockholders of Cryptometrics. At the closing of the Proposed Transaction, the Company's current directors would resign as directors of the Company and would also resign as officers and executives of the Company. The Company's board of directors would be replaced with designees of Cryptometrics, at least a majority of whom would be independent and who, in whole or in part, would also constitute the audit committee of the Company's board of directors. In connection with the Proposed Transaction, the Cryptometrics stockholders will agree not to sell or otherwise dispose of the shares of Common Stock that are received in connection with the Proposed Transaction for a period of 12 months from the Closing; provided, that subject to compliance with all relevant securities laws, 35% of the shares will not be subject to the lock-up provision, if and so long as, the shares of the post-merger Company are trading on the NASDAQ Small Cap Market. The Proposed Transaction is subject to various conditions being satisfied prior to Closing, including, among others: * completion of all steps necessary to increase the number of authorized shares of Common Stock of the Company from 250,000,000 to 450,000,000 and approval of a name change to a name including "Cryptometrics"; * the Registration Statement relating to the registration of the shares of Common Stock being issued to the stockholders of Cryptometrics being declared effective by the Securities and Exchange Commission; * the listing of the Company's Common Stock on the NASDAQ Small Cap Market; and * the Company not having outstanding indebtedness for borrowed money in excess of the principal amount of $2,000,000. In addition, the Closing is conditioned upon (1) each party completing a due diligence review, the results of which are satisfactory in all respects to each party; (2) the Company and Cryptometrics obtaining all appropriate and necessary corporate and stockholder approvals for the transaction; and (3) the entering into of definitive agreements among the parties, including, without limitation, a mutually acceptable definitive acquisition agreement between Cryptometrics and the Company. A full-text copy of the non-binding Term Sheet is available for free at http://ResearchArchives.com/t/s?193 Cryptometrics was incorporated in May 2000 under the name Postal Hut, Inc. and in November 2001 changed its name to Cryptometrics, Inc. Cryptometrics's business focuses on the biometric security industry. Cryptometrics produces hardware and software products that take advantage of the internationally approved standards for biometric identification and verification. JAG Media Holdings, Inc., is a provider of Internet-based equities research and financial information that offers its subscribers a variety of stock market research, news, commentary and analysis, including "JAG Notes", the Company's flagship early morning consolidated research product. Through the Company's wholly-owned subsidiary TComm (UK) Limited, the Company also provides various video streaming software solutions for organizations and individuals. The Company's websites are located at http://www.jagnotes.com/http://www.tcomm.co.uk/and http://www.tcomm.tv/ * * * Bankruptcy Warning As reported in the Troubled Company Reporter on July 26, 2005, Management further believes that the Company will be able to generate sufficient revenues from its remaining facsimile transmission and web site operations and obtain sufficient financing from its equity line agreement with the investment partnership prior to its expiration in Aug. 2006, or through other financing agreements, to enable it to continue as a going concern through at least April 30, 2006. However, if the Company cannot generate sufficient revenues and obtain sufficient additional financing, if necessary, by that date, the Company has indicated that it may be forced thereafter to restructure its operations, file for bankruptcy or entirely cease its operations. JERRY HUGGINS: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Jerry Wayne Huggins 111 D Drive Chocowinity, North Carolina 27817 Bankruptcy Case No.: 05-07303 Chapter 11 Petition Date: September 16, 2005 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, North Carolina 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ States Resources Corp. Value of security: $175,000 Attn: Manager or Agent $25,000 4848 South 131st Street Omaha, NE 68137 Wells Fargo $35,200 Attn: Manager or Agent P.O. Box 7487 Boise, ID 83707 Pitt County Tax Collector $32,163 Attn: Manager or Agent P.O. Box 875 Greenville, NC 27835 MBNA America $21,304 Citi Cards $14,170 Bank of America $6,159 First Citizens Bank $5,413 Branch Banking & Trust $3,258 Beaufort Co. TaxCollector $1,600 Town of Ayden $1,400 Internal Revenue Service $700 JILLIAN'S ENT: Court Okays Partnership Interest Sale to Tango ------------------------------------------------------------- The Hon. David T. Stosberg of the U.S. Bankruptcy Court for the Western District of Kentucky approved the sale of Jillian's Entertainment Holdings, Inc., and its debtor-affiliates' partnership interest in Sugarloaf Gwinnett Entertainment Company to Tango of Sugarloaf, Inc., pursuant to a Court-approved auction held on Aug. 17 and 18, 2005. Steven L. Victor, the plan administrator appointed pursuant to the Debtors' confirmed plan of reorganization, executed a contract with Tango to sell the Debtors' 50.10% interest in the partnership for $900,000. The Debtors anticipate the sale transactions will close on Sept. 30, 2005. The Sugarloaf Partnership Sugarloaf Gwinnett Entertainment Company is a limited partnership formed by Sugarloaf Mills Limited Partnership and Jillian's of Gwinnett GA, Inc. in September 2001. Jillian's is the general partner under the partnership agreement while Sugarloaf Mills is a limited partner, owning a 49.90% interest. The partnership constructed and operated a family-style restaurant and entertainment center. Dave & Buster's, Inc., who purchased all of the Debtors' assets for approximately $65 million in 2004, had the option to acquire the partnership interest pursuant to the terms of the asset purchase agreement. When Dave & Buster's, Inc., failed to exercise its option through several rejection deadlines from March 31 to June 30, 2005, the plan administrator moved to negotiate a sale with other interested parties. Headquartered in Louisville, Kentucky, Jillian's Entertainment Holdings, Inc. -- http://www.jillians.com/-- operates more than 40 restaurant and entertainment complexes in about 20 states. The Company filed for chapter 11 protection on May 23, 2004 (Bankr. W.D. Ky. Case No. 04-33192). Edward M. King, Esq., at Frost Brown Todd LLC and James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of more than $100 million and estimated debts of over $100 million. Judge David T. Stosberg confirmed the Debtors' Amended Joint Liquidating Plan on Dec. 12, 2004. KAISER GROUP: Reaches Agreement in Principle to Settle Class Claim ------------------------------------------------------------------ Kaiser Group Holdings, Inc. (Pink Sheets: KGHI) filed a motion with the United States Court of Appeals for the Third Circuit seeking to stay Kaiser's appeal of the order of the United States Bankruptcy Court for the District of Delaware granting the motion of a class comprised of former holders of shares of ICT Spectrum Constructors, Inc., to compel Kaiser to issue an additional 247,350 shares of common stock to the class members. The litigation pertained to a 1998 transaction in which ICT merged into a subsidiary of Kaiser's predecessor company, Kaiser Group International, Inc. Kaiser filed the motion after reaching an agreement in principle with the class representatives that would result in, among other things, the distribution of 175,000 newly issued and 15,625 previously issued shares of Kaiser's common stock to the class members. Common Stock Deregistration In addition, Kaiser has agreed to postpone the deregistration of its common stock and to refrain from the issuance of any dividend on Kaiser's common stock or any common stock dividend on Kaiser's preferred stock pending implementation of the terms of the settlement. The agreement in principle is subject to the negotiation of definitive documentation and Bankruptcy Court approval. Kaiser currently anticipates that the shares will be issued and distributed by the end of the first quarter of 2006. Kaiser Group Holdings, Inc., is a Delaware holding company formed on December 6, 2000 for the purpose of owning all of the outstanding stock of Kaiser Group International, Inc. Kaiser Group International, Inc., continues to own the stock of its remaining subsidiaries. On June 9, 2000, Kaiser Group International, Inc., and 38 of its domestic subsidiaries voluntarily filed for protection under Chapter 11 of the United States Bankruptcy Code in the District of Delaware (case nos. 00-2263 to 00-2301). Kaiser Group International, Inc. emerged from bankruptcy with a confirmed Second Amended Plan of Reorganization declared effective on Dec. 18, 2000. In its Form 10-K for the fiscal year ended December 31, 2003, Kaiser Group Holdings, Inc. further states: "The effectiveness of the Plan as of December 18, 2000, did not in and of itself complete the bankruptcy process. The process of resolving in excess of $500 million of claims initially filed in the bankruptcy is ongoing. By far the largest class of claims (Class 4) was made up of creditor claims other than trade creditor and equity claims. Class 4 claims included holders of Kaiser Group International, Inc.'s senior subordinated notes due 2003 (Old Subordinated Notes). Holders of allowed Class 4 claims received a combination of cash and our preferred (New Preferred) and common stock (New Common) in respect of their claims. Such holders received one share of New Preferred and one share of New Common for each $100 of claims. However, the number of shares of New Preferred issued was reduced by one share for each $55.00 of cash received by the holder of an allowed Class 4 claim. "Pursuant to the terms of the Plan, we were required to complete our initial bankruptcy distribution within 120 days of the effective date of the Plan. Accordingly, on April 17, 2001, we effected our initial distribution of cash, New Preferred and New Common to holders of Class 4 claims allowed by the Bankruptcy Court. At that time, there were approximately $136.8 million of allowed Class 4 claims. The amount of unresolved claims remaining at April 17, 2001 was approximately $130.5 million. "To address the remaining unresolved claims, the Bankruptcy Court issued an order on March 27, 2001, establishing an Alternative Dispute Resolution -- ADR -- procedure whereby the remaining claimants and we produce limited supporting data relative to their respective positions and engage in initial negotiation efforts in an attempt to reach an agreed claim determination. If necessary, the parties were thereafter required to participate in a non- binding mediation before a mediator pre-selected by the Bankruptcy Court. All unresolved claims as of March 27, 2001, became subject to the ADR process. Since April 17, 2001, the date of the initial distribution, $123 million of asserted claims have been withdrawn, negotiated or mediated to an agreed amount, resulting in cash payments approximating $2.2 million and issuances of 683 shares of New Preferred and 823 shares of New Common. "As of March 26, 2004, the amount of unresolved claims was approximately $7.5 million. We expect to resolve the remaining claims in the first six months of 2004 and currently believe that the total amount of Class 4 claims ultimately to be allowed in the Old Kaiser bankruptcy proceeding will not exceed $142.5 million. As demonstrated by the claim settlements completed since April 17, 2001, and based on the belief that it is in the Company's and its shareholders' best interest, we have been settling certain remaining Class 4 claims entirely for cash payments in lieu of the combination of cash and New Preferred and New Common as contemplated in the Plan. We intend to continue to use this settlement alternative during its resolution of remaining Class 4 claims. "From time to time in the future, as remaining unresolved claims are resolved, excess cash from the 'reserve' fund (including cash added to 'reserve' fund in payment of pro forma dividends, classified as interest expense subsequent to July 1, 2003, on retained shares of New Preferred) must be used to redeem outstanding shares of New Preferred. In January 2003, we redeemed 282,000 shares of outstanding New Preferred by using $8.9 million and $5.2 million of restricted and unrestricted cash, respectively. In October 2003, we redeemed 113,530 shares of outstanding New Preferred by using $1.6 million and $4.6 million of restricted and unrestricted cash, respectively. In February 2004, we redeemed 95,932 shares of New Preferred by using $3.2 million of restricted cash and $2.1 million of unrestricted cash." KI HOLDINGS: Moody's Reviews $203 Million Notes' Junk Rating ------------------------------------------------------------ Moody's Investors Service placed its ratings for Koppers Inc. and KI Holdings Inc., including the latter's B2 corporate family rating, under review for possible upgrade. This action follows KI Holdings' filing of a Form S-1 registration statement regarding an initial public offering of common shares, for approximately $125 million of gross proceeds. The equity offering is expected to be completed in the fourth quarter of 2005. The company plans to use the majority of the net proceeds of the IPO to redeem, at a premium, a portion of the senior secured notes at Koppers and to pay accrued and unpaid interest on the redeemed notes. If the IPO is successful, the ratings of both Koppers and KI Holdings, or just Koppers, could be raised. These ratings were placed under review: For Koppers Inc.: * the B2 rating for the $320 million of 9.875% senior secured notes, due 2013 For KI Holdings Inc.: * the B2 corporate family rating * the Caa2 rating for the $203 million aggregate principal amount of 9.875% senior discount notes, due 2014 The review will be concluded shortly after the conclusion of the IPO and related debt repayment. The review will focus on the post-closing capitalization and dividend policy of KI Holdings. If the ratings are raised, they would most likely benefit by only one notch, and it is possible that any upgrade would only affect Koppers' senior secured rating, not the KI Holdings ratings. The proposed transaction will reduce debt by about $100 million, or 0.77 turns of LTM EBITDAR. KI Holdings' pro forma debt would drop to $416 million (but $533 million using Moody's Financial Metrics, which adjust debt for underfunded pension and lease obligations) and Koppers' debt would drop to $282 million ($399 million using Moody's Financial Metrics). Moody's current ratings reflect: * the company's reliance on a narrow range of somewhat cyclical industrial products; * high customer concentration; * modest free cash flow; * environmental risk; * high leverage; and * recent shareholder distributions, which have depleted equity. However, the ratings are supported by: * Koppers' global and diverse end markets; * a leading market position in many of its businesses; * the stability provided by multi-year sales contracts; * the essential nature of its products; and * its diversified raw material supply base. Koppers Inc., headquartered in Pittsburgh, is a worldwide producer of: * carbon compounds, and * treated wood products for use in a variety of markets including: * the railroad, * aluminum, * chemical, and * steel industries. Koppers had sales of $974 million for the twelve months ended June 30, 2005. Koppers Inc. is the sole subsidiary of KI Holdings Inc., which is owned by Saratoga Partners III, L.P. and management employees of Koppers Inc. KOPPERS INC: Moody's Reviews B2 Senior Secured Notes Rating ----------------------------------------------------------- Moody's Investors Service placed its ratings for Koppers Inc. and KI Holdings Inc., including the latter's B2 corporate family rating, under review for possible upgrade. This action follows KI Holdings' filing of a Form S-1 registration statement regarding an initial public offering of common shares, for approximately $125 million of gross proceeds. The equity offering is expected to be completed in the fourth quarter of 2005. The company plans to use the majority of the net proceeds of the IPO to redeem, at a premium, a portion of the senior secured notes at Koppers and to pay accrued and unpaid interest on the redeemed notes. If the IPO is successful, the ratings of both Koppers and KI Holdings, or just Koppers, could be raised. These ratings were placed under review: For Koppers Inc.: * the B2 rating for the $320 million of 9.875% senior secured notes, due 2013 For KI Holdings Inc.: * the B2 corporate family rating * the Caa2 rating for the $203 million aggregate principal amount of 9.875% senior discount notes, due 2014 The review will be concluded shortly after the