/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/051007.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, October 7, 2005, Vol. 9, No. 238 Headlines ACC PROPERTIES: Voluntary Chapter 11 Case Summary AIR CARGO: Wants Exclusive Plan-Filing Period Extended to Nov. 2 ALLEGIANCE TELECOM: Settles Verizon's $13.7 Million Admin. Claim ALOHA AIRGROUP: Hires Steven Varner at Alvarez & Marsal as CRO AMERICAN TOWER: Proposes New $2.45 Billion Credit Facilities AMERISOURCEBERGEN: Acquires Canada's Trent Drugs for $83 Million ANZA CAPITAL: Singer Lewak Expresses Going Concern Doubt ATA AIRLINES: Wants Bar Date Set for Amended Scheduled Claims ATKINS NUTRITIONALS: Disclosure Statement Hearing Set for Nov. 1 ATKINS NUTRITIONALS: Wants to Walk Away from Unexpired Sublease BANC OF AMERICA: Fitch Places Low-B Ratings on Two Cert. Classes BETHLEHEM STEEL: Trust Wants Montage Fee Engagement Pact Approved BUEHLER FOODS: Plans to Close Six More Stores BUENA VISTA: Case Summary & 13 Largest Unsecured Creditors CARBIZ INCORPORATED: Closes $690,318 Debenture Financing CAROLINA TOBACCO: Wants Kerr Russell as Special Litigation Counsel CARRINGTON MORTGAGE: Fitch Puts BB+ Rating on $6.7MM Pvt. Certs. DAVITA INC: Completes Gambro Healthcare Acquisition DELTA AIR: Court Gives Final Nod on GE's $2.2 Bil. DIP Financing DELTA AIR: DP3 Wants Continued Payment on Retired Pilots' Pensions DELTA AIR: Gets Court Nod to Assume Delta Connection Agreements DIAL THRU INT'L: Posts $1.05MM Net Loss in Quarter Ended July 31 DELPHI CORP: Potential Ch. 11 Filing Cues Fitch to Junk Ratings DELTA FUNDING: Fitch Junks Ratings on Six Certificate Classes DEVELOPERS DIVERSIFIED: Completes $177 Million Asset Disposition DOANE PET: Offering $150 Million Notes Via Private Placement ENTERGY NEW ORLEANS: Can Set-Up Interim Compensation Procedures ENTERGY NEW ORLEANS: Gets Court Okay to Pay Critical Vendor Claims FALCON PRODUCTS: Court Okays Modified CBA with UFCW Int'l Union FLOW INTERNATIONAL: Appoints Douglas Fletcher as New VP & CFO FREDERICK MCNEARY: APC Partners Files Joint Chapter 11 Plan GENERAL MOTORS: Selling 20% Equity Stake in Fuji Heavy Industries GREGORY PARK: Case Summary & 20 Largest Unsecured Creditors GT BRANDS: Has Until Jan. 9 to Decide on Three Unexpired Leases HAWS & TINGLE: Case Summary & 20 Largest Unsecured Creditors HORNBECK OFFSHORE: Closing Additional $75MM Private Debt Offering HUDSON VALLEY: Has Until Oct. 12 to File Schedules & Statements HUDSON VALLEY: Meeting of Creditors Slated for Oct. 17 HUDSON VALLEY: Wants O'Connell & Aronowitz as Bankruptcy Counsel HUFFY CORP: PBGC Takes Over Employees' Retirement Pension Plan INDIANTOWN COGENERATION: Fitch Lowers Senior Debt Rating to BB IRIDIUM OPERATING: Wins 23rd Extension of Plan-Filing Period J. CREW: Commences Cash Tender Offer for $275-Mil Sr. Sub. Notes JP MORGAN: Fitch Holds Low-B Ratings on Six Certificate Classes KENNETH STUART: Case Summary & 16 Largest Unsecured Creditors KMART CORP: Court Lifts Stay to Allow Stafford to Pursue Action LITTLE EGYPT: Case Summary & 6 Largest Unsecured Creditors MINTA INC: Case Summary & 5 Largest Unsecured Creditors MORTGAGE CAPITAL: Fitch Retains BB Rating on $3.6MM Class J Certs. NATIONAL TOUR: Case Summary & 28 Largest Unsecured Creditors NAVIGATOR GAS: Manx Liquidator Hires Wilmer Cutler as Counsel NORTHWEST AIRLINES: Asks for Injunction Against Utility Companies NORTHWEST AIRLINES: Pays Prepetition Fuel Supplier Claims NORTHWEST AIRLINES: Bankruptcy Schedules Must be Filed by Jan. 12 OPTICAL DATACOM: Trustee & Bank Group Settlement Pact Approved PEERLESS SYSTEMS: Earns $1.1 Million in Quarter Ended July 31 POLAROID CORP.: Seeks More Time to Object to Claims PRESTWICK CHASE: APC Partners Files Joint Chapter 11 Plan PRESTWICK CHASE: Can Use APC's Cash Collateral Until October 31 PROTOCOL SERVICES: Murray Devine Approved as Valuation Experts RESORT AT SUMMERLIN: Bankruptcy Court Closes Chapter 11 Cases RICHTER FURNITURE: Case Summary & 20 Largest Unsecured Creditors SAINT VINCENTS: NY City Wants Utilities Paid Prior to Parsons Sale SEA INSURANCE: Moody's Withdraws Ba3 Financial Strength Rating SIRVA INC: Lenders Extend Credit Agreement & Receivables Sale Pact SOLECTRON CORP: Reports FY 2005 Fourth Quarter Financial Results SPORTS CLUB: Arranging New Financing & Selling 9 Clubs for $65MM SPORTS CLUB: Balance Sheet Upside-Down by $9.3-Mil at December 31 SPORTS CLUB: Stockholders' Deficit Widens to $11.4-Mil at March 31 STRATUS SERVICES: Shareholders Recommend Chapter 11 Filing TECNET INC: Court Sets Dec. 8 Bar Date for Newly Discovered Claims TEE JAYS: Taps Pounders & Associates as Real Estate Broker T & M RENTALS: Case Summary & 13 Largest Unsecured Creditors TIMES SQUARE: Taps Keen Realty to Market Retail Space TOM'S FOODS: Opts to Sell Assets in 363 Sale Rather Than Liquidate TOWER AUTOMOTIVE: Court Okays Bowling Green Sale for $1.5 Mil. TOWER AUTOMOTIVE: Relocating Ford Ranger Frame Assembly Plant TOWER AUTOMOTIVE: Wants to Reject Milwaukee Facility Agreements TRI-STATE STRUCTURAL: Case Summary & 20 Largest Creditors TRM CORPORATION: Gets $40.4 Million from Private Equity Placement UAL CORP: Secures $3 Billion All-Debt Exit Financing US CAN: Amends 2004 and Q1 & Q2 2005 Financial Statements VIKING INSURANCE: Moody's Withdraws Ba3 Financial Strength Rating WINDSWEPT ENVIRONMENTAL: Reports $1.3MM Equity Deficit at June 28 WORLDCOM INC: Inks $315 Mil. Tax Settlement Pact with 16 States XTEN NETWORKS: Posts $309,804 Net Loss in Quarter Ended July 31 * U.S. Trustee's Office Issues Guidelines for Gulf Coast Debtors * BOOK REVIEW: All Organizations Are Public: Comparing Public and Private Organizations ********* ACC PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Lead Debtor: ACC Properties 1, LLC c/o Adelphia Communications Corporation 5619 DTC Parkway Greenwood Village, Colorado 80111 Bankruptcy Case No.: 05-44167 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- ACC Properties 103, LLC 05-44168 ACC Properties 105, LLC 05-44170 ACC Properties 109, LLC 05-44171 ACC Properties 121, LLC 05-44172 ACC Properties 122, LLC 05-44174 ACC Properties 123, LLC 05-44178 ACC Properties 130, LLC 05-44190 ACC Properties 146, LLC 05-44192 ACC Properties 154, LLC 05-44193 ACC Properties 156, LLC 05-44195 Type of Business: The Debtors are affiliates of Adelphia Communications Corporation, which filed for chapter 11 protection on June 25, 2002 (Bankr. S.D.N.Y. Case No. 02-41729). These Debtors have asked to be jointly administered under the said case. Chapter 11 Petition Date: October 6, 2005 Court: Southern District of New York (Manhattan) Debtors' Counsel: Paul V. Shalhoub, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 Tel: (212) 728-8764 Fax: (212) 728-8111 Estimated Assets: $1 Million to $10 Million Estimated Debts: More than $100 Million The Debtors' List of 20 Largest Unsecured Creditors is unavailable as of press time. AIR CARGO: Wants Exclusive Plan-Filing Period Extended to Nov. 2 ---------------------------------------------------------------- Air Cargo, Inc., asks the U.S. Bankruptcy Court for the District of Maryland to extend until Nov. 2, 2005, the time within which it has the exclusive right to file a plan of reorganization. The Debtor also asks the Court to extend its exclusive period to solicit plan acceptances to Jan. 4, 2006. The Debtor tells the Court that it has entered a crucial stage of its plan development as the mediation with Air France, the truckers and other airlines moves forward. The Debtor reminds the Court that the mediation in the Air France Adversary Proceeding was held on Sept. 15 and Sept. 16, 2005. The mediation has been partially successful after an initial settlement pact was drafted, the Debtor says. The extension will afford the Debtor an opportunity to conclude the negotiation with Air France. Headquartered in Annapolis, Maryland, Air Cargo, Inc., provided contract management, freight bill auditing and consolidated freight invoicing and payment services for wholesale cargo customers. The Company filed for chapter 11 protection on Dec. 7, 2004 (Bankr. D. Md. Case No. 04-37512). Alan M. Grochal, Esq., at Tydings & Rosenberg, LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $16,300,000 and total debts of $17,900,000. ALLEGIANCE TELECOM: Settles Verizon's $13.7 Million Admin. Claim ---------------------------------------------------------------- The Allegiance Telecom Liquidating Trust, successor-in-interest to Allegiance Telecom, Inc., inked a settlement agreement resolving all issues related to approximately $13.7 million in administrative expense claims asserted by Verizon Communications Inc. against the Debtor's estate. The Verizon settlement, signed on Sept. 13, 2005, caps the net liabilities owed to Verizon at $4.25 million. The settlement amount will be paid by XO Communications, Inc., pursuant to the terms of its asset purchase agreement with the Debtor. As reported in the Troubled Company Reporter, XO Communications acquired substantially all of the Debtor's assets in Feb. 2004 for $322 million in cash and 45.38 million shares of XO common stock. Eugene I. Davis, the ATLT plan administrator, asks the U.S. Bankruptcy Court for the Southern District of New York to approve the settlement agreement and direct XO Communications to pay the settlement amount owed to Verizon. Verizon Claim Verizon provided telecommunication services and facilities to Allegiance Telecom and its affiliates prior to and during the course of the Debtor's bankruptcy proceedings. Similarly, the Debtor offered telecommunication services to Verizon pursuant to interconnection agreements and tariffs filed with various state and federal regulatory authorities, and other contracts. In Aug. 2004, Verizon filed a request for payment of administrative expenses totaling $13,655,149 for services rendered to the Debtor from the petition date on May 13, 2003, to the plan effective date on June 23, 2004. Meanwhile, ATLT asserted that that Verizon owes the Debtors over $11 million for services and facilities provided during the same period. Verizon claimed that the payments sought by the ATLT are not supported by the terms of the applicable interconnection agreements and tariffs. The ATLT had also asserted that charges sought by Verizon were calculated incorrectly and are not supported by the terms of Verizon's contracts. Settlement Agreement To resolve all claims and counter-claims between Verizon and the ATLT arising during the postpetition period, the parties agree to limit Verizon's claim at $4.25 million. The amount represents charges owed to Verizon during the postpetition period, net of any valid claims asserted by ATLT. XO Communications is required to pay the settlement amount within 12 days following the Bankruptcy Court's approval of the settlement agreement. Verizon can compel the Debtor to pay the settlement amount if XO Communications fails to pay Verizon by the payment deadline. Allegiance Telecom, Inc., (OTCB: ALGXQ) -- http://www.algx.com/ -- is a facilities-based national local exchange carrier headquartered in Dallas, Texas. Allegiance offers a complete telecommunications package, including local, long distance, international calling, high-speed data transmission and Internet services and a full suite of customer premise communications equipment and service offerings. Allegiance serves 36 major metropolitan areas in the U.S. with its single source approach. It announced financial restructuring plans under Chapter 11 of the U.S. Bankruptcy Code on May 14, 2003. Ira S. Dizengoff, Esq., Philip C. Dublin, Esq., and Kenneth A. Davis, Esq., at Akin Gump Strauss Hauer & Feld represent Allegiance Telecom Liquidating Trust. On June 10, 2004, the Court confirmed the Debtor's Third Amended Joint Plan of Reorganization and that Plan became effective on June 23, 2004. ALOHA AIRGROUP: Hires Steven Varner at Alvarez & Marsal as CRO -------------------------------------------------------------- Aloha Airgroup and Aloha Airlines, Inc., ask the U.S. Bankruptcy Court for the District of Hawaii for permission to retain Alvarez & Marsal, LLC's Steven Varner as their chief restructuring officer, nunc pro tunc to September 5, 2005. Steven Varner, Alvarez & Marsal's managing director, has 14 years of restructuring experience. Mr. Varner has advised board of directors, debtors-in-possession, investors, lenders and creditor committees in numerous turnaround and reorganization situations. Mr. Varner will: a) perform a financial review of the Debtors including but not limited to, a review and assessment of financial information that has been, and that will be, provided by the Debtors to the Senior DIP Lenders, including without limitation their short and long term projected cash flows and assist the Debtors in developing and refining their business plan; b) assist in the identification of cost reduction and operations improvement opportunities; c) develop for the boards review possible restructuring plans or strategic alternatives for maximizing the enterprise value of the Debtors' business lines; and d) perform such other services as requested or directed by the board and agreed to by such officer. Mr. Varner discloses that his Firm receives a $25,000 retainer. He will bill the Debtors $550 per hour for his professional services. The Debtors assure the Court that Mr. Varner and Alvarez & Marsal do not represent any interest materially adverse to the Debtors or their estate. Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. -- http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. Aloha Airgroup and its subsidiary Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors it listed more than $50 million in estimated assets and debts. AMERICAN TOWER: Proposes New $2.45 Billion Credit Facilities ------------------------------------------------------------ American Tower Corporation's (NYSE: AMT) operating subsidiaries are seeking to refinance the Company's existing credit facilities. The Company is proposing to refinance its existing $1.1 billion senior credit facility at the American Tower operating company level with a new $1.3 billion facility and to refinance its existing $900 million senior secured credit facility at the SpectraSite operating company level with a new $1.15 billion facility. The proposed AMT OpCo facility would consist of: -- a $300 million senior secured revolving credit facility, -- a $750 million senior secured term loan, and -- a $250 million senior secured delayed draw term loan, each maturing in 2010. The proposed SCI OpCo facility would consist of: -- a $250 million senior secured revolving credit facility, -- a $700 million senior secured term loan, and -- a $200 million senior secured delayed draw term loan, each maturing in 2010. The Company is in the process of obtaining commitments from a group of lenders for the new credit facilities. The proposed facilities are subject to satisfactory lender commitments and are subject to negotiation, execution and delivery of definitive loan documentation and various other conditions. Borrowings under the new facilities would be used to repay the Company's existing senior secured credit facilities and for general corporate purposes, including refinancing other existing indebtedness. The Company is seeking to have the proposed credit facility in place during the fourth quarter and expects that the proposed credit facility will provide the Company with greater liquidity, improve operating and financial flexibility and reduce interest costs. American Tower -- http://www.americantower.com/-- is the leading independent owner, operator and developer of broadcast and wireless communications sites in North America. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. * * * As reported in the Troubled Company Reporter on Sept. 13, 2005, Moody's Investors Service upgraded the ratings of American Tower Corporation and its subsidiaries. The ratings action is based upon: * the company's track record of good revenue and cash flow growth and free cash flow generation; and * its history of devoting that free cash flow to debt reduction to substantially reduce the company's financial risk profile. Further, American Tower benefits from the acquisition of the less leveraged Spectrasite and its substantial free cash flow generation. The affected ratings are: American Tower Corporation: * Corporate family rating upgraded to Ba2 from B1 * Speculative grade liquidity rating affirmed at SGL-1 * 9.375% Senior Notes due 2009 upgraded to B1 from B3 * 7.5% Senior Notes due 2012 upgraded to B1 from B3 * 7.125% Senior Notes due 2012 upgraded to B1 from B3 * 5% Convertible Notes due 2010 upgraded to B1 from B3 American Towers, Inc. (fka American Tower Escrow Corp.): * 7.25% Senior Subordinated Notes due 2011 upgraded to Ba2 from B2 * 0% Senior Subordinated Discount Notes due 2008 upgraded to Ba2 from B2 American Tower, LP and American Towers, Inc. (co-borrowers): * Senior secured credit facility maturing 2011 upgraded to Baa3 from Ba3 Spectrasite Communications, Inc.: * Senior secured credit facility maturing 2011/2012 upgraded to Ba1 from Ba3 SpectraSite, Inc.: * Corporate family rating withdrawn * 8.25% Senior Notes due 2010 rating withdrawn. AMERISOURCEBERGEN: Acquires Canada's Trent Drugs for $83 Million ---------------------------------------------------------------- AmerisourceBergen Corporation (NYSE:ABC) acquired Trent Drugs (Wholesale) Ltd, one of the largest national pharmaceutical distributors in Canada for a purchase price of approximately US$83 million, which includes the assumption of debt of approximately US$43 million. AmerisourceBergen anticipates Trent will be accretive to fiscal year 2006 earnings per share by approximately $0.01 to $0.02. "Trent's national coverage and its management team provide a solid foundation for expanding our pharmaceutical distribution capability into the Canadian marketplace," said R. David Yost, AmerisourceBergen Chief Executive Officer. "Trent is a logical expansion of our pharmaceutical distribution business and continues AmerisourceBergen's strategic focus on the pharmaceutical supply channel." "We are excited about joining AmerisourceBergen and continuing the rapid growth of our distribution business in Canada," said Richard Normandeau, who will remain Trent President and has joined AmerisourceBergen as Regional Vice President, AmerisourceBergen Drug Corporation in Canada reporting directly to Terrance Haas, Senior Vice President and President of AmerisourceBergen Drug Corporation. "AmerisourceBergen's financial strength, distribution expertise, and unique retail programs enhance our ability to continue to offer our customers superior service and distribution capability." Headquartered in Kingston, Ontario, Trent generated about US$500 million in revenue over the last twelve months. Trent distributes pharmaceuticals in the provinces of Ontario, Quebec, British Columbia, and the Atlantic provinces, which represent approximately 80 percent of the Canadian population. Founded in 1986 by Mahen J. Acharya, Chairman and Chief Executive Officer, the company has a strong presence in the Canadian retail pharmacy market, and is focused on growing its hospital business. Mr. Acharya has left the company to pursue other interests. AmerisourceBergen financed the acquisition with borrowings under a new CDN$135 million credit facility that will be available as well for general corporate purposes related to the Company's new Canadian operations. AmerisourceBergen (NYSE:ABC) -- http://www.amerisourcebergen.com/ -- is one of the largest pharmaceutical services companies in the United States. Servicing both pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. With more than $54 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 14,000 people. * * * As reported in the Troubled Company Reporter on Sept. 9, 2005, Moody's Investors Service assigned Ba2 ratings to AmerisourceBergen Corporation's new $500 million and $400 million offerings of senior unsecured notes. Proceeds from these transactions are expected to be used to refinance two existing senior note offerings. The company recently announced board authorization of approximately $400 million in share repurchases, which will raise total repurchase availability to $750 million. Following these announcements, Moody's affirmed ABC's existing long-term and speculative grade liquidity ratings. Moody's said the rating outlook remains stable. ANZA CAPITAL: Singer Lewak Expresses Going Concern Doubt -------------------------------------------------------- Singer, Lewak, Greenbaum & Goldstein, LLP, expressed substantial doubt about Anza Capital, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended April 30, 2005. The auditing firm points to the Company's recurring losses from operations, accumulated deficit, and working capital deficiency. McKennon, Wilson & Morgan, LLP, also raised substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for fiscal 2004. The Company's balance sheet showed $9,777,000 of assets at April 30, 2005 and liabilities totaling $10,510,000. During the year ended April 30, 2005, the Company posted a $3,580,000 net loss compared to a $1,122,000 net loss in fiscal 2004. The Company reported a 20.25% decline in revenue in Fiscal 2005 from the year earlier. Management attributes the losses in fiscal 2005 to decreased production and lower earnings per loan. Management also cites three other contributing factors: - provision for contingent liabilities related to ongoing lawsuits totaling $740,178; - increases in general and administrative expenses; and - equity issuance costs paid to consultants totaling $1,643,207. Mortgage Banking Activities Effective May 31, 2005, the Company terminated its mortgage banking activities after failing to secure a renewal of its warehouse line of credit. The Company lost its warehouse line of credit because its subsidiary, American Residential Funding, Inc., did not meet the maximum deductible requirement for the errors and omissions insurance. Material Weakness Management identified two material weaknesses that render the Company's disclosure controls and procedures ineffective at the reasonable assurance level as of April 30, 2005. These material weaknesses are: a) Failure to timely file the Form 10-K for the year ended April 30, 2005. Management evaluated the impact of the Company's inability to timely file periodic reports with the Securities and Exchange Commission and concluded that the control deficiency resulting from the late filing represent a material weakness. b) insufficient accounting and finance personnel. To remediate the material weaknesses reported for the fiscal year ended April 30, 2005, Management has retained a third-party consultant to provide advise regarding the Company's financial reporting process. About Anza Capital Headquartered in Costa Mesa, California, Anza Capital, Inc., operates as the holding company for American Residential Funding, Inc. and Bravo Realty.com. AMRES provides home financing through loan brokerage and banking. AMRES, through its agents in 125 branches, is licensed in 34 states to originate loans. The mortgage loans originated by it are generally one-to-four-family mortgage loans, which are permanent loans secured by mortgages on nonfarm properties, including attached or detached single-family or second/vacation homes and one-to-four-family primary residences; and condominiums or other attached dwelling units, including individual condominiums, row houses, townhouses, and other separate dwelling units even when located in buildings containing five or more such units. Bravo is a real estate sales company focused in California. ATA AIRLINES: Wants Bar Date Set for Amended Scheduled Claims ------------------------------------------------------------- As previously reported, on December 2, 2004, the U.S. Bankruptcy Court for the Southern District of Indiana ordered all creditors to file their prepetition claims against ATA Airlines, Inc. and its debtor-affiliates on or before January 24, 2005. The Bar Date Order did not require any person or entity: (i) whose claim is listed on the Statement of Financial Affairs and its Schedule of Assets and Liabilities filed by each of the Debtors on December 13, 2005; (ii) whose claim is not listed as "disputed," "contingent," or "unliquidated"; and (iii) who does not dispute the amount, classification or nature of the claim set forth in the Schedules, to file a proof of claim. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that the Debtors intend to file Amended Schedules of Assets and Liabilities. Accordingly, the Debtors ask the Court to require any party whose interests are affected by the Amendments and who dispute the Amendment Liability to file a proof of claim on or before 5:00 p.m. Pacific time of the 23rd day from the filing of the Amended Schedules. The Debtors request that any Affected Party failing to timely file a proof of claim be forever bound by the Amendment Liability. Procedure for Filing the Proofs of Claim The Debtors propose to serve the notice of the Amendment Bar Date to the Affected Parties within one business day of the filing of the Amendments. Copies of the Amendment Bar Date Notice may be obtained by calling 1-888-909-0100 or by downloading at the Web site of BMC Group at http://www.bmcgroup.com/ata Any Affected Party wishing to assert a prepetition claim under Sections 101(5) and 501(d) of the Bankruptcy Code that is different in amount or classification from the Amendment Liability must file an original, written proof of claim by overnight mail/hand delivery or by mail to BMC group. Proofs of claim sent by facsimile or telecopy will not be accepted. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATKINS NUTRITIONALS: Disclosure Statement Hearing Set for Nov. 1 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing at 2:30 p.m., on Nov. 1, 2005, to consider the adequacy of the Disclosure Statement explaining the First Amended Joint Plan of Reorganization filed by Atkins Nutritionals, Inc., and its debtor-affiliates. Summary of Amended Joint Plan The Amended Plan provides for a restructuring of the Debtors' financial obligations that will result in a significant deleveraging of the Debtors and a downsized operation to better meet reduced market demand. On the Effective Date of the Plan, Reorganized Atkins Holdings is authorized to issue the New Common Stock without the need for any further corporate action and without any further action by holders of Claims or Equity Interests. The New Common Stock, which will be subject to dilution by the New Management Interests, will consist of 15 million authorized shares of Reorganized Atkins Holdings, 10 million of which will be issued and distributed to the holders of Allowed First Lien Claims and Allowed Second Lien Claims pursuant to Article IV of the Plan. The remainder of the authorized New Common Stock will be reserved for future purposes, as determined by the Board of Reorganized Atkins Holdings, consistent with its New Organizational Documents. Treatment of Claims and Interests The Plan groups claims and interests into six classes. Impaired claims consist of: 1) First Lien Claims, totaling approximately $216.4 million will receive the Ratable Proportion of the New Tranche A Senior Notes and 8,400,000 shares of the New Common Stock; 2) Second Lien Claims, totaling approximately $18 million will receive the Ratable Proportion of 1,600,000 shares of the New Common Stock and the New CVR Interests pursuant to the New CVR Agreement executed by the New CVR Agent; 3) General Unsecured Claims, totaling approximately $91 million will not receive or retain any property or interest in property on account of those Claims; and 4) Old Equity Interests will be cancelled and the holders of Old Equity Interests will not receive or retain any property or interest in property on account of those Interests. Unimpaired claims consist of: 1) Priority Non-Tax Claims, totaling approximately $40,000 will be paid in full, in cash with post-petition interest; 2) Other Secured Claims, totaling approximately $718,000 and at the sole option of the Debtors after consultation with the Pre-Petition Agent or the Reorganized Debtors will be: a) reinstated or be paid in full in cash, together with post-petition interest, or b) satisfied by the surrender of the underlying collateral or otherwise rendered unimpaired in accordance with Section 1124 of the Bankruptcy Code, or c) accorded other appropriate treatment, including deferred cash payments as consistent with Section 1129(b) of the Bankruptcy Code, or d) paid on other terms as the Debtors and the holders of of Other Secured Claims may agree upon. A full-text copy of the Disclosure Statement and Amended Joint Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=051006002916 Objections to the Disclosure Statement, if any, must be filed and served by Oct. 25, 2005. Headquartered in New York, New York, Atkins Nutritionals, Inc. -- http://atkins.com/-- sell nutritional supplements based on its founder, Dr. Robert C. Atkins' nutritional philosophy of controlled-carbohydrate lifestyle. The Debtors also sell more than 100 food products and nutritional supplements, as well as informational products such as diet books and cookbooks. Atkins' products are sold in more than 30,000 stores in North America under numerous trademarks. The Company along with Atkins Nutritionals Holdings, Inc., Atkins Nutritionals Holdings II, Inc., and Atkins Nutritionals (Canada) Limited, filed for chapter 11 protection on July 31, 2005 (Bankr. S.D.N.Y. Case No. 05-15913). Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represents the Debtors in the United States, while lawyers at Osler, Hoskin & Harcourt, LLP, represents the Debtors in Canada. As of May 28, 2005, they listed $265.6 million in total assets and $323.2 million in total debts. ATKINS NUTRITIONALS: Wants to Walk Away from Unexpired Sublease --------------------------------------------------------------- Atkins Nutritionals, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to reject an unexpired nonresidential real property lease located at 100 Park Avenue in Manhattan, nunc pro tunc to Sept. 30, 2005. The Sublease, dated Dec. 15, 2003, is between Atkins Nutritionals, Inc., as sublessee, and Union Data Service Center, Inc., the predecessor-in-interest to Seligman Data Corp., as sublessor. The Debtors have evaluated the Sublease and the costs associated with their obligations under the Sublease and have concluded that the Sublease is unnecessary to their continued operations and constitutes an unnecessary cash drain on their business. At present, the Debtors have vacated the premises, returned the keys and provided written notice of surrender to Seligman Data. The Debtors give the Court four reasons in support of their motion: 1) continued compliance with the terms of the Sublease would be burdensome and would provide no corresponding benefit to them or their estates; 2) even with the assistance of the Debtors' real estate consultants to promote and market the Sublease for assignment or sublease to other parties, they have been unable to find that kind of arrangement on an economic basis; 3) they have determined in the exercise of their business judgment that the Sublease has no value to their estates and it is in their best interests and of their creditors not to continue the Sublease; and 4) Seligman Data as Sublandlord, will not be prejudiced by the effective date of the rejection because Seligman was already informed on Aug. 16, 2005, of the Debtors' intention to surrender the premises of the real property and Seligman will be informed of the proposed effective date of the rejection. The Court will convene a hearing at 10:00 a.m., on Oct. 11, 2005, to consider the Debtors' request. Headquartered in New York, New York, Atkins Nutritionals, Inc. -- http://atkins.com/-- sell nutritional supplements based on its founder, Dr. Robert C. Atkins' nutritional philosophy of controlled-carbohydrate lifestyle. The Debtors also sell more than 100 food products and nutritional supplements, as well as informational products such as diet books and cookbooks. Atkins' products are sold in more than 30,000 stores in North America under numerous trademarks. The Company along with Atkins Nutritionals Holdings, Inc., Atkins Nutritionals Holdings II, Inc., and Atkins Nutritionals (Canada) Limited, filed for chapter 11 protection on July 31, 2005 (Bankr. S.D.N.Y. Case No. 05-15913). Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represents the Debtors in the United States, while lawyers at Osler, Hoskin & Harcourt, LLP, represents the Debtors in Canada. As of May 28, 2005, they listed $265.6 million in total assets and $323.2 million in total debts. BANC OF AMERICA: Fitch Places Low-B Ratings on Two Cert. Classes ---------------------------------------------------------------- Banc of America Large Loan, Inc., commercial mortgage pass-through certificates, Series 2005-ESH are rated by Fitch Ratings:: -- $749,050,000 class A-1 'AAA'; -- $305,950,000 class A-2 'AAA'; -- $475,000,000 class A-3 'AAA'; -- $2,420,000,000 class X-1 'AAA'; -- $2,420,000,000 class X-2 'AAA'; -- $290,000,000 class B 'AA-'; -- $60,000,000 class C 'A+'; -- $56,000,000 class D 'A'; -- $99,000,000 class E 'A-'; -- $62,000,000 class F 'BBB+'; -- $65,000,000 class G 'BBB'; -- $138,000,000 class H 'BBB-'; -- $120,000,000 class J 'BB+'; -- $100,000,000 class K 'BB'. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, of which the primary asset is one floating-rate loan secured by a portfolio of 450 extended stay hotels and one office building, having an aggregate principal balance of approximately $2,520,000,000 as of the cutoff date. For a detailed description of Fitch's rating analysis, see the report titled 'Banc of America Large Loan, Inc., series 2005-ESH', dated Sept. 16, 2005, and available on the Fitch Ratings web site at http://www.fitchratings.com/ BETHLEHEM STEEL: Trust Wants Montage Fee Engagement Pact Approved ----------------------------------------------------------------- Montage Partners, LLC, a Nevada limited liability company, has proposed to locate otherwise uncollected assets which previously constituted Bethlehem Steel Corporation and its debtor-affiliates' assets for which the Bethlehem Steel Corporation Liquidating Trust has not collected. Thus, pursuant to a Contingent Fee Engagement Agreement, the Liquidating Trust will engage Montage as an independent contractor to locate the Specified Assets and realize on and collect those assets through commercial, legal or judicial process for the benefit of the Trust. Montage will furnish to the Liquidating Trust a detailed description of the Specified Assets. John W. Kibler, Esq., at King & Spalding LLP, in New York, recounts that pursuant to the Debtors' confirmed Plan of Liquidation, James A. Goodman, as Liquidating Trustee, is authorized to compromise, adjust, pursue, prosecute, abandon or otherwise deal with and settle any cause of action in favor of or against the Liquidating Trust. Mr. Kibler tells the U.S. Bankruptcy Court for the Southern District of New York that under the Agreement, Montage will receive a commission equal to 50% of the gross recovery from the realization or collection of the Specified Assets. Montage will at first remit to the Liquidating Trust the total proceeds of the gross recovery immediately on the realization upon or collection of all or any portion of the Specified Assets. The Liquidating Trust will forward back to Montage 50% of the total proceeds of the gross recovery realized or collected upon all or a portion of the Specified Assets remitted to the Trust. By this application, the Liquidating Trust asks Judge Lifland to approve the Contingent Fee Engagement Agreement with Montage. According to Mr. Kibler, Montage will bear all collection costs, finders' or other fees, charges, commissions, or expenses attendant to the location, realization or collection of the Specified Assets. Montage will also shoulder all counsel fees and litigation expenses, if any, attendant to the location, realization or collection of the Specified Assets. However, if the Commission under the Agreement minus all Litigation Costs incurred by Montage will result in Montage recovering less than 40% of the gross recovery, then the Liquidating Trust and Montage will each bear one-half of any additional Litigation Costs incurred once the Minimum Commission Recovery is obtained. A full-text copy of the Contingent Fee Engagement Agreement is available for free at: http://bankrupt.com/misc/ContingentFeeEngagementAgreement.pdf Headquartered in Bethlehem, Pennsylvania, Bethlehem Steel Corporation -- http://www.bethlehemsteel.com/-- was the second- largest integrated steelmaker in the United States, manufacturing and selling a wide variety of steel mill products including hot- rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail, specialty blooms, carbon and alloy bars and large diameter pipe. The Company filed for chapter 11 protection on October 15, 2001 (Bankr. S.D.N.Y. Case No. 01- 15288). Jeffrey L. Tanenbaum, Esq., and George A. Davis, Esq., at WEIL, GOTSHAL & MANGES LLP, represent the Debtors in their restructuring, the centerpiece of which was a sale of substantially all of the steelmaker's assets to International Steel Group. When the Debtors filed for protection from their creditors, they listed $4,266,200,000 in total assets and $4,420,000,000 in liabilities. Bethlehem obtained confirmation of a chapter 11 plan on October 22, 2003, which took effect on Dec. 31, 2003. (Bethlehem Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) BUEHLER FOODS: Plans to Close Six More Stores --------------------------------------------- Bill Medley, writing for the Evansville Business Journal, reports that Buehler Foods, Inc., will close six additional stores. Three of the stores are located in Louisville, Ky., and the other three are located in Jeffersonville, Ind., Shelbyville, Ky., and St. Matthews, Ky. As previously reported, the Company closed four former Winn- Dixie stores in Louisville and made plans to close four more supermarkets while in bankruptcy protection. Two Buehler stores in the Louisville area -- located on Lyndon Lane and Dixie Highway -- will be closed along with stores in Princeton, Ind., and Carmi, Ill. Buehler is Indiana's largest privately owned independent food retailer, employing more than 3,000 people. Headquartered in Jasper, Indiana, Buehler Foods, Inc. -- http://www.buylowstores.com/-- 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. BUENA VISTA: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Buena Vista Lofts LLC 2901 Waverly Place Los Angeles, California 90039 Bankruptcy Case No.: 05-36011 Chapter 11 Petition Date: October 6, 2005 Court: Central District of California (Los Angeles) Judge: Erithe A. Smith Debtor's Counsel: Steven A. Schwaber, Esq. 2600 Mission Street, Suite 100 San Marino, California 91108 Tel: (626) 403-5600 Total Assets: $23,453,000 Total Debts: $12,169,703 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cliff Lockman Loan convertible $150,000 4401 Morella Street into equity - Studio City, CA 91607 unsecured Donna Spencer Unsecured loan $120,000 1793 North Euclid Avenue Upland, CA 91784 Manuel Godinez Unsecured loan $100,000 624 Chicago Street Los Angeles, CA 90023 Donna and Greg Kittleson Unsecured loan $100,000 2491 Euclid Crescent East Upland, CA 91784 Donna Spencer Unsecured loan $50,000 Donna and Greg Kittleson Unsecured loan $50,000 Carlson Law Group Legal services $46,833 M2A Architectural $46,414 Services Mark Cowper Unsecured loan $30,000 Michael Cowper Unsecured loan $20,000 Nabih Youssef & Assoc. Structural $8,918 Engineering Serivces Kimley-Hom Civil Engineering $1,193 Services Craig Lawson & Co. Consulting Services- $345 Land use CARBIZ INCORPORATED: Closes $690,318 Debenture Financing -------------------------------------------------------- Carbiz Inc. has closed a non-brokered convertible debenture financing pursuant to which a total of CDN$809,119 or $690,318 principle amount of debentures were issued. Proceeds from this financing will be used to repay the principle and interest related to certain of the debentures maturing on Oct. 6, 2005. Carbiz also is continuing to work toward listing of its common shares for trading on the United States Over-the- Counter (OTC) Bulletin Board. Pursuant to the terms of the financing, upon listing on the OTC Bulletin Board and its concurrent delisting from the TSX Venture Exchange, the principle amount of the debentures and all accrued interest will be automatically converted to units of Carbiz at a conversion price of CDN$0.15 per unit. Each unit will consist of one common share, one Class A common share purchase warrant and one-half of one Class B common share purchase warrant. Each whole Class A or Class B purchase warrant may be exercised to acquire one Carbiz common share at a price of CDN$0.15 on or before the date that is five years from the date of issuance of the new debentures. Certain of Carbiz's debenture holders agreed to an extension of the maturity date of their convertible debentures. Those current debenture holders who have agreed to a 6-month extension of the original maturity date of their debenture will enjoy the same conversion terms as the new debenture holders. All of the new debentures were purchased by insiders of Carbiz. Based in Sarasota, Florida and Toronto, Canada, Carbiz, Inc., -- http://www.carbiz.com/-- is a provider of Internet and software solutions to the North American automotive industry. Carbiz's suite of business solutions includes dealer software products focused on the finance, sub-prime finance and "buy-here, pay-here" markets. Carbiz has 40 full-time employees and provides finance solutions, lead generation, Internet capability and training services. Carbiz supports more than 3,000 dealers with a recurring revenue model, in addition to individual product sales. Carbiz also provides a tax refund service and refund anticipation loans at a facility in Clearwater, Florida that employs 90 people on a seasonal basis. As of July 31, 2005, the Company's equity deficit narrowed to $964,981 from a $1,062,047 deficit at January 31, 2005. CAROLINA TOBACCO: Wants Kerr Russell as Special Litigation Counsel ------------------------------------------------------------------ Carolina Tobacco Company asks the Honorable Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon for permission to employ Kerr, Russell & Weber, PLC, as its special counsel. KRW will represent the Debtor in a pending state court litigation in the State of Michigan entered as Carolina Tobacco Company v. Mike Cox, Ingham County Circuit Court Case No. 04-868-CZ. KRW will: (a) prepare and file all documents necessary to stay the pending litigation, and (b) take any other action necessary or advisable depending on the status of the Debtor's bankruptcy proceeding. Joanne G. Swanson, Esq., a partner at Kerr, Russell & Weber, PLC, discloses that the Firm received a $6,000 prepetition retainer. The current hourly rates of professionals engaged are: Professional Designation Hourly Rate ------------ ----------- ----------- William A. Sankbeil, Esq. Attorney $360 Joanne G. Swanson, Esq. Attorney $270 The Debtor believes that Kerr, Russell & Weber, PLC, is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Kerr, Russell & Weber, PLC -- http://www.krwplc.com/-- is a full service law firm. Headquartered in Portland, Oregon, Carolina Tobacco Company -- http://www.carolinatobacco.com/-- manufactures Roger-brand cigarettes. The Company filed for chapter 11 protection on April 18, 2005 (Bankr. D. Ore. Case No. 05-34156). Tara J. Schleicher, Esq., at Farleigh Wada & Witt P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $24,408,298 in assets and $14,929,169 in debts. CARRINGTON MORTGAGE: Fitch Puts BB+ Rating on $6.7MM Pvt. Certs. ---------------------------------------------------------------- Carrington Mortgage Loan Trust series 2005-NC5, is rated by Fitch Ratings: -- $1.0 billion classes A-1, A-2 and A-3 certificates 'AAA'; -- $52.4 million class M-1 certificates 'AA+'; -- $49.0 million class M-2 certificates 'AA'; -- $32.9 million class M-3 certificates 'AA-'; -- $24.2 million class M-4 certificates 'A+'; -- $44.3 million class M-5 and class M-6 certificates 'A'; -- $16.1 million class M-7 certificates 'A-'; -- $18.1 million class M-8 certificates 'BBB+'; -- $16.1 million class M-9 certificates 'BBB'; -- $14.8 million class M-10 (privately offered) certificates 'BBB-'; -- $6.7 million class M-11 (privately offered) certificates 'BB+'. The 'AAA' rating on the senior certificates reflects the 23.20% total credit enhancement provided by the 3.90% class M-1, the 3.65% class M-2, the 2.45% class M-3, the 1.80% class M-4, the 1.75% class M-5, the 1.55% class M-6, the 1.20% class M-7, the 1.35% class M-8, the 1.20% class M-9, the 1.10% class M-10, the 0.50% class M-11 and the 2.75% initial overcollateralization. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the integrity of the transaction's legal structure as well as the primary servicing capabilities of New Century Mortgage Corporation (rated 'RPS3' by Fitch). Deutsche Bank National Trust Company will act as trustee. As of the cut-off date, Oct. 1, 2005, the mortgage loans have an aggregate balance of $1,378,577,271. Approximately 67.61% of the mortgage loans are interest only. The weighted average mortgage rate is approximately 7.04% and the weighted average remaining term to maturity is 356 months. The average cut-off date principal balance of the mortgage loans is approximately $221,129. The weighted average original loan-to-value ratio is 80.61% and the weighted average Fair, Isaac & Co. score is 631. The properties are primarily located in California (39.03%), Florida (8.38%) and New York (6.99%). DAVITA INC: Completes Gambro Healthcare Acquisition --------------------------------------------------- DaVita Inc. (NYSE: DVA) closed its acquisition of Gambro Healthcare U.S. on Oct. 5, 2005. The closing follows the Federal Trade Commission completing its review of the acquisition earlier this week and issuing a consent order allowing for the closing of the acquisition. As part of the transaction, DaVita also entered into a previously announced supply agreement with Gambro Renal Products to provide a significant majority of its hemodialysis product supply and equipment requirements for the next ten years. DaVita financed the acquisition largely through a new credit facility, entered on Oct. 5, 2005, with JP Morgan Securities Inc. serving as lead arranger on this financing. The facilities under the credit agreement consist of a $250 million six-year revolving credit facility, a $350 million six-year term loan A facility and a $2,450 million seven-year term loan B facility. DaVita CEO, Kent Thiry stated, "The DaVita Village is excited to welcome the good people of Gambro. We continue to believe that this combination will significantly increase our ability to meet the needs of all of our constituencies over the long-term." Giving effect to the divestitures required by the FTC in the consent order, DaVita's acquisition adds approximately 520 dialysis centers to its operations representing a total census of approximately 39,000 patients. DaVita now serves approximately 94,000 patients at over 1,200 clinics in more than 40 states and the District of Columbia. Gambro AB is a global medical technology and healthcare company with positions in renal care (services and products) and blood component technology. Gambro generated approximately $3.23 billion (SEK 26.1 billion) of revenue in 2003, 60 percent of which was for dialysis services. DaVita, Inc., headquartered in El Segundo, California, is an independent provider of dialysis services in the U.S. for patients suffering from end-stage renal disease (chronic kidney failure). As of December 31, 2004, the company operated 658 outpatient dialysis centers located in 37 states and the District of Columbia, serving over 53,000 patients. For the last twelve months ended March 31, 2005, DaVita had total revenues of $2.4 billion. * * * The Company's 6-5/8% Senior Notes due Mar. 15, 2013 carries Standard & Poor's Ratings Services B rating. DELTA AIR: Court Gives Final Nod on GE's $2.2 Bil. DIP Financing ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York granted final approval for the $2.2 billion in post-petition financing Delta Air Lines (NYSE:DAL) has arranged to help support its business during its Chapter 11 reorganization. On Thursday, Judge Prudence C. Beatty granted final authority for Delta to utilize $1.9 billion in debtor-in-possession financing provided to Delta by GE Commercial Finance and Morgan Stanley as co-lead arrangers. Pursuant to the court's interim approval in the first day orders on Sept. 16, 2005, Delta had already borrowed $1.4 billion under this facility. The total size of this credit facility was increased to $1.9 billion from $1.7 billion, and the interest rate on two of the term loans under this facility was reduced due to strong demand from participants in the loan syndicate. The Court has also given final approval for Delta's secured post- petition financing provided by American Express. Delta borrowed the full $350 million of this facility pursuant to the Court's interim approval on Sept. 16, 2005. In connection with the borrowing of the balance of the $1.9 billion DIP facility, Delta will apply $50 million of the proceeds to pay down an equal amount of the American Express facility. As a result, Delta will have $2.2 billion of post-petition financing, an increase of approximately $1.22 billion from the pre-petition secured credit facilities. "We are very pleased with the successful outcome of our efforts to obtain this level of post-petition financing," said Edward Bastian, Delta's chief financial officer. "Because of strong demand from financial institutions that wanted to participate in the DIP loan being arranged by GE Commercial Finance and Morgan Stanley, we were able to increase the size of that loan by $200 million and also reduce the interest rate we will pay on a substantial portion of this loan. We believe that our ability to achieve these significant improvements to the DIP credit facility and to secure the continued participation of American Express in the loan package indicates the confidence that investors have in our business plan and our ability to execute that plan. The financial demands on our company continue to be unrelenting -- including unprecedented and unpredictable fuel prices. We believe our new financing arrangements will be sufficient to support our business during the reorganization, but it will require a continued commitment across our organization to reducing costs and growing revenues." 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: DP3 Wants Continued Payment on Retired Pilots' Pensions ------------------------------------------------------------------ DP3, Inc., doing business as Delta Pilots' Pension Preservation Organization, represents 1,800 retired pilots of Delta. DP3 tells the U.S. Bankruptcy Court for the Southern District of New York that Delta Air Lines Inc. and its debtor-affiliates are attempting to circumvent the procedural requirements of Section 1113 of the Bankruptcy Code in their request to honor obligations to employees, including the retired pilots. Dean Booth, Esq., at Schreeder, Wheeler & Flint, LLP, in Atlanta, Georgia, points out that the Debtors have represented that they do not seek authority to continue paying the ongoing minimum funding contributions to the retired pilots' defined benefit plan and ongoing non-qualified pension benefit payments in accordance with the unrejected and unmodified collective bargaining agreement. Mr. Booth reminds Judge Beatty that Section 1113 of the Bankruptcy Code forbids any unilateral modification of benefits paid pursuant to a CBA unless certain substantive and procedural requirements are satisfied. The Court may approve a rejection of a CBA if it determines that: (1) the debtor has submitted proposals to the union; (2) the union has rejected the Debtor's proposals without good cause; and (3) the balance of the equities clearly favors rejection of the agreement. Allowing a debtor to cease paying its collectively bargained obligations at the outset of a reorganization case before rejection of the applicable CBA violate both Section 1113 and the statutory distress termination procedures under the Employee Retirement Income Security Act. Mr. Booth asserts that the failure to make the payments under the benefit plans is a de facto unilateral modification, or termination, of benefits prohibited by Section 1113. Delta admitted during the first day hearing that $15 million for a $21 billion company is absolutely ordinary course, Mr. Booth points out. He avers that, if $15 million is so relatively immaterial to a $21 billion company like Delta, then Delta can certainly afford to pay its obligations to its retired pilots as required by the CBA. DP3 suspects that Delta is following the playbook of United Air Lines by promising to skip the October minimum funding contribution and by terminating payments under the non-qualified plan. United Air Lines recently orchestrated an "involuntary" Pension Benefit Guaranty Corporation termination of its pilots' pension plan by "skipping" minimum funding contributions so that United could breach its prior agreement with the pilots' union regarding maintenance of their pension plans and avoid the substantive and procedural requirements of Section 1113. The PBGC will use the missed payments by Delta as an excuse to "involuntarily" terminate the defined benefit pension plan before the cost of living adjustment to PBGC's guaranteed maximum benefit kicks in for 2006. DP3 asks the Court not to allow Delta to similarly do an end run around their CBA through a premeditated strategy of a consensual "involuntary" pension plan termination by the PBGC with Delta's aid and blessing. Mr. Booth asserts that Delta's bypass of Section 1113 is a fait accompli. He explains that Delta and the not yet appointed authorized representative of the retired pilots cannot now negotiate "proposed" modifications to the retirees' collectively bargained for pension benefits in good faith. Rather than having to offer a proposal of cutting benefits, Delta would be in the enviable position of offering to restore already terminated benefits. Section 1113 and the Railway Labor Act do not allow for unilaterally preempted one-sided negotiations between management and labor. Accordingly, DP3 asks the Court to compel the continued payment of ongoing minimum funding contributions to the retired pilots' defined benefit plan and ongoing non-qualified pension benefit pursuant to the CBA. 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. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Gets Court Nod to Assume Delta Connection Agreements --------------------------------------------------------------- The Delta Connection program is Delta Air Lines, Inc.'s regional carrier service, which feeds passengers and cargo to its extensive route system through contracts with various regional airlines, including: -- the Second Amended and Restated Delta Connection Agreement dated as of September 8, 2005, between Delta Air Lines, Inc., and Atlantic Southeast Airlines, Inc., and -- the Amended and Restated Delta Connection Agreement dated as of September 8, 2005, by and between Delta and SkyWest Airlines, Inc. By this motion, Delta Air Lines Inc. and its debtor-affiliates sought the U.S. Bankruptcy Court for the Southern District of New York's permission to assume the SkyWest and ASA Connection Agreements. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, explain that, under the Connection Agreements, the regional airlines offer air transportation of passengers or cargo exclusively under the DL flight designator code of Delta primarily between small and medium-sized cities and the Debtors' hub airports. The Debtors schedule all of the Delta Connection flights operated by these regional airlines and retain all revenues generated from those flights, including all passenger ticket sales and cargo sales. In exchange for operating the Delta Connection service, the Debtors pay each of the regional carriers for the cost of operating those flights and other factors intended to approximate market rates for those services. ASA is a regional airline that has served as a leading member of Delta Connection since 1984. ASA operates more than 900 Delta Connection flights each day to 126 airports in 38 states, the District of Columbia, Canada, Mexico and the Caribbean. ASA operates a fleet of 151 aircraft and employs nearly 6,000 aviation professionals across its route system. Delta acquired a 20 percent ownership stake in ASA in 1984 and purchased all of the remaining outstanding equity of ASA in 1999. SkyWest Airlines is a wholly owned subsidiary of SkyWest, Inc., and operates as an independently owned partner carrier for the Debtors and United Airlines. SkyWest Airlines has been a Delta Connection carrier since 1987 and currently serves 59 Delta Connection locations with approximately 480 daily departures, primarily from Delta's hub in Salt Lake City, Utah. SkyWest Airline's Delta Connection fleet currently consists of 56 fifty- passenger Canadair Regional Jets. On August 15, 2005, Delta and ASA Holdings, Inc., entered into a Stock Purchase Agreement to sell 100% of the outstanding shares of ASA to SkyWest for a total purchase price of $425 million. On September 7, 2005, the transaction contemplated by the ASA Sale Agreement closed and Delta received $350 million, consisting of $330 million of purchase price and $20 million related to aircraft deposits. Delta entered into the Connection Agreements, under which ASA and SkyWest Airlines agreed to continue to serve as Delta Connection regional carriers through 2020. Delta's Connection Agreement with ASA includes strong incentives for ASA to meet or exceed specific performance benchmarks and enhance cost efficiency. In connection with entering into the Connection Agreements, Delta or Comair, Inc., has agreed to lease or sublease a total of 40 regional jet aircraft to ASA or SkyWest Airlines for the duration of the applicable Connection Agreement. Pursuant to the ASA Sale Agreement, upon assumption of the Connection Agreements pursuant to a court order containing certain negotiated provisions, Delta will receive an additional $125 million from SkyWest under the ASA Sale Agreement, consisting of $95 million of deferred purchase price and $30 million related to additional aircraft deposits, providing the Debtors estates with a substantial and critical postpetition cash infusion. Mr. Huebner asserts that, in addition to providing $125 million of cash needed to sustain the Debtors' operations, assuming the Connection Agreements is important to the Debtors' operations because it will enable the traveling public to continue to make convenient connections at the Debtors' hubs to smaller-sized cities via flights operated by ASA or SkyWest Airlines. Without these connections to Delta Connection flights operated by ASA and SkyWest Airlines, the Debtors would be unable to maintain acceptable levels of passenger and cargo service to certain markets, Mr. Huebner says. * * * At a hearing yesterday, Oct. 6, 2005, the Debtors received court authorization to assume the Delta Connection agreements between Delta and Atlantic Southeast Airlines and SkyWest Airlines, which were entered into in September 2005 in connection with Delta's sale of ASA to SkyWest Inc. 