conclusion of the IPO and related debt repayment. The review will focus on the post-closing capitalization and dividend policy of KI Holdings. If the ratings are raised, they would most likely benefit by only one notch, and it is possible that any upgrade would only affect Koppers' senior secured rating, not the KI Holdings ratings. The proposed transaction will reduce debt by about $100 million, or 0.77 turns of LTM EBITDAR. KI Holdings' pro forma debt would drop to $416 million (but $533 million using Moody's Financial Metrics, which adjust debt for underfunded pension and lease obligations) and Koppers' debt would drop to $282 million ($399 million using Moody's Financial Metrics). Moody's current ratings reflect: * the company's reliance on a narrow range of somewhat cyclical industrial products; * high customer concentration; * modest free cash flow; * environmental risk; * high leverage; and * recent shareholder distributions, which have depleted equity. However, the ratings are supported by: * Koppers' global and diverse end markets; * a leading market position in many of its businesses; * the stability provided by multi-year sales contracts; * the essential nature of its products; and * its diversified raw material supply base. Koppers Inc., headquartered in Pittsburgh, is a worldwide producer of: * carbon compounds, and * treated wood products for use in a variety of markets including: * the railroad, * aluminum, * chemical, and * steel industries. Koppers had sales of $974 million for the twelve months ended June 30, 2005. Koppers Inc. is the sole subsidiary of KI Holdings Inc., which is owned by Saratoga Partners III, L.P. and management employees of Koppers Inc. MAGRUDER COLOR: Walks Away from 19 Contracts & Leases ----------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey allowed Magruder Color Company and its debtor-affiliates to reject 19 unexpired non-residential real property leases and executory contracts effective as of Aug. 11, 2005. The Debtors' counsel, Bruce Buechler, Esq., at Lowenstein Sandler PC, tells the Bankruptcy Court that the Debtors no longer need the executory contracts and unexpired leases and that elimination of the associated administrative liability will help increase the Debtors' liquidity. Mr. Buechler adds that none of the executory contracts are materially below market so there's no justification for continuing to incur administrative expenses under the agreements while scouting for a third party purchaser. Mr. Buechler reports that all leased parcels of real estate rejected by the Debtors were surrendered to the respective landlords prepetition. Likewise, the leased equipment and vehicles have already been surrendered to the respective lessors. Claims arising from the rejection of the contracts and leases must be filed with the Clerk of the Bankruptcy Court by Oct. 7, 2005. A list of the rejected contracts and leases is available for free at http://bankrupt.com/misc/Magrudercontracts.pdf Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MAGRUDER COLOR: Wants Exclusive Period Extended to December 29 -------------------------------------------------------------- Magruder Color Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey to extend until December 29, 2005, the time within which they have the exclusive right to file a plan of reorganization. The Debtors also want their exclusive period to solicit plan acceptances extended to February 27, 2006. The Debtors seek these extensions: i) to avoid premature formulation of a Chapter 11 plan and ii) to ensure that the formulated plan takes into account the interests of the Debtors, their estates and creditors. Furthermore, the extension period will allow the Debtors to finalize sales of their assets pursuant to section 363 of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MAGRUDER COLOR: Wants to Retain Daley-Hodkin Corp. as Auctioneer ---------------------------------------------------------------- Magruder Color Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey for permission to retain Daley-Hodkin Corp. as their liquidation consultants and auctioneers to sell some of their assets, nunc pro tunc to Aug. 26, 2005. Daley-Hodkin will: a) take the necessary steps to implement the auction sale of the assets in a manner to maximize the value thereof and to generate the highest and best offers; b) control the sale process, including the public auction of the assets; c) facilitate the dissemination of information to interested parties with respect to an auction sale; d) take any other acts to prepare for, conduct and effectuate the sale and insure the highest possible price and best offer for the assets; and e) provide consulting and appraisal services to the Debtors. Daley-Hodkin will charge each buyer a 10% buyer's premium for all sales consummated through private sale, which will be added to each buyer's invoice and not be considered property of the Debtor's estates. Daley-Hodkin's fee for all sales made by private sale will be 50% of the buyer's premium. The other half of it will be credited towards the firm's expenses. The Firm's professional rates: Designation Daily Rate ----------- ---------- Coordinator $500 Field Supervisor $275 Field Assistant $200 Bookkeeper $225 To the best of the Debtors' knowledge, Daley-Hodkin is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D. N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MEDCO HEALTH: Moody's Rates $500 Million Credit Facility at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Medco Health Solutions Inc.'s new senior unsecured credit facility. Moody's also affirmed Medco's existing ratings. The ratings outlook remains stable. Ratings of Medco Health Solutions Inc. affirmed: * Ba1 corporate family rating * Ba1 senior unsecured 7.25% Notes of $500 million, due 2013 Ratings of Medco Health Solutions Inc. assigned: * Ba1 senior unsecured revolving credit facility of $500 million, due 2010 * Ba1 senior unsecured term loan of $750 million, due 2010 The Ba1 rating reflects Medco's larger size and revenue base relative to its competitors and high market share in the mail order pharmacy business. Moody's believes that Medco has effectively used its scale in negotiating: * purchase prices with generic drug manufacturers, * rebate arrangements with branded pharmaceutical companies, and * reimbursement levels with retail pharmacies. In addition, Medco's more favorable mix of the higher margin mail order business has enabled the company to expand its margins and generate solid operating cash flow. Moody's anticipates that mail order business will continue to grow because of increased use of mandatory mail and three tier co-pays. The ratings also reflect: * Medco's willingness to de-lever over the past two years, prior to the Accredo acquisition; * its new business wins; * a higher retention rate for existing business; and * expansion of the higher growth, higher margin specialty pharmacy business with the Accredo transaction. Moody's is also encouraged by Medco's willingness to offer innovative and flexible solutions for both employers and managed care customers. The ratings also consider the positive fundamentals of the PBM industry: * favorable demographic trends; * rising drug utilization; * increasing demand on behalf of payers for cost-containment services; and * the expansion of mail order service capabilities, where profitability is higher, especially for generic drugs. Moody's expects that industry profitability will benefit from continued increase of generic penetration of total prescriptions dispensed, particularly as over $36 billion in major branded pharmaceutical drugs will lose patent protection between 2006 and 2008. Moody's also anticipates that the overall demand and utilization for prescription drugs will be aided by the Medicare part D coverage. Moody's believes, however, that certain industry characteristics present ongoing credit risk. The combination of a mature market, limited differentiation between the major PBMS in their product and service offerings, and the consolidation of the independently owned PBM markets has resulted in a more competitive environment and increased account turnover. In particular, Medco lost a major mail-order-only client to a competitor at the end of 2004. The consolidation of the managed care industry could also result in the loss of additional accounts as several of the acquirers have their own in-house PBMs. Further, the industry still confronts continued litigation, government investigations, and governmental pressure, which could result in changes of existing PBM business practices. In particular, customers and the government have been demanding greater transparency of operating metrics and procedures as well as enhanced disclosure of financial arrangements with manufacturers and others. Moody's notes that Medco, unlike its peers, does report the amount of rebates it receives from pharmaceutical manufacturers and what percentage of these rebates that it retains. The ratings also consider these company-specific risks related to Medco: * increased operational and financial risk associated with the Accredo acquisition; * anemic revenue growth due to loss of some major accounts; and * obligations inherent in the Merck managed care agreement. Medco also has higher customer concentration risk compared with its peers as United Healthcare accounts for almost 20% of 2004 revenues. The stable outlook anticipates that Medco will successfully integrate Accredo and grow its specialty pharmacy business. Moody's expects Medco to use its cash flow to repay debt and reduce its leverage. As a result, the ratio of free cash flow to adjusted debt should improve from a projected 20% at the end of 2005 to a ratio in the range of the high 20s to lows 30s within two years. The senior unsecured credit facility benefits from a guarantee from the parent, Medco Health Solutions Inc. as well its subsidiaries. The senior credit facility is rated at the same level as the corporate family rating as it accounts for a preponderance of total outstanding debt. Medco Health Solutions, Inc. is a leading pharmaceutical benefit manager. Medco's clients include: * 150 of the Fortune 500 corporations; * unions; * health maintenance organizations; * Blue Cross/Blue Shield plans; * insurance carriers; and * local, state and federal employee benefit programs. MEDICALCV INC: Balance Sheet Upside-Down by $14 Mil at July 31 -------------------------------------------------------------- MedicalCV Inc. delivered its quarterly report on Form 10-QSB for the quarter ending July 31, 2005, to the Securities and Exchange Commission on Sept. 14, 2005. The Company reported $5,070,184 of net income for the quarter ending July 31, 2005, after recognizing a $6.4 million gain on account of decreased warrant-related liability. At July 31, 2005, the Company's balance sheet showed $10,972,691 in total assets and a $14,059,307 stockholders deficit. A full-text copy of MedicalCV's latest quarterly report is available at no charge at http://ResearchArchives.com/t/s?194 Going Concern Doubt The Company has sustained losses and negative cash flows from operations in recent years and expects these conditions to continue for the foreseeable future. At July 31, 2005, the Company had an accumulated deficit of $37,555,405. Although the Company raised funds through the sale of convertible preferred stock in the last quarter of fiscal year 2005, the level of cash required for operations during fiscal year 2006 is difficult to predict, and management anticipates that development of its new products will require additional capital by October 2006. These matters raise substantial doubt about the Company's ability to continue as a going concern. PricewaterhouseCoopers LLP, after auditing the Company's financial statements for fiscal years 2004 and 2005, expressed doubt about the Company's ability to continue as a going concern. Lurie Besikof Lapidus & Company, LLP, will audit MedicalCV's fiscal 2006 financial statements. MedicalCV's fiscal year ends on April 30. MedicalCV, Inc., is a cardiothoracic surgery device manufacturer. Previously, its primary focus was on heart valve disease. It developed and marketed mechanical heart valves known as the Omnicarbon 3000 and 4000. In November 2004, after an exhaustive evaluation of the business, MedicalCV decided to explore options for exiting the mechanical valve business. The Company intends to direct its resources to the development and introduction of products targeting treatment of atrial fibrillation. MEI LLC: Andrew D. Thomas Approved as Local Counsel --------------------------------------------------- The U.S. Bankruptcy Court Southern District of Indiana gave MEI, LLC permission to employ Andrew D. Thomas, Esq., as its bankruptcy co-counsel. Mr. Thomas will: 1) advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continued operation of its business and management of its properties; 2) take necessary action with respect to handling of liability of all leases to which the Debtor is a party; 3) represent the Debtor with respect to all matters currently under consideration in connection with the proceedings filed by MAK Energy, LLC; 4) prepare on behalf of the Debtor as debtor-in-possession necessary applications, answers, orders, reports, plans, disclosure statements and other legal papers; and 5) perform all other legal services for the Debtor as debtor- in-possession which may be necessary in its chapter 11 case. Mr. Thomas charges $225 per hour for his services. Mr. Thomas assures the Court that he does not represent any interest materially adverse to the Debtor or its estate. Headquartered in Evansville, Indiana, MEI, LLC is a real estate developer. The Company filed for chapter 11 protection on June 17, 2005 (Bankr. S.D. Ind. Case No. 05-71351). Adria S. Price, Esq., at Price & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $10 million to $50 million and debts of $1 million to $10 million. MEI LLC: Has Until Nov. 30 to Make Lease-Related Decisions ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana, extended, until Nov. 30, 2005, the period within which MEI, LLC, can elect to assume, assume and assign, or reject its unexpired nonresidential real property leases. The Debtor tells the Court that it is a party to nine unexpired nonresidential real property leases with these nine lessors: a) Simon Tennes, RR #4, Mount Carmel, Illinois 62863; b) Danny P. Shackelford, 3022 Deer Creek Drive, Sugar Land, Texas 77478; c) Herman J. Steckler and C. June Steckler, RDF #4, Mt. Carmel, Illinois 62683; d) Charles A. Newkirk and Alice B. Weaver Newkirk, Rt. #1, Box 247, Mt. Carmel, Illinois 62863; e) Albert Rigg and Gladys Rigg, R.R. #1, Mt. Carmel, Illinois 62863; f) Frederick N. Steckler and Karen E. Steckler, Rt. #1, Mt. Carmel, Illinois 62863; g) Michael R. Steckler and Janice F. Steckler, Rt. #1, Mt. Carmel, Illinois 62863; h) Robert Haase and Eileen Haase, RR #1, Mt. Carmel, Illinois 62863; and i) Richard A. Bosecker, Darell L. Bosecker, David H. Bosecker, and Darlene Hale, with Mr. Bosecker having power of attorney for other two lessors, and his address is 304 N. 6th Street, Elkville, Illinois 62932. The Debtor explains that, as lessee, it has become the assignee of the previous lessees in connection with the unexpired leases, with the exception of Mr. Shackelford, whose original lease was with MEI, LLC. The extension is therefore necessary because automatic rejection of the leases would have severe negative effects on the ability of the Debtor to reorganize. Headquartered in Evansville, Indiana, MEI, LLC is a real estate developer. The Company filed for chapter 11 protection on June 17, 2005 (Bankr. S.D. Ind. Case No. 05-71351). Adria S. Price, Esq., at Price & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $10 million to $50 million and debts of $1 million to $10 million. MEI LLC: MAK Energy Wants Case Converted or Dismissed ----------------------------------------------------- MAK Energy, LLC, asks the U.S. Bankruptcy Court for the Southern District of Indiana, Evansville Division, to dismiss the chapter 11 proceeding of MEI, LLC, or in the alternative, convert it into a chapter 7 liquidation proceeding. MAK Energy holds a promissory note secured by five real property mortgages on account of a $4,250,025 indebtedness incurred by MEI from 1998 to 1999. The Note, according to MAK, was in default since June 17, 2003. On Nov. 10, 2004, MAK filed an amended complaint to foreclose the mortgages in the Circuit Court of the Second Judicial Circuit in Wabash County, Illinois. On Mar. 18, 2005, the Circuit Court entered a summary judgment in favor of MAK, allowing it to foreclose on its collateral. Also, MAK was given the right to the rents under the leases governing the mortgages. After the Debtor filed for bankruptcy on June 17, MAK was advised that MEI was attempting to collect rents from its tenants that were not yet due and owing. Consequently, MAK's counsel informed the Debtor that it doesn't consent to MEI's attempt to use cash collateral without the Court's permission. On July 8, the Court granted MEI authority to use MAK's cash collateral to pay specific vendors only. Despite the restriction imposed by the Court, MAK alleges that MEI has been making payments to other vendors and paying prepetition debts using the cash collateral. Specifically, MEI made transfers to Verizon Wireless and Charles Brown, an insider, both of which lack Court approval. Based on this, MAK urges the Court to dismiss or convert the case. Another alternative MAK wants is for the Court to lift the automatic stay so it can foreclose on its collateral as ordered by the Second Circuit. Headquartered in Evansville, Indiana, MEI, LLC is a real estate developer. The Company filed for chapter 11 protection on June 17, 2005 (Bankr. S.D. Ind. Case No. 05-71351). Adria S. Price, Esq., at Price & Associates, LLC, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets of $10 million to $50 million and debts of $1 million to $10 million. NBTY INC: Prices $200 Million 7-1/8% Sr. Sub. Debt Offering ----------------------------------------------------------- NBTY, Inc. (NYSE: NTY) priced an offering of $200,000,000 aggregate principal amount of senior subordinated notes due 2015. The notes are being offered to investors at a price of 99.117% of principal amount. The closing of the Offering is scheduled to occur on Sept. 23, 2005, and is subject to customary closing conditions. The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and to persons outside the United States under Regulation S of the Securities Act. The Notes will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the Untied States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws. This press release shall not constitute an offer to sell or a solicitation of any offer to purchase any of these securities, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act. NBTY, Inc. -- http://www.NBTY.com/-- is a leading vertically integrated manufacturer and distributor of a broad line of high- quality, value-priced nutritional supplements in the United States and throughout the world. The Company markets approximately 2,000 products under several brands, including Nature's Bounty(R), Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R), Rexall(R), Sundown(R), MET-Rx(R), WORLDWIDE Sport Nutrition(R), American Health(R), GNC (UK)(R), DeTuinen(R), LeNaturiste(TM) and SISU(R). * * * As reported in the Troubled Company Reporter on July 20, 2005, Standard & Poor's Ratings Services affirmed its ratings on vitamin manufacturer NBTY Inc., including its 'BB' corporate credit rating. Standard & Poor's removed the ratings from CreditWatch, where they were placed on June 7, 2005, with negative implications, following NBTY's announcement of its plans to acquire nutritional supplement manufacturer Solgar Vitamin and Herb, an operating unit of Wyeth Consumer Healthcare, a division of Wyeth (A/Negative/A-1) for $115 million. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and a recovery rating of '2' to NBTY's proposed $120 million senior secured term loan A, indicating the expectation of substantial (80%-100%) recovery of principal in the event of a payment default. The outlook on the Bohemia, New York-based company is negative. Pro forma total debt outstanding at March 31, 2005, was about $412 million. The proposed $120 million, five-year senior secured term loan A is due 2010, or March 15, 2007, if the 8.625% senior subordinated notes due Sept. 15, 2007, are still outstanding. Proceeds of the new term loan A will finance NBTY's pending acquisition of Solgar, as part of a proposed credit facility amendment that will permit the acquisition, as well as other modifications to the company's existing credit facility. The ratings are based on preliminary terms and are subject to review upon final documentation. Also, Moody's Investors Service rated NBTY Inc.'s new $120 million senior secured term loan A at Ba2. In addition, Moody's affirmed NBTY's existing ratings, including its corporate family rating (formerly, "senior implied rating") of Ba2. Proceeds from the term loan (net $115 million) will fund NBTY's pending acquisition of Solgar from Wyeth. Notwithstanding the risks associated with a high-priced, debt-financed acquisition, the ratings affirmation reflects the strong alignment of Solgar with NBTY's products, integration capabilities, and long-term growth strategies, as well as the ongoing solid financial profile and market position of NBTY in the nutritional supplements industry. Moody's says the outlook remains stable. NEW VISUAL CORP: Losses & Deficit Trigger Going Concern Doubt ------------------------------------------------------------- New Visual Corporation delivered its quarterly report on Form 10-QSB for the quarter ending July 31, 2005, to the Securities and Exchange Commission on Sept. 14, 2005. The Company reported a $2.2 million net loss on $10,360 of net revenues for the quarter ending July 31, 2005. For the nine-month period ending July 31, 2005, New Visual's reported a $3.7 million loss on $26,558 of net revenue. At July 31, 2005, the Company's balance sheet shows $7,667,447 in total assets and $4,949,812 in liabilities. While the New Visual's balance sheet shows the company is solvent at July 31, 2005, it reports a $3.1 working capital deficiency at July 31, 2005. Management believes that the Company will continue to incur net losses and cash outflows from operating activities through at least the first half of 2006. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Marcum & Kliegman LLP, the Company's independent registered public accounting firm, expressed the same view after auditing the Company's financial statement for the fiscal year ending October 31, 2004. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?195 New Visual Corporation is developing advanced transmission technology to enable data to be transmitted across copper telephone wire at speeds and over distances that exceeds those offered by leading DSL technology providers. The Company intends to market this novel technology to leading equipment makers in the telecommunications industry. Through its wholly owned subsidiary, NV Technology, the Company intends to design, develop, manufacture and license semiconductor hardware and software products based upon our Semiconductor Technologies. Through its wholly owned subsidiary, NV Entertainment, the Company recognized in the year ended October 31, 2004, gross profit from the revenues from the hit feature-length documentary, STEP INTO LIQUID. According to its distributor, the Film has grossed $3.7 million in box office receipts since its domestic theatrical release in August 2003. Since April 2004 it has been, and now remains, in wide DVD release domestically, grossing approximately $14 million in sales and rentals. The Film is currently in theatrical distribution internationally. NORTHWEST AIRLINES: Nasdaq Common Stock Trading Halts on Sept. 26 ----------------------------------------------------------------- Northwest Airlines Corporation (Nasdaq: NWAC) disclosed that its common stock would cease trading on the NASDAQ stock market, effective with the opening of business on Sept. 26, 2005. Northwest received written notification on Sept. 15, 2005, from NASDAQ that its common stock will be delisted in accordance with Marketplace Rules 4300, 4450(f) and IM-4300. Because of the exchange notification, the fifth character "Q" will be added to the company's trading symbol, which will change from NWAC to NWACQ at the opening of business on Sept. 19, 2005. Once delisted, shares could still be traded in the "over-the-counter" market. Northwest Airlines urges that appropriate caution be exercised with respect to existing and future investments in its common stock. It is entirely possible that ultimately no value will be ascribed to the company's existing common stock or other equity securities. Investors and other interested parties can monitor the progress of the airline's reorganization on the Internet at http://www.nwa-restructuring.com. In addition, the investor relations section of the company's Web site can be accessed at http://www.nwa.com/ Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington, D.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST AIRLINES: Fitch Places EETCs on Rating Watch Negative --------------------------------------------------------------- Fitch Ratings has placed six enhanced equipment trust certificate (EETC) transactions on Rating Watch Negative. The Rating Watch Negative reflects the bankruptcy filing of Northwest Airlines, Fitch's subsequent downgrade of Northwest's issuer default rating to 'D', as well as the outlook for the aircraft that support the EETC transactions. During the first 60 days of its bankruptcy, Northwest is not required to make payments to support its EETC and other aircraft financings. According to U.S. Bankruptcy Law, Northwest must determine whether it will resume payments or permanently stop payments during the 60-day period. Renegotiations of payments could also occur. Permanent stoppage of payments would trigger a return of the aircraft collateral. Interest and principal on the EETCs are paid every six months. The EETCs have liquidity facilities sufficient to pay interest on the rated classes for three payment periods. While it is difficult to determine which payments Northwest will continue, renegotiate, or stop permanently, Fitch expects that as part of its bankruptcy Northwest will likely downsize its fleet and eliminate non-core aircraft. If aircraft are returned, the EETC holders will look to sell or lease the aircraft. The ratings placed on Rating Watch Negative by Fitch are: Northwest Airlines pass-through certificates, series 2003-1 -- Class D 'CCC+'. Northwest Airlines pass-through certificates, series 2002-1 -- Class C-1 'B'; -- Class C-2 'B'. Northwest Airlines European enhanced equipment trust certificates, series 2001-2 -- Class A 'A-'; -- Class B 'BB-'. Northwest Airlines pass-through trusts, series 1996-1 -- Class A 'BB'; -- Class B 'B-'; -- Class C 'CCC+'. NWA Trust No.1 -- Class A 'BB-'; -- Class B 'B'. NWA Trust No.2 -- Class A 'BBB+'; -- Class B 'BB'; -- Class C 'B+'; -- Class D 'CCC+'. PACIFIC KAAFA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Pacific Kaafa Development aka Kaafa Development 80 Tobin Clark Drive Hillsborough, California 94010 Bankruptcy Case No.: 05-33174 Chapter 11 Petition Date: September 19, 2005 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Kevin R. Martin, Esq. McNichols, Randick, O'Dea and Tooli 5000 Hopyard Road, #400 Pleasanton, California Tel: (925) 460-3700 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. PATHMARK STORES: Posts $5.1 Million Net Loss in Second Quarter -------------------------------------------------------------- Pathmark Stores, Inc. (Nasdaq: PTMK) reported unaudited results for its second quarter and six-month period ended July 30, 2005. Sales for the second quarter of fiscal 2005 were $1 billion, a decrease of 1.1% from $1.01 billion in the prior year's second quarter. Same-store sales decreased 2.0% in the second quarter. The Company reported a net loss of $5.1 million in the second quarter of fiscal 2005 compared to a net loss of $1.6 million, in the prior year's second quarter. The results for the second quarter of fiscal 2005 included a $2.8 million pretax charge, related to the early extinguishment of debt. Excluding this item and a $0.2 million expense relating to strategic alternatives, the Company would have reported a net loss of $3.4 million. "When I took over as CEO two weeks ago, I noted my confidence in Pathmark - a strong franchise with excellent locations and store volumes," John Standley, Chief Executive Officer, said. "While there are some near-term challenges to overcome, I am excited about Pathmark's potential." Mr. Standley continued, "Our second quarter results were largely due to weak sales, a trend which has continued into the third quarter. We have already begun implementing plans to improve in-store merchandising and product assortments and to upgrade the look of our stores. Looking forward, Pathmark will become a stronger, consumer-driven company with better in-store execution and more compelling financial results." Pathmark Stores, Inc., is a regional supermarket currently operating 142 supermarkets primarily in the New York - New Jersey and Philadelphia metropolitan areas. The Company filed for chapter 11 protection on July 12, 2000 (Bankr. Case 00-02963). The Court confirmed its prepackaged Plan of Reorganization on Sept. 7, 2004. S&P currently rates Pathmark's $350 million 8-3/4% Senior Subordinated Notes due 2012 at CCC+. PAUL DAPONTES: Case Summary & List of 18 Unsecured Creditors ------------------------------------------------------------ Debtor: Paul N. Dapontes c/o Fairfield Imports, LLC 747 East Main Street Stamford, Connecticut 06902 Bankruptcy Case No.: 05-51213 Type of Business: The Debtor owns an auto dealership business. Chapter 11 Petition Date: September 19, 2005 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James M. Nugent, Esq. Harlow, Adams, and Friedman 300 Bic Drive Millford, Connecticut 06460 Tel: (203) 878-0661 Total Assets: $480,000 Total Debts: $1,160,064 Debtor's List of 18 Creditors Holding Unsecured Nonpriority Claims: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cornerstone Bank Loan - business debt $339,135 550 Summer Street Stamford, CT 06901 Fleet Bank Small Business Credit card - $110,053 P.O. Box 15368 business debt Wilmington, DE 19886 American Express Credit card $48,191 P.O. Box 1270 Newark, NJ 07101 Perkins Family Partnership Judgment $32,000 Vehicle Leasing Judgment - $33,938 Business debt Bank of New York Credit card $13,177 Discover Card Credit card $13,691 AT&T Universal Card Credit card $12,489 Donald Lane, Jr. Business debt $10,000 Bank of America Business Credit card - $7,700 Serv business debt American Express Line of credit $6,000 Citibusiness Card Credit card - $3,850 business debt Citibusiness Card Credit card - $3,797 business debt Nextel Communications Telephone charges $2,769 American Express Blue Credit card - $2,158 business debt Capital One Credit card - $1,294 business debt Citizens Bank Line of credit - $385 business debt BMW Financial Services Business debt $1 POLARIS NETWORKS: Wants More Time to Draft Consensual Plan ---------------------------------------------------------- Polaris Networks, Inc., asks the U.S. Bankruptcy Court for the Northern District of California, San Jose Division, for an extension of its time to file and solicit acceptances of a chapter 11 plan without interference from other parties. The Debtor wants until Dec. 9, 2005, to file a plan and until Feb. 7, 2006, to solicit acceptances of that plan. After five years of research and development, the Debtor designed the OMX Optical Transport Switch -- a piece of networking hardware designed to facilitate large telecommunications networks, and the IntelliOp Management Solution, the software that operates the OMX and allows it to integrate with other networks. Currently, the Debtor is having difficulties attracting buyers for its newly-developed technology because of its precarious financial position. Through a chapter 11 plan, which will allow the Debtor to emerge from chapter 11 as a financially healthy company, Polaris anticipates that buyers' confidence will be renewed resulting in the sale of its OMX and IntelliOp software. Berg & Berg Developers provided the Debtor a $600,000 DIP loan. The fresh capital will ensure that Polaris will be able to retain its core professionals to continue developing the OMX and the IntelliOp software. The products, the Debtor believes, will likely form the basis of a new value contribution to fund a plan of reorganization. The Debtor says the extension will be used to finalize the terms of a consensual plan with Berg & Berg without the threat and potential cost of a competing hostile plan fight. Headquartered in San Jose, California, Polaris Networks, Inc., -- http://www.polarisnetworks.com/-- provides a new generation optical transport switch for metro core networks. The Company filed for chapter 11 protection on May 13, 2005 (Bankr. N.D. Ca. Case No. 05-52927). Anne E. Wells, Esq., at Levene, Neale, Bender, Rankin and Brill LLP represents the Debtor. When the Company filed for protection from its creditors, it listed $1 to $10 million in assets and $10 to $50 million in debts. POLYAIR INTER: Lenders Extend Loan Agreement Until Feb. 28 ---------------------------------------------------------- Polyair Inter Pack Inc. (TSX:PPK)(AMEX:PPK) reported a net loss of $2.9 million on sales of $51.5 million for the quarter ended July 31, 2005, compared with net income of $700,000 on sales of $56.8 million for the third quarter of 2004. "We have previously reported that the accumulated losses and more specifically in the pool division had resulted in the Company not being in compliance with certain financial covenants in its lending agreements," Henry Schnurbach, President and Chief Executive Officer, said. "We are pleased to report that our lenders in