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. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIAL THRU INT'L: Posts $1.05MM Net Loss in Quarter Ended July 31 ---------------------------------------------------------------- Dial Thru International Corporation delivered its financial results for the quarter ended July 31, 2005 to the Securities and Exchange Commission on Sept. 14, 2005. In its Form 10-QSB for the quarter ended July 31, 2005, the Company reports a $1,049,142 net loss as compared to $488,273 net loss for the same period in 2004. The Company's operating loss has increased and to date it has been generally unable to achieve positive cash flow on a quarterly or annual basis, primarily due to the fact that its present lines of business do not generate a volume of business sufficient to cover overhead costs. At July 31, 2005, the Company's balance sheet showed $3,275,125 of assets, liabilities totaling $9,641,583 and a stockholders' deficit of $6,366,458. The Company has an accumulated deficit of approximately $48.4 million as well as a working capital deficit of approximately $6.7 million at July 31, 2005. The Company currently has no commitments for additional funding or credit facilities. Most Payables Past Due The Company has a significant amount of trade accounts payables and accrued liabilities, of which approximately 68%, or approximately $4.2 million, is past due. Management anticipates a $500,000 to $700,000 cash shortfall from operations during the next 12 months. Debt Agreement Violations Management reports that the Company has violated certain requirements of its convertible debt agreements relating to failure to register the underlying securities, and timely payment of principal and interest, including payment in full on the maturity date of the notes, either through the issuance of common stock, or payment in cash. The Company's lenders have not declared Dial Thru in default and have allowed it to continue to operate. On June 1, 2005, the Company and its third-party lenders agreed to amend the notes payable and convertible debenture agreements to extend the maturity dates to various times ranging from November 26, 2005 through February 29, 2008. Further, approximately $2.3 million is due to two of the Company's executives and a director. Going Concern Doubt KBA Group LLP, raised substantial doubt about the Company's ability to continue as a going concern after auditing its financial statements for the fiscal year ended Oct. 31, 2004. KBA Group's audit report pointed to the Company's: - recurring losses since fiscal 2002; - $9.3 million excess in current liabilities against current assets; and - shareholders' deficit totaling $6.5 million. About Dial Thru Dial Thru International Corporation -- http://www.dialthru.com/-- is a facilities-based provider of telecommunications products and services, including international dial-thru, re-origination, Internet fax, e-Commerce, ISP, ASP, Unified Messaging, phone card products, and other enhanced Internet telephony services. The Company is developing a private IP Telephony network and utilizes Voice over Internet Protocol and other compression techniques to improve both cost and efficiencies of telecommunications transmissions. Dial Thru selectively targets emerging international markets with demand for services that can be derived from IP technologies. DELPHI CORP: Potential Ch. 11 Filing Cues Fitch to Junk Ratings --------------------------------------------------------------- Given the potential for a bankruptcy filing by Delphi Corporation's self-imposed deadline of Oct. 17, Fitch Ratings has downgraded the ratings of Delphi: -- Issuer default rating (IDR) to 'CCC' from 'B-'; -- Senior unsecured notes to 'CC' and revised the recovery rating on the senior unsecured to 'R6' from 'R5'; -- Trust preferred securities to 'CC' and revised the recovery rating on the senior unsecured to 'R6' from 'R5'. The senior secured bank facilities remain at 'B' (revised recovery rating of 'R1' from 'R3'). All ratings remain on Rating Watch Negative. Fitch believes that the ability of the UAW to influence the restructuring of Delphi is greater through an out-of-court process, thereby providing an incentive for concessions. However, the complexity of the three-party negotiations, the short time- frame involved, and the uncertainty surrounding GM's strategy in resolving Delphi's situation have heightened the risks of a bankruptcy. Fitch believes that the bulk of the cost reductions necessary to return Delphi to financial viability will fall on the UAW through headcount reductions, facility closures, and wage and benefit reductions. Although General Motors has guaranteed very substantial benefit obligations for Delphi workers in the event of a bankruptcy, Fitch does not view these guarantees as sufficient rationale in itself to cause GM to avoid a Delphi bankruptcy. The nature of the cash outflows associated with Delphi's pension and OPEB obligations, the fact that OPEB obligations are likely to be reduced at some point (due to the unsustainability of current health care spending levels at GM), and the potential capacity to terminate Delphi's pension program indicate that the impact of absorbing these obligations is primarily longer term in nature. The potential ability to terminate Delphi's pension plan in bankruptcy may provide incentive to GM and Delphi to pursue this route. This would allow Delphi to avoid very significant near- term funding requirements and, over the long term, would add PBGC resources to pay Delphi pension obligations and moderate GM's liabilities under the guarantee. However, Fitch does expect GM participation in any form of restructuring as the potential for supply disruptions, labor disruptions, and the incentive to maintain open UAW relations provide substantial rationale for GM to contribute financially to a smooth restructuring process. In a bankruptcy, Fitch's recovery analysis shows that unsecured debt holders are likely to suffer substantial losses. Fitch views that a bankruptcy restructuring could result in a partial dismantling of the company, driven in part by GM's ability to influence the direction of the restructuring via supply contracts. Unsecured holders would also be substantially diluted by PBGC claims and GM claims arising under its guarantee, limiting recovery prospects. If Delphi were to file prior to the Oct. 17 deadline (the date that the new bankruptcy law takes effect), secured holders would likely be in a position of full recovery. However, on Oct. 17 and under the new law, trade creditors are expected to move up the recovery chain in terms of access to collateral. In addition, under proposed pension legislation, the PBGC is seeking to obtain additional collateral rights that would not apply under the current bankruptcy code. As a result of Fitch's expectation that any bankruptcy filing is likely to occur prior to the impact of the new bankruptcy code and pension legislation, the recovery rating on the secured holders have been revised to 'R1' from 'R3', while the recovery ratings on the senior unsecured debt have been revised to 'R6' from 'R5'. DELTA FUNDING: Fitch Junks Ratings on Six Certificate Classes ------------------------------------------------------------- Fitch Ratings has taken these rating actions on the Delta Funding Corp. home equity transactions: Delta Funding, series 2000-1 -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 affirmed at 'A'; -- Class B downgraded to 'C' from 'CC'. Delta Funding, series 2000-2 -- Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 affirmed at 'BBB-'; -- Class B remains at 'C'. Delta Funding, series 2000-3 -- Classes A-1A and A-6F affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A'; -- Class B downgraded to 'C' from 'B-'. Delta Funding, series 2000-4 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 remains at 'CCC'; -- Class B remains at 'C'. The underlying collateral of these deals consists of a mix of both fixed and adjustable-rate subprime mortgages. The affirmations affect approximately $41.9 million in principal. The upgrades affect approximately $26.3 million in principal and the downgrades affect around $25.3 million. The pool factors (principal outstanding as a percent of the initial loan pool) on the above referenced transactions range from 11.45% (series 2000-2) to 14.70% (series 2000-1). Due to performance triggers that are in breach in all the transactions, principal distributions on the certificates are currently applied in a sequential order. Thus, the priority of payments has varied effects on the assorted parts of each pool's capital structure. Generally, this results in a reduction to the credit risk of the more senior tranches, as evidenced by the upgrades to the class M- 1 in series 2000-1 and series 2000-2. There is, however, a higher degree of risk associated with the lower priority of payment to the subordinate classes, represented by the downgrades in series 2000-1 and series 2000-3. Fitch will continue to closely monitor these deals. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/ DEVELOPERS DIVERSIFIED: Completes $177 Million Asset Disposition ---------------------------------------------------------------- Developers Diversified Realty Corporation completed its $177 million disposition of 25 office and industrial properties to Brascan Real Estate Opportunity Fund, an investment fund launched by Brookfield Asset Management Inc. (currently Brascan Corporation). The $177 million sale price is comprised of $170 million in cash and a contingent payment of $7 million in subordinated equity, based on the portfolio's performance, including proceeds from a potential disposition. As previously disclosed, proceeds from the sale will be used to pay down Developers Diversified's revolving credit facility, which was used to fund Developers Diversified's acquisition of its interest in the real estate underlying a portfolio of open and operating Mervyns stores, and for general corporate purposes. Brascan Real Estate Opportunity Fund -- http://www.brascancorp.com/-- was established by Brookfield Asset Management to invest opportunistically in commercial real estate in North America. Brookfield Asset Management is a specialist asset management company, with a focus on property, power and infrastructure assets. The Company has $40 billion of assets under management, including 70 premier office properties and over 130 power generating plants. The Company is listed on the New York and Toronto stock exchanges under the symbol BNN. Developers Diversified -- http://www.ddr.com/-- currently owns or manages over 500 operating and development retail properties in 44 states, plus Puerto Rico, comprising approximately 114 million square feet. Developers Diversified is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which acquires, develops and manages shopping centers. * * * As reported in the Troubled Company Reporter on July 8, 2005, Fitch Ratings has upgraded the following securities issued by Developers Diversified Realty Corp and Developers Diversified Realty, L.P.: -- Senior unsecured debt to 'BBB' from 'BBB-'. Fitch also affirms the following: -- Preferred stock 'BB+'. Fitch said the rating outlook is stable. DOANE PET: Offering $150 Million Notes Via Private Placement ------------------------------------------------------------ Doane Pet Care Company commenced a private placement of $150 million of senior subordinated notes due 2015. The senior subordinated notes will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The private offering, which is subject to market and other conditions, will be made within the United States only to qualified institutional buyers, and outside the United States only to non-U.S. investors under Regulation S of the Securities Act. The senior subordinated notes are expected to be eligible for resale under Rule 144A. The Company currently intends to use the proceeds from the offering, together with investments of Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan Board, and Doane senior management and borrowings under a new senior credit facility, to fund certain transactions in connection with OTPP's acquisition of beneficial ownership of substantially all of the capital stock of the Company's parent corporation, Doane Pet Care Enterprises, Inc. Doane Pet Care Company -- http://www.doanepetcare.com/-- based in Brentwood, Tennessee, is the largest manufacturer of private label pet food and the second largest manufacturer of dry pet food overall in the United States. The Company sells to approximately 550 customers around the world and serves many of the top pet food retailers in the United States, Europe and Japan. The Company offers its customers a full range of pet food products for both dogs and cats, including dry, semi-moist, soft-dry, wet, treats and dog biscuits. * * * As reported in the Troubled Company Reporter on Sept. 2, 2005, Moody's Investors Service placed the ratings of Doane Pet Care Company and Doane Products Company under review for possible upgrade. This follows Doane's announcement that it has entered into a definitive agreement in which its parent company -- Doane Pet Care Enterprises, Inc., will be acquired by Teachers' Private Capital for $840 million. Doane has stated that as part of the transactions, Teachers will make a substantial equity investment into Doane, allowing it to retire all of its outstanding preferred stock and reduce the amount of funded debt on its balance sheet. As reported in the Troubled Company Reporter on Aug. 31, 2005, Standard & Poor's Ratings Services placed its ratings on private- label pet food manufacturer, Doane Pet Care Co., on CreditWatch with positive implications. This includes the 'B' corporate credit rating and other ratings on the company. CreditWatch with positive implications means that the ratings could be affirmed or raised following the completion of Standard & Poor's review. T he Brentwood, Tennessee-based company's total debt outstanding (including preferred stock) at July 2, 2005, was about $696 million. ENTERGY NEW ORLEANS: Can Set-Up Interim Compensation Procedures --------------------------------------------------------------- Section 331 of the Bankruptcy Code provides, in relevant part, that: "A trustee, an examiner, a debtor's attorney, or any professional person employed under Section 327 of 1103 of this title may apply to the Court not more than once every 120 days after an order for relief in a case under this title, or more often if the court permits, for such compensation for services rendered . . ." In this regard, the Debtor asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to establish interim compensation procedures and expense reimbursement procedures for retained professionals in its Chapter 11 case. The Debtor wants to pay and reimburse its professionals on a monthly basis, comparable to the procedures established in other large Chapter 11 cases. Furthermore, the Debtor wants to require the Professionals seeking interim compensation to serve detailed invoices outlining the services rendered and expenses incurred to: a) its counsel; b) an official committee of unsecured creditors that may be appointed; c) Entergy Corporation; d) The Bank of New York Trust Company, N.A.; e) Hibernia National Bank; and f) the United States Trustee. R. Patrick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in Baton Rouge, Louisiana, explains that if there is no timely objection, the Debtor will pay its Professionals 80% of the fee amount and 100% of disbursements incurred for the month. The Debtor's proposed interim compensation and reimbursement procedures provide that: a. By the 20th day of each month, following the month for which compensation is sought, the Professionals will submit a set of invoices to the Service Parties. Each entity will have 10 days to review the Fee Statement. At the expiration of the 10-day period, if no objection is timely filed, each Professional will notify the Debtor that no objections have been filed. Upon receipt of the notice, the Debtor will pay 80% of the fees and 100% of the disbursements requested. b. In the event that an objection is timely filed, the objector and the Professional will attempt to reach an agreement regarding the correct payment to be made. If the parties are unable to agree within 15 days after receipt of the notice of objection, the Professional will have the option of (i) filing the objection together with a request for payment of the disputed amount with the Court; or (ii) foregoing payment of the disputed amount until the next interim fee application hearing. c. The first fee statement will be submitted to the Service Parties no later than November 15, 2005, and will cover the period from the Petition Date through the end of October 31, 2005. d. About every four months, each Professional will file an application for interim Court approval and allowance of the compensation and reimbursement of expenses requested for the prior four months in the Fee Statements. e. The pendency of an application or a Court order that payment of compensation or reimbursement of expenses was improper as to a particular Fee Statement will not disqualify a Professional from future payment. f. Neither the objection to, the payment of, nor the failure to object to pay, monthly interim compensation and reimbursements will bind the United States Trustee, any Professional, any party-in-interest, or the Court with respect to the allowance of interim or final applications for compensation and reimbursement. Mr. Vance notes that the procedures suggested will enable the parties to closely monitor costs of administration and allow the Debtor to maintain a more level cash flow availability and implement efficient cash management procedures. The Debtor further asks the Court to permit each member of the Official Committee of Unsecured Creditors, once appointed, to submit statements of expenses and supporting vouchers to the counsel for the Committee, who will then collect and submit the requests for reimbursement in accordance with the proposed procedures. * * * The Court approves the Debtor's request. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Gets Court Okay to Pay Critical Vendor Claims ------------------------------------------------------------------ Entergy New Orleans Inc., sought and obtained the U.S. Bankruptcy Court for the Eastern District of Louisiana's authority to pay prepetition claims owing to third-party suppliers and contractors that are essential to: * the uninterrupted function of their business operations; and * the recovery of the New Orleans metropolitan area in the aftermath of Hurricane Katrina. In the alternative, the Court permits the Debtor to pay up to $23 million in prepetition claims of the Critical Restoration Vendors in the ordinary course of business. The obligations to Critical Restoration Vendors include: a) obligations owed to Critical Vendors that do not have formal contracts with the Debtor; b) obligations owed to Critical Vendors whose contracts with the Debtor will shortly expire, or whose contracts can be terminated under both non-bankruptcy laws and the Bankruptcy Code; and c) obligations owed to Critical Vendors, who may suspend or limit performance of the supply of goods and services to the Debtor. Tara G. Richard, Esq., at Jones, Walker, Waetchter, Poitevent, Carrere & Denegre, L.L.C., in Lafayette, Louisiana, tells the Court that during this critical post-Katrina period, the Debtor's efforts to restore, recover and rebuild its electrical and gas facilities, which form the basic infrastructure for the New Orleans metropolitan area, would be materially impaired unless the Debtor can ensure that its Critical Restoration Vendors continue to provide services and goods. Ms. Richard maintains that payment of the Critical Restoration Vendor Claims is vital to the Debtor's reorganization efforts because: a) the Critical Restoration Vendors are often the only source from which the Debtor can procure certain goods and services; b) failure to pay the Critical Restoration Vendor Claims during this particularly difficult and trying time for all in the New Orleans metropolitan area, would very likely result in the Critical Restoration Vendors terminating their provision of goods and services to the Debtor, thereby negatively impacting ENOI's restoration and recovery operations; or c) the Critical Vendors themselves would be irreparably damaged by the Debtor's failure to pay their prepetition claims, requiring the Debtor to try to obtain goods and services elsewhere that would not be available or would be only available at a higher price or on unfavorable terms and creating an extreme administrative burden on the Debtor and leading to disruption of the Debtor's business. Ms. Richard assures the Court that the Debtor has sufficient liquidity to pay the prepetition claims of Critical Restoration Vendors without any adverse effect in its postpetition operations. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) FALCON PRODUCTS: Court Okays Modified CBA with UFCW Int'l Union --------------------------------------------------------------- The Honorable Barry S. Schermer of the U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, authorized Falcon Products, Inc., and its debtor-affiliates to modify their collective bargaining agreement with the United Food and Commercial Workers International Union. Judge Schermer determined that Falcon's modified CBA proposal satisfies the requirements of 11 U.S.C. Section 1113(c): 1) the proposal was made in good faith based on the most complete and reliable business and financial information available; 2) the proposed modifications are necessary to permit the Debtors to successfully reorganize; 3) the proposal treats the UFCW members fairly and equitably; 4) the Debtors have provided the UFCW with all current information needed to assess the proposal; 5) the Debtors and the Union have met and negotiated but were unable to come to an agreement; 6) the Debtors and UFCW each believ that they have negotiated in good faith; and 7) the authorized representative of the UFCW refused to accept the proposal. A full-text copy of the Revised CBA is available for free at: http://bankrupt.com/misc/Falcon.CBA.pdf Headquartered in Saint Louis, Missouri, Falcon Products, Inc. -- http://www.falconproducts.com/-- designs, manufactures, and markets an extensive line of furniture for the food service, hospitality and lodging, office, healthcare and education segments of the commercial furniture market. The Debtor and its eight debtor-affiliates filed for chapter 11 protection on January 31, 2005 (Bankr. E.D. Mo. Lead Case No. 05-41108). Brian Wade Hockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $264,042,000 in assets and $252,027,000 in debts. FLOW INTERNATIONAL: Appoints Douglas Fletcher as New VP & CFO ------------------------------------------------------------- FLOW International Corporation (Nasdaq: FLOWE) appointed Douglas P. Fletcher as Vice President and Chief Financial Officer. Mr. Fletcher will oversee all of FLOW's financial functions from the company's headquarters in Kent, Washington, and report directly to Stephen R. Light, FLOW's President and Chief Executive Officer. Fletcher joined FLOW on August 16th, 2005, when he was appointed interim CFO. "We are very pleased to welcome Doug as a full-time member of our executive team," said Stephen R. Light, FLOW's President and Chief Executive Officer. "Doug is a seasoned executive with a long and impressive record overseeing some large financial organizations. His depth of experience will no doubt make a very positive contribution to FLOW." Mr. Fletcher has nearly 30 years of experience in finance, strategic planning, and accounting. Before joining FLOW, Mr. Fletcher served as CFO of GiftCertificates.com and of eCharge Corporation, both based in Seattle. Prior to that, Mr. Fletcher held various senior positions in corporate and structured finance, equipment finance, restructuring, and other finance positions with Citibank in New York. Mr. Fletcher also held several senior finance positions, including Group Controller, with International Paper Company, and served as a Senior Auditor of Price Waterhouse in New York. Mr. Fletcher has a Bachelors degree in accounting from Ohio University. Flow International Corporation -- http://www.flowcorp.com/ -- is the world's leading developer and manufacturer of ultrahigh- pressure waterjet technology for cutting, cleaning, and food safety applications, providing state-of-the-art ultrahigh-pressure (UHP) technology to industries including automotive, aerospace, job shop, surface preparation, food and more. * * * As reported in the Troubled Company Reporter on Sept. 22, 2005, Flow International Corporation (Nasdaq: FLOW) has been further delayed from filing its Form 10-Q for the fiscal 2006 first quarter ended July 31, 2005. On Sept. 16, 2005, the Company filed a Form 12b-25 to extend the filing date for its interim report, extending the filing date to Sept. 19, 2005. The Company did not file the Form 10-Q on Sept. 19, 2005, and currently is unable to predict when it will file the 10-Q. The Company, after consultation with its Independent Registered Public Accounting Firm has determined that it will restate its financial results for the year ended April 30, 2005, as a result of an error related to the valuation of anti-dilution warrants issued to the Company's lenders on March 21, 2005. The warrants were issued as a result of the issuance of securities in a PIPE transaction. The amount of the restatement, which will result in a non-cash adjustment, is estimated to be approximately $600,000 and will increase the Company's paid-in capital and net loss for the year ended April 30, 2005. The restatement for these warrants will not have any effect on net shareholder's equity as of April 30, 2005. In conjunction with the Public Company Accounting Oversight Board's inspection of the IRPAF, the IRPAF has advised that it continues to complete required audit procedures in connection with the 2005 financial statements. Until the IRPAF has completed these procedures and the 2005 financial statements are restated, the Company will not be in a position to file the 10- Q for the first quarter. FREDERICK MCNEARY: APC Partners Files Joint Chapter 11 Plan ----------------------------------------------------------- APC Partners II, LLC, a secured creditor of Prestwick Chase Inc. and Frederick J. McNeary, Sr., delivered a Joint Chapter 11 Plan of Reoganization to the U.S. Bankruptcy Court for the Northern District of New York. Plan Funding On the Effective Date, APC will make a $1,800,000 capital contribution to Reorganized Prestwick to: a) fund the payments to be made pursuant to the terms of the Plan; b) provide the Reorganized Prestwick with adequate working capital; c) fund repairs, rehabilitation and deferred maintenance of the senior living facility and real property; and d) resolve and cure any non-compliance with the Army Corps of Engineers' wetlands rules and regulations, building codes and any necessary or desirable improvements to ensure the health, safety and welfare of its residents. Plan Structure APC's Plan provides for: a) a comprehensive restructuring of Prestwick Chase's debt; b) an injection of fresh working capital into Prestwick Chase to restore residents' security deposits; c) rehabilitation of the senior living facility to ensure the health, safety and welfare of the residents; and d) the sale of substantially all of Frederick McNeary, Sr.'s non-exempt assets. Treatment of Claims A. Claims Against Prestwick Chase: The Reorganized Prestwick will institute a program of capital improvements and use modifications to its senior living facility and real property to remedy the current violations to satisfy the Town of Greenfield PUD Allowed Claim. On the Effective Date, M&T will retain its liens and will receive a new Note in the principal amount of $13,702,155. APC Partners' secured claim will be allowed for $1.6 million and will be exchanged for part of the New Equity Interests. Other Allowed Secured Claims will be reinstated or paid in full in cash. On the Effective Date, general unsecured creditors will be paid 25% of their claims. In addition, these creditors will share pro rata in recoveries made out of causes of action until such time that their claims will be fully paid. Prior to the Debtors' bankruptcy filings, Mr. McNeary and Prestwick Chase guaranteed the repayment of all sums of money loaned to Putnam Brook by the Town of Greenfield in 1998. In relation to that loan, the Town of Greenfield Putnam Brook Guarantee was established. Pursuant to the Plan, the Guarantee will be continued. However, the amount of guarantee will be reduced to 50% of the amount collected from Putnam Brook, Inc. Old Equity Interests will be cancelled. B. Claims Against Frederick McNeary: These secured claims will be paid in full: -- Adirondack Trust -- Capital Bank -- DaimlerChrysler -- IndyMac -- Partners Trust -- Realty USA -- Wells Fargo Upon liquidation of its collateral, APC will receive a cash distribution equal to the aggregate value of its liens on the Debtor's real property, with interest at a rate of 150 basis points over the five year Treasury bill priced at the confirmation date. M&T's allowed claim will be paid in full through the sale of the Debtor's Exit 13N Property. General Unsecured creditors are expected to recover 100% of their claims over time. The first distribution to the unsecured creditors will be approximately 20% of their aggregate claims that will be funded from net proceeds of the liquidation of the Debtor's assets after all claims with higher priorities are satisfied. The unsecured portion of APC's claim will be subordinated to the claims of the unsecured creditors. Town of Greenfield Putnam Brook Guarantee will remain in place without any modifications. Headquartered in Saratoga Springs, New York, Prestwick Chase, Inc. -- http://www.prestwickchase.com/-- offers senior housing and independent living as an alternative to home ownership. The Company filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Robert J. Rock, Esq., at Albany, New York, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. Headquartered in Saratoga Springs, New York, Frederick J. McNeary, Sr., is a real estate developer and broker. He is also a shareholder of bankrupt Prestwick Chase, Inc., which filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Mr. McNeary filed for chapter 11 protection on April 29, 2005 (Bankr. N.D.N.Y. Case No. 05-13007). Howard M. Daffner, Esq., at Segel, Goldman, Mazzotta & Siegel, P.C., represents the Debtor. When Mr. McNeary filed for protection from his creditors, he estimated less than $50,000 in assets and listed $10 million to $50 million in debts. GENERAL MOTORS: Selling 20% Equity Stake in Fuji Heavy Industries ----------------------------------------------------------------- General Motors Corp. (NYSE: GM) disclosed the sale of its approximate 20% equity stake (about 157 million shares) in Fuji Heavy Industries. The alliance between GM and FHI will end and GM will refocus its efforts and resources in the Asia Pacific region's high-growth markets and with its other strategic partners. Toyota Motor Corporation will purchase 68 million shares, or approximately 8.7%, of FHI shares outstanding, from General Motors for US$4.60 (JPY 520) per share, or about $315 million in cash. GM intends to divest its remaining 11.4% interest by offering for sale its shares (89 million shares) into FHI's 90 million share open-market buyback program announced earlier Wednesday, and through market sales if necessary. "We've had a good partnership; however both GM and FHI came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach," said Troy Clarke, GM group vice president and president, GM Asia Pacific. "We have a great deal of respect for FHI and Toyota. We wish them well in their new relationship." The divestiture of GM's stake in FHI is expected to be completed in the fourth quarter. Since GM acquired a stake in FHI in 2000, the companies have been involved in various joint projects in product development, advanced technology, global purchasing and supply chain management, and product distribution. GM currently partners with FHI on one production vehicle, the Saab 9-2x, which will continue. Other joint arrangements with FHI will be dissolved over time. For example, GM and FHI's previously announced Saab crossover vehicle development program will be cancelled. The sale by GM of its interest in FHI, including cash proceeds received and any potential gain on sale, will be recorded in the fourth quarter. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM today employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. In 2004, GM sold nearly 9 million cars and trucks globally, up 4 percent and the second-highest total in the company's history. GREGORY PARK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Gregory Keehwa and Victoria Vaughn Park 2654 Thurleston Lane Gwinnett, Georgia 30097 Bankruptcy Case No.: 05-79598 Chapter 11 Petition Date: October 5, 2005 Court: Northern District of Georgia (Atlanta) Debtors' Counsel: Richard E. Thomasson, Esq. Hanes & Thomasson Suite 875, 3355 Lenox Road Atlanta, Georgi 30326 Tel: (404) 816-1700 Total Assets: $1,005,200 Total Debts: $1,565,245 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cornerstone Bank Value of security: $410,256 2060 Mount Paran Road, NW $950,000 Suite 100 Senior lien: Atlanta, GA 30327 $770,000 Robert & Holly Park $85,000 74 Hilltop Road Chestnut Hill, MA 02467 Chase $28,668 P.O. Box 15153 Wilmington, DE 19886 Chase $28,261 Bank of America $26,177 John & Grace Park $25,000 Chase $20,923 MBNA $20,104 Steve & Lisa Vaughn $24,000 MBNA $17,716 MBNA $13,911 Capital One $11,452 Gwinnett County Property Tax $10,919 Wachovia Bank, NA $10,000 Bank of America $8,985 Capital One $8,249 American Express $8,238 TPC@Sugarloaf $8,218 Michael & Susan Elkourie $5,000 MBNA $3,107 GT BRANDS: Has Until Jan. 9 to Decide on Three Unexpired Leases --------------------------------------------------------------- The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan extended GT Brands Holdings LLC and its debtor-affiliates' time until Jan. 9, 2006, to elect to assume, assume and assign, or reject three unexpired nonresidential real property leases. As previously reported in the Troubled Company Reporter on Sept. 8, 2005, the Debtors are parties to three unexpired nonresidential real property leases relating to their headquarter offices in New York City, their warehouse and distribution facility in Jersey City, New Jersey, and a fitness facility in Columbia, South Carolina, related to their Firm line of fitness DVDs, videos and related products. The Debtors have been unable to make reasoned decisions whether to assume or reject the leases because they were preoccupied with the operation of their businesses and were busy addressing creditor issues and concerns. The Debtors also want to minimize the likelihood of inadvertent rejections of valuable leases or premature assumption of other leases. The Debtors assure the Court that they are current on all their postpetition rent obligations under each unexpired lease pursuant to Sec. 365(d)(3) of the Bankruptcy Code. Headquartered in New York, New York, GT Brands Holdings LLC, supplies home video titles to mass retailers. The Debtors also develop and market branded consumer, lifestyle and entertainment products. The Company and its affiliates filed for chapter 11 protection on July 11, 2005 (Bankr. S.D.N.Y. Case No. 05-15167). Brian W. Harvey, Esq., at Goodwin Procter LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed total assets of $79 million and total debts of $212 million. HAWS & TINGLE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Haws & Tingle, Ltd. 650 West Vickery Boulevard Fort Worth, Texas 76104 Bankruptcy Case No.: 05-82478 Type of Business: The Debtor is a building contractor. Chapter 11 Petition Date: October 6, 2005 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Mark Edward Andrews, Esq. Neligan Tarpley Andrews & Foley LLP 1700 Pacific Avenue, Suite 2600 Dallas, Texas 75201 Tel: (214) 840-5300 Fax: (214) 840-5301 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Zurich American Insurance Co. Insurance Bonding $2,809,572 12222 Merit Drive Dallas, TX 75251-2283 Way Engineering Ltd. Trade Debt $728,904 5308 Ashbrook Houston, TX 77081 Alamo Tile Company Trade Debt $716,828 2202 Northwest Loop 410 San Antonio, TX 78230 Suss Woodcraft International Trade Debt $558,419 9585 Wanklyn Street LaSalle, Quebec Canada H8R1Z1 Premier Electric, LP Trade Debt $408,511 220 South Sylvania, Suite 213 Fort Worth, TX 76111 Haggerty Plumbing Trade Debt $361,605 1318 Hatton Road Wichita Falls, TX 76302 EO Integrated Systems, Inc. Trade Debt $310,041 12700 - 31 Mile Road Washington, MI 48095-4769 Willis of Texas, Inc. Trade Debt $264,615 Dallas/Fort Worth Division P.O. Box 730310 Dallas, TX 75373-0310 Kone, Inc. Trade Debt $246,803 801 Hammond Street, Suite 400 Coppell, TX 75019 Regional Electrical Systems Trade Debt 4217,176 3409 Raider Drive Fort Worth, TX 76053 Oak Cliff Mirror & Glass Trade Debt $216,109 Company Inc. 2202 North Beckley Dallas, TX 75208 Carrco Painting Contractors Trade Debt $215,478 4422 Action Street Garland, TX 75042 Jack Pierce Electric Trade Debt $189,821 1504 13th Street Wichita Falls, TX 76301 Steel, Inc. Trade Debt $179,936 405 Clarendon Avenue Scottsdale, GA 30079 Flatiron Capital Corporation Financing of $150,001 P.O. Box 17600 Denver, CO 80217-6000 Opening Specialties Trade Debt $142,197 P.O. Box 847626 Dallas, TX 75284-7626 Crown Corr., Inc. Trade Debt $141,212 2321 East Pioneer Drive Irving, TX 75061 Otis Elevator Company Trade Debt $135,153 P.O. Box 905454 Charlotte, NC 28290-5454 Ideal Engineering, Inc. Trade Debt $126,039 10706 Craighead Drive Houston, TX 77025-5802 W.T. Byler Co., Inc. Trade Debt $121,182 15203 Lillja Road Houston, TX 77060-5299 HORNBECK OFFSHORE: Closing Additional $75MM Private Debt Offering ----------------------------------------------------------------- Hornbeck Offshore Services, Inc. (NYSE: HOS) closed its private placement of an additional $75,000,000 aggregate principal amount of its 6.125% Senior Notes due 2014 under its indenture dated as of Nov. 23, 2004. The Additional Notes were priced at 99.25% of principal amount to yield 6.232%, have substantially the same terms as the original notes and are due in 2014. The Company intends to use the proceeds from the sale of the Additional Notes, as well as the proceeds from its concurrent public offering of common stock, to partially fund the construction of new OSVs, ocean-going tugs and ocean-going, double-hulled tank barges and the retrofit or conversion of certain existing vessels, including MPSVs. In addition, the combined proceeds may be used in connection with possible future acquisitions and additional new vessel construction programs, as well as for general corporate purposes. Pending these uses, the Company will repay debt under its revolving credit facility, which may be reborrowed. Hornbeck Offshore Services, Inc. is a leading provider of technologically advanced, new generation offshore supply vessels in the U.S. Gulf of Mexico, Trinidad and other select international markets, and is a leading transporter of petroleum products through its fleet of ocean-going tugs and tank barges, primarily in the northeastern U.S. and in Puerto Rico. Hornbeck Offshore currently owns and operates a fleet of over 50 U.S.- flagged vessels primarily serving the energy industry. * * * As reported in the Troubled Company Reporter on Sept. 30, 2005, Moody's affirmed the Ba3 Corporate Family Rating and the Ba3 rating on the existing $225 million senior unsecured notes for Hornbeck Offshore Services, Inc. while also assigning a Ba3 to the company's proposed $75 million senior unsecured notes add- on offering. Moody's said the outlook remains stable. As reported in the Troubled Company Reporter on Sept. 29, Standard & Poor's Ratings Services affirmed the ratings on Hornbeck Offshore Services Inc. (BB-/Stable/--) following its announced common stock offering and $75 million debt placement. Furthermore, the $75 million additional 6.125% senior notes due 2014, were rated 'BB-'. The outlook is stable. Pro forma the offerings, Covington, Louisiana-based Hornbeck will have $300 million of debt. HUDSON VALLEY: Has Until Oct. 12 to File Schedules & Statements --------------------------------------------------------------- The Honorable Robert E. Littlefield, Jr., of the U.S. Bankruptcy Court for the Northern District of New York, Albany Division, extended Hudson Valley Care Centers, Inc.'s time until Oct. 12, 2005, to file its schedules and statements. Michael D. Assaf, Esq., at O'Connell and Aronowitz in Albany, New York, tells the Court that the Debtor is gathering information from various sources to complete posting all transactions on the Debtor's books of accounts. The Debtor is also in the process of listing and valuing its machinery and equipment and listing all pending contract. The Debtor says that these actions cannot be concluded for only two weeks. The extension is needed to complete the schedules and statements. Headquartered in Ghent, New York, Hudson Valley Care Centers, Inc., operates a nursing home. The Debtor filed for chapter 11 protection on September 13, 2005 (Bankr. N.D.N.Y. Case No. 05-16436). Michael D. Assaf, Esq., at O'Connell and Aronowitz represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 to $500,000 and debts between $10 million to $50 million. HUDSON VALLEY: Meeting of Creditors Slated for Oct. 17 ------------------------------------------------------ The U.S. Trustee for Region 2 will convene a meeting of Hudson Valley Care Centers, Inc.'s creditors at 11:30 a.m., on Oct. 17, 2005, at Hearing Room 101, Ground Floor, 74 Chapel Street in Albany, New York. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Ghent, New York, Hudson Valley Care Centers, Inc., operates a nursing home. The Debtor filed for chapter 11 protection on September 13, 2005 (Bankr. N.D.N.Y. Case No. 05-16436). Michael D. Assaf, Esq., at O'Connell and Aronowitz represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 to $500,000 and debts between $10 million to $50 million. HUDSON VALLEY: Wants O'Connell & Aronowitz as Bankruptcy Counsel ---------------------------------------------------------------- Hudson Valley Care Centers, Inc., asks the Honorable Robert E. Littlefield, Jr., of the U.S. Bankruptcy Court for the Northern District of New York, Albany Division, for permission to employ O'Connell and Aronowitz as its bankruptcy counsel. O&A will represent the Debtor in all phases of the bankruptcy proceeding. The Firm will also prepare pleadings, motions, disclosure demands and responses, settlement negotiations, preparation and conduct of examinations before trial, court appearances, trial work, and any other necessary matter. Michael D. Assaf, Esq., a member at O'Connell and Aronowitz, discloses that the Firm received a $25,000 retainer. The hourly rates of professionals engaged are: Designation Hourly Rate ----------- ----------- Partners and Counsel $250 Associate Attorneys $200 Law Clerks and Paralegals $125 The Debtor believes that O'Connell and Aronowitz is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. O'Connell and Aronowitz -- http://www.oalaw.com/-- is a full service law firm that has offices in Albany and Plattsburgh, New York. Headquartered in Ghent, New York, Hudson Valley Care Centers, Inc., operates a nursing home. The Debtor filed for chapter 11 protection on September 13, 2005 (Bankr. N.D.N.Y. Case No. 05-16436). Michael D. Assaf, Esq., at O'Connell and Aronowitz represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 to $500,000 and debts between $10 million to $50 million. HUFFY CORP: PBGC Takes Over Employees' Retirement Pension Plan -------------------------------------------------------------- The Pension Benefit Guaranty Corporation confirmed that it has assumed responsibility for the pension plans of 3,700 workers and retirees of Huffy Corp. and its affiliates. As reported in the Troubled Company Reporter on Aug. 18, 2005, the U.S. Bankruptcy Court for the Southern District of Ohio gave Huffy Corporation and its debtor-affiliates permission to terminate its employee retirement plan. The Court determined that the Debtors met the requirements for a voluntary distress termination of their retirement plan pursuant to Section 363(b) of the Bankruptcy Code and Section 4041 of the Employee Retirement Income Security Act of 1974. The Debtors' retirement plan is a single-employee defined benefit plan established on October 31, 1952. From 1952 to 1997, the plan only covered salaried employees. Between 1967 and 1997, Huffy established three other pension plans governing different groups of employees: * hourly-rate employees (the Bicycle Hourly Plan); * office and clerical employees of Huffy Bicycle Division (the Bicycle Office Plan); and * the Huffy Service First, Inc. Retirement Plan. After the Debtor's retirement plan officially ended on Aug. 31, 2005, the PBGC became trustee of Huffy Corp.'s retirement plan on Oct. 4, 2005. The plan is 47 percent funded, with $71.7 million in assets to cover $152.4 million in benefit promises. The PBGC estimates that it will be responsible for $80 million of the $80.7 million shortfall for the plan. On Sept. 21, 2005, the Bankruptcy Court approved a compromise settlement between the PCBG and the Debtors to resolve the dispute of various claims filed by the PBGC in connection with the termination of the Debtors' retirement plan. The PBGC expects to recover between $7 and $9 million on its claim. About the PBGC The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 31,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. Headquartered in Miamisburg, Ohio, Huffy Corporation -- http://www.huffy.com/-- designs and supplies wheeled and related products, including bicycles, scooters and tricycles. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim Martin Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $138,700,000 in total assets and $161,200,000 in total debts. The Court confirmed the Debtors' chapter 11 Plan on Sept. 23, 2005. INDIANTOWN COGENERATION: Fitch Lowers Senior Debt Rating to BB -------------------------------------------------------------- Fitch Ratings has downgraded to 'BB' from 'BBB-' the senior secured rating on Indiantown Cogeneration L.P. and Indiantown Cogeneration Funding Corp.'s taxable first mortgage bonds and tax- exempt facility revenue bonds. The Rating Watch Negative has been removed. The rating action is a result of the deterioration in ICL's financial performance following the execution of the second amendment to the coal sales agreement. Debt service coverage ratios for the annual period ending December 2005 are expected to fall below 1.2 times based on ICL's current fuel costs. Absent a significant improvement in energy revenues, ICL faces heightened exposure to operating risks that could increase operating costs or reduce availability and therefore capacity payments. Fitch assigned the Rating Watch in December 2004 after ICL agreed to the second amendment, which required a 42% increase above the contractual coal price previously in effect. The ongoing failure to adjust the unit energy payment cost in the power purchase agreement and the increase in the fixed contractual coal price have combined to exacerbate the mismatch between energy revenues and fuel costs. Energy revenues improved slightly after the replacement fuel index, the basis for the coal-cost component of the energy payments made to ICL, took effect in late 2004. However, with the execution of the second amendment, ICL's actual fuel costs subsequently climbed well above the cost of coal specified in the replacement index. Consequently, energy revenues continue to fall short of fuel costs, putting pressure on ICL's liquidity. Though the PPA provides for adjustment of the UEPC in the event that fuel costs exceed energy revenues, the adjustment process has not been resolved in a timely manner. Fitch believes that ICL will eventually achieve an increase in energy revenues as required by the PPA, but the magnitude and the timing of such an increase remains uncertain; the introduction of a lawsuit has the potential to prolong the adjustment process. On Sept. 8, 2005, ICL filed a complaint against Florida Power & Light Co., the counterparty to the PPA, in the United States District Court for the Middle District of Florida. In the complaint, ICL alleges breach of contract for FPL's failure to adjust the UEPC. The outcome of the lawsuit cannot be determined at this time. ICL may be vulnerable to price volatility in the coal market, as the coal supply agreement is subject to a price re-opener in 2007. If ICL and FPL cannot establish a precedent for resolving the adjustment process in a timely manner and coal prices continue to rise, further disparities between energy payments and fuel costs could develop. However, cash flows could stabilize and credit quality could be enhanced if ICL receives substantial assurance that the UEPC will be promptly adjusted to compensate for rising fuel costs. The Indiantown project consists of a 330-megawatt coal-fired qualifying facility located in Martin County, Florida, supplying energy and capacity to FPL and steam to Louis Dreyfus Citrus. ICL is a special purpose limited partnership jointly owned by Dana Commercial Credit and Cogentrix Energy, Inc., an indirect wholly owned subsidiary of Goldman Sachs Group, Inc. ICL's management, operations, and maintenance functions are performed by subsidiaries of Cogentrix. IRIDIUM OPERATING: Wins 23rd Extension of Plan-Filing Period ------------------------------------------------------------ The Hon. Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York issued a bridge order extending Iridium Operating LLC and its debtor-affiliates' exclusive period to file a chapter 11 plan until Nov. 15, 2005. As reported in the Troubled Company Reporter, the Debtors had asked for several extensions of its exclusive plan-filing period in order to craft a plan of reorganization that takes into account the substantive changes to their businesses. The Debtors indicated that Motorola, Inc., The Chase Manhattan Bank, as Agent, and the Debtors' Official Committee of Unsecured Creditors have no objections to the requested extension. The Bankruptcy Court will convene a hearing at 2:30 p.m. on Nov. 2, 2005, to consider the Debtor's 23rd motion to extend their exclusive plan filing and solicitation periods. Iridium Operating LLC develops and deploys a global wireless personal communication system. The Company and its debtor- affiliates filed for chapter 11 protection on August 13, 1999 (Bankr. D. Del. Case No. 99-02854). William J. Perlstein, Esq., and Eric R. Markus, Esq., at Wilmer, Cutler & Pickering represent the Debtors in their restructuring efforts. J. CREW: Commences Cash Tender Offer for $275-Mil Sr. Sub. Notes ---------------------------------------------------------------- J. Crew Operating Corp. commenced a cash tender offer for any and all of its outstanding $275 million principal amount of 9-3/4% Senior Subordinated Notes due 2014 (CUSIP No. 46612GAC1) and is soliciting consents to proposed amendments to the Indenture pursuant to which the Notes were issued. The tender offer and the consent solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated October 3, 2005. The proposed amendments to the Indenture would eliminate or modify substantially all of the affirmative and negative covenants, the provision obligating the Company to make an offer to repurchase the Notes in the event of a change in control of the company, the security and collateral provisions, and certain events of default contained in the Indenture, would subordinate the Company's obligations under the Notes to the Company's obligations under a new senior secured term loan to be entered into by the Company and would provide for the amendment and termination of the security agreement related to the Notes. The tender offer and consent solicitation are scheduled to expire at 9:00 am, New York City time, on November 1, 2005, unless extended. The consent payment deadline is 5:00 pm, New York City time on October 14, 2005, unless extended. If the tender offer and consent solicitation are consummated, holders of Notes who tender their Notes at or prior to the Consent Payment Deadline will receive the Total Consideration equal to $1,015.07 per $1,000 principal amount of the Notes validly tendered, or 101.507% of their par value. If the tender offer and consent solicitation are consummated, holders of Notes who tender their Notes after the Consent Payment Deadline but prior to the Expiration Time, will receive $1,010 per $1,000 principal amount of the Notes validly tendered. The Total Consideration is the sum of the Tender Consideration and a consent payment of $5.07. In each case, holders that validly tender their Notes will receive accrued and unpaid interest up to, but not including, the settlement date. All holders that tender their Notes are obliged to deliver their consent to the adoption of the proposed amendments to the Indenture, even though holders that tender their Notes after the Consent Payment Deadline will not receive the Consent Payment. If the proposed amendments become effective, then all the Notes will be subject to the proposed amendments. The tender offer and consent solicitation are conditioned upon the simultaneous closing of the IPO and the Loan Facility. The tender offer and consent solicitation are also conditioned upon the consent of holders collectively holding a majority in principal amount of the outstanding Notes. Holders of this amount of outstanding Notes have already agreed, subject to certain conditions, to tender all of their Notes. The tender by these holders would constitute the requisite consents to adopt the proposed amendments to the Indenture. Questions regarding the tender offer and consent solicitation should be directed to: Goldman, Sachs & Co. Dealer-Manager 212-357-5680 877-686-5059 Attn: Credit Liability Management Group Requests for assistance or additional sets of the offer materials may be directed to Global Bondholder Services Corporation, the Information Agent and Depositary for the tender offer and consent solicitation, at 866-873-6300. J.Crew Group, Inc. is a nationally recognized multi-channel retailer of quality women's and men's apparel, shoes and accessories. The Company operates 156 retail stores, the J.Crew catalog business, j.crew.com and 44 factory outlet stores. * * * As reported in the Troubled Company Reporter on Sept. 22, 2005, Moody's placed the ratings of J. Crew Group, Inc. on review for possible upgrade following the company's filing for an upcoming initial public offering and plan to utilize the proceeds to de-lever its balance sheet. These ratings were placed on review for possible upgrade: * Corporate family rating of B3 * Senior discount notes of Caa2 As reported in the Troubled Company Reporter on Aug. 23, 2005, Standard & Poor's Ratings Services placed its ratings on J. Crew Group Inc., including its 'B-' corporate credit rating, on CreditWatch with positive implications. The ratings on J. Crew Corp. and J. Crew Intermediate LLC were also placed on CreditWatch with positive implications. J. Crew had total debt (including preferred stock that is mandatorily redeemable in 2009) of about $577 million as of April 30, 2005. The CreditWatch listing follows J. Crew's S-1 filing with the SEC for an IPO of its common stock of up to $200 million. JP MORGAN: Fitch Holds Low-B Ratings on Six Certificate Classes --------------------------------------------------------------- Fitch Ratings upgrades JP Morgan Chase's commercial mortgage pass- through certificates, series 2003-ML1: -- $26.7 million class B certificates to 'AA+' from 'AA'; -- $10.5 million class C certificates to 'AA' from 'AA-'; -- $22.1 million class D certificates to 'A+' from 'A'; -- $12.8 million class E certificates to 'A' from 'A-'. Fitch also affirms these classes: -- $341.2 million class A-1 'AAA'; -- $387.1 million class A-2 'AAA'; -- Interest only class X-1 'AAA'; -- Interest only class X-2 'AAA'; -- $23.2 million class F 'BBB'; -- $9.3 million class G 'BBB-'; -- $16.3 million class H 'BB+'; -- $10.5 million class J 'BB'; -- $5.8 million class K 'BB-'; -- $5.8 million class L 'B+'; -- $7 million class M 'B'; -- 4.6 million class N 'B-'. Fitch does not rate the $15.1 million class NR certificates. The upgrades reflect the defeasance of six loans (6.1%) and the scheduled principal paydown from loan amortization. As of the September 2005 distribution date, the pool's aggregate certificate balance has decreased 3.4% to $898.1 million from $929.8 million since issuance. To date, there have been no loan payoffs or losses. Fitch reviewed the one credit assessed loan in the pool, the Hyatt Regency Crystal City (5.48%). The loan maintains an investment grade assessment. This loan is secured by a 685-room hotel property located in Crystal City Arlington, VA. As of year-end 2004, the Fitch stressed debt service coverage ratio (DSCR) has increased to 1.71 times (x) from 1.65x the year before, but remains lower than issuance level of 1.82x. The property's performance had declined due to renovations carried out during 2003 and has since been showing signs of improvement. Occupancy for year-end 2004 was 76% up from 68% the year before. The Fitch stressed DSCR is calculated using servicer provided OSAR NOI adjusted for capital expenditures, reserves, and a stressed debt service constant. KENNETH STUART: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Kenneth Stuart, Jr. 5 High Ridge Road Wilton, Connecticut 06897 Bankruptcy Case No.: 05-51439 Chapter 11 Petition Date: October 6, 2005 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Stephen P. Wright, Esq. Harlow, Adams, and Friedman 300 Bic Drive Milford, Connecticut 06460 Tel: (203) 878-0661 Fax: (203) 878-9568 Total Assets: $71,188 Total Debts: $2,489,844 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Estate of Kenneth Stuart Sr. $2,400,000 c/o Peter Truebner, Esq. 454 Danburry Road Wilton, CT 06901 Stamford Hospital Medical bills $15,000 20 Shelburne Road Stamford, CT 06902 Internal Revenue Service Taxes $14,000 135 High Street Hartford, CT 06103 Citi Platinum Select Card Credit card $13,673 Charles Bliss Tax preparation & $10,042 witness fee Robert Slavitt, Esq. Alleged legal $10,000 services rendered New Milford Savings Bank Personal guaranty $8,000 GE Capital Consumer Services Purchase money $6,500 Security Borders Visa Credit card $5,273 Citi Platinum Select Card Credit card $2,500 The Harvard Alumni Assoc. MC Credit card $1,977 Bank of America Visa Credit card $1,871 Wilton Physical Therapy Medical bills $500 Stamford Radiology Assoc. Medical bills $341 Town of Wilton Auto taxes $166 Amex Delta Credit card $1 KMART CORP: Court Lifts Stay to Allow Stafford to Pursue Action --------------------------------------------------------------- After engaging in negotiations, Kmart Corporation concedes that Marion Stafford has exhausted the Court-approved personal injury settlement procedures. In accordance with an Agreed Order signed by the parties, the Court lifts the automatic stay and the Plan Injunction to permit litigation to proceed and continue to a final judgment or settlement. Judge Sonderby clarifies that the stay and the Plan Injunction will remain in effect with respect to any and all actions by Ms. Stafford to execute on any final judgment or settlement against Kmart and its property. As reported in the Troubled Company Reporter on August 5, 2005, Marion Stafford asked the U.S. Bankruptcy Court for the Northern District of Illinois to terminate the Plan Injunction or modify the automatic stay to allow her to pursue a personal injury claim against Kmart Corporation in the Wayne County Circuit Court, State of Michigan. Before the Petition Date, Ms. Stafford sustained injuries caused by an employee in a Kmart store in Detroit, Michigan. Ms. Stafford filed a claim in Kmart's Chapter 11 case. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) LITTLE EGYPT: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Little Egypt Housing Development Corporation 310 8th P.O. Box 168 Cairo, Illinois 62914 Bankruptcy Case No.: 05-42942 Type of Business: The Debtor provides low income housing. Chapter 11 Petition Date: October 5, 2005 Court: Southern District of Illinois (Benton) Debtor's Counsel: Bradley P. Olson, Esq. 144 South Division Carterville, Illinois 62918 Tel: (618) 985-5262 Fax: (618) 985-5962 Total Assets: $344,500 Total Debts: $1,746,857 Debtor's 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rural Development USDA 17 Units and 36 $1,739,352 2118 W. Park Court, Suite A unit complex Champaign, IL 61821 Wilkins McNair, PC Service $3,000 201 N. Charles St., Ste. 1102 Baltimore, MD 21201 Lowe's Home Improvement Credit $2,500 Warehouse P.O. Box 105981, Dept. 79 Atlanta, GA 30353-5981 Hey, Roe, Seabaugh & Stroder Service $1,090 Accounting Firm 12 SO Silver Springs Cape Girardeau, MO 63702 Cairo Public Utility Utility $800 110 Commercial Cairo, IL 62914 Bullseye Telecom Tele-services $115 25900 Greenfield Rd, Ste. 330 Oak Park, MI MINTA INC: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Minta, Inc. 500 Sutter Street, #518 San Francisco, California 94102-1114 Bankruptcy Case No.: 05-33792 Chapter 11 Petition Date: October 6, 2005 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Iain A. Macdonald, Esq. Law Offices of Macdonald and Assoc. 2 Embarcadero Center, #1670 San Francisco, California 94111-3930 Tel: (415) 362-0449 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mary Hipkiss & the Estate Lawsuit: Estate of $2,000,000 of Matt Hipkiss Matt Hipkiss & Mary c/o Matthew W. Claman, Esq. Hipkiss v. Minta, 425 G Street, #610 Inc.; Big Air of Anchorage, AK 99501 Alaska; and David H. Hines #AN-04-8555 Cl Mary Hipkiss Workers compensation $360,000 c/o Matthew W. Claman, Esq. insurance claim 425 G Street, #610 Anchorage, AK 99501 Miller & Associates Attorneys fees $8,560 5005 Southwest Meadows Road #405 Lake Oswego, OR 97035 State of Alaska Rent $1,620 Anchorage International Airport, P.O. Box 196960 Anchorage, AK 99519 Municipality of Anchorage Property taxes $1,513 P.O. Box 196040 Anchorage, AK 99519 MORTGAGE CAPITAL: Fitch Retains BB Rating on $3.6MM Class J Certs. ------------------------------------------------------------------ Fitch Ratings affirms Mortgage Capital Funding, Inc.'s commercial mortgage pass-through certificates, series 1996-MC1: -- $18.9 million class C at 'AAA'; -- $19.3 million class D at 'AAA'; -- $16.9 million class E at 'AAA'; -- $7.2 million class F at 'AAA'; -- $32.6 million class G at 'AA'; -- $18.1 million class H at 'BBB-'; -- $3.6 million class J at 'BB'; -- Interest-only class X-2 at 'AAA'. Fitch does not rate the $11.5 million class K certificates. Classes A-1, A-2A and A-2B and interest-only class X-1 have paid in full. The rating affirmation reflects increasing concentrations within the transaction. The transaction has paid down an additional 18% since Fitch's last upgrade in April 2005. As of the September 2005 distribution date, the pool's aggregate collateral balance has been reduced approximately 73.4%, to $128.1 million from $482.4 million at closing and total loan count has decreased to 47 loans from 162 at issuance. Fitch has identified two properties in the transaction that have been affected by Hurricane Katrina. One property (4.4%) is a retail center in Thibodaux, LA, which has sustained minimal damage. Damage estimates have not yet been assessed on the other retail property (1.2%), located in Fairhope, AL. However, the property has been able to continue daily operations. Currently, there are no delinquent loans or loans in special servicing. NATIONAL TOUR: Case Summary & 28 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: National Tour Inc. Suite 100, 2100 East Fourth Street Santa Ana, California 92705 Bankruptcy Case No.: 05-17914 Type of Business: The Debtor executes brand name and product identification tours across the U.S. See http://www.nationaltourinc.com/ Chapter 11 Petition Date: October 5, 2005 Court: Central District of California (Santa Ana) Judge: Robert W. Alberts Debtor's Counsel: James C. Bastian, Jr., Esq. Shulman Hodges & Bastian LLP 26632 Towne Center Drive, Suite 300 Foothill Ranch, California 92610-2808 Tel: (949) 340-3400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 28 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ West Winds Enterprises, LLC Building lease - $2,600,000 Attn: Managing Member 7275 West Winds 1543 Providence Road Blvd., Concord, Charlotte, NC 28207 NC 28027 Internal Revenue Services $1,400,000 Special Procedures Branch Insolvency Group 3 Mail Stop 5503 24000 Avila Road Laguna Niguel, CA 92677 Kay Martin Loan $195,000 P.O. Box 2649 Quinlan, TX 75474 Cannanwill, Inc. Insurance premiums $170,000 Employment Develop Dept. Tax lien filed Mar. $101,400 15, 2005, filing number 2005000191393; certificate number 05067671149 American Express Credit card $90,000 North Carolina Department $87,800 of Revenue California Bank & Trust Credit card $50,000 Red Roof Inn Hotel and lodging $39,751 Gendron & Company Accounting and tax $30,620 services United Van Lines Inc. Transportation $24,458 services Imobile Networks, Inc. Technology services $21,914 Acentron Technologies, Inc. Technology services $18,690 incurred June 2005 through August 2005 Ayres Suites Mission Viejo Trade creditor $17,104 incurred October 2004 Montroy Supply Co. Material/supplies $16,897 Silhouettes Inc. Temp services $16,000 Featherlite Inc. Equipment $15,170 Labor Ready Mid-Atlantic Inc Temp services $13,627 incurred June 2005 through September 2005 Windward Communications Trade creditor $10,500 Group Classic Transport Inc Auto transport $8,225 incurred May 2005 City of Concord - Trade creditor $5,068 Collections incurred September 2005 Electrical Construction & Electrical $4,770 Design construction services Enterprise Fleet Services Transportation $4,300 services Sonitrol Security Systems Security and $4,110 Inc. technology services Allstar Copy Fax Copy services $3,483 incurred May 2005 through July 2005 Fairfield Inn Hotel and lodging $2,768 Charlotte Motor Speedway Trade creditor $2,685 incurred January 2005 and May 2005 Cintas Corporation Trade creditor $2,648 incurred May 2005 NAVIGATOR GAS: Manx Liquidator Hires Wilmer Cutler as Counsel ------------------------------------------------------------- Michael John Fayle, the Liquidator for Navigator Gas Transport PLC and its debtor-affiliates, asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Wilmer Cutler Pickering Hale and Dorr LLP as his bankruptcy counsel. As reported in the Troubled Company Reporter on August 25, 2005, Deemster Kerruish of the High Court of Justice of the Isle of Man ordered that Navigator Gas Transport plc and its subsidiaries commence an orderly liquidation of its businesses. The Manx Court also ordered that an independent liquidator be appointed in the Debtor's wind-down proceedings to control its business. Mr. Fayle has selected Wilmer Cutler because of the firm's expertise in the field of the Debtors' protections and creditors' rights, and business reorganizations under Chapter 11 of the Bankruptcy Code. Wilmer Cutler is expected to: 1) advise the Liquidator with respect to his powers and duties and the management and operation of the Liquidating Debtors' businesses and properties in the post-confirmation context; 2) attend meetings and negotiating with representatives of creditors and other parties in interest and respond to creditor inquiries and advise and consult on the conduct of the Liquidating Debtors' cases, including all of the legal and administrative requirements of operating in Chapter 11 in the post-confirmation context; 3) represent the Liquidator in connection with any adversary proceedings or automatic stay litigation or contested matters that may be commenced in or in connection with these Chapter 11 cases and any other action necessary to protect and preserve the Liquidating Debtors' estates; 4) represent and advise the Liquidator regarding the Confirmed Committee Plan and potential modified plan and any other plan that may be filed in these Chapter 11 cases; 5) represent and advise the Liquidator in connection with the U.S. aspects and effects of the Liquidating Debtors' pending Isle of Man insolvency proceedings; 6) appear before this Court, any appellate courts, and the U.S. Trustee and protect the interests of the Liquidating Debtors' estates before such courts and the U.S. Trustee; 7) prepare, file and prosecute motions, applications, answers, orders, reports, and papers necessary to the administration of the Liquidating Debtors' estates in the post-confirmation context; 8) represent and advise the Liquidator in connection with any claims asserted by or against the Liquidator or any of the Liquidating Debtors or their estates, and any objections thereto, including, without limitation, the negotiation, settlement and prosecution of such matters; and 9) perform all other legal services for and providing all other legal advice to the Liquidator that may be necessary and proper in the Liquidating Debtors' Chapter 11 proceedings, including, without limitation, services or legal advice relating to applicable state and federal laws. The Firm will bill the Debtors based on its professionals' current hourly rates: Designation Hourly Rate ----------- ----------- Partners $400 - $790 Junior Partners $380 - $475 Counsel $360 - $560 Associates $240 - $440 Attorneys/Specialists $200 - $385 Paraprofessionals $60 - $225 The attorneys who will represent the Liquidator, and their hourly billing rates: Counsel Hourly Rate ------- ----------- Philip D. Anker $655 Elisabeth G. Gasparini $420 George Shuster $370 To the best of the Liquidator's knowledge, Wilmer Cutler does not have any interest adverse to the Liquidator or any of the Debtors' estates. Headquartered in Castletown, Isle of Man, Navigator Gas Transport PLC, transports liquefied petroleum gases and petrochemical gases between ports throughout the world. The Company along with its debtor-affiliates filed for chapter 11 protection on Jan. 27, 2003 (Bankr. S.D.N.Y. Case No. 03-10471). Adam L. Shiff, Esq., at Kasowitz, Benson, Torres & Friedman LLP represents the Debtors in the United States. When the Company filed for protection, it listed $197,243,082 in total assets and $384,314,744 in total debts. NORTHWEST AIRLINES: Asks for Injunction Against Utility Companies ----------------------------------------------------------------- Section 366 of the Bankruptcy Code provides that during the initial 20 days after the Petition Date, utilities may not alter, refuse or discontinue service to, or discriminate against, a debtor solely on the basis of the commencement of its case or the existence of prepetition debts owed by the debtor. Following the 20-day period, utilities may discontinue service to the debtor if the debtor does not provide adequate assurance of future performance of its postpetition obligations. According to Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft, LLP, in New York, Northwest Airlines Corporation and igs debtor-affiliates obtain electricity, water, telephone, or other similar services, from in excess of 650 different utility companies, thus, uninterrupted utility service is vital to the continued operation of their businesses and to the success of their Chapter 11 cases. "Termination of Utility Services provided to the Debtors (even temporarily) could result in a suspension of flights, potentially stranding customers and resulting in a loss of goodwill and customer loyalty," Mr. Zirinsky notes. In this regard, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) prohibit the Utility Companies from altering, refusing, or discontinuing Utility Services on account of prepetition invoices, including the making of demands for security deposits or accelerated payment terms; and (b) deem the utility service providers adequately assured of future performance. The Debtors inform the Court that they are establishing a $2,016,000 reserve fund for the benefit of the Utility Companies, to provide further adequate assurance of future payment of their utility bills. In addition, the Debtors seek the Court's authority to pay certain amounts owed to foreign creditors, including foreign utility companies. The Debtors note that the foreign utility companies will not be participating in the Utility Reserve. Mr. Zirinsky states that in the event of a need to resort to the Utility Reserve for payment, any prepetition payment actually made to foreign vendors should be reallocated to any outstanding postpetition invoices, thereby providing adequate assurance to the foreign utility companies of payment for postpetition services. "Such reallocation would also set the foreign utility companies on equal grounds as the domestic utility companies, who did not receive payment for their pre-petition charges," Mr. Zirinsky explains. Moreover, Mr. Zirinsky points out that the Debtors have established a good payment history with virtually all of their Utility Companies, consistently making payments on a regular and timely basis. Mr. Zirinsky assures the Court that, to the Debtors' knowledge, there are no defaults or arrearages of any significance with respect to their undisputed Utility Services invoices, other than the payment interruptions that may be caused by the commencement of their Chapter 11 cases. 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. Lead 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 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 Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Pays Prepetition Fuel Supplier Claims --------------------------------------------------------- Northwest Airlines Corporation and its debtor-affiliates purchase fuel for their own use and for certain regional carriers and alliance partners. Specifically, Northwest Airlines, Inc., purchases its fuel from NWA Fuel Services Corporation, a wholly owned subsidiary, and from numerous third party fuel suppliers. Prior to the Petition Date, Northwest Airlines and NFS purchased jet fuel from fuel suppliers pursuant to fuel supply contracts or fuel purchase orders. The vast majority of fuel purchases are made by advance payments via wire transfer to 44 fuel suppliers. Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that Northwest Airlines and NFS generally make prepayments to Prepaid Fuel Suppliers on a weekly basis. For the month of July, Northwest Airlines and NFS's aggregate advance wire payments to Fuel Suppliers were, collectively, $301,000,000. Periodically, the Prepaid Fuel Suppliers reconcile Northwest Airlines and NFS's advance payments against their fuel usage for the applicable prepayment period. Northwest Airlines' and NFS's remaining fuel purchases are made on account and paid in arrears to certain other fuel suppliers. The Debtors estimate that as of the Petition Date, Northwest Airlines owes $2,400,000 to the Other Fuel Suppliers for prepetition services. Fuel Delivery & Storage Northwest Airlines and NFS utilize certain national and regional pipelines to transport fuel from the point of purchase across the country to various storage facilities pursuant to pipeline or transport agreements with certain common carrier pipeline providers. They also utilize various storage facilities located near several major airports to store the fuel transported by pipeline. Mr. Zirinsky tells U.S. Bankruptcy Court for the Southern District of New York that Northwest Airlines and NFS are party to storage agreements with certain storage facility providers. These services are primarily provided on credit to be paid by invoice, but a portion of these services are provided on a "prepay" basis. The Debtors currently owe, collectively, $500,000 to the Pipeline and Storage Providers for services performed prior to the Petition Date. Into-Wing Service Contracts In addition, the Debtors are parties to certain into-wing fueling service contracts. Pursuant to these Into-Wing Service Contracts, third parties either: (i) arrange for the delivery of fuel into Northwest Airlines' aircraft without any participation or involvement by Northwest Airlines; or (ii) transport "airport fuel" from the Debtors' storage facilities located at or near airport terminals into Northwest Airlines' aircraft. Northwest Airlines also provides "into-wing" fueling services to other airlines in connection with certain of its Supply Contracts. In the ordinary course, Northwest Airlines and NFS frequently subcontract the "into-wing" fueling services to third parties, which actually load the fuel onto aircraft. Mr. Zirinsky says that as of the Petition Date, the Debtors owe $5.3 million to third party into-wing service providers for prepetition transport activities provided pursuant to the Into- Wing Service Contracts. Fuel Consortia & Other Arrangements The Debtors have ownership interests in 21 fuel consortia, and are party to 30 fuel committee cost sharing cooperatives. Mr. Zirinsky explains that the Fuel Consortia lease, operate and manage fuel storage facilities located at or near airports in which carriers and fuel suppliers store their fuel in one or more commingled fuel tanks. The Debtors and the other Fuel Consortia owners pay a fee to the fuel facility service providers for their services in connection with the Fuel Consortia. The Fuel Consortia are established by airlines to minimize and share the cost of local fuel storage. Certain of these consortia are organized as separate corporations of which the Debtors are an equal-share owner with the other members. "The Debtors' participation in these arrangements results in significant cost savings that would be unattainable if the Debtors were not able to make all payments as due and generally maintain their existing relationships in the ordinary course of business," Mr. Zirinsky says. The Debtors are also parties to certain other arrangements by which numerous third parties provide a variety of services to them in connection with the purchase, sale and movement of fuel. Mr. Zirinsky informs the Court that the Debtors currently owe, collectively, $200,000 to third party providers for prepetition services pursuant to the Other Fuel Service Arrangements. Debtors Want to Pay Prepetition Fuel Obligations Mr. Zirinsky says that the Debtors' fuel supply, trading and distribution systems are essential to the continued performance of the Debtors' airline operations and their integrated efforts to manage fuel costs. Mr. Zirinsky asserts that any interruption in the Debtors' fuel supply and distribution system would hinder NFS's ability to perform under its Supply Contracts and to execute trading sales, both of which are critical components of the Debtors' comprehensive strategy to manage fuel costs. At the Debtors' request, the Court authorizes them to: (a) pay any prepetition outstanding obligations to the Other Fuel Suppliers and, as necessary, to the Prepaid Fuel Suppliers for any unpaid overages; (b) pay any prepetition outstanding obligations with respect to all Pipeline and Storage Providers who are paid in arrears by the Debtors; (c) pay prepetition payments to counterparties to the Into- Wing Service Contracts, the Fuel Consortia, and Other Fuel Service Arrangements; (d) continue honoring, performing, and exercising their postpetition rights and obligations in accordance with the contracts and arrangements with the Fuel Suppliers, and counterparties to the Pipeline and Storage Provider Agreements, Into-Wing Service Contracts and Other Fuel Service Arrangements; and (e) continue participating in the Fuel Consortia postpetition in accordance with established practices thereunder and in the ordinary course of business, and to perform and honor their postpetition obligations to the Fuel Consortia. Judge Gropper rules that, subject to the prior written permission of the Debtors, the automatic stay is modified to the limited extent necessary to allow for the payments received by the Fuel Suppliers, Pipeline and Storage Providers, or counterparties under the Into-Wing Service Contracts, Fuel Consortia, and Other Fuel Service Arrangements, or credits existing prior to the Petition Date, to be applied to undisputed claims relating to fuel liftings and pipeline and storage facility usage occurring postpetition. The parties are permitted to exercise any set off and recoupment rights pursuant to Section 553 of the Bankruptcy Code as may be necessary to ensure the application of the fuel or pipeline and storage prepayments or credits. To the extent the Fuel Related Vendors, under any of the Debtors' relationships under which prepetition amounts are payable to creditors, perform the obligations and provide acceptable business terms, the Debtors are authorized to condition any prepetition payments on the Fuel Related Vendors continuing to provide them with, or otherwise comply with the On-Going Obligations/Terms. The Court authorizes the Debtors to: (a) pay their Fuel Related Vendors on the condition that by accepting payment, the Fuel Related Vendors agree to maintain, reinstate or otherwise comply with the On-Going Obligations/Terms during the pendency of the Debtors' cases; (b) obtain written verification of On-Going Obligations/Terms from the Fuel Related Vendors before issuing payment. The absence of a written verification will not limit the Debtors' rights. The Court rules that if the Fuel Related Vendor does not provide the Debtors with, or otherwise comply with, the On-Going Obligations/Terms during the pendency of the Debtors' cases, any payments of prepetition claims made after the Petition Date may be deemed to be unauthorized postpetition transfers and automatically recoverable by the Debtors. 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. Lead 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 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 Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIRLINES: Bankruptcy Schedules Must be Filed by Jan. 12 ----------------------------------------------------------------- At Northwest Airlines Corporation and its debtor-affiliates' request, the U.S. Bankruptcy Court for the Southern District of New York extended their deadline to file schedules of assets and liabilities, statements of financial affairs, statements of executory contracts and unexpired leases, and schedules of current income and expenditures for another 120 days, through and including January 12, 2006. The extension is without prejudice to their right to seek an additional extension if cause exists. The Debtors are required under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure to file their Schedules and Statements within 15 days after the Petition Date. Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft LLP, New York, explains, however, that the Debtors have more than 65,000 readily ascertainable creditors. Therefore, the conduct and operation of the Debtors' business requires them to maintain voluminous books and records and a complex system of accounting. These books, records, and documents are located at various operating sites around the world. Consequently, the Debtors will not be able to satisfactorily prepare the Schedules and Statements within 15 days as outlined in Bankruptcy Rule 1007(c). Mr. Zirinsky ascertains that the Debtors' request is not prejudicial to the rights of any party in the Debtors' cases. The Court further directs the Debtors to file on or before October 14, 2005, to prepare a consolidated list of creditors and equity security holders in electronic format that is acceptable to the Clerk of the Court, in lieu of any required matrix, and to make it available only upon written request. 