principle have amended the Company's loan agreement to address the covenant defaults. The lenders have also agreed in principle to extend the current operating loan agreement, which expires on Nov. 1, 2005, for three years and provide an additional $5 million dollar working capital line until Feb. 28, 2006. The Company is also considering the sale of certain of its real estate and other non packaging assets with a view to concentrate its management and capital resources." Polyair Inter Pack Inc. -- http://www.Polyair.com/ -- in its Polyair Packaging and Cantar Pool Products divisions manufactures and distributes a wide range of protective packaging products and swimming pool products. These products are sold to distributors and retailers across North America. The company operates eleven manufacturing facilities, seven of which are in the US where it generates the majority of its sales. PORTRAIT CORP: Barry Feld to Resign as CEO, Chairman & President ---------------------------------------------------------------- Barry Feld disclosed his intention to resign his positions as Portrait Corporation of America, Inc.'s Chairman, CEO and President. Mr. Feld stated that he intends to retain his current titles and provide a smooth transition while the Company undertakes a search for his successor, a process which will commence promptly. The Company also disclosed the formation of a Transition Committee to be chaired by John F. Klein, a Company director, and to include Mr. Feld and other senior officers. The Transition Committee, which will report to the Board of Directors, will be responsible for overseeing and implementing the activities of the Company on a day-to-day basis until a new CEO is installed. "PCA and Barry Feld have enjoyed a constructive six-year relationship, during which time the Company's sales, studio locations and earnings have grown meaningfully, notwithstanding the challenges the Company currently faces," John A. Sprague, a PCA director and Managing Partner of Jupiter Partners, majority shareholder of the Company, said. "While we regret Barry's decision to depart, we appreciate his willingness to assist in an orderly transition, and we wish him success and happiness in his future endeavors." Mr. Feld commented: "I am pleased at the accomplishments of this management team and am confident that the efforts to date toward achieving a turn-around in the Company's current operations will bear fruit. I intend to work with the Transition Committee to ensure that PCA does not miss a beat during this transition period." Portrait Corporation of America, Inc., is the largest operator of retail portrait studios in North America and one of the largest providers of professional portrait photography products and services in North America based on sales and number of customers. Operating under the trade name Wal-Mart Portrait Studios, the Company is the sole portrait photography provider for Wal-Mart Stores, Inc. As of January 30, 2005, the Company operated 2,401 permanent portrait studios in Wal-Mart discount stores and supercenters in the United States, Canada, Mexico, Germany and the United Kingdom and provided traveling services to approximately 1,000 additional Wal-Mart store locations in the United States. The Company also serves other retailers and sales channels with professional portrait photography services. At Jan. 31, 2005, Portrait Corporation of America Inc.'s balance sheet showed a $171,041,000 stockholders' deficit, compared to a $141,144,000 deficit at Feb. 1, 2004. PREMIER AUTOMAX: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Premier Automax Inc. 855 Highway 51 Bypass Dyersburg, Tennessee 38024 Bankruptcy Case No.: 05-34784 Type of Business: The Debtor is a dealer of used cars. See http://www.premierautomax.com/ Chapter 11 Petition Date: September 19, 2005 Court: Western District of Tennessee (Memphis) Debtor's Counsel: Gary L. Jewel, Esq. Law Office of Gary L. Jewel 6000 Poplar Avenue, Suite 403 Memphis, Tennessee 38119 Tel: (901) 685-2408 Fax: (901) 685-2421 Total Assets: $605,000 Total Debts: $1,151,000 Debtor's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of Friendship Floorplan loan $375,000 P.O. Box 36 Friendship, TN 38034 Manheim Automotive Financial $280,000 Services 400 Northridge Road Atlanta, GA 30350 Automotive Financial Group Floorplan $200,000 5400 Getwell Memphis, TN 38150 Security Bank SBA loan covering $130,000 all assets Citizens City & County Floor plan loan $100,000 American Express $31,000 State of Tennessee Department Sales taxes $25,000 of Revenue Internal Revenue Service FICA & Withholding $10,000 PROXIM CORP: Wants to Assume & Assign Sublease to Terabeam ---------------------------------------------------------- Proxim Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to assume and assign a Sublease dated as of Aug. 23, 1999, between Proxim Corp., and PlaceWare, Inc. The Sublease is for a nonresidential real property located at 295 North Bernardo Avenue, Mountain View, California. The Debtors propose to assume and assign the sublease to Terabeam Wireless, the business name of YDI Wireless, Inc. Terabeam is the purchaser of substantially all of the Debtors' assets and the assignee of various executory contracts and unexpired leases from the Debtors, including the master lease for the property. The Debtors tell the Court that the sublease was inadvertently excluded from the list of unexpired leases to be assumed and assigned as part of the sale. As reported in the Troubled Company Reporter on July 29, 2005, Terabeam Wireless completed the purchase of substantially all of the Debtors' assets pursuant to an asset purchase agreement. The asset purchase agreement, dated July 18, 2005, was approved by the Court on July 20, 2005. Following that approval, the parties addressed the other pre-closing issues and completed the transaction on Wednesday, July 27. Under the terms of the asset purchase agreement, Terabeam acquired and assumed most of the domestic and foreign operations of Proxim for a cash purchase price of approximately $25,200,000, subject to certain adjustments, liability assumptions, and deductions. In addition, upon Court approval, Terabeam is obligated to provide debtor-in- possession financing, which will ultimately be deducted from the purchase price. In order to allow Terabeam to realize the benefits of the Master Lease, which it has assumed pursuant to the sale, Terabeam must also become the assignee of the sublease. Assigning the sublease to Terabeam, the Debtors say, will also directly benefit the estates by eliminating potential rejection damages that may be asserted against the Debtors by PlaceWare. Headquartered in San Jose, California, Proxim Corporation -- http://www.proxim.com/-- designs and sells wireless networking equipment for Wi-Fi and broadband wireless networks. The Debtors provide wireless solutions for the mobile enterprise, security and surveillance, last mile access, voice and data backhaul, public hot spots, and metropolitan area networks. The Debtor along with its affiliates filed for chapter 11 protection on June 11, 2005 (Bankr. D. Del. Case No. 05-11639). When the Debtor filed for protection from its creditors, it listed $55,361,000 in assets and $101,807,000 in debts. RED TAIL: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Red Tail Canyon LLC P.O. Box 22334 Portland, Oregon 97269 Bankruptcy Case No.: 05-41235 Chapter 11 Petition Date: September 19, 2005 Court: District of Oregon (Portland) Judge: Trish M. Brown Debtor's Counsel: J. Stephen Werts, Esq. Cable Huston Benedict Haagensen & Lloyd 1001 Southwest 5th Avenue, Suite 2000 Portland, Oregon 97204 Tel: (503) 224-3092 Fax: (503) 224-3176 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ROGERS COMMS: Pricing Tender Offer for 10.625% Senior Sec. Notes ---------------------------------------------------------------- Rogers Communications Inc. and Rogers Telecom Holdings Inc., a wholly owned subsidiary of RCI and formerly known as Call-Net Enterprises Inc., reported that RogersTelecom has determined the consideration to be paid in connection with its cash tender offer for any and all of its US$222.9 million aggregate principal amount of 10.625% Senior Secured Notes due 2008 (CUSIP No. 130910AJ1) and consent solicitation to amend the related indenture. The Tender Offer and the Solicitation are subject to the terms and conditions set forth in Rogers Telecom's Offer to Purchase and Consent Solicitation Statement dated August 30, 2005. Holders of Notes who validly tendered (and did not validly withdraw) Notes and validly delivered (and did not validly revoke) consents to the proposed amendments on or prior to 5:00 p.m., New York City time, on September 13, 2005, will receive total consideration per $1,000 principal amount of Notes tendered of $1,071.11, which amount includes a consent payment of $30, and also will receive any accrued and unpaid interest from the most recent interest payment date for the Notes to, but not including, the initial settlement date, which Rogers Telecom expects will occur today, September 14, 2005. Holders of Notes who validly tender Notes after 5:00 p.m., New York City time, on September 13, 2005 but on or prior to 11:59 p.m., New York City time, on September 27, 2005 will receive total consideration of $1,041.11 per $1,000 principal amount of Notes tendered, and also will receive any accrued and unpaid interest from the most recent interest payment date for the Notes to, but not including, the final settlement date, which Rogers Telecom expects will occur on September 28, 2005. The consideration for each $1,000 principal amount of Notes tendered was determined as of 2:00 p.m., New York City time, on September 13, 2005, as set forth in the Statement. Rogers Telecom's obligation to accept and pay for Notes validly tendered in the Tender Offer is subject to the terms and conditions set forth in the Statement and related materials. Holders should consult the Statement and related materials in their entirety for a full description of the terms and conditions of the Tender Offer and the Solicitation. RCI and Rogers Telecom also announce today that holders of more than a majority in aggregate principal amount of the Notes have delivered the requisite consents to adopt the proposed amendments to the indenture governing the Notes. Rogers Telecom plans to enter into a supplemental indenture that will amend and supplement the indenture to give effect to the proposed amendments. The proposed amendments set forth in the supplemental indenture will not become effective unless and until Rogers Telecom accepts validly tendered Notes representing at least a majority in principal amount of the outstanding Notes for payment pursuant to the Tender Offer and the Solicitation. If the proposed amendments become effective, all holders of Notes, including non non- tendering holders, will be bound thereby. The Tender Offer will expire at 11:59 p.m., New York City time, on September 27, 2005, unless extended. All withdrawal rights of tendering holders of Notes terminated at 5:00 p.m., New York City time, on September 13, 2005. Accordingly, tendering holders may no longer withdraw their Notes. Citigroup Global Markets Inc. is acting as the dealer manager and solicitation agent for the Tender Offer and the Solicitation. Questions regarding the Tender Offer and the Solicitation may be directed to: Citigroup Global Markets Inc. Liability Management Group (800) 558-3745 (U.S. toll free) (212) 723-6106 (collect). Requests for documents may be directed to the information agent: Global Bondholder Services Corporation (866) 470-3800 (U.S. toll-free) (212) 430-3774 (collect) Rogers Communications Inc. (TSX: RCI; NYSE: RG) -- http://www.rogers.com/-- is a diversified Canadian communications and media company engaged in three primary lines of business. Rogers Wireless Inc. is Canada's largest wireless voice and data communications services provider and the country's only carrier operating on the world standard GSM/GPRS technology platform; Rogers Cable Inc. is Canada's largest cable television provider offering cable television, high-speed Internet access, voice-over- cable telephony services and video retailing; and Rogers Media Inc. is Canada's premier collection of category leading media assets with businesses in radio and television broadcasting, televised shopping, publishing and sports entertainment. On July 1, 2005, Rogers completed the acquisition of Call-Net Enterprises Inc. (now Rogers Telecom Holdings Inc.), a national provider of voice and data communications services. Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.) -- http://www.sprint.ca/-- was acquired by Rogers Communications Inc. on July 1, 2005, and through its wholly owned subsidiary Rogers Telecom Inc. (formerly Sprint Canada Inc.) is a leading Canadian integrated communications solutions provider of home phone, wireless, long distance and IP services to households, and local, long distance, toll free, enhanced voice, data and IP services to businesses across Canada. Rogers Telecom owns and operates an extensive national fiber network, has over 150 co- locations in major urban areas across Canada including 33 municipalities and maintains network facilities in the U.S. and the U.K. * * * As reported in the Troubled Company Reporter on June 14, 2005, Fitch Ratings has initiated coverage of Rogers Telecom Holdings Inc. (formerly Call-Net Enterprises Inc.) and assigned a 'B-' rating to its senior secured notes. Fitch also places the ratings of Call-Net on Rating Watch Positive due to the CDN$330 million all-stock acquisition of Call-Net by Rogers Communications Inc. (rated 'BB-' by Fitch). Approximately $223 million of debt securities are affected by these actions. As reported in the Troubled Company Reporter on May 31, 2005, Standard & Poor's Rating Services affirmed its 'BB' long-term corporate credit ratings and 'B-2' short-term credit ratings on Rogers Communications Inc., Rogers Wireless Inc., and Rogers Cable Inc. S&P said the outlook is stable. RUFUS INC: Creditors Have Until Nov. 16 to File Proofs of Claim --------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware set 5:00 p.m. on Nov. 16, 2005, as the deadline for all creditors owed money by Rufus, Inc., aka Family Pet Centers, on account of claims arising prior to Aug. 10, 2005, to file written proofs of claim. All governmental units are directed to file their written proofs of claim on or before 5:00 p.m. on Feb. 6, 2006. All written proofs of claim must be mailed or delivered to: Rufus, Inc. Claims Docketing Center c/o Logan & Company, Inc. 546 Valley Road Upper Montclair, New Jersey 07043 Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs, dog food, supplies and accessories. The Debtor also operates a chain of six retail stores in the Northeastern United States. The Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr. D. Del. Case No. 05-12218). Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its bankruptcy proceeding. When the Debtor filed for protection from its creditors, it listed $1.8 million in total assets and $12.7 million in total debts. RUFUS INC: Court OKs Logan and Company as Claims & Noticing Agent ----------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware gave Rufus, Inc., aka Family Pet Centers permission to employ Logan and Company, Inc., as its claims and noticing agent. As previously reported in the Troubled Company Reporter on Aug. 15, 2005, Kathleen M. Logan, the President of Logan and Company, Inc., discloses the current hourly rates of professionals who will work in the engagement: Designation/Work Hourly Rate ---------------- ----------- Principal $270 Court Testimony $300 Statement & Schedule Preparation $200 Account Executive Support $185 Public Website Design & Maintenance $185 Programming Support $150 Project Coordinator $125 Data Preparation Analysis $100 Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs, dog food, supplies and accessories. The Debtor also operates a chain of six retail stores in the Northeastern United States. The Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr. D. Del. Case No. 05-12218). Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its bankruptcy proceeding. When the Debtor filed for protection from its creditors, it listed $1.8 million in total assets and $12.7 million in total debts. RUSH RODEO: List of 12 Largest Unsecured Creditors -------------------------------------------------- Rush Rodeo Company, LLC released a list of its 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Stewart Bros. Construction Co. $4,504 1106 North Garfield West Plains, MO 65775 Bristol Broadcasting $1,442 P.O. Box 2397 Paducah, KY 42002 Action Radio Company $1,400 Orlando, FL 32801 Davis Trailer $1,400 2808 Highway 11 Moselle, MS 39459 Capital Pac Lease $1,127 Rankin County CO-OP $916 Eureka Productions $914 Kudzu 102 $800 WADI $761 Twin City Broadcasting $714 Boswell Radio LLC $700 Pitney Bowes $78 Headquartered in Lake, Mississippi, Rush Rodeo Company, LLC filed for chapter 11 protection on Aug. 10, 2005 (Bankr. S.D. Miss. Case No. 05-53570). Jeffrey K. Tyree, Esq., at harris & Geno, PLLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $1 million to $10 million. RUSSELL-STANLEY: Creditors' Proofs of Claims Are Due By Sept. 23 ---------------------------------------------------------------- The United Sates Bankruptcy Court for the District of Delaware set Sept. 23, 2005, as the deadline for all creditors owed money by Russell-Stanley Holdings, Inc., and its debtor-affiliates on account of claims arising prior to Aug. 19, 2005, to file formal written proofs of claim. Creditors must deliver their claim forms to: Russell-Stanley Holdings, Inc. c/o The Trumbull Group Griffin Center Four Griffin Road North P.O. Box 721 Windsor, Connecticut 06095 Proof of Claim forms are available at http://www.uscourts.gov/bkforms/official/b10.pdf Headquartered in Bridgewater, New Jersey, Russell-Stanley Holdings, Inc. -- http://www.russell-stanley.com/-- is North America's largest plastic drum manufacturer, second largest steel drum manufacturer, and a leading industrial container supply chain management company. The Company and its affiliates filed for chapter 11 protection on Aug. 19, 2005 (Bankr. D. Del. Case No. 05-12339). Mark S. Chehi, Esq., and Sarah E. Pierce, Esq., Kayalyn A. Marafioti, Esq., Frederick D. Morris, Esq., and Bennett S. Silverberg, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 24, 2005, the Debtors estimated total assets of $293,388,432 and total debts of $669,100,295. S-TRAN HOLDINGS: Argues Chapter 7 Not in Creditors Best Interests ----------------------------------------------------------------- As previously reported, Keeman Petroleum Co., Inc., asked the U.S. Bankruptcy Court for the District of Delaware to convert S-Tran Holdings, Inc. and its debtor-affiliates' chapter 11 proceedings into chapter 7 liquidation proceedings. Keeman supplied the Debtors with petroleum goods and didn't receive payment. The supplier believes that the Debtors have no hope of reorganizing as evidenced by the cessation of their operations beginning May 5. As such, the liquidation of its assets should be made under chapter 7 of the Bankruptcy Code, Keeman says. The Debtors concede that they have stopped their operations and are in the process of orderly liquidating the estates' assets under chapter 11. They have reduced their workforce to 14 employees who are facilitating the wind-down of the businesses. The Debtors contend that converting the proceedings under chapter 7 will incur additional costs to the estates resulting in lesser distributions to creditors. In addition, the Debtors think that the best persons to negotiate the sale of their assets are their remaining employees who know the business well. A chapter 7 trustee may cause more harm than good, the Debtors assert. The Debtors point out that bringing in new parties and professionals in the middle of a reorganization process to begin liquidation in a chapter 7 proceeding is not the most practical, efficient, expeditious, or most effective manner of liquidating their estates. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second-day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. S-TRAN HOLDINGS: Wants Taylor & Martin to Auction Motor Vehicles ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on June 15, 2005, the U.S. Bankruptcy Court for the District of Delaware gave S-Tran Holdings, Inc., and its debtor-affiliates permission to employ Taylor & Martin, Inc., as their auctioneers. The Debtors ask the Court to extend the employment of Taylor & Martin under Section 101 of the Bankruptcy Code and Rule 2014 and 6005 of the Federal Rules of Bankruptcy Procedures. The Debtors also want to pay Taylor & Martin's compensation without further Court order. Taylor & Martin have already completed the auction of substantially all of the Debtors' equipment, shop, office, dock and miscellaneous personal property. Now, the Debtors want Taylor & Martin to auction some personal property in Tunica, Mississippi. Taylor & Martin will: -- conduct the auction of tractors, trailers and other motor vehicles, and -- consummate private sales and conduct additional auctions. Specifically, Taylor & Martin will: (a) prepare personal property for sale; (b) provide promotional support for the sale prior to the auction; (c) conduct a sale in a commercially reasonable manner, which will be staffed by qualified auctioneers, informed sales personnel, ringmen, and transaction closing personnel in order to properly display, sell, close and account for all transactions relating to the personal property; (d) prepare financial settlements in connection with each sale; (e) provide a dedicated coordinator to assist with equipment marshalling, delivered unit count, sales site security, contract labor and equipment preparation; (f) provide labor and equipment necessary to transport all personal property to the auction sale sites, and (g) lease auction sites as necessary. Paul C. Wachter, a member at Taylor & Martin, discloses that the Firm will be paid a 9.5% commission of the auction proceeds for the sale of each item of personal property. As reported, the Debtors believe that Taylor & Martin is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05- 11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. S-TRAN HOLDINGS: Wants to Employ BDO Seidman as Tax Advisor ----------------------------------------------------------- S-Tran Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ BDO Seidman, LLP as their tax advisor, nunc pro tunc to Sept. 2, 2005. The Debtors want BDO Seidman to prepare some state and federal tax returns for the fiscal year ending Dec. 31, 2004. The Firm will also prepare applicable Income Tax Return for the states of Alabama, California, Delaware, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, and Virginia. James B. Willis, a member at BDO Seidman, LLP, discloses that the Firm's fess is in the range of $45,000 to $50,000. The Firm's current hourly rates are: Designation Hourly Rate ----------- ----------- Partner $400 Senior Manager $325 Manager $225 Staff $125 BDO Seidman, LLP -- http://www.bdo.com/-- is one of the country's leading accounting and tax service providers. The Debtors believe that BDO Seidman, LLP, is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05- 11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. SAINT VINCENTS: Says No to Paying Nurses' Pension & Benefit Claims ------------------------------------------------------------------ Saint Vincents Catholic Medical Centers of New York asks the U.S. Bankruptcy Court for the Southern District of New York to deny the New York State Nurses Association's demand for payment of prepetition pension and benefit claims. The Nurses' Association had asked for the payment of retroactive pay increase commencing Nov. 1, 2004, pursuant to a Memorandum Agreement signed on June 18, 2005. The Agreement provides the Base Compensation Rates for nurses who are members of the Association and working at the Debtors' hospitals. The Nurses' Association estimates that approximately $507,752 is due for this retroactive prepetition pay raise and $60,000 for the one-month postpetition wage increase, exclusive of the employers' contribution to the Federal Insurance Contributions Act. On a per nurse basis, this amount comes between $1,000 and $2,000 on the prepetition raise. The Debtors claims that only $480,000 is due to the nurses. In addition, the Nurses Association tendered for payment two checks that it received from SVCMC as contribution to the Benefit Fund and the Pension Fund: -- $162,348 for the Pension Fund; and -- $1,288,789 for the Benefit Fund. The Debtor's counsel, Stephen B. Selbst, Esq., at McDermott Will & Emery LLP, argues that by seeking authorization to pay certain prepetition wages, the Debtors sought to achieve the dual goals of maintaining financial stability for their employees and not disrupting their operations or further straining their financial position. He recounts that the Debtors agreed with the New York State Nurses Association to pay its members at the increased rate specified in a Memorandum of Agreement as of the payroll cycles commencing July 31, 2005, and August 7, 2005, for Bayley-Seton and Staten Island Hospitals. On September 6, 2005, the Debtors further agreed to become current for all unpaid postpetition amounts accrued at the increased rate commencing at the completion of the first payroll cycle following the earlier of entry of an order approving an additional or substitute postpetition financing, or November 15, 2005. The Debtors have also agreed to pay the amount due for the prepetition wage increase for the period from November 1, 2004, through the Petition Date via payment of six monthly installments commencing at the completion of the first payroll cycle following the earlier of the entry of an additional or substitute postpetition financing, or January 1, 2006. Mr. Selbst explains that the Debtors need the flexibility to address the prepetition pension and benefit claims at a later time or under a plan of reorganization, in accordance with their fiduciary duties to all creditors and business priorities. If the Debtors address the pension and benefit claims under a plan, it will be after the Debtors have fully examined the Agreement and after the Court has made a determination regarding the priority or non-priority status of the claims. Mr. Selbst asserts that the Bankruptcy Code does not require the prepetition payments. The pension and benefit contributions stand on a different basis from the prepetition and postpetition wages because of their magnitude and because there is no immediate harm to the nurses if the Debtors are not forced to make the payment at this time. The prepetition arrears for the Nurses Association's pension and benefit payments exceed $1.4 million. If the Association's prepetition claims are paid, similarly situated creditors could assert claims of almost eight to 10 times this amount in respect of their claims. The Debtors simply should not be required to make substantial prepetition payments when the restructuring process is in its infancy and the lack of payment is not causing immediate harm, Mr. Selbst asserts. The Debtors fully disagree with the Nurses Association's assertion that the Debtors have intentionally discriminated its members by not reissuing the Debtors' issued checks for $1,805,482 on June 29, 2005. The Debtors' liquidity crisis was the cause for the Payments to be dishonored, Mr. Selbst says. "The dishonored payments to the New York Nurses Association Pension Fund and the New York Nurses Association Benefit Fund constitute only a portion of similar payments, which were declined and remain unpaid to various labor unions." Mr. Selbst assures the Court that the Nurses Association members are receiving their full benefits at this time, notwithstanding the missed payment. The Debtors have made all postpetition payments to the Nurses Association. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Settles Utility Dispute with NewEnergy ------------------------------------------------------ Saint Vincent Catholic Medical Centers of New York and Constellation NewEnergy, Inc., have engaged in negotiations to resolve issues concerning their Electricity Service Agreement, dated October 10, 2003. As reported in the Troubled Company Reporter, Constellation NewEnergy asked the U.S. Bankruptcy Court for the Southern District of New York for authority to terminate, under Section 556, its Energy Services Agreement with Saint Vincents. In its motion to terminate, Constellation NewEnergy told the Bankruptcy Court that it has the right to terminate its agreement with the Debtor under Section 556 of the Bankruptcy Code that provides that a forward contract merchant can terminate a forward contract based on an Ipso Facto Default clause in the contract notwithstanding the automatic stay or other provisions of the Bankruptcy Code. To settle their disputes and avoid further litigation, the parties stipulate that: (a) The Agreement will be terminated, and NewEnergy is authorized to take necessary steps to effectuate the termination; (b) NewEnergy will notify Consolidated Edison Company of New York, Inc., to de-enroll SVCMC's accounts from service by NewEnergy, in accordance with Con Edison's standard practices. Termination of service under the Agreement with respect to each Debtor's account will be effective on the first regularly scheduled meter read date after Con Edison processes the de-enrollment; (c) NewEnergy will continue to invoice SVCMC, and SVCMC will pay NewEnergy, for amounts owed under the Agreement with respect to the period from the Petition Date through the Termination Date within 15 days of the date of the invoices concerning the period. The invoices will be submitted after the appropriate information from Con Edison is provided to NewEnergy, and the amounts owed will constitute an administrative expense pursuant to Sections 503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code; (d) Within 60 days after the Termination Date, NewEnergy will also provide SVCMC with a statement reflecting any adjustments with respect to the Postpetition Period. Any additional payments owed by SVCMC to NewEnergy will be paid to NewEnergy within 15 days of the date of the statement, and will constitute an administrative expense. Should the adjustments result in a credit to SVCMC, NewEnergy agrees to include a check payable to SVCMC with its adjustment statement; and (e) The Stipulation will not affect NewEnergy's rights with respect to its claim for amounts owed under the Agreement for the period prior to the Petition Date. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAMSONITE CORP: Equity Deficit Narrows to $38.22 Mil at July 31 --------------------------------------------------------------- Samsonite Corporation delivered its quarterly report on Form 10-Q for the quarter ending July 31, 2005, to the Securities and Exchange Commission on September 14, 2005. As of July 31, 2005, the Company's equity deficit narrowed to $38,216,000 from a $49,139,000 deficit at Jan. 31, 2005. The Company has assets totaling $572,625,000 and debts aggregating $595,951,000 at July 31, 2005. The Company's consolidated revenues for the three months ended July 31, 2005, increased to $236.5 million from $224.8 million in the second quarter of the prior year, an increase of $11.7 million, or 5.2%. Operating income increased by $3.6 million to $17.6 million for the three months ended July 31, 2005 compared to July 31, 2004. Current year operating income reflects an increase in gross profit of $10.7 million compared to the prior year which was partially offset by selling, general and administrative expenses that were $8.2 million higher than in the prior year. Included in the $8.2 million is a $2.0 million increase in the second quarter as a result of starting up the joint venture in Japan, which commenced operations in January 2005. Net income for the three months ended July 31, 2005 was $2.1 million, compared to a net loss of $18.3 million in the prior year period. The $20.4 million difference is attributable to" * an increase in operating income from the prior year of $3.6 million; * other expenses decreased by $15.7 million, primarily due to the inclusion in the prior year period of $13.7 million of redemption premiums and the write-off of $4.1 million of deferred financing costs related to the refinancing of the Company's 10-3/4% senior subordinated notes completed in June 2004; * interest expense decreased by $1.6 million due to the effects of the June 2004 refinancing; * an increase in interest income of $0.4 million; and * an increase in income tax expense of $0.9 million. A full-text copy of Samsonite's latest quarterly report is available at no charge at http://researcharchives.com/t/s?190 Samsonite Corporation designs, manufactures and distributes luggage, casual bags, business cases and travel related products throughout the world. The Company also licenses its brand names and is involved with the design and sale of apparel. SCHOTT ALARM: List of 14 Largest Unsecured Creditors ---------------------------------------------------- Schott Alarm Co., released a list of its 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Siemens Building Tech/Faraday $23,912 P.O. Box 945658 Atlanta, GA 30394 Northern Video Supply $15,104 P.O. Box 66971 St. Louis, MO 63168 Lakritz Herman and Wissbrum, P.C. $12,561 30100 Telegraph Road Bingham Farms, MI 48025 Financial Pacific Leasing $3,732 Honeywell $3,450 Verizon $3,228 Habron Electric $2,250 Speedway $1,774 Darol Cosens $1,700 Waste Management $1,023 Arrow Uniform $642 Thyssenkrupp Elevator $274 Lowes Business Account $223 AT&T $220 Headquartered in Flint, Michigan, Schott Alarm Co., Inc. installs, services and monitors electronic security services. The Company filed for chapter 11 protection on Aug. 17, 2005 (Bankr. E.D. Mich. Case No. 05-34166). Dennis M. Haley, Esq., at Winegarden, Haley, Lindholm & Robertson, P.L.