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. Lead 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 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 Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) OPTICAL DATACOM: Trustee & Bank Group Settlement Pact Approved -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between Frederick B. Rosner, Esq., the Chapter 11 Trustee for Optical DataCom, LLC's estate, and U.S. Bank National Association, First Bank, GE Corporate Financial Services, Inc., IBM Credit LLC and Wachovia Bank National Association. The agreement, dated July 27, 2005, resolves disputes between the Debtor and the lenders. The parties agree to resolve all disputes to avoid incurring additional expenses for litigation. Under the settlement agreement: 1) the Bank Group will release the Trustee and the Debtor's estate from the obligation under a court-approved agreement to remit to the Bank Group the amount of $250,000; 2) the proceeds of any recovery based on the contract claims of the Debtor's estate against large defendants will not be required to be paid to the Bank Group on account of their lien but will instead be distributed on a pro-rate basis for payment of allowed unsecured claims in the case, including, but not limited to the allowed claims of the Bank Group and U.S. Bank; 3) subject to a common interest agreement, the Bank Group agrees to the following: i) share certain expert work product relating to a forensic accounting report by Boston & Associates, P.C. ii) consent to the Trustee's use of members of Morris-Anderson as potential expert witnesses and consultants with regard to legal actions against persons other than the Bank Group iii) make available to the Trustee for a period of time and subject to certain conditions documents relating to due deligence on the loan made by the Bank Group to the Debtor and representations made to the Bank Group as to asset values in connection with the making of the loan iv) make available to the Trustee an individual at each Bank Group member organization that has knowledge regarding documents produced, to the extent such a person currently exists within the member organization; 4) the Trustee and the Debtor's estate are releasing the Bank Group Releases from any and all claims and the adversary proceeding shall be dismissed with prejudice; 5) the Bank Group is releasing the Trustee and the Trustee's counsel for any claims arising out of their service to date as Trustee and Trustee's counsel in the Debtor's case; 6) The Bank Group will hold an allowed unsecured claim in the Debtor's case in the amount of $35,000,000 less the aggregate amount of all payments, if any, they may receive after the date of the settlement agreement on account of the proceeds' receipt of any remaining collateral; 7) U.S. Bank will hold an allowed unsecured claim in the Debtor's case in the amount of $10,918,611.12; and 8) the expense of the forensic accounting report shall constitute an administrative expense under section 503(b)(3)(d) in favor of the documentation agent for the Bank Group and will be paid solely out of the first proceeds of any litigation recoveries from any of the large defendants. Optical Datacomm, LLC, now known as OODC LLC, supplies network integration services solutions and design and manufactures custom connectionized fiber optic, copper and coaxial cable assemblies to telecommunication companies worldwide. The Company filed for chapter 11 protection on November 17, 2001. H. Jeffrey Schwartz, Esq. at Benesch, Friedlander, Coplan & Aronoff, LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. In its petition, the Company listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. PEERLESS SYSTEMS: Earns $1.1 Million in Quarter Ended July 31 ------------------------------------------------------------- Peerless Systems Corporation delivered its quarterly report on Form 10-Q for period ended July 31, 2005, to the Securities and Exchange Commission on Sept. 14, 2005. The Company's financial results for the second quarter of Fiscal 2006 show: - a 53% increase in revenue to $9.7 million versus the same quarter last year; and - net income of $1.1 million, representing a 166% sequential increase versus the first quarter of fiscal 2006, and $2.6 million positive swing from second quarter last year; Compared to January 31, 2005, total assets at July 31, 2005 increased 27% to $16.0 million and stockholders' equity increased 31% to $8.5 million, primarily the result of the net income. The Company's cash and investment portfolio at July 31, 2005 was $10.2 million, an increase of 57% from $6.5 million as of January 31, 2005, and the ratio of current assets to current liabilities was 2.0:1, which is an increase from the 1.8:1 ratio as of January 31, 2005. Going Concern Doubt While the Company has registered profits for the first and second quarters of fiscal 2006, it has been unprofitable in four of the last five fiscal years resulting in a $6,572,039 accumulated loss since inception. Management says that the accumulated loss raises substantial doubt about the Company's ability to continue as a going concern. Ernst & Young LLP, audited the Company's financial statements for the year ended Jan. 31, 2005 and 2004. The auditors issued a clean and unqualified opinion. The Kyocera-Mita Deal On March 1, 2005, the Company entered into a binding Memorandum of Understanding with Kyocera-Mita Corporation to provide a range of non-exclusive engineering services and product development services. Pursuant to the Memorandum of Understanding, Kyocera- Mita has agreed to pay the Company an aggregate of $24.0 million, payable in $2.0 million quarterly installments over the initial three-year term of the Memorandum. The long-term liquidity of the Company is dependent upon this understanding. About Peerless Systems Peerless Systems Corporation - http://www.peerless.com/-- provides imaging and networking technologies and components to the digital document markets, which include manufacturers of color, monochrome and multifunction office products and digital appliances. In order to process digital text and graphics, digital document products rely on a core set of imaging software and supporting electronics, collectively known as an imaging controller. Peerless' line of scalable software and silicon offerings enables its customers to shorten their time-to-market and reduce costs by offering unique solutions for multiple products. Peerless' customer base includes companies such as Canon, IBM, Konica Minolta, Kyocera Mita, Lenovo, OkiData, Ricoh, RISO, Seiko Epson and Xerox. POLAROID CORP.: Seeks More Time to Object to Claims --------------------------------------------------- Wind Down Associates LLC, the Plan Administrator appointed under the confirmed Third Amended Joint Plan of Reorganization of Primary PDC, Inc., (f/k/a Polaroid Corporation) and its debtor affiliates, asks the U.S. Bankruptcy Court for the District of Delaware to extend, until Nov. 15, 2005, the time within which it can object to Disputed Claims filed against the Debtors' estates. Wind Down gave the Court two reasons in support of the extension: a) because more than 9,000 proofs of claim were filed against the Debtors' estates, the extension will ensure that all claims not yet objected to will be the subject of an objection if appropriate; and b) it is continuing to negotiate and consensually resolve various Disputed Claims and is wishes to avoid filing more objections to unresolved claims if the negotiations for those Disputed Claims become successful; Objections to the proposed extension of the claims objection deadline must be filed with the Clerk of the Bankruptcy Court by Oct. 7, 2005. The Bankruptcy Court will convene a hearing at 2:00 pm on Oct. 14, 2005, to consider the Debtors' request. Headquartered in Cambridge, Massachusetts, Primary PDC, Inc., (f/k/a Polaroid Corporation), -- http://www.primarypdc.com-- is responsible for settling claims and for administering business matters related to the former Polaroid Corporation. Substantially all of the assets of Polaroid Corporation were sold to OEP Imaging Operating Corporation on July 31, 2002. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 12, 2001 (Bankr. D. Del. Case No. 01-10864). The Court confirmed the Debtors' chapter 11 Plan on Nov. 18, 2003, and the Plan took effect on Dec. 17, 2003. Wind Down Associates LLC is the Plan Administrator under the confirmed Plan. Joseph A. Malfitano, Esq., at Young, Conaway, Stargatt & Taylor and Phil Dublin, Esq., at Akin, Gump, Strauss, Hauer & Feld, L.L.P., represents the Plan Administrator. PRESTWICK CHASE: APC Partners Files Joint Chapter 11 Plan --------------------------------------------------------- APC Partners II, LLC, a secured creditor of Prestwick Chase Inc. and Frederick J. McNeary, Sr., delivered a Joint Chapter 11 Plan of Reoganization to the U.S. Bankruptcy Court for the Northern District of New York. Plan Funding On the Effective Date, APC will make a $1,800,000 capital contribution to Reorganized Prestwick to: a) fund the payments to be made pursuant to the terms of the Plan; b) provide the Reorganized Prestwick with adequate working capital; c) fund repairs, rehabilitation and deferred maintenance of the senior living facility and real property; and d) resolve and cure any non-compliance with the Army Corps of Engineers' wetlands rules and regulations, building codes and any necessary or desirable improvements to ensure the health, safety and welfare of its residents. Plan Structure APC's Plan provides for: a) a comprehensive restructuring of Prestwick Chase's debt; b) an injection of fresh working capital into Prestwick Chase to restore residents' security deposits; c) rehabilitation of the senior living facility to ensure the health, safety and welfare of the residents; and d) the sale of substantially all of Frederick McNeary, Sr.'s non-exempt assets. Treatment of Claims A. Claims Against Prestwick Chase: The Reorganized Prestwick will institute a program of capital improvements and use modifications to its senior living facility and real property to remedy the current violations to satisfy the Town of Greenfield PUD Allowed Claim. On the Effective Date, M&T will retain its liens and will receive a new Note in the principal amount of $13,702,155. APC Partners' secured claim will be allowed for $1.6 million and will be exchanged for part of the New Equity Interests. Other Allowed Secured Claims will be reinstated or paid in full in cash. On the Effective Date, general unsecured creditors will be paid 25% of their claims. In addition, these creditors will share pro rata in recoveries made out of causes of action until such time that their claims will be fully paid. Prior to the Debtors' bankruptcy filings, Mr. McNeary and Prestwick Chase guaranteed the repayment of all sums of money loaned to Putnam Brook by the Town of Greenfield in 1998. In relation to that loan, the Town of Greenfield Putnam Brook Guarantee was established. Pursuant to the Plan, the Guarantee will be continued. However, the amount of guarantee will be reduced to 50% of the amount collected from Putnam Brook, Inc. Old Equity Interests will be cancelled. B. Claims Against Frederick McNeary: These secured claims will be paid in full: -- Adirondack Trust -- Capital Bank -- DaimlerChrysler -- IndyMac -- Partners Trust -- Realty USA -- Wells Fargo Upon liquidation of its collateral, APC will receive a cash distribution equal to the aggregate value of its liens on the Debtor's real property, with interest at a rate of 150 basis points over the five year Treasury bill priced at the confirmation date. M&T's allowed claim will be paid in full through the sale of the Debtor's Exit 13N Property. General Unsecured creditors are expected to recover 100% of their claims over time. The first distribution to the unsecured creditors will be approximately 20% of their aggregate claims that will be funded from net proceeds of the liquidation of the Debtor's assets after all claims with higher priorities are satisfied. The unsecured portion of APC's claim will be subordinated to the claims of the unsecured creditors. Town of Greenfield Putnam Brook Guarantee will remain in place without any modifications. Headquartered in Saratoga Springs, New York, Prestwick Chase, Inc. -- http://www.prestwickchase.com/-- offers senior housing and independent living as an alternative to home ownership. The Company filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Robert J. Rock, Esq., at Albany, New York, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. Headquartered in Saratoga Springs, New York, Frederick J. McNeary, Sr., is a real estate developer and broker. He is also a shareholder of bankrupt Prestwick Chase, Inc., which filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Mr. McNeary filed for chapter 11 protection on April 29, 2005 (Bankr. N.D.N.Y. Case No. 05-13007). Howard M. Daffner, Esq., at Segel, Goldman, Mazzotta & Siegel, P.C., represents the Debtor. When Mr. McNeary filed for protection from his creditors, he estimated less than $50,000 in assets and listed $10 million to $50 million in debts. PRESTWICK CHASE: Can Use APC's Cash Collateral Until October 31 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York granted Prestwick Chase, Inc., permission to use Cash Collateral securing repayment of pre-petition obligations to APC Partners II, LLC, and grant adequate protection to APC Partners and M&T Real Estate Trust, the Successor-in-Interest to M&T Real Estate, Inc. Pre-Petition Debt & Cash Collateral Use M&T is a secured creditor of the Debtor by virtue of two loan agreements and various other agreement and documents evidencing Prestwick's indebtedness. As previously reported in the Troubled Company Reported on June 6, 2005, APC Partners is a secured creditor of the Debtor by virtue of its assignment of certain loan documents delivered by the Debtor and others to Ballston Spa National Bank. The loan documents are: a) a Promissory Note dated Dec. 1, 2001, in the original principal amount of $3,500,000 b) an assignment of Rents, dated June 30, 1999, and recorded on March 6, 2003, in Volume 01639, Page 00433 at the Saratoga County Clerk's Office; and c) numerous other loan documents, including Mortgages, Mortgage Consolidation and Extension Agreements, a Forbearance Agreement and Personal Guarantees. The Debtor will use M&T Real and APC Partners' Cash Collateral to avoid immediate and irreparable harm to its bankruptcy estate and prevent the immediate diminution in the value of the estate. The Court authorizes the Debtor to use the Cash Collateral until the termination date of Oct. 31, 2005, solely for the purpose of funding its post-petition operations in accordance with the specific line items of a non-public Approved Budget. The Court orders that the Debtor may not incur or pay any expenses in an amount that exceeds any line item in the secret Budget by more than the lesser of 10% or $1,500 per line item without the prior written consent of M&T and APC. Adequate Protection As adequate protection for its interest, M&T Real is granted a valid, perfected and enforceable first priority and senior security interest equivalent to a lien granted under Section 364(d) of the Bankruptcy Code in all of the Debtor's pre-petition and post-petition property. As adequate protection for its interest, APC Partners is granted a valid, perfected and enforceable second priority and junior security interest, subject to the limitations of 11 U.S.C. Section 506 and to the rights of any party-in-interest to contest the amount of APC's secure claims, in all of the Debtor's post- petition Collateral. Headquartered in Saratoga Springs, New York, Prestwick Chase, Inc. -- http://www.prestwickchase.com/-- offers senior housing and independent living as an alternative to home ownership. The Company filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Robert J. Rock, Esq., at Albany, New York, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. PROTOCOL SERVICES: Murray Devine Approved as Valuation Experts -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California gave Protocol Services, Inc., and its debtor-affiliates permission to employ Murray, Devine & Co. Inc., as their valuation experts. Murray Devine will: 1) provide business enterprise valuation of the Debtors in connection with their corporate restructuring chapter 11 protection; 2) render expert witness services and consulting in connection with their chapter 11 cases and assist in establishing the Debtors' going concern value as a guide in formulating a plan of reorganization; and 3) provide all other business valuation and consulting services to the Debtors that are necessary in their chapter 11 cases. Francis X. Devine, an Executive Vice-President of Murray Devine, previously disclosed that his Firm received a $50,000 one-time Valuation Fee. Mr. Devine reports Murray Devine's professionals bill: Designation Hourly Rate ----------- ----------- Principals $375 Sr. Vice-Presidents $325 Vice-Presidents $275 Analysts $175 Mr. Devine assured the Court that Murray Devine does not represent any interest materially adverse to the Debtors or their estates. Headquartered in Deerfield, Illinois, Protocol Services, Inc., and its subsidiaries offers agency services, database development and management, data analysis, direct mail printing and lettershops, e-marketing, media replication, and inbound and outbound teleservices. Protocol has offices and operations in California, Colorado, Illinois, Louisiana, Florida, Michigan, North Carolina, New York, Massachusetts, Connecticut and Canada and employs over 4,000 individuals. The Company and its affiliates -- Protocol Communications, Inc., Canicom, Inc., Media Express, Inc., and 3588238 Canada, Inc. -- filed for chapter 11 protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782 through 05-06786). Bernard D. Bollinger, Jr., Esq., and Jeffrey K. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. RESORT AT SUMMERLIN: Bankruptcy Court Closes Chapter 11 Cases ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada entered a final decree closing the chapter 11 cases of The Resort at Summerlin Limited Partnership and its debtor-affiliate, The Resort at Summerlin, Inc. The Court closed the proceedings after the estates were fully administered and all required distributions under its liquidating chapter 11 Plan were made. Headquartered in Las Vegas, Nevada, The Resort at Summerlin, Limited Partnership owns and operates The Regent Las Vegas, a luxury hotel, casino and spa complex located in Las Vegas. The Company and its debtor-affiliate filed for chapter 11 protection on Nov. 21, 2000 (Bankr. D. Nev. Case No. 00-18878). Laurel E. Davis, Esq., at Lionel Sawyer & Collins represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $296,366,000 and total debts of $365,802,000. The Debtors' Plan was confirmed on July 14, 2005. RICHTER FURNITURE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Richter Furniture Manufacturing 2231 East 49th Street Los Angeles, California 90058 Bankruptcy Case No.: 05-35558 Type of Business: The Debtor manufactures mid- to high- end upholstered furniture in Los Angeles. An involuntary chapter 7 petition was filed against the Company on Sept. 30, 2005 (Bankr. C.D. Calif. Case No. 05-35404). Chapter 11 Petition Date: October 5, 2005 Court: Central District of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: David M. Poitras, Esq. Jeffer, Mangels, Butler & Marmaro LLP 1900 Avenue of the Stars, 7th Floor Los Angeles, California 90067 Tel: (310) 203-8080 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ N.R. Michaelson Enterprises Trade debt $985,590 Inc. 17010 Rancho Street Encino, CA 91316 Workforce Personnel, Inc. Payroll services $638,386 23407 Copacabana Street Malibu, CA 91316 Catawba Leather Trade debt $547,248 120 10th Street, Southwest Hickory, NC 28602 G&M Mattress Company Trade debt $419,354 5401 East Slauson Avenue City of Commerce, CA 90040 Tiger Imports Trade debt $257,257 211 Old Thomasville Road Highpoint, NC 27260 Morgan Fabrics Trade debt $238,166 Montclair Wood Corporation Trade debt $225,012 Sullivan Curtis Monroe Insurance $208,038 Molteni & C S.P.A. Trade debt $163,582 North American Foam and Trade debt $142,705 Combining Co. American Express (Gold) Trade debt $118,535 Moore and Giles Trade debt $94,965 LA Carton Trade debt $90,695 Atlas Spring Corporation Trade debt $85,587 Marco Bautista Trade debt $77,211 Anderson Bremer Company Trade debt $67,039 Bonded Fiberloft Trade debt $61,616 Foam Factory Company Trade debt $59,875 Pacific UPH Supply Corp. Trade debt $50,395 Melu Corporation Trade debt $45,551 SAINT VINCENTS: NY City Wants Utilities Paid Prior to Parsons Sale ------------------------------------------------------------------ The City of New York asks the U.S. Bankruptcy Court for the Southern District of New York to approve the Parsons Manor Sale contingent on Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates payments of the City's first lien for unpaid sewer charges plus interest against the property. As reported in the Troubled Company Reporter, Kinchung Lam has offered to buy Parson Manor for $12.5 million. The Debtors intend to use a portion of sale proceeds to reduce amounts due under their postpetition financing agreement with HFG Healthco-4 LLC. TaeRa K. Franklin, Esq., assistant corporation counsel for the City of New York, informs the Court that the New York City Water Board has a secured claim against Parsons Manor for water and sewer charges equal to $54,332 -- $44,334 of which is for prepetition charges. The City objects to the extent that the Sale Motion seeks an authority to sell Parsons Manor "free and clear of liens, claims and encumbrances." Ms. Franklin asserts that the City's first priority lien against Parsons Manor should be paid out of the proceeds of the sale at the closing. Section 11-301 of the New York City Administrative Code, which governs the City's secured claims, provides that: ". . . all sewer rents, sewer surcharges and water rents, and the interest and charges thereon, which may be laid or may have heretofore been laid, upon any real estate now in the city, shall continue to be, until paid, a lien thereon, and shall be preferred in payment to all other charges." Ms. Franklin notes that the Debtors' exemption status under Section 501(c)(3) of the Internal Revenue Code recognized by the Internal Revenue Services does not exempt them from paying water and sewer charges. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) SEA INSURANCE: Moody's Withdraws Ba3 Financial Strength Rating -------------------------------------------------------------- Moody's Investors Service withdrew the Ba3 insurance financial strength ratings of two Royal & SunAlliance USA operating subsidiaries -- Viking Insurance Company of Wisconsin and The Sea Insurance Company of America -- subsequent to their removal from the Royal & SunAlliance USA intercompany pool. Moody's has withdrawn the ratings due to the reorganization of the companies. Royal & Sun Alliance Insurance Group PLC has announced the sale, pending regulatory approval, of its specialty US non-standard auto business (including Viking Wisconsin) to Sentry Insurance a Mutual Company. The liabilities of Sea Insurance Company have been assumed by the members of the Royal & SunAlliance USA intercompany pool. These ratings have been withdrawn: Viking Insurance Company of Wisconsin: -- insurance financial strength at Ba3 The Sea Insurance Company of America: -- insurance financial strength at Ba3 SIRVA INC: Lenders Extend Credit Agreement & Receivables Sale Pact ------------------------------------------------------------------ SIRVA, Inc., a global relocation services provider, disclosed an amendment to SIRVA's credit agreement (entered into by SIRVA Worldwide, Inc., a subsidiary of SIRVA) and a waiver and amendment to its receivables sale agreement. The credit agreement amendment and the waiver and amendment to the receivables sale agreement are both effective as of Sept. 30, 2005. Receivables Sale Agreement The receivables are comprised of relocating employee receivables and employer receivables arising under certain relocation services agreements, including all of its related assets. As previously disclosed, an affiliate of LaSalle Bank National Association sold all of the issued and outstanding stock of Executive Relocation to a subsidiary of SIRVA in December 2004. Affiliates of LaSalle and General Electric Capital Corporation are lenders on SIRVA's credit agreement, and may continue in the future to provide funding to SIRVA and its affiliates. Under the Sale Agreement, SRC sells undivided percentage interests in a receivables portfolio on a non-recourse basis to LaSalle, CIT and GECC, which are unaffiliated third parties. The initial payment for the interests in the receivables pool is discounted and the balance only paid if and when the receivables are collected. Since SRC is entitled to payment from the collected balances, it retains an interest in the unfunded portion of the sold receivables and it also retains an interest in the amount of any receivables that are not eligible under the terms of the Sale Agreement. SIRVA Relocation and Executive Relocation are involved in the receivables collection process. In connection with the execution and delivery of this amendment, SRC paid LaSalle an amendment fee in an amount equal to 0.12% of the Aggregate Commitment as defined in the Sale Agreement. SIRVA RELOCATION CREDIT, LLC, is a seller under an Amended and Restated Receivables Sale Agreement dated as of Dec. 23, 2004 (as amended), with GENERAL ELECTRIC CAPITAL CORPORATION, THE CIT GROUP/BUSINESS CREDIT, INC. and LASALLE BANK NATIONAL ASSOCIATION, as purchasers. SIRVA RELOCATION LLC and EXECUTIVE RELOCATION CORPORATION serve as Servicers and Originators while LaSalle serves as Agent under the agreement. A full-text copy of the WAIVER AND FOURTH AMENDMENT TO AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT is available at no charge at http://ResearchArchives.com/t/s?229 Credit Facility Amendment Among other things, the Fourth Amendment to Credit Agreement amended and restated certain financial covenants relating to SIRVA's maintenance of a specified Consolidated Interest Coverage Ratio and a specified COnsolidated Leverage Ratio. The amendment also extends separate deadlines for SIRVA to deliver its financial statements in accordance to this schedule: * Nov. 15, 2005 -- the deadline for SIRVA to deliver audited financial statements for the year ended Dec. 31, 2004; and * Dec. 31, 2005 -- the deadline for SIRVA to deliver unaudited financial statements for each of the quarterly periods ended March 31, 2005, June 30, 2005 and Sept. 30, 2005. Pursuant to the Amendment, the lenders also consented to SIRVA's disposition of its U.S. insurance business and certain ancillary businesses pursuant to a purchase agreement, dated Sept. 21, 2005, among SIRVA, SIRVA Worldwide, North American Van Lines, Inc., and Allied Van Lines, Inc., as sellers, and IAT Reinsurance Company Ltd., as buyer. In connection with the execution and delivery of the Fourth Amendment to Credit Agreement, SIRVA Worldwide paid the lenders an amendment fee in an amount equal to 0.25% of the sum of each lender's Revolving Credit Commitment and Term Loans outstanding as of Sept. 29, 2005. SIRVA WORLDWIDE, INC., and its foreign subsidiaries are borrowers under a Credit Agreement dated as of Dec. 1, 2003 (as amended) with JPMORGAN CHASE BANK, N.A., as Administrative agent for several banks and other financial institutions. J.P. MORGAN SECURITIES INC. serves as sole lead arranger and sole bookrunner under the agreement. The lenders include affiliates of LaSalle and GECC, which are "purchasers" under SIRVA's receivables securitization facility. A full-text copy of the FOURTH AMENDMENT TO THE CREDIT AGREEMENT dated as of Sept. 29, 2005, is available at no charge at http://ResearchArchives.com/t/s?22a SIRVA, Inc. -- http://www.sirva.com/-- is a leader in providing relocation solutions to a well- established and diverse customer base around the world. The company is the leading global provider that can handle all aspects of relocations end-to-end within its own network, including home purchase and home sale services, household goods moving, mortgage services and insurance. SIRVA conducts more than 365,000 relocations per year, transferring corporate and government employees and moving individual consumers. The company operates in more than 40 countries with approximately 7,500 employees and an extensive network of agents and other service providers. SIRVA's well-recognized brands include Allied, northAmerican, Global, and SIRVA Relocation in North America; Pickfords, Huet, Kungsholms, ADAM, Majortrans, Allied Arthur Pierre, Rettenmayer, and Allied Varekamp in Europe; and Allied Pickfords in the Asia Pacific region. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Standard & Poor's Ratings Services lowered its ratings on relocation service provider SIRVA Inc. and its primary operating subsidiary, SIRVA Worldwide Inc. The corporate credit rating on both entities was lowered to 'B+' from 'BB'. All ratings remain on CreditWatch with negative implications, where they were placed on April 8. 