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $277,153 in total assets and $1,570,094 in total debts. SCOTT DESERT: Files Schedules of Assets and Liabilities ------------------------------------------------------- Scott Desert Shadows, LLC, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of Arizona, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $1,800,000 B. Personal Property $2,500 C. Property Claimed as Exempt D. Creditors Holding Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding $3,644,519 Unsecured Nonpriority Claims ----------- ---------- Total $1,802,500 $3,644,519 Headquartered in Phoenix, Arizona, Scott Desert Shadows, LLC, filed for chapter 11 protection on Aug. 15, 2005 (Bankr. D. Ariz. Case No. 05-14892). Steven N. Berger, Esq., at Engelman Berger, P.C., 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. SCOTT DESERT: List of 3 Largest Unsecured Creditors --------------------------------------------------- Scott Desert Shadows, LLC released a list of its 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Foothills Shadows Associates Seller under sale $1,000,000 5141 North 40th Street agreement Suite 500 Phoenix, AZ 85018 RAL Consulting, Inc. Environmental $20,000 4214 East Indian School Road analysis fees Suite 201 Phoenix, AZ 85018 Brier & Irish, P.L.C. Legal fees $15,000 c/o Craig T. Irish, Esq. 2400 East AZ Biltmore Circle, Suite 1290 Phoenix, AZ 85016 Headquartered in Phoenix, Arizona, Scott Desert Shadows, LLC, filed for chapter 11 protection on Aug. 15, 2005 (Bankr. D. Ariz. Case No. 05-14892). Steven N. Berger, Esq., at Engelman Berger, P.C., 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. SCOTT DESERT: U.S. Trustee Unable to Organize Committee ------------------------------------------------------- Ilene J. Lashinsky, the United States Trustee for Region 14 responsible for appointing official committees in debtors' bankruptcy cases, reported to the U.S. Bankruptcy Court for the District of Arizona that despite efforts to contact unsecured creditors, there has not been a sufficient showing of creditor interest as of Sept. 12, 2005. Therefore, the United States Trustee has been unable to appoint an Unsecured Creditors' Committee. Headquartered in Phoenix, Arizona, Scott Desert Shadows, LLC, filed for chapter 11 protection on Aug. 15, 2005 (Bankr. D. Ariz. Case No. 05-14892). Steven N. Berger, Esq., at Engelman Berger, P.C., 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. SELECT MEDICAL: Inks Private Offering for $175 Mil. of Sr. Notes ---------------------------------------------------------------- Select Medical Holdings Corporation, the parent company of Select Medical Corporation, entered into an agreement to privately sell $175 million aggregate principal amount of senior floating rate notes due 2015, which will bear interest at a rate per annum, reset semi-annually, equal to the 6-month LIBOR plus 5.75%. The floating rate notes will be general unsecured obligations of Holdings and will not be guaranteed by Select or its subsidiaries. The floating rate notes are expected to be issued and sold in a private offering to institutional investors pursuant to Rule 144A and Regulation S under the Securities Act of 1933. The consummation of the offering is subject to customary closing conditions and Select's obtaining an amendment to its credit facility to permit the transaction. The net proceeds of the issuance of the floating rate notes, together with cash on hand of Select, will be used to reduce the amount of Holdings' preferred stock, to make a payment to participants in Holdings' long-term cash incentive plan, and to pay related fees and expenses. Through acquisitions and new development, Select Medical has established itself as the largest operator of LTAC hospitals in the U.S. and the second-largest operator of outpatient rehabilitation clinics. The company operates 98 LTACs in 26 states, 4 inpatient rehabilitation hospitals, and 740 outpatient rehabilitation clinics in the U.S. and Canada. * * * As reported in the Troubled Company Reporter on Sept. 12, 2005, Moody's Investors Service assigned a rating of Caa1 to the proposed offering of $250 million in senior unsecured notes by Select Medical Holdings Corporation, the parent company of Select Medical Corporation. The proceeds of the proposed offering will be used to redeem $250 million of preferred equity contributed to the company by a financial sponsor group consisting of Welsh Carson Anderson & Stowe and Thoma Cressey Equity Partners in the leveraged buy-out of Select Medical that closed in February 2005. As reported in the Troubled Company Reporter on Sept. 12, 2005, Standard & Poor's Ratings Services assigned its 'B-' rating to Select Medical Holdings Corp.'s proposed $250 million senior unsecured floating-rate notes due 2015, issued under Rule 144A. Proceeds will be used to redeem preferred stock. Existing ratings on Select Medical Corp., including the 'B+' corporate credit rating, were affirmed. The outlook is negative. Debt outstanding (pro forma for the new issue) is about $1.8 billion. SOLUTIA INC: U.S. Labor Unions Okay New Collective Labor Pacts -------------------------------------------------------------- Each of Solutia Inc.'s U.S. labor unions has ratified new five- year collective bargaining agreements which set pension and health and welfare benefits for its employees who are represented by labor unions. The agreements, which take effect Jan. 1, 2006, provide for changes to pension and welfare benefits consistent with those Solutia had previously implemented for U.S. non-union employees. "The ratification of these agreements is a strong endorsement of the future of our company by a very important segment of our employees. These changes will help us emerge from bankruptcy as a viable, well-positioned company. I would like to commend the union officers at each of our facilities for their leadership in working with us to build a Solutia that can achieve its ultimate potential," said Jeffry N. Quinn, president and CEO, Solutia Inc. James R. Voss, senior vice president of business operations, added, "The new agreements includes changes to our pension and employee welfare benefits that are necessary for Solutia to be cost competitive on a global basis, and to improve the future viability of our unionized facilities. In an era when too often companies have an adversarial relationship with their unions in the courtroom or on the picket lines, we are pleased that our union memberships had the foresight to work with us and negotiate and ratify five-year agreements that are in everyone's best interests." Approximately 14 percent of Solutia's 4,100 U.S. employees are represented by labor unions. These seven local labor unions represent employees at five Solutia sites: * Anniston, Ala.; * Sauget, Ill. (Krummrich Plant); * St. Louis, Mo. (Queeny Plant); * Trenton, Mich.; and * Springfield, Mass. (Indian Orchard Plant). These sites produce products as Saflex(R) and Butvar(R) resin, used in the automotive and commercial/residential construction industries, along with other products such as Therminol(R) heat transfer fluids, which are used in manufacturing processes at temperatures ranging from -60 degrees F to 750 degrees F, and Skydrol(R), the most advanced fire-resistant hydraulic fluid for aviation. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. SR TELECOM: To Appeal Nasdaq Delisting Notice --------------------------------------------- SR Telecom Inc. (TSX: SRX, Nasdaq: SRXA) reported that it received notice from The Nasdaq Stock Market Listing Qualifications Department that Nasdaq has determined to delist SR Telecom's common shares from the Nasdaq National Market. SR Telecom intends to appeal this delisting to a Nasdaq Listing Qualifications Panel; this request for a hearing will stay the delisting of SR Telecom's common shares, which was initially scheduled for the opening of business on September 21, 2005, pending the resolution of such appeal by the Listing Qualifications Panel. SR Telecom has received two Nasdaq Staff Determinations: (1) the first on September 12, 2005, indicating that SR Telecom fails to comply with the $10 million shareholders' equity requirement for continued listing set forth in Marketplace Rule 4450(a)(3), and (2) the second on September 14, 2005, indicating that SR Telecom fails to comply with the $1.00 minimum bid price requirement for continued listing set forth in Marketplace Rule 4450(a)(5) and that its common shares are therefore subject to delisting from the Nasdaq National Market. SR Telecom intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determinations. Under Nasdaq's rules, the delisting of SR Telecom's Common Shares will be automatically stayed until the Listing Qualifications Panel makes its determination. SR Telecom Inc. (TSX: SRX, Nasdaq: SRXA) designs, manufactures and deploys versatile, Broadband Fixed Wireless Access solutions. For over two decades, carriers have used SR Telecom's products to provide field-proven data and carrier-class voice services to end- users in both urban and remote areas around the globe. SR Telecom's products have helped to connect millions of people throughout the world. * * * As reported in the Troubled Company Reporter on May 18, 2005, Deloitte & Touche LLP raised substantial doubt about SR Telecom Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended December 31, 2004. Factors that prompted the going concern opinion include: -- the Company's losses for the current and prior years, -- negative cash flows, -- significant deficiency in working capital, -- reduced availability of supplier credit, -- breach of a number of its long-term debt covenants and undertakings, and -- lack of operating credit facilities. Deloitte said the realization of assets and the discharge of liabilities in the ordinary course of business are subject to significant uncertainty. TIMKEN CO: Inks New Four-Year Labor Pact with Steelworkers ---------------------------------------------------------- The Timken Company and the steelworkers union have reached a new, four-year labor agreement. Members of the steelworkers union voted on Sept. 15 to ratify the new contract, which covers approximately 2,700 people at the company's bearing plants in Canton and steel plants in Canton and Wooster, Ohio. Timken employs more than 4,500 in Stark County, Ohio. "This is a success for our associates and the community," said Don Walker, senior vice president - human resources and organizational advancement. "We are pleased to have successfully concluded this matter with the union and look forward to intensifying our focus on delivering the quality and value our customers demand." The new contract goes into effect when the current contract expires on Sept. 26, 2005. The Timken Company (NYSE: TKR) -- http://www.timken.com/-- keeps the world turning, with innovative ways to make customers' products run smoother, faster and more efficiently. Timken's highly engineered bearings, alloy steels and related products and services turn up everywhere - on land, on the seas and in space. With operations in 27 countries, sales of $4.5 billion in 2004 and 26,000 employees, Timken is Where You Turn(TM) for better performance. * * * As reported in the Troubled Company Reporter on Apr. 4, 2005, Moody's Investors Service has affirmed The Timken Corporation's Ba1 senior implied and senior unsecured ratings and changed the ratings outlook to stable from negative. The change in the outlook is based on the company's improved operating performance and positive effect on financial metrics, the success in achieved integration related synergies from the Torrington acquisition, and a more favorable outlook for the company's industrial and steel segments over the near and intermediate term. TRANSITIONS BOOKPLACE: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Transitions Bookplace, Inc. 1000 West North Avenue Chicago, Illinois 60622 Bankruptcy Case No.: 05-38402 Type of Business: The Debtor is a bookstore that specializes in personal growth, inward exploration and the pursuit of spirituality. See http://www.transitionsbookplace.com/ Chapter 11 Petition Date: September 19, 2005 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Andrew J. Abrams, Esq. Sugar, Friedberg & Felsenthal LLP 30 North LaSalle Street, Suite 3000 Chicago, Illinois 60602 Tel: (312) 704-9400 extension 2172 Fax: (312) 372-7951 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 ------ --------------- ------------ Baker & Taylor, Inc. Merchandise $61,454 1205 Payshere Circle Chicago, IL 60674 New Leaf Distributing Co. Merchandise $58,804 401 Thorton Road Lithia Springs, GA 30122 Santosh & Doris Krinsky Trust Loan $51,342 33719 116th Street Twin Lakes, WI 53181 North Avenue Property LLC Rent $44,823 Hawthorne LLC Rent $34,045 Putnam Berkeley Group Merchandise $21,355 Citibank Advantage Business Credit Card $16,109 Frost Ruttenberg & Rothblatt PC Legal Fees $11,655 Harper Collins Publishers Merchandise $11,640 Random House, Inc. Merchandise $11,136 Aronberg Goldgehn Legal Fees $10,855 Davis & Garmisa Baker & Taylor Entertainment Merchandise $8,479 Beyond Words Publishing, Inc. Merchandise $7,814 Publishers Group West Merchandise $7,000 Maria's Janitorial Services Janitorial $5,835 VHPS Virginia Merchandise $5,652 Institute for Inner Studies Merchandise $5,453 Notes & Queries, Inc. Merchandise $5,383 Bookazine Merchandise $4,959 Integral Yoga Distribution Merchandise $4,685 TRIM TRENDS: Wants Plan-Filing Period Stretched to Dec. 14 ---------------------------------------------------------- Trim Trends Company, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, to extend, until Dec. 14, 2005, their exclusive period for filing a chapter 11 Plan of Reorganization. The Debtors also want their exclusive period to solicit plan acceptances extended to Feb. 13, 2006. The Debtors tell the Bankruptcy Court that a variety of logistical and practical issues have prevented them from filing a plan. In particular, the Debtors do not expect to complete the proposed sale of a substantial portion of their assets, subject to higher and better offers at an auction, within the current exclusive plan-filing period. Headquartered in Farmington Hills, Michigan, Trim Trends Company, LLC -- http://www.trimtrendsco.com/-- manufactures automobile and light truck component parts for both original equipment manufacturers and Tier 1 suppliers. The Company and its debtor- affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-56108). Joseph M. Fischer, Esq., at Carson Fischer, P.L.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $65 million and total liabilities of $81 million. UAL CORP: IRS Seeks $114 Million in Back Taxes ---------------------------------------------- The Internal Revenue Service filed a claim in the U.S. Bankruptcy Court for the Northern District of Illinois seeking to recover $114 million from UAL CORP. for excise taxes and missed contributions to its pension plans. The IRS' claim adds to UAL's financial woes that needs to be resolved before it can emerge from bankruptcy in February 2006 as targeted. The airline got Court approval in July 2004 to dump its pension obligations on the Pension Benefit Guaranty Corp., a move which save it approximately $645 million a year. Earlier this month, UAL and its 26 subsidiaries filed a joint reorganization plan. The Plan contemplates a debt-for-equity swap to settle claims of the estates' creditors while extinguishing shareholders equity. UAL Corp.'s Disclosure Statement explaining its Plan is scheduled for a hearing on October 11 before the Honorable Eugene R. Wedoff. The Debtors anticipate that the confirmation hearing will be held in mid January 2006. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. UAL CORP: Wants Court to Approve GECAS Sale/Leaseback Deal ---------------------------------------------------------- As previously reported, the multi-year negotiations with the Public Debt Group have finally culminated in the signing of term sheets, on Aug. 5, 2005, for the restructuring of UAL Corporation and its debtor-affiliates' obligations in connection with the vast majority of the Public Debt Group aircraft that the Debtors has retained in its fleet. On Aug. 30, 2005, the Debtors sought Court approval of a global settlement. For most of the Public Debt Group aircraft subject to the Global Settlement, the parties reached agreement on restructured long- term lease rates or mortgage financing. The parties, however, could not come to terms on new lease rates for six Boeing 767- 300ER aircraft and 12 associated Pratt & Whitney PW 4060 engines, originally financed prepetition through several pre-1997 public debt transactions. The Aircraft bear tail numbers N642UA, N643UA, N644UA, N646UA, N647UA, and N661UA. Unable to restructure the rates on the 767 Aircraft, the parties instead entered into certain agreements for the Debtors' outright purchase of the 767 Aircraft, which the Court approved on August 26, 2005. To refinance the cost of purchasing the 767 Aircraft being purchased by the Debtors from the Public Debt Group, the Debtors negotiated a letter agreement with GE Commercial Aviation Services LLC. By this motion, the Debtors seek the U.S. Bankruptcy Court for the Northern District of Illinois' permission to enter into the Letter Agreement. Among other things, the Letter Agreement provides that: * GECAS will purchase the 767 Aircraft from the Debtors and then lease the Aircraft back to the Debtors. * The lease price schedule for the leases is base on the purchase price that GECAS pays the Debtors for the Aircraft. * The leases will be secured by a junior lien on their pre- existing collateral which secures the Debtors' obligations to PK AirFinance, Inc., an affiliate of GECAS, none of which collateral secures the Debtors' obligations under their DIP facility or any other party other than GECAS and certain of its affiliates. * The leases will contain cross acceleration clauses to all other lease and loan obligations with GECAS and will contain a default provision that will be triggered if any leases are not assumed or loan obligations are not reinstated by the Debtors' emergence. James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago, Illinois, assures Judge Wedoff that the terms of the Letter Agreement are fair and reasonable. The Debtors will obtain financing for the Aircraft under terms that are superior to both the prepetition lease agreements and the Public Debt Group's lease proposals. Additionally, the Letter Agreement will replenish the Debtors' liquidity. "The Letter Agreement, including both the sale transaction and the lease transactions contemplated therein, has gone through many drafts, was negotiated over the course of a number of weeks and is the product of lengthy discussions on an arm's length basis and is not the product of collusion," Mr. Sprayregen says. The DIP Lenders have also consented to the transactions contemplated under the Letter Agreement. Letter Agreement Is Binding The Debtors ask the Court to declare that the Letter Agreement is binding on them and their successors and permitted assigns, including any trustee appointed under Chapter 7 of the Bankruptcy Code or otherwise. The Debtors also ask Judge Wedoff to: -- modify and lift the automatic stay and make Section 1110 of the Bankruptcy Code applicable to the leases to permit enforcement of remedies under the Letter Agreement and related agreements; -- approve the transaction, free and clear of all liens, claims and encumbrances; -- find that GECAS is a good faith purchaser entitled to the protection of Section 363(m); and -- grant GECAS a junior security interest in the 2002 Collateral to secure the Debtors' obligations under the new leases. Terms Are Confidential Mr. Sprayregen notes that the terms of the Letter Agreement are of a highly confidential and sensitive nature to both the Debtors and GECAS. The Debtors have provided the details of the Letter Agreement to counsel for the Official Committee of Unsecured Creditors, non-recused members of the Creditors' Committee and the DIP Lenders. When the Court grants authority to enter into the Letter Agreement, the Debtors will provide documentation to counsel for the DIP Lenders and counsel for the Creditors' Committee and, if required, will file these documents with the Court under seal. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNISYS CORP: Bondholders Tender $339.8 Million of 8-1/8% Notes -------------------------------------------------------------- Unisys Corporation (NYSE:UIS) accepted tenders and consents for $339.8 million aggregate principal amount of 8-1/8% senior notes due 2006, as of 5:00 p.m., New York City time, on Sept. 15, 2005. The notes represent approximately 85% of the $400 million notes outstanding. Based on the pricing formula described in the Offer to Purchase and Consent Solicitation Statement dated Sept. 9, 2005, the total consideration to be paid by Unisys for these notes, which includes the $20 consent payment, is $1,025.65 for each $1,000 principal amount of notes. Holders of these notes will also be paid accrued and unpaid interest up to, but not including, the payment date. Unisys said it expects to make payment for these notes on Monday, Sept. 19, 2005, using the proceeds from its issuance, on Sept. 14, 2005, of $550 million of senior notes. Unisys said that it expects to take an estimated pre-tax charge in the third quarter of approximately $11 million for the premium paid and unamortized debt expense in respect of the $339.8 million of notes tendered as of the Consent Date. Consent Solicitation In tendering their notes, holders consented to amendments that will eliminate substantially all of the restrictive covenants and certain default triggers from the indenture governing the notes. Unisys and the trustee have therefore executed a supplemental indenture containing the amendments described in the company's Offer to Purchase and Consent Solicitation Statement. The amendments will become operative when Unisys makes the payment referred to above. Holders who validly tender their notes after the Consent Date and prior to 5 p.m., New York City time, on Oct. 7, 2005, are not entitled to the $20 consent payment, and will receive the total consideration minus the consent payment. In such case, holders will receive $1,005.65 for each $1,000 principal amount of notes tendered after the Consent Date but on or prior to the Expiration Date. Citigroup Global Markets Inc. and Banc of America Securities LLC are the exclusive dealer managers and solicitation agents for the tender offer and consent solicitation. Questions regarding the tender offer and consent solicitation can be directed to Citigroup Global Markets Inc., Liability Management Group at 800-558-3745 (toll free) or 212-723-6106 (collect) or Banc of America Securities LLC, High Yield Special Products at 888-292-0070 (toll free) or 704-388-9217 (collect). Requests for documents may be directed to Global Bondholder Services Corp., the information agent, at 866-924-2200 (toll free) or 212-430-3774 (banks and brokers). Unisys -- http://www.unisys.com/-- is a worldwide information technology services and solutions company. The Company combines expertise in consulting, systems integration, outsourcing, infrastructure and server technology with precision thinking and relentless execution to help clients, in more than 100 countries, quickly and efficiently achieve competitive advantage. * * * As reported in the Troubled Company Reporter on Sept. 13, 2005, Moody's Investors Service affirmed Unisys Corporation's corporate family rating at Ba3 and short term liquidity rating at SGL-3, and assigned a Ba3 to Unisys Corporation's proposed new senior unsecured notes. The company plans to offer approximately $450 million of senior unsecured notes to be drawn under its $1.5 billion shelf program rated (P)Ba3. Proceeds from the offering will be used to tender for $400 million of 8 1/8% senior notes due June 2006. USGEN NEW ENGLAND: Wants Court to Nix Carlile Enterprises' Claim ---------------------------------------------------------------- On Sept. 10, 2003, USGen New England, Inc., and Carlile Enterprises, Inc., entered into a Consulting Services Agreement whereby Carlile will perform consulting services for USGen, including assisting USGen in the procurement of coal under new contracts. On March 31, 2005, Carlile filed a complaint against USGen seeking to recover $2,963,759 as compensation for services rendered under the Agreement or the reasonable value of the services rendered, plus punitive damages. The Complaint asserts that Carlile rendered consulting services to USGen from September 26, 2003, through December 31, 2004, and that these services were a necessary cost and expense of preserving USGen's estate, as provided in Section 503(b)(1)(a) of the Bankruptcy Code. Leslie Polt, Esq., at Blank Rome LLP, in Washington, D.C., relates that USGen sought to dismiss the Complaint because it erroneously asserts claim under a postpetition contract and Section 503 of the Bankruptcy Code through an adversary proceeding. However, the dismissal was denied. On June 10, 2005, Carlile filed a claim for $2,963,759 for the services it rendered under the Agreement. The Carlile Claim lists Section 507(a)(1) as the basis for its claim. Section 507(a)(1) states that administrative expenses allowed under Section 503(b), which includes the actual and necessary costs and expenses of preserving the estate, are entitled to priority. USGen argues that Carlile's Claim is procedurally improper. According to Mr. Polt, Section 501 provides that "[a] creditor or an indenture trustee may file a proof of claim." A "creditor" is generally defined as a holder of one or more prepetition claims against the debtor. A person cannot be a creditor if the claim that is being asserted did not arise before the petition date. Thus, Mr. Polt notes, an application for payment of a postpetition administrative expense should not be asserted as a proof of claim. Mr. Polt asserts that because the Carlile Claim did not arise before the Petition Date, Carlile is not a "creditor" permitted to file a proof of claim. Moreover, Mr. Polt continues, the Carlile Claim and issues related thereto are identical to the Adversary Proceeding. USGen asks the U.S. Bankruptcy Court for the District of Maryland to disallow and expunge the Carlile Claim. Headquartered in Bethesda, Maryland, USGen New England, Inc., an affiliate of PG&E Generating Energy Group, LLC, owns and operates several electric generating facilities in New England and purchases and sells electricity and other energy-related products at wholesale. The Debtor filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian, Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in its restructuring efforts. When it sought chapter 11 protection, the Debtor reported assets amounting to $2,337,446,332 and debts amounting to $1,249,960,731. The Debtor filed its Second Amended Plan of Liquidation and Disclosure Statement on March 24, 2005 (PG&E National Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) VIDEOCOM SATELLITE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Videocom Satellite Associates, Inc. 502 Sprague Street Dedham, Massachusetts 02026 Bankruptcy Case No.: 05-18677 Type of Business: The Debtor offers satellite communication downlinking & uplinking, telephone & telegraphic equipment. See http://www.videocom.com/ Chapter 11 Petition Date: September 19, 2005 Court: District of Massachusetts (Boston) Debtor's Counsel: Nicholas Katsonis, Esq. de Verges & Katsonis 40 Southbridge Street, Suite 215 Worcester, Massachusetts 01608 Tel: (508) 754-2600 Fax: (508) 754-1818 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. VIDEOTRON LTEE: Closes $175 Million Senior Debt Offering -------------------------------------------------------- Videotron Ltee successfully closed its private offering of $175 million aggregate principal amount of 6-3/8% Senior Notes due December 15, 2015, which were sold at a slight discount and result in an effective yield of 6.444%. The net proceeds from the sale of the Senior Notes amount to $171.8 million (CDN$203.6 million) and will be used to repay CDN$79 million under Videotron's revolving credit facility, being all amounts outstanding thereunder, and to pay a dividend of CDN$100.0 million to Quebecor Media Inc., Videotron's parent company. The remainder of such net proceeds will be used for other general corporate purposes. The President and Chief Executive Officer of Videotron, Mr. Robert Depatie, said: "We are once again very pleased with the market reception which this offering of Senior Notes enjoyed, reflecting investors' acknowledgement of Videotron's robust financial condition and operating performance." "After conversion into Canadian dollars, the interest coupon for this issue of Senior Notes of Videotron will be 5.98%, representing a very attractive effective interest rate of 6.05% after taking into account the slight discount at issuance", commented Jacques Mallette, Executive Vice President and Chief Financial Officer of Quebecor Media Inc. The offering was made on a private placement basis to qualified institutional buyers in the United States in reliance upon Rule 144A under the United States Securities Act of 1933, as amended, or the U.S. Securities Act. The new Senior Notes have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to a registration statement or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. Videotron Ltee -- http://www.videotron.com/--, a wholly owned subsidiary of Quebecor Media Inc., is an integrated communications company engaged in cable television, interactive multimedia development, Internet access services and residential telephone service. Videotron is a leader in new technologies with its illico interactive television system and its broadband network, which supports high-speed cable Internet access, analog and digital cable television, and other services. Videotron serves 1,459,000 cable television customers in Quebec; including over 411,000 illico customers as of August 31, 2005. Videotron is also the Quebec leader in high-speed Internet access, with 591,000 customers to its cable modem and dial-up services. Videotron provides residential telephone service to more than 75,000 customers in Montreal, Quebec City, Laval and Montreal South Shore. * * * As reported in the Troubled Company Reporter on Sept. 12, 2005, Standard & Poor's Ratings Services assigned its 'B+' rating to Montreal, Quebec-based Videotron Ltee's proposed US$175 million senior unsecured notes due December 2015, to be issued under Rule 144A with registration rights. The debt is rated one notch below the long-term corporate credit rating, reflecting its junior position in the company's capital structure. In addition, all ratings outstanding on Videotron and its parent company, Quebecor Media Inc., along with the ratings on Quebecor Media's subsidiary Sun Media Corp., including the 'BB-' long-term corporate credit rating, were affirmed. The outlook on all companies is stable. WESTERN WATER: Wants to Sell Assets to Colorado Water for $14.3MM ----------------------------------------------------------------- Western Water Company asks the U.S. Bankruptcy Court for the Northern District of California to approve its request to sell substantially all of its assets free and clear of liens, claims and interests to Colorado Water Resources, LLC, subject to a higher and better offer, and to approve the Bid Procedures for the asset sale. The Debtor and Colorado Water, the stalking horse bidder, entered into an Asset Purchase Agreement on Sept. 6, 2005, calling for the sale of substantially all of the Debtor's assets to Colorado Water for $14,300,000. Under that Agreement, the Debtor will assume and assign the Assigned Executory Contracts to Colorado Water and the Debtor will assume the Assumed Liabilities. Upon the Court's entry of an order approving the Bid Procedures, Colorado Water will deposit in escrow with the Debtor, to be held in trust in an interest bearing account, a $1 million Good Faith Deposit. The Asset Purchase Agreement is subject to higher and better offers in a public auction. In the event that a competitor tops Colorado Water's bid, the Debtor will pay Colorado Water a $528,000 Break-Up Fee. A full-text copy of the Asset Purchase Agreement and the Bid Procedures is available for free at http://tinyurl.com/9dgze The Court will convene a hearing to approve the Bid Procedures for the asset sale on Sept. 26, 2005. All parties seeking to be Qualified Bidders must submit their bids by Oct. 18, 2005. The auction for the Debtor's assets is scheduled at 10:00 a.m., on Oct. 21, 2005, at the offices of Morrison & Foerster, 5200 Republic Plaza, Denver, Colorado. The Court will convene a final sale hearing at 1:30 p.m., on Oct. 24, 2005, to approve the Debtor's sale request. Headquartered in Point Richmond, California, Western Water Company manages, develops, sells and leases water and water rights in the western United States. The Company filed for chapter 11 protection on May 24, 2005 (Bankr. N.D. Calif. Case No. 05-42839). Adam A. Lewis, Esq., at the Law Offices of Morrison and Foerster , represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $10 Million and $50 Million. WORLDCOM INC: Court Approves $702,755 Platinum Settlement Pact -------------------------------------------------------------- At WorldCom, Inc., and its debtor-affiliates' request, the U.S. Bankruptcy Court for the Southern District of New York approves a settlement agreement with Platinum Partners Value Arbitrage Fund L.P. Platinum holds a $702,755 claim against the Debtors. Platinum acquired the Claim from James Allman in May 2003, pursuant to an Assignment of Claim Agreement. As a result of the transfer, Mr. Allman has no rights in or to the Claim. The Debtors may have listed the Claim in one or more of the schedules they filed with the Court. According to Mark A. Shaiken, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, the Debtors disputed the amount, extent, and type of claim to which Platinum is entitled on account of the Claim. The Settlement Agreement provides that Platinum will have an allowed, general unsecured claim for $425,000, to be paid as a Class 6 unsecured claim under the Debtors' confirmed Plan of Reorganization. Payment of the Claim will be made in accordance with the Plan. All payments made to Platinum will be in full satisfaction of any amount owed, or that could be owed, to Platinum under the Plan on account of the Claim and any Scheduled Amounts. The Court further bars Mr. Allman from filing any further proofs of claim. 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. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM INC: Court Orders $1.6 MM Funds Deposited Into Account --------------------------------------------------------------- Before the Petition Date, Dobie Properties, LLC, commenced an action against Debtor WorldCom Network Services, Inc., in the Circuit Court, Fourth Judicial Circuit, Duval County, Florida, seeking to quiet title and confirm its alleged title to a parcel of real estate in Florida. WorldCom Network disputed Dobie's claim in the Florida Action and counterclaimed to quiet title to the Florida Property and to certain telecommunications equipment located in or on the Florida Property. While the Florida Action was pending, the Florida Department of Transportation filed an eminent domain action against the Debtors -- the Condemnation Action. The Florida Action Settlement Agreement In light of the Condemnation Action, the Debtors and Dobie agreed to settle the Florida Action. Dobie consented to the confirmation of the Debtors' title to the Florida Property. In return, the Debtors agreed to pay Dobie a certain portion of the contingent proceeds from the Condemnation Action. Subsequently, the parties executed a Joint Motion to Vacate the Consent Judgment in accordance with an escape clause in the Settlement Agreement. However, the Joint Motion was not filed and was instead held in escrow by Dobie, pending negotiations to amend the Settlement Agreement. On May 7, 2002, the parties entered into an amended Settlement Agreement, wherein both parties anticipated that the FDOT would deposit $445,000 in the registry of the court hearing the Condemnation Action and that liquidated Dobie's claim to any of the proceeds of the Condemnation Action, thereby negating the need for the Joint Motion to Vacate. The Amended Settlement Agreement provides that the Debtors and Dobie agree to share any proceeds over and above the $445,000 realized in the Condemnation Action equally, with a cap on the amounts potentially recoverable by Dobie of $1.6 million. However, after the Petition Date, Dobie filed the Joint Motion to Vacate and a Motion to Lift the Automatic Stay in the Debtors' Chapter 11 cases, seeking to proceed with the Florida Action. The Debtors objected to Dobie's request. Accordingly, the Bankruptcy Court returned the Florida Action to status quo ante and lifted the automatic stay to allow the Condemnation Action to continue, solely for purposes of determining the compensation to be paid by the FDOT. The Bankruptcy Court further prohibited the Debtors and Dobie from withdrawing all or any of the funds on deposit in the Registry, or which thereafter may be deposited by the FDOT in the Registry. The Condemnation Action was thereafter resolved and the proceeds were deposited into the Registry, to be later assigned to a segregated account held by the Debtors' counsel. According to Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in New York, the Debtors proposed to Dobie that the parties would agree by a stipulation that the funds in the Registry would be transferred to Gaylord Merlin Ludovici Diaz & Bain, the Debtors' counsel in the Condemnation Action. The Debtors further proposed that $1.6 million of the funds will be maintained by Gaylord in a segregated account. The remaining funds will be disbursed to the Debtors. Dobie's counsel agreed. However, during negotiations on the details of the stipulation, Dobie filed a motion in the Condemnation Action, seeking to vacate the Condemnation Order, in light of the alleged conflict between the Condemnation Order and the Bankruptcy Court's Consent Order. On August 30, 2005, the Condemnation Action Court required the funds to be returned to the Registry by September 6, 2005. Dobie has since refused to the disbursement of any portion of the condemnation funds to the Debtors, Mr. Strochak notes. Mr. Strochak asserts that Dobie's rights under the Amended Settlement Agreement constitute a "claim" entitled to no more than $1.6 million. By this motion, the Debtors ask the Court to disburse to them the funds received in the Condemnation Action in excess of $1.6 million. The Debtors further seek the Court's authority to deposit the remaining $1.6 million into a segregated, interest bearing account to be maintained by Gaylord pending resolution of the parties' competing claims. The Debtors seek that no disbursement of the funds in the Escrow Account will be made without either written agreement of both parties or a further Court order. Dobie Responds Dobie disputes the Debtors' application of the law to the Settlement Agreement. Michael Bowlus, Esq., at Ford, Bowlus, Duss, Morgan, Kenney, Safer & Hampton, P.A., in Jacksonville, Florida, argues these points: (a) The Settlement Agreement was executory, requiring performance. Since Dobie actually performed its obligations, the Settlement Agreement was adopted and ratified by the Debtors under the Plan of Reorganization. Thus, the Debtors are obligated to perform under the Settlement Agreement; (b) To the extent the Debtors seek to breach the Settlement Agreement postpetition and deny that Dobie is entitled to $1.6 million from the Registry, that breach entitles Dobie to enforce the default provisions under the Settlement Agreement, making the Settlement Agreement null and void and return to mediation in the Florida Action; (c) The Debtors' attempts to claim the entire Proceeds constitutes a breach of the Settlement Agreement, entitling Dobie to the remedies in the Settlement Agreement; and (d) The Debtors' attempts to obtain possession of $2.07 million of the Proceeds in the Registry constitutes an admission by the Debtors that it desires the benefits of the Settlement Agreement, while at the same time denying the existence of the Settlement Agreement. "The Debtors have already accepted, ratified, confirmed, adopted, and accepted the benefits of the Settlement Agreement by their actions, and should now be estopped from attempting to reject it," Mr. Bowlus contends. The parties and the proceeds in the Registry are subject to disputed issues of fact and law. Thus, Mr. Bowlus asserts that it would be improper to disburse any of the Proceeds until the parties' dispute is resolved. Moreover, Mr. Bowlus contends that the Debtors' proposed resolution would rule upon the issue of "entitlement" to the funds in the Registry, without providing Dobie the opportunity to present evidence and testimony as to the disputed factual issues and legal arguments. "[T]here is no 'emergency' as alleged by the Reorganized Debtors, in that the proceeds held in the Registry are secure and not in danger," Mr. Bowlus maintains. * * * Judge Gonzalez rules that the funds held in the Registry will be deposited into a segregated, interest bearing account to be maintained by Gaylord Merlin Ludovici Diaz & Bain, pending resolution of the parties' competing claims. The Court further orders that no disbursement of the funds from the Escrow Account will be made without a written agreement of both parties or further Court Order. The Court sets a hearing on October 11, 2005, to determine the parties' rights with respect to the funds recovered in the Condemnation Action and held in the Escrow Account. 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. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000) XYBERNAUT CORP: Panel Taps Linowes and Blocher as Local Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Xybernaut Corporation and its debtor-affiliate ask the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to employ Linowes and Blocher LLP as its local counsel. Linowes and Blocher will: 1) assist and advise the Committee in the administration of the Debtors' chapter 11 cases and the exercise of oversight with respect to the Debtors' affairs including all issues arising from or impacting the Debtors or the Committee in the Debtors' chapter 11 cases; 2) prepare on behalf of the Committee of all necessary applications, motions, orders, reports and other legal papers; 3) appear in Bankruptcy Court and at statutory meetings of creditors to represent the interests of the Committee; 4) assist and advise the Committee in the negotiation, formulation, drafting and confirmation of any plan of reorganization and its related matters, and in the exercise of oversight with respect to any transfer, pledge, conveyance, sale or other liquidation of the Debtors' assets; 5) investigate, as the Committee may desire, concerning the assets, liabilities, financial condition and operating issues concerning the Debtors that may be relevant to their chapter 11 cases; 6) communicate with the Committee's constituents, the Debtors, the Equity Holders Committee and others as necessary in the case in furtherance of the Committee's responsibilities; and 7) perform all other necessary legal services to the Committee that it will require from Linowes and Blocher as its local counsel in the Debtors' chapter 11 cases. Paul Sweeney, Esq., a Partner of Linowes and Blocher, is one of the attorneys from the Firm performing services to the Committee. Mr. Sweeney reports Linowes and Blocher's professionals bill: Designation Hourly Rate ----------- ----------- Partners $315 - $375 Associates $190 - $260 Paralegals $130 - $135 Linowes and Blocher assures the Court that it does not represent any interest materially adverse to the Committee, the Debtors or their estates. Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. XYBERNAUT CORP: Panel Taps Parente Randolph as Financial Advisors ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Xybernaut Corporation and its debtor-affiliate ask the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to employ Parente Randolph, LLC as its accountants and financial advisors. Parente Randolph will: 1) assist the Committee in analyzing the current financial positions of the Debtors, including their books and records, and evaluate the Cash Management Systems currently being used by the Debtors; 2) assist the Committee in evaluating the Debtors' financial projections and test the reasonableness of the assumptions used in developing those financial projections; 3) assist the Committee in analyzing and assessing the Debtors' business plan, evaluating the Debtors' operations, and preparing hypothetical orderly and forced liquidation analyses; 4) assist the Committee in analyzing the financial ramifications of any proposed transactions for which the Debtor may seek Bankruptcy Court approval, including assumption or rejection of executory contracts, compensation and retention and severance plans; 5) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of their businesses, and the desirability of continuing that business, and any other matters relevant to the Debtors' chapter 11 cases; 6) assist and advise the Committee in its analysis of the Debtors' Statements of Financial Affairs and Schedules of Assets and Liabilities; 7) investigate and analyze on behalf of the Committee the Debtors' financial operations, related-party transactions and accounts, intercompany transfers and asset recovery potential; 8) assist and advise the Committee and its counsel in the development, evaluation and documentation of any Plan of Reorganization or Plan of Liquidation, including developing, structuring and negotiating the terms and conditions of those Plans; 9) assist the Committee in the evaluation of a proposed sale, if any, and related procedures under Section 363 of the Bankruptcy Code, including valuation of assets and identification of potential buyers; 10) render expert testimony on behalf of the Committee and provide forensic accounting services; and 11) Provide all other accounting and financial advisory services, as requested by the Committee or its counsel from time to time and agreed to by Parente Randoph. Howard S. Cohen, C.P.A., A Principal of Parente Randolph, reports the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Principals $300 - $425 Managers & Senior Associates $175 - $325 Staff $100 - $175 Para-professionals $70 - $100 Parente Randolph assures the Court that it does not represent any interest materially adverse to the Committee, the Debtors or their estates. Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. YUKOS OIL: Gets Moscow Court Nod to Decrease Claim to RUB388-Bil. ----------------------------------------------------------------- According to Interfax, the Moscow Arbitration Court granted Yukos Oil Company's request to decrease the amount of its claim for damages related to the sale of Yuganskneftegas from 398.8 billion rubles to 388.32 billion rubles. Yukos recalculated its claim based on Yugansk's financial report for the second quarter of 2005, Interfax reports, citing a Yukos representative. Interfax relates that the Moscow Court scheduled a preliminary hearing on September 28. Headquartered in Houston, Texas, Yukos Oil Company is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. On Feb. 24, 2005, Judge Letitia Z. Clark dismissed the Chapter 11 case. (Yukos Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) YUKOS OIL: Moscow Ct. Rejects Yukos' Call to Freeze 76.79% Shares ----------------------------------------------------------------- RIA Novosti reports that the Moscow Arbitration Appeals Court rejected Yukos Oil Company's appeal to freeze 76.79% of Yuganskneftegas shares. Yukos submitted the appeal as part of its claim to dispute the sale of its former main oil unit, Yuganskneftegas. An arbitration court had earlier rejected the appeal, after which Yukos lawyers challenged the court's ruling before an appeals tribunal. As of June 29, 2005, Yukos owes over $2 billion in back taxes, RIA Novosti relates, citing the Russian Justice Ministry. As reported in the Troubled Company Reporter on June 16, 2005, the Debtor filed a motion in the Moscow Arbitration Court to annul the auction where 43 shares (76.79% of Authorized Capital) of Yuganskneftegas were sold, and the deed of sale of the shares in its former core production subsidiary, as well as for reimbursement of damages suffered as a result of the auction in the amount in excess of RUB324 billion. Headquartered in Houston, Texas, Yukos Oil Company is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. On Feb. 24, 2005, Judge Letitia Z. Clark dismissed the Chapter 11 case. (Yukos Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- ACCO Brands Corp ABD (28) 878 (364) Abraxas Petro ABP (43) 106 (5) AFC Enterprises AFCE (44) 216 52 Alliance Imaging AIQ (52) 621 43 Amazon.com Inc. AMZN (64) 2,601 782 AMR Corp. AMR (615) 29,494 (2,230) Atherogenics Inc. AGIX (76) 235 213 Bally Total Fitn BFT (172) 1,461 (290) Biomarin Pharmac BMRN (110) 167 (4) Blount International BLT (220) 446 126 CableVision System CVC (2,430) 10,111 (1,607) CCC Information CCCG (107) 96 20 Centennial Comm CYCL (480) 1,447 59 Choice Hotels CHH (185) 283 (36) Cincinnati Bell CBB (625) 1,891 (18) Clorox Co. CLX (553) 3,617 (258) Compass Minerals CMP (81) 667 129 Crown Media HL-A CRWN (34) 1,289 (130) Delphi Corp. DPH (4,392) 16,511 256 Deluxe Corp DLX (124) 1,508 (276) Denny's Corporation DENN (260) 494 (73) Domino's Pizza DPZ (574) 420 (21) Echostar Comm-A DISH (972) 7,281 269 Emeritus Corp. ESC (123) 720 (43) Foster Wheeler FWLT (490) 2,012 (175) Guilford Pharm GLFD (20) 136 60 Graftech International GTI (34) 1,006 264 I2 Technologies ITWO (153) 386 124 ICOS Corp ICOS (57) 243 160 IMAX Corp IMAX (38) 241 27 Intermune Inc. ITMN (7) 219 133 Investools Inc. IED (22) 56 (47) Isis Pharm. ISIS (124) 147 46 Kulicke & Soffa KLIC (44) 365 182 Lodgenet Entertainment LNET (72) 275 15 Lucent Tech Inc. LU (70) 16,437 2,517 Maxxam Inc. MXM (681) 1,024 103 Maytag Corp. MYG (77) 3,019 398 McDermott Int'l MDR (140) 1,489 123 McMoran Exploration MMR (39) 377 135 Nexstar Broadc - A NXST (51) 684 27 Northwest Airline NWAC (3,563) 14,352 (1,392) NPS Pharm Inc. NPSP (98) 310 215 ON Semiconductor ONNN (346) 1,132 270 Owens Corning OWENQ (8,225) 7,766 1,391 Primedia Inc. PRM (771) 1,506 16 Qwest Communication Q (2,663) 24,070 1,248 Revlon Inc. - A REV (1,102) 925 70 Riviera Holdings RIV (27) 216 5 Rural/Metro Corp. RURL (184) 221 18 Ruth's Chris Stk RUTH (49) 110 (22) SBA Comm. Corp.-A SBAC (50) 857 19 Sepracor Inc. SEPR (201) 1,175 717 St. John Knits Inc. SJKI (52) 213 80 US Unwired Inc. UNWR (76) 414 56 Vector Group Ltd. VGR (33) 527 173 Verifone Holding PAY (36) 248 48 Vertrue Inc. VTRU (48) 447 (96) Weight Watchers WTW (36) 938 (266) Worldspace Inc.-A WRSP (1,720) 560 (1,786) WR Grace & Co. GRA (605) 3,423 811 ********* 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 Junior M. Pinili, 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 ***