2005, due to: * the continued delay in filing SIRVA's year-end 2004 financial statements; * ongoing investigation related primarily to its insurance and European businesses; and * the disclosure that the cost to address its financial control weaknesses will be significantly higher than originally anticipated. In July 2005, SIRVA was granted amendments to its bank facility and accounts-receivable securitization program, extending the filing deadline for its financial statements until Sept. 30, 2005. SOLECTRON CORP: Reports FY 2005 Fourth Quarter Financial Results ---------------------------------------------------------------- Solectron Corporation (NYSE:SLR) reported sales of $2.4 billion in the fourth quarter of fiscal 2005. Sales in the fourth quarter of fiscal 2004 were $3 billion, and sales in the third quarter of fiscal 2005 were $2.6 billion. The company reported a GAAP profit after tax from continuing operations in the fourth quarter of $10.3 million, compared with a GAAP loss after tax from continuing operations of $40.1 million in the fourth quarter of last year. The company had non-GAAP profit after tax in the fourth quarter of $37 million excluding $6.7 million of charges for restructuring and a $20 million offset to revenue related to a premium for a recent contract win. "Solectron ended fiscal 2005 in a position of strength," commented Mike Cannon, president and chief executive officer. "We are pleased that our operating performance improved significantly over last year, and that we generated approximately $945 million in operating cash flow in the year, giving us one of the strongest balance sheets in the industry." "We believe we are well positioned for fiscal 2006, as we continue to grow our revenue pipeline by focusing on expanding our engagements with existing customers and winning new business in non-traditional markets," continued Cannon. Quarterly Highlights: Improved Working Capital Metrics The company made further improvements in working capital during the quarter. Days sales outstanding were 46 days and days payables outstanding improved to 54 days. Inventory turns were 7.9 and the company's cash conversion cycle was 38 days, an improvement of three days from the prior period. Stock Repurchase Program Announced in July On July 27, Solectron announced a program to purchase up to $250 million of common stock pursuant to a stock repurchase program. This repurchase program reflects management's commitment to improving shareholder value, and is supported by the company's strong operating cash flow and balance sheet position. During the quarter, the company repurchased $69.6 million of its common stock, or approximately 17 million shares, pursuant to this plan. Fiscal 2005 Operating Results Improved Over Fiscal 2004 For the year, the company reported a GAAP net loss after tax from continuing operations of $12 million compared with a GAAP net loss after tax from continuing operations of $262.4 million in fiscal 2004. In fiscal 2005, the company reported non-GAAP net income after tax from continuing operations of $163.3 million excluding impairment, restructuring, and other charges of $175.3 million, compared with non-GAAP net income after tax from continuing operations of $3.1 million excluding impairment, restructuring, and other charges of $265.5 million in fiscal 2004. Sales in fiscal 2005 were $10.4 billion, compared with $11.6 billion in fiscal 2004. Key Comparisons: Q4 '04 vs. Q4 '05 Cash increased from $1.4 billion to $1.7 billion. Cash cycle improved from 48 days to 38 days. Debt decreased from $1.2 billion to $706.6 million. Debt-to-capital ratio improved from 34 percent to 22 percent. First-Quarter 2006 Guidance Fiscal first-quarter guidance is for sales of $2.3 billion to $2.5 billion, and for non-GAAP EPS from continuing operations in a range from 2 cents to 4 cents, on a fully diluted basis. Solectron Corporation -- http://www.solectron.com/-- provides a full range of worldwide manufacturing and integrated supply chain services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, product manufacturing, and product warranty and end-of-life support. The company is based in Milpitas, California, and had sales from continuing operations of $11.64 billion in fiscal 2004. * * * As reported in the Troubled Company Reporter on Jan. 13, 2005, Fitch Ratings affirmed Solectron Corporation's debt ratings: -- 'BB-' senior unsecured debt; -- 'BB+' senior secured bank credit facility; -- 'B' subordinated debt. Fitch says the Rating Outlook is Stable. Approximately $1.2 billion of debt is affected by Fitch's action. SPORTS CLUB: Arranging New Financing & Selling 9 Clubs for $65MM ---------------------------------------------------------------- The Sports Club Company plans to arrange for new financing secured by its real property in West Los Angeles and sell six of its nine sports and fitness complexes to an affiliate of Millennium for $65 million. Millennium is the Company's largest stockholder and is the landlord at four of these Clubs. The Clubs to be sold include three facilities located in New York City, and single Clubs in Boston, Massachusetts, Washington D.C. and San Francisco, California. In addition, the management agreement for the Club in Miami, Florida will be assigned to Millennium. A portion of the proceeds from the asset sale and new financing will be used to retire the Company's outstanding $100 million of Senior Secured Notes due in March 2006. On March 15, 2006, the Company's entire $100 million principal amount of the Senior Secured Notes are due along with $5.6 million of interest. The Company does not have the cash to make these payments. The Company said there is no assurance that we will able to consummate any of these transactions. If it will be unable to sell these assets or finance the West Los Angeles property, the Company would be required to raise additional capital by issuing equity if the bondholders are not willing to extend the due date of the Senior Secured Notes. If those events would not occur, the Company would probably default on the principal payment of the Senior Secured Notes and the holders of the Senior Secured Notes could elect to foreclose on its assets. The Sports Club Company, based in Los Angeles, California, owns and operates luxury sports and fitness complexes nationwide under the brand name "The Sports Club/LA." * * * Going Concern Doubt As reported in the Troubled Company Reporter on October 7, 2005, Stonefield Josephson, Inc., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's: * recurring net losses, * $12.3 working capital deficiency, * $107 million accumulated deficit, and * $100 million senior debt maturing by March 2006. SPORTS CLUB: Balance Sheet Upside-Down by $9.3-Mil at December 31 ----------------------------------------------------------------- The Sports Club Company delivered its annual report on Form 10-K for the year ending December 31, 2004, to the Securities and Exchange Commission on September 30, 2005. The Company's total revenue from continuing operations for the year ended December 31, 2004, was $43.7 million, compared to $37.0 million for the same period in 2003, an increase of $6.7 million or 17.9%. The Company's club operating costs and cost of products and services increased by $8 million or 36.2% to $30.1 million for the year ended December 31, 2004, versus $22.1 million for the same period in 2003. The Company's selling and marketing expenses were $1.5 million for the year ended December 31, 2004, versus $1 million for the same period in 2003, an increase of $449,000 or 43.0%. General and administrative expenses were $8.1 million for the year ended December 31, 2004, versus $7.5 million for the same period in 2003, an increase of $631,000. The Company recorded a charge of $1.1 million during the year ended December 31, 2004. This charge is comprised of various costs, primarily legal fees and investment banking fees, related to a proposed equity transaction that was initiated in April 2003 and abandoned in February 2004. The Company's loss from discontinued operations was $12.5 million for the year ended December 31, 2004, versus $13.2 million for the same period in 2003, a decrease of $725,000 or 5.5%. The Company incurred a $20.8 million net loss in 2004. As of December 31, 2005, the Company's balance sheet reflected assets amounting to $231.5 million and debts totaling $226 million. As of December 31, 2004, the Company's balance sheet showed a $9.3 million equity deficit compared to a $5.5 million equity at December 31, 2003. Going Concern Doubt Stonefield Josephson, Inc., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's: * recurring net losses, * $12.3 working capital deficiency, * $107 million accumulated deficit, and * $100 million senior debt maturing by March 2006. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?223 The Sports Club Company, based in Los Angeles, California, owns and operates luxury sports and fitness complexes nationwide under the brand name "The Sports Club/LA." SPORTS CLUB: Stockholders' Deficit Widens to $11.4-Mil at March 31 ------------------------------------------------------------------ The Sports Club Company delivered its quarterly report on Form 10-Q for the quarter ending March 31, 2005, to the Securities and Exchange Commission on September 30, 2005. The Company's total revenue from continuing operations for the three months ended March 31, 2005, was $11.7 million, compared to $10.7 million for the same period in 2004, an increase of $1 million or 9.1%. The Company's club operating costs and cost of products and services increased by $356,000 or 4.9% to $7.7 million for the three months ended March 31, 2005, versus $7.3 million for the same period in 2004. The Company's selling and marketing expenses were $418,000 for the three months ended March 31, 2005, versus $437,000 for the same period in 2004, a decrease of $19,000 or 4.3%. General and administrative expenses were flat at $2 million for both the three months ended March 31, 2005 and the three months ended March 31, 2004. The Company's loss from discontinued operations was $885,000 for the three months ended March 31, 2005, versus $3.4 million for the same period in 2004, a decrease of $2.5 million or 73.7%. The Company incurred $2.2 million net loss for the first quarter. At March 31, 2005, the Company's cash balance was $6 million. As of March 31, 2005, the Company's balance sheet reflected assets amounting to $231.5 million and debts totaling $226 million. As of March 31, 2005, the Company's equity deficit widened to $11.4 million from a $9.3 million deficit at December 31, 2004. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?224 The Sports Club Company, based in Los Angeles, California, owns and operates luxury sports and fitness complexes nationwide under the brand name "The Sports Club/LA." * * * Going Concern Doubt As previously reported, Stonefield Josephson, Inc., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the company's 2004 annual financial statements. The auditing firm pointed to the Company's: * recurring net losses, * $12.3 working capital deficiency, * $107 million accumulated deficit, and * $100 million senior debt maturing by March 2006. STRATUS SERVICES: Shareholders Recommend Chapter 11 Filing ---------------------------------------------------------- PIP Management, Inc. and Essex & York, Inc., disclosed that efforts to obtain value for shareholders of Stratus Services Group, Inc. (OTCBB:SSVG) continue to be impeded by Stratus' relationship with ALS, LLC, a private outsourcing company that is 50% owned by the son of Stratus' CEO, Joseph Raymond. In connection with Stratus' secondary offering, which closed in August 2004, Stratus told investor groups that Michael O'Donnell, Sr., would become Stratus' new CEO and Joseph Raymond, Jr., would become its COO, and Mr. O'Donnell and Joe Raymond, Jr. gave detailed presentations to that effect. Instead, Stratus and ALS entered into a consulting agreement that gave Joe Raymond, Jr. effective control of Stratus's operations. As a result of this consulting agreement, ALS's interests diverged from those of Stratus's shareholders. And the agreement failed to generate any of the cost savings or profits that Stratus and ALS forecast when they entered into this agreement. By means of an agreement dated May 25, 2005, between Stratus, ALS, PIP Management, and Essex & York, Stratus' consulting agreement with ALS was terminated, but Stratus remains indebted to ALS. Stratus' board is still trying to negotiate an agreement with ALS that would allow Stratus to delay certain payments currently due to ALS and thereby gain the time needed to explore alternative ways to obtain value for Stratus's shareholders. PIP Management and Essex & York are of the view that ALS may be refusing to allow this to happen because Stratus's failure would allow ALS to gain the majority of Stratus's business for a fraction of its real value. "We are disappointed that ALS continues to stand in the way of unlocking some value for Stratus's long-suffering shareholders," Chris Janish of PIP Management said. "Given that ALS's dealings with Stratus have since the beginning been tainted by conflicts of interest, we feel that it is time for ALS to step aside and allow Stratus to act for the benefit of all shareholders and creditors. We are recommending to the board that the company file for Chapter 11 bankruptcy, which would give the company time to restructure to the satisfaction of both shareholders and creditors. We firmly believe that the enterprise value of the company is greater than the current market capitalization minus its debt. We intend to challenge any transaction that does not reflect the true value of the company." Default The May 25th agreement contained various Stratus obligations in favor of PIP Management and Essex & York, including the obligation to hold a special meeting of shareholders no later than Sept. 30, 2005, but Stratus is in default of those obligations. These obligations were structured to benefit holders of Stratus's common stock. "We have entered into a forbearance agreement with ALS as a result of certain defaults under our Outsourcing Agreement," the Company disclosed in its Form 10-Q for the quarterly period ended June 30, 2005. "If we cannot obtain an extension of the ALS forbearance, or are unable to cure defaults under the ALS Outsourcing Agreement, as amended, going forward, there can be no assurance that we will be able to obtain an alternative outsourcing provider. These conditions raise substantial doubts about our ability to continue as a going concern." The Company received a going concern qualification from its auditors Amper Politziner & Mattia, P.C., on its financial statements for the fiscal year ended Sept. 30, 2004. The auditing firm pointed to the Company's $11,001,305 working capital deficit, which is primarily the result of losses incurred during the last four years. At June 30, 2005, Stratus Services' balance sheet reported a $4,249,489 stockholders' deficit, compared to a $4,507,221 equity deficit at Sept. 30, 2004. Stratus Services Group Inc. provides a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States. TECNET INC: Court Sets Dec. 8 Bar Date for Newly Discovered Claims ------------------------------------------------------------------ At the request of Scott M. Seidel, the Chapter 7 Trustee overseeing the liquidation of TecNet, Inc., the U.S. Bankruptcy Court for the Northern District of Texas set Dec. 8, 2005, as the last day for some newly discovered creditors to file their proofs of claim against the Debtor's estate. As previously reported in the Troubled Company Reporter on August 30, 2005, Mr. Seidel discovered additional creditors that were not provided with a Notice to File Claims and did not have the opportunity to file their proofs of claim. The trustee told the Court a bar date must be established for the newly discovered creditors so that they may be given a chance to file their claims. Proofs of claim may be filed by mail, addressed to: Clerk of the U.S. Bankruptcy Court 1100 Commerce Street, Room 12A24 Dallas, Texas 75242 Headquartered in Garland, Texas, TecNet, Inc., provides telecommunication services, filed for chapter 11 protection on April 8, 2004 (Bankr. N.D. Tex. Case No. 04-34162) and its case was converted to a chapter 7 liquidation proceeding on June 4, 2004. Scott M. Siedel serves as the chapter 7 Trustee. Mark A. Weisbart, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts of over $10 million and estimated debts of over $100 million. On June 7, 2005, the Court converted the chapter 11 case to a chapter 7 proceeding. Scott M. Seidel was appointed as the Chapter 7 Trustee. TEE JAYS: Taps Pounders & Associates as Real Estate Broker ---------------------------------------------------------- Tee Jays Manufacturing Co., Inc., asks the U.S. Bankruptcy Court for the Northern District of Alabama, for permission to employ Pounders & Associates, Inc., as its real estate broker. The Debtor wants to hire Pounders as the listing broker for various pieces of its real estate property, a copy of which is available for free at http://ResearchArchives.com/t/s?22c Pounders will act as broker in private sales outside the ordinary course of business and carry on all functions typically permitted to a real estate broker, including: -- advertising; -- solicitation; -- facilitation of negotiations; -- contracting; and -- coordinating the closing of various real estate transactions. The Debtor discloses that Pounders & Associates will be paid an 8% commission of the gross sale price or 4% of the gross sale price if the property is co-brokered. To the best of the Debtor's knowledge, Pounders & Associates does not hold any interest adverse to the Debtor or its estates. Headquartered in Florence, Alabama, Tee Jays Manufacturing Co., Inc., is a textile manufacturing company. The Company filed for chapter 11 protection on February 4, 2005 (Bankr. N.D. Ala. Case No. 05-80527). Stuart M. Maples, Esq., at Johnston Moore Maples & Thompson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. T & M RENTALS: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: T & M Rentals, LLC 24973 TR 192 Coshocton, Ohio 43812 Bankruptcy Case No.: 05-69563 Type of Business: The Debtor is a holding company for real estate assets. Marty Ralston owns 100% of the Debtor's outstanding shares. Chapter 11 Petition Date: October 3, 2005 Court: Southern District of Ohio (Columbus) Judge: Charles M. Caldwell Debtor's Counsel: William Todd Drown, Esq. Folland & Drown LPA 555 Chestnut Street Coshocton, Ohio 43812 Tel: (740) 291-8080 Fax: (740) 291-8080 Total Assets: $891,647 Total Debts: $1,203,022 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Home Loan Savings Bank T & M Rentals $455,519 401 Main Street 1124 Gross Ave., Coshocton, OH 43812 Coshocton, OH Auditors Value: $22,350 220 North 6th Sreet, Coshocton, OH Value of security: $339,640 Home Loan Savings Bank T & M Rentals $274,258 401 Main Street 432 South 4th Coshocton, OH 43812 Street, Coshocton, Ohio Auditor's Value: $58,930 369 South 5th Street, Coshocton, Ohio Auditor's Value: $47,990 Value of security: $139,490 The Home Loan Savings Bank T & M Rentals $100,000 1038 Chestnut Street, Coshocton, OH Auditors Value: $41,590 Value of security: $75,000 The Home Loan Savings Bank T & M Rentals $96,000 407 N. 8th Street, Coshocton, OH Auditors Value: $41,690 928 Orange Street, Coshocton, OH Auditors Value: $44 Value of security: $86,470 The Home Loan Savings Bank T & M Rentals $24,227 407 North 8th Street, Coshocton, Ohio Auditors Value: $41,690 928 Orange Street, Coshocton, OH Auditors Value: $44 Value of security: $86,470 Jacobs Vanaman Agency, Inc. Property Insurance $6,027 Tuscarawas County Treasurer Property tax $2,155 Parcels 45- 02382.000, 45- 01332.000 Tuscarawas County Treasurer Property Taxes $1,959 TCM Bank, N.A. Visa/Master Card $905 City of Coshocton Utilities and $577 account #: D16-16335-01 & B04-04360-02 Newcomerstown Water & Utilites, accts. $474 Waste Treatment 701-020-00, 801-021-00, 001-021-10, 001-020-00, 001-021-20 AEP of Ohio Utility $365 J & J Refuse, Inc. Trash pick up $106 TIMES SQUARE: Taps Keen Realty to Market Retail Space ----------------------------------------------------- Times Square Enterprises, LLC has retained Keen Realty, LLC to market its leasehold interest in 210 West 42nd Street. Times Square Enterprises owns and operates the Times Square Brewery Restaurant. Keen Realty is a real estate firm specializing in selling excess assets and restructuring real estate and lease portfolios. The Firm's marketing efforts will culminate in an auction on Dec. 6, 2005, subject to U.S. Bankruptcy Court for the Southern District of New York's approval. The deadline for submitting bids is Dec. 1, 2005. Available for assignment is the leasehold interest in 12,000+/- sq. ft. of tri-level retail space, including 6,000+/- sq. ft. of first floor space, on New York City's world famous 42nd Street in the heart of the Theatre District and Times Square. "This location is incomparable and provides retailers with an extremely rare opportunity to secure a presence in the thriving Times Square market. This is an ideal flagship location for retailers," said Mike Matlat, Keen Realty's Vice President. "We are encouraging interested parties to contact us immediately for additional information," Mr. Matlat added. All furniture, fixtures, and equipment, including restaurant and brewery equipment, are also available. Keen Realty, LLC is a consulting firm specializing in the disposition of excess real estate assets for companies in bankruptcy and/or restructuring situations. Other current and recent clients of Keen include Arthur Andersen, Parmalat, Fleming Companies, Huffman Koos, Just for Feet, Pillowtex, Spiegel / Eddie Bauer, and Warnaco. Headquartered in New York, New York, Times Square Enterprises, LLC, filed for chapter 11 protection on Aug. 15, 2005 (Bankr. S.D.N.Y. Case No. 05-16502). Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, represents the Debtor in its chapter 11 proceedings. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and debts. TOM'S FOODS: Opts to Sell Assets in 363 Sale Rather Than Liquidate ------------------------------------------------------------------ Tom's Foods Inc. asks the U.S. Bankruptcy Court for the Middle District of Georgia for permission to sell substantially all of its assets to its DIP Lenders, subject to higher and better offers, pursuant to Sec. 363 of the U.S. Bankruptcy Code. The Debtor tells the Court that it needs to consummate a sale of its business by Oct. 21, 2005, anticipating that it will run out of cash by then. The Debtor says it is in jeopardy of liquidation due to soaring administrative costs in their bankruptcy proceedings and continuing defaults under its DIP Loan Agreement. DIP Defaults Pursuant to the term of the DIP Order, the Company is in default under the DIP Loan Agreement because: (a) for the four-week period ending July 30, 2005, the Company's total operating deposits were 87% of budgeted amounts, which is 3% less than the amounts required under the Agreement; (b) the Company failed to make its required quarterly contribution to the Tom's Foods Pension Plans by the July 15, 2005, deadline; (c) the Company failed to deliver to the DIP Lenders and Agent the required EBITDA amounts by the time and in the manner set forth in the Agreement; and (d) the Company was three days late in filing its required First Monthly Financial Statements. Failed Reorganization Plan Talks Attempts to finalize the terms of a consensual plan of reorganization with the DIP Lenders, the Ad Hoc Noteholders Committee, the Indenture Trustee and the Official Committee of Unsecured Creditors have failed. The Debtor believes that given its forecasted liquidity problems, a plan of reorganization is not feasible due to: (i) the lack of sufficient time to confirm a plan before the company runs out of money; and (ii) the need for at least $6.5 million in new financing, which the Debtor does not have, in order to fund a consensual plan. The Debtor does not believe that it can access additional financing in an amount necessary to avoid the need for an asset sale. Thus, it is confident that a prompt sale of its assets could result in the successful continuation of its business. DIP Lenders as Stalking Horse Bidder Pursuant to the DIP Loan Agreement, the Debtor owed Fleet Capital Corporation approximately $22 million, which is secured by first priority liens on and security interests in substantially all of the Debtor's assets. In addition, The Bank of New York -- as successor in interest to IBJ Schroder Bank & Trust -- holds, on behalf of the noteholders, a $70 million secured claim against the Debtor on account of the 10-1/2% senior secured notes due Nov. 1, 2004. The notes are secured by the Noteholder Liens and the Noteholder Adequate Protection Liens. The Debtor believes that the liens are properly perfected and fully enforceable liens and security interests. The DIP Lenders have agreed to act as a stalking horse bidder to purchase the Debtor's assets free and clear of all liens, claims, interests and encumbrances, pursuant to an Asset Purchase Agreement. Terms of the agreement include: -- a $15 million initial credit bid of the DIP Debt; plus -- assumption of certain of the Debtor's liabilities and obligations; -- a waiver of some portion of the Stalking Horse's general unsecured claims upon the closing date; plus -- cash not less than $2.3 million which will be used as a fund to pay professional fees, U.S. Trustee fees, and other operating expenses subject to a $400,000 carve-out to pay accrued and unpaid expenses of the Debtor's counsel. The Creditors Fund will be reduced by all payments made on or after Sept. 9, 2005. To the extent cure costs exceed $2.2 million, the Creditor Fund will be reduced dollar for dollar. Headquartered in Columbus, Georgia, Tom's Foods Inc. manufactures and distributes snack foods. Its product categories include chips, sandwich crackers, baked goods, nuts, and candies. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. M.D. Ga. Case No. 05-40683). David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $93,100,000 and total debts of $79,091,000. TOWER AUTOMOTIVE: Court Okays Bowling Green Sale for $1.5 Mil. -------------------------------------------------------------- As previously reported, Tower Automotive Products Company, Inc., asks Judge Gropper to approve its asset purchase agreement with Gary Force and Tim Kannaly for the sale of real property and related de minimis equipment in Bowling Green, Kentucky, free and clear of liens, claims and encumbrances. Under the Purchase Agreement, Tower Products will sell the Bowling Green Facility to Messrs. Force and Kannaly for $1,150,000 in cash. A five-page copy of the Purchase Agreement is available for free at http://bankrupt.com/misc/bowlingreenagreement.pdf Bowling Green Facility The Bowling Green Facility is a 45,850-square foot manufacturing and warehouse facility on 10 acres of land in an industrial park in Bowling Green. It was originally built by A.O. Smith Corporation in 1990 to manufacture composite spring components for Ford trucks. The facility was closed in 1991 and reopened in 1996 to produce specialized components for Toyota and Honda. Tower Products acquired the Bowling Green Facility in 1997, in connection with its acquisition of A.O. Smith's automotive products division. From April of 1997 through June of 2005, Tower Products continued to utilize the Facility for the production of specialized components for Toyota and Honda. In early 2005, in connection with the Debtors' overall restructuring strategy to reduce fixed costs by reducing and consolidating the number of operating locations, Tower Products determined that the work being performed at the Bowling Green Facility could be better accommodated in existing floor space at Tower Products' other manufacturing plants. As of June 30, 2005, Tower Products ceased all operations at the Bowling Green Facility. The estimated monthly cost associated with holding the inactive Facility is $5,000. Marketing Campaign In anticipation of shutting down the Bowling Green Facility, Tower Products hired Neal Turner Realty, a commercial real estate firm, to assist in locating potential purchasers for the Facility. The initial asking price for the Facility was $1,495,000. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that Neal Turner has initiated a marketing campaign for the Bowling Green Facility, which was conducted on all levels -- nationally, regionally, state-wide and locally. Specifically, Neal Turner has taken these marketing initiatives: (a) The Bowling Green Facility was added to two commercial and industrial real estate listing services; (b) Aerial and internal photographs, building plans and recorded documentation were gathered and used to create a comprehensive piece to be distributed to potential buyers; (c) The Commonwealth of Kentucky's Economic Cabinet was contacted related to the availability of the Bowling Green Facility. A representative of the cabinet toured the Facility in early June, and the Facility was then added to the available building inventory file, and the cabinet's Web site; (d) Local and regional chambers of commerce were notified regarding the availability of the Facility. A complete marketing package was delivered and meetings were scheduled to discuss specifics on the Facility and potential prospective buyers with interest; (e) Over 300 marketing pieces were distributed to known investors, users and industrial real estate brokers throughout the Southeast; (f) Broadcast email was sent to members of the Society of Industrial and Office Realtors regarding the availability of the Facility; and (g) Two 4' x 8' double-sided real estate signs were used -- one on the Facility itself, and the other one at the entrance to the industrial park where the Facility is located. The entrance to the industrial park has an approximate 25,000 daily vehicle traffic count. As a result of Neal Turner's extensive marketing campaign, three prospective purchasers extended letters of intent to buy the Property. The $1,150,000 offer from Messrs. Force and Kannaly represents the highest and best bid for the Bowling Green Facility. Upon closing, Tower Products will pay Neal Turner a one-time fee equal to 7% of the Purchase Price in consideration of its postpetition services in connection with the marketing of the Bowling Green Facility. Judge Gropper grants Tower Automotive Products's request. However, the sale of the real property and related de minimis equipment in Bowling Green, Kentucky, will not and does not include any equipment subject to a Master Lease Agreement, dated October 20, 2000, between Tower Products and Varilease Technology Group, Inc. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) TOWER AUTOMOTIVE: Relocating Ford Ranger Frame Assembly Plant ------------------------------------------------------------- Tower Automotive (OTC BB: TWRAQ) will relocate production of Ford Ranger frame assemblies from its Milwaukee, Wisconsin facility to its facility in Bellevue, Ohio. The Company said that the operational consolidation is a part of its efforts to improve operational efficiency and reduce costs. The Company expects no interruption in product shipment to Ford Motor Company due to the consolidation. "Securing Tower's future as a leading supplier to the automotive industry is the primary objective of our restructuring," Bill Pumphrey, Tower Automotive's President of North American operations, said. "This consolidation of operations is designed to help Tower become a stronger, more cost-competitive company. We recognize that this action affects our colleagues, and we feel deeply for those affected by this action. However, it is a necessary step toward Tower's successful emergence from Chapter 11." Tower expects that the consolidation of its Milwaukee operations into the Bellevue facility will be complete by March 2006, at which point production at the Milwaukee facility will cease. This action will affect approximately 300 colleagues at the Milwaukee facility. As required under the Workers Adjustment and Retraining Notification Act, Tower notified employees in August of the Company's intention to reduce the workforce. Additionally, Tower has been in contact with the unions that represent its Milwaukee employees regarding this action. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. TOWER AUTOMOTIVE: Wants to Reject Milwaukee Facility Agreements --------------------------------------------------------------- Tower Automotive Inc. and its debtor-affiliates entered into a series of agreements on September 25, 2001, relating to the lease of equipment comprising two assembly lines utilized in the manufacture of Dodge Ram truck frames at the Debtors' manufacturing facility in Milwaukee, Wisconsin. The Equipment is owned by Wells Fargo Bank Northwest, National Association, in its capacity as owner trustee pursuant to two trusts created on behalf of General Foods Credit Investors No. 2 Corporation, a wholly owned subsidiary of Philip Morris Capital Corporation, and General Electric Capital Corporation. Each of the Trusts owns a 50% undivided ownership interest in the Equipment. The Milwaukee Facility Agreements include, but are not limited to: (1) an Equipment Lease Agreement, dated September 25, 2001, between GFCI, as owner participant; Wells Fargo, as lessor; and Tower Automotive Products Company, Inc., as lessee; (2) an Equipment Lease Agreement, dated September 25, 2001, between GECC, as owner participant, Wells Fargo, as lessor, and Tower Automotive Products, as lessee; (3) a Building Lease Agreement, dated September 25, 2001, between Tower Automotive Products, as lessor, and Wells Fargo, as lessee, providing for the lease of an undivided 50% leasehold interest in Building #36 and underlying land; (4) a Building Sublease Agreement, dated September 25, 2001, between Wells Fargo, as sublessor, and Tower Automotive Products, as sublessee, providing for the sublease of the same undivided 50% leasehold interest in Building #36 and underlying land that is the subject of the GFCI Building Lease; (5) a Building Lease Agreement, dated September 25, 2001, between Tower Automotive Products, as lessor, and Wells Fargo, as lessee, providing for the lease of an undivided 50% leasehold interest in Building #36 and underlying land; and (6) a Building Sublease Agreement, dated September 25, 2001, between Wells Fargo, as sublessor, and Tower Automotive Products, as sublessee, providing for the sublease of the same undivided 50% leasehold interest in Building #36 and underlying land that is the subject of the GECC Building Lease. In a Transition Agreement approved by U.S. Bankruptcy Court for the Southern District of New York, the parties agree to reject the Milwaukee Facility Agreements effective as of July 15, 2005. Judge Gropper sets November 15, 2005, as the deadline by which GFCI, GECC, and Wells Fargo must file proofs of claim relating to the rejection of the Milwaukee Facility Agreements, without prejudice to their right to amend their claims. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) TRI-STATE STRUCTURAL: Case Summary & 20 Largest Creditors --------------------------------------------------------- Debtor: Tri-State Structural and Miscellaneous, Inc. f/d/b/a Tri-State Machinery, Inc. f/d/b/a Tri-State Machine Co., Inc. 4040 Columbia Highway Dothan, Alabama 36303 Bankruptcy Case No.: 05-12242 Chapter 11 Petition Date: October 5, 2005 Court: Middle District of Alabama (Dothan) Debtor's Counsel: Cameron A. Metcalf, Esq. Espy & Metcalf P.O. Drawer 6504 Dothan, Alabama 36302 Tel: (334) 793-6288 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 ------ --------------- ------------ Internal Revenue Service $142,360 Attn: Bkr Mail Clerk 801 Tom Martin Drive, Suite 126 Birmingham, AL 35211 Sabel Steel On Account $47,206 P.O. Box 4747 Montgomery, AL 36103-4747 Qualico Steel $45,906 P.O. Box 149 Webb, AL 36376 Chatham Steel Corp. On Account $45,437 Airgas South, Inc. On Account $32,042 Alabama Dept. of Revenue $31,577 Southern Steel Products On Account $28,896 O'Neal Steel Inc. On Account $18,950 Citi Platinum Select Credit card $16,119 Valley Joist On Account $11,390 Alabama Department of SUTA $9,457 Industrial Relations Amerisafe Inc. On Account $8,824 American Interstate On Account $8,824 Insurance Co. - 24759 Service Machine Co. On Account $7,461 Citi Divedend Card Credit card $6,914 Headland Structural On Account $3,300 Detailing Bobby Dean Tax Service On Account $2,260 Sam's Club Credit card $2,217 Thompson Tractor Co. On Account $1,926 LDI Dunwoody On Account $1,256 TRM CORPORATION: Gets $40.4 Million from Private Equity Placement ----------------------------------------------------------------- TRM Corporation (NASDAQ: TRMM) has privately placed 2,778,375 shares of its common stock at $14.54 per share to both new and existing shareholders. Banc of America Securities LLC acted as placement agent in the transaction. The transaction generated gross proceeds of $40.4 million, which TRM will use to pay expenses related to the offering, fund acquisitions and reduce debt. TRM Corp. continues to experience multinational expansion in its ATM operation and remains among the largest independent ATM networks in the United Kingdom. Currently employing over 400 people throughout the United States, Canada, and the United Kingdom, TRM manages over 30,000 locations in deployment, processing, and maintenance for both ATM and Photocopy services. * * * As reported in the Troubled Company Reporter on Sept. 8, 2005, Standard & Poor's Ratings Services placed its 'B+' corporate credit and other ratings on Portland, Oregon-based TRM Corporation on CreditWatch with negative implications following the company's announcement that it intends to acquire the automated teller machines business of Travelex UK Ltd. for about $78 million. As reported in the Troubled Company Reporter on Oct. 25, 2004, Moody's Investors Service assigned a B2 rating to the proposed $150 million senior secured bank credit facilities of TRM Corporation. The ratings outlook is stable. These ratings are assigned: * B2 Senior Secured Bank Credit Facility Rating * B2 Senior Implied Rating * Caa1 Issuer Rating * SGL-2 speculative grade liquidity rating UAL CORP: Secures $3 Billion All-Debt Exit Financing ---------------------------------------------------- UAL Corporation (OTC Bulletin Board: UALAQ), the holding company whose primary subsidiary is United Airlines, disclosed that JPMorgan and Citigroup will be joint lead arrangers for a $3 billion all-debt exit financing package with very competitive terms. This marks a significant step forward to United's anticipated exit from bankruptcy in February 2006. "United's restructuring positions the company to compete successfully with the strongest airlines and to confront ongoing industry volatility," said Glenn Tilton, United's chairman, CEO and president. "With the past three years as a proving ground and with these global institutions as our partners, we now look forward to moving beyond our restructuring and focusing all of United's energy and resources on our customers, our investors and our employees." Exit Financing The commitment letter signed by United earlier yesterday is for $3 billion of debt financing with a term of six years. The loan's interest rate is LIBOR (London Interbank Offered Rate) plus 450 basis points and has minimal amortization. JPMorgan and Citigroup will syndicate the loan to a consortium of financial institutions. "We have supported United throughout the many complexities of its rigorous and thorough restructuring," said James B. Lee, vice chairman of JPMorgan Chase. "United has highly attractive assets and a tested, successful management team. The company has proven its ability to navigate through difficult and volatile circumstances while continuing to improve its operations and financial performance." "United has made significant progress and has dramatically improved every aspect of its business," said Chad Leat, head of global credit markets for Citigroup corporate and investment banking. "We are extremely pleased to be joint lead for the company's financing and look forward to continuing to work with them." United previously disclosed that the company received proposals from four leading financial institutions for all-debt exit financing. Exit financing will be used by United to: -- repay its debtor-in-possession facility; -- make other payments required upon exit from bankruptcy; and -- ensure strong cash balances to conduct post-reorganization operations. "We are very pleased to have arranged financing on attractive terms from two outstanding global financial institutions," said Jake Brace, executive vice president and chief financial officer. "United is a far different company coming out of bankruptcy than it was going in. Our demonstrated ability to restructure resulted in four major banks competing vigorously to provide exit financing, and today's agreement reflects the market's confidence in United. We also thank the Creditors' Committee for their active participation and support in the evaluation and selection process." United's commitment letter will be submitted to the U.S. Bankruptcy Court for approval on Oct. 7 for consideration at the Oct. 21 Omnibus Hearing. Additional terms will also be included in the amended Plan of Reorganization expected to be filed with the Bankruptcy Court in the future. 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. US CAN: Amends 2004 and Q1 & Q2 2005 Financial Statements --------------------------------------------------------- U.S. Can Corporation amended its financial statements for: * the year ending December 31, 2004, * the quarter ending April 3, 2005, and * the quarter ending July 3, 2005, and delivered appropriate Forms 10-K/A and 10-Q/A to the Securities and Exchange Commission on October 4, 2005. As reported in the Troubled Company Reporter on Sept. 22, 2005, the Audit Committee of the Company's Board of Directors agreed with management's recommendation to restate the Company's financial statements for the effects of changing the Company's inventory policy from LIFO to FIFO. The Securities and Exchange Commission's staff sent a comment letter to the Company requesting information relating to the Company's accounting change from LIFO to FIFO and the application of APB Opinion No. 20. Full-text copies of the amended regulatory filings are available at no charge at: Period URL ------ --- Year ending Dec. 31, 2004 http://ResearchArchives.com/t/s?226 Qtr. ending Apr. 3, 2005 http://ResearchArchives.com/t/s?227 Qtr. ending July 3, 2005 http://ResearchArchives.com/t/s?228 U.S. Can Corporation is a leading manufacturer of steel containers for personal care, household, automotive, paint and industrial products in the United States and Europe, as well as plastic containers in the United States and food cans in Europe. As of July 3, 2005, U.S. Can's balance sheet showed a $413,743,000 equity deficit, compared to a $398,429,000 deficit at Dec. 31, 2004. VIKING INSURANCE: Moody's Withdraws Ba3 Financial Strength Rating ----------------------------------------------------------------- Moody's Investors Service withdrew the Ba3 insurance financial strength ratings of two Royal & SunAlliance USA operating subsidiaries -- Viking Insurance Company of Wisconsin and The Sea Insurance Company of America -- subsequent to their removal from the Royal & SunAlliance USA intercompany pool. Moody's has withdrawn the ratings due to the reorganization of the companies. Royal & Sun Alliance Insurance Group PLC has announced the sale, pending regulatory approval, of its specialty US non-standard auto business (including Viking Wisconsin) to Sentry Insurance a Mutual Company. The liabilities of Sea Insurance Company have been assumed by the members of the Royal & SunAlliance USA intercompany pool. These ratings have been withdrawn: Viking Insurance Company of Wisconsin: -- insurance financial strength at Ba3 The Sea Insurance Company of America: -- insurance financial strength at Ba3 WINDSWEPT ENVIRONMENTAL: Reports $1.3MM Equity Deficit at June 28 ----------------------------------------------------------------- Windswept Environmental Group, Inc., delivered its annual report on Form 10-K for the year ending June 28, 2005, to the Securities and Exchange Commission on October 3, 2005. The Company reported $82,441 of net income on $20,200,410 of net revenues for the year ending June 28, 2005. At June 30, 2005, the Company's balance sheet shows $9,972,484 in total assets and a $1,310,050 stockholders deficit. On June 30, 2005, the Company completed a financing transaction, in which it sold to Laurus Master Fund, Ltd., a secured convertible term note in the principal amount of $5 million. As of September 9, 2005, the Company owed Laurus $6 million pursuant to a restated convertible senior secured note. Laurus holds a senior security interest in the Company's and its subsidiaries assets collateralizing the note. In addition, Spotless holds a subordinated security interest collateralizing our $500,000 note issued to Spotless Plastics (USA), Inc. The existence of these security interests may impair the Company's ability to raise additional debt capital. Going Concern Massella & Associates, CPA, PLLC, the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's * recurring losses from operations, * working capital deficit, * stockholders' deficit, * difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. Massella & Associates replaced Deloitte & Touche LLP as the Company's auditors after the Company's audit committee approved the dismissal of Deloitte on June 30, 2005. Deloitte & Touche's report for the fiscal year ended June 29, 2004, included a reference to a substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?22b Windswept Environmental Group, Inc. -- http://www.tradewindsenvironmental.com/-- through its wholly owned subsidiary, Trade-Winds Environmental Restoration, Inc., provides a full array of emergency response, remediation, disaster restoration and commercial drying services to a broad range of clients. WORLDCOM INC: Inks $315 Mil. Tax Settlement Pact with 16 States --------------------------------------------------------------- The tax commissions or taxing authorities of 16 states filed certain claims arising out of or relating to WorldCom, Inc. and its debtor-affiliates' royalty program: (1) Alabama, (2) Arkansas, (3) Connecticut, (4) Florida, (5) Georgia, (6) Iowa, (7) Kentucky, (8) Maryland, (9) Massachusetts, (10) Michigan, (11) Missouri, (12) New Jersey, (13) Ohio, (14) Pennsylvania, (15) Wisconsin, and (16) the District of Columbia. The State Claims were originally filed for approximately $590 million in taxes, penalties and interest. A 71-page list of the State Claims is available for free at: http://bankrupt.com/misc/cs_worldcom_royalty_claims.pdf To resolve their dispute related to the claims and other issues, the Debtors and the 16 States entered into a settlement agreement. The salient terms of the Agreement are: (a) Any and all Royalty Claims will be deemed satisfied in full, released, withdrawn, and expunged by the States as against the Debtors; (b) In full and complete satisfaction of all tax, interest and penalties related to the Royalty Program, the Debtors will pay the States $315,000,000; (c) The Surviving Claims will be resolved by taking into account, without challenge, the Consolidated Restatements and reversal of the Royalties; (d) The Debtors will not file and will not be required to file any refund claim or amended return with any of the States with respect to state income, franchise, gross receipts or similar taxes for tax years ending on or before December 31, 2002; (e) Any change in the Debtors' federal taxable income for Tax Years ending on or before December 31, 2002, through audit or final determination with the Internal Revenue Service, will not affect the settlement; and (f) The States will not use the Royalty Program nor any Royalties paid or accrued as a basis to assert nexus or any other claim based on minimum contacts against the Debtors or for any other purpose. A full-text copy of Claims Settlement Agreement with the 16 States is available for free at http://ResearchArchives.com/t/s?230 By this motion, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to approve their Settlement Agreement with the 16 States. Jerome L. Epstein, Esq., at Jenner & Block, LLP, in Washington, D.C., asserts that the Agreement settles the States' claims for less than the total amount claimed or demanded, preserving the Debtors' cash. "By resolving disputed claims issues without litigation, the Agreement reduces transaction costs and expedites resolution of one of the most significant groups of claims remaining in the claims resolution process." Michigan's Statement Attorney General Mike Cox reported a $15 million settlement that Michigan, 14 other states, and the District of Columbia have entered into with MCI-WorldCom as payment of back taxes owed by the company to the Michigan Department of Treasury. "Today's settlement will bring much-needed millions for Michigan without requiring the State to litigate numerous tax claims arising out of MCIWorldCom's 2002 Chapter 11 bankruptcy," said Mr. Cox. The settlement with the bankruptcy debtors of MCI-WorldCom concludes more than a year of negotiations between the parties. The agreement relates to taxes owed to the states from MCI- WorldCom, including taxes owed because of potential accounting errors and resulting bankruptcy claims arising from the company's Royalty Program. The states' position is that the accounting methods employed by the company's accountants, KPMG, allowed MCI- WorldCom to take deductions or add-backs from 1999 - 2001 not allowed under the states' tax laws. Under the terms of the agreement, MCI-WorldCom will pay the participating states a lump sum of $315 million related to the Royalty Program by the end of October 2005, of which Michigan will receive approximately $10.2 million. In addition, Michigan will receive an additional $4.9 million by the end of October 2005 as a result of Department of Treasury audits for tax years before MCI's Royalty Program, bringing its total to $15,098,065. The settlement does not include an admission of wrongdoing from MCI-WorldCom. Michigan joined Alabama, Arkansas, Connecticut, the District of Columbia, Florida, Georgia, Iowa, Kentucky, Maryland, Massachusetts, Missouri, New Jersey, Ohio, Pennsylvania, and Wisconsin in the settlement, which was filed by MCI-WorldCom Tuesday in the United States Bankruptcy Court for the Southern District of New York. It is expected to be approved by the Court at an October 11 hearing and payment will be made shortly thereafter. 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. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) XTEN NETWORKS: Posts $309,804 Net Loss in Quarter Ended July 31 --------------------------------------------------------------- Xten Networks, Inc., nka CounterPath Solutions, Inc., delivered its financial results for the quarter ended July 31, 2005, to the Securities and Exchange Commission on Sept. 14, 205. In its Form 10-QSB for the three months ended July 31, 2005, the Company reports a $309,804 net loss compared to a $201,091 net loss for the same period in 2004. The Company's balance sheet showed $1,885,487 of assets at July 31, 2005, and liabilities totaling $758,524. Going Concern Doubt As of July 31, 2005, the Company had not yet achieved profitable operations and has generated an accumulated deficit of $1,387,393 since its incorporation in April 2003. The Company has had negative cash flows since inception and currently has no arrangements for further financing. Management says the Company's continuing losses and negative cash flows raise substantial doubt about its ability to continue as a going concern. Amisano Hanson Chartered Accountants, of Vancouver, Canada, expressed substantial doubt about Xten's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended April 30, 2005 and 2004. The auditing firm points to the Company's dependence on its ability to raise capital from stockholders or other sources to sustain operations or generate profitable operations. Headquartered in Vancouver, B.C., Xten Networks, nka CounterPath Solutions, Inc. -- http://www.xten.com/-- provides Voice over Internet Protocol software and related consulting services to customers in North America, South America, Europe, Asia and other areas of the world. The Company designs, develops and markets software, based upon session initiation protocol, which is used to make or receive phone calls from a computer running the Windows 2000, Windows XP, Mac OS X or Linux operating systems, or a personal digital assistant running the Windows Mobile Pocket PC operating system. The Company changed its name to CounterPath Solutions, Inc., on Sept. 16, 2005 following a merger to its subsidiary, Ineen Inc. The Company's common stock will be quoted on the NASD Over-the-Counter Bulletin Board under the new symbol "CTPS" effective at the opening of the market on September 16, 2005. * U.S. Trustee's Office Issues Guidelines for Gulf Coast Debtors ---------------------------------------------------------------- The United States Trustee Program issued bankruptcy enforcement guidelines that take into account the hardships experienced by victims of recent hurricanes in the Gulf Coast region. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which takes effect on Oct. 17, 2005, contains various new requirements for parties to a bankruptcy proceeding. The Program announced it is taking the following steps to address the impact of current law and the BAPCPA upon victims of natural disaster. Document Requirements Under current law and the BAPCPA, debtors provide documents such as payment advices and statements of income. U.S. Trustees will not file enforcement motions against debtors who cannot produce documents due to natural disasters, if they are otherwise eligible for bankruptcy relief. Means Test Under the BAPCPA, individual debtors undergo a "means test" to determine whether they are eligible for Chapter 7 relief or whether Chapter 7 relief is presumed abusive. Generally speaking, the BAPCPA permits a debtor to rebut that presumption of abuse by showing "special circumstances." In determining whether to file an enforcement motion on grounds of presumed abuse, the Program will consider income loss, expense increase, and other adverse effects of a natural disaster to constitute "special circumstances." Attendance at Creditors' Meetings U.S. Trustees will exercise flexibility and provide alternative means for a debtor to attend the mandatory meeting of creditors if, due to the adverse effects of a natural disaster, the debtor cannot appear personally and testify under oath in the district where the case is filed. Venue U.S. Trustees will not raise or support venue objections in cases in which the debtor was displaced due to a natural disaster, unless the filing constitutes a systemic abuse or presents extraordinary circumstances. Small Business Chapter 11 Bankruptcies U.S. Trustees will not take enforcement actions against Chapter 11 small business debtors who, as a result of a natural disaster, cannot reasonably be expected to perform statutory duties such as attending an initial debtor interview and filing financial reports. U.S. Trustees will not seek conversion or dismissal of a small business Chapter 11 case if the grounds for filing the case are attributable to a natural disaster and there are reasonable prospects for reorganization. U.S. Trustees will not oppose reasonable and necessary extensions of time to file a disclosure statement and confirm a reorganization plan, if a small business debtor cannot comply with the deadlines because of a natural disaster. The BAPCPA requires individual debtors to undergo credit counseling before filing for bankruptcy. The BAPCPA authorizes U.S. Trustees to approve credit counseling agencies according to criteria set forth in the law. On October 4, 2005, the Program announced a temporary waiver of the statutory requirements for credit counseling for bankruptcy filers in Louisiana and the Southern District of Mississippi due to the effects of Hurricane Katrina. The U.S. Trustee Program is the component of the Justice Department that promotes integrity and efficiency in the nation's bankruptcy system by enforcing bankruptcy laws, providing oversight of private trustees, and maintaining operational excellence. The Program has 21 regions and 95 field offices. Under federal law, the Program is not responsible for overseeing bankruptcy cases filed in Alabama or North Carolina. * BOOK REVIEW: All Organizations Are Public: Comparing Public and Private Organizations ----------------------------------------------------------------- Author: Barry Bozeman Publisher: Beard Books Paperback: 204 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982331/internetbankrupt Bozeman breaks down the simple, widely-accepted categorization of organizations into either public or private, with the former being government organizations and everything else, private. This view of the innumerable and widely varied organizations in all parts of the United States has held up since at least the latter 1800s even though it is demonstrably inapplicable. It's plain that not all government organizations are public; the CIA and FBI are but two that can hardly be labeled this. And not all other organizations lumped into the category of private can be said to be this since they operate in one way or another in the public domain and are subject in varying ways to varying degrees to the public's representative, namely the government. Even in recent decades as government has grown ever larger and more involved in all areas of the society and corporations have become more expansive and changeable with globalization, the simplistic, inaccurate division of public and private continues to hold up. The "sector blurring" Bozeman was seeing when he first wrote this work in the 1980s has increased and accelerated, making All Organizations Are Public a more relevant and useful guide to understanding the topology and workings of today's organizations that it was when it was first published. The outsourcing of certain tasks traditionally done by American servicemen and women to civilian employees of a business organization is one current example of operations and an organization which cannot fall neatly into the public-private categorization. The more complex relationship at times virtually a cooperation between government and corporations in the globalization of business is another current example of the "sector blurring" prompting Bozeman to take the measure of what was very noticeably happening with modern-day organizations. He not only reports what has been going on, but also develops concepts and devises principles of use for corporate strategists and managers as well as business school teachers, entrepreneurs considering starting or expanding a business, and government officials. Bozeman's view of modern organizations rests not on the common and changeable references of popular opinion, the marketplace of ideas, or the phenomena of consumerism, but on the central social reality of "political authority." In doing away with the conventional, yet misleading categories of public and private, Bozeman does not leave the reader with a vague, cosmic-like view of the field of organizations. The two categories are replaced with an interrelated set of axioms and corollaries bringing a logic and order to the vast and diverse world of organizations. The first axiom is, "Publicness is not a discrete quality but a multidimensional property. An organization is public to the extent that it exerts or is constrained by political authority." The first corollary to this is, "An organization is private to the extent that it exerts or is constrained by economic activity." Bozeman recognizes that government (i.e., "public") and organizations formed or owned by regular citizens (i.e., "private") do have differences. They come into being from different motives and different purposes, and they are related to the public in different ways and operate differently. Nonetheless, the structure and operations of all organizations are affected, and in some cases determined, by the overriding political authority. In Bozeman's conception, "publicness refers to the degree to which the organization is affected by political authority." Some are tightly controlled by this political authority, while others are barely touched by it. But no organization is entirely free of such authority. With his axioms and corollaries, Bozeman gives principles and characteristics for apprehending the nature of particular organizations. Today's research and development (R&D) organizations are a kind of organization that the conventional public-private categorization cannot begin to make sense of. "Research and development organizations provide a fertile ground for analysis of dimensions of publicness." As hybrids involving aspects of universities, government, and industry, R&D organizations are playing important economic and social roles in such areas as health, the environment, demographics, and welfare. Many are located at universities and run by faculty members. Many corporations have R&D divisions. The value and relevance of Bozeman's key factor of political authority is seen especially with respect to R&D organizations. Current government policies on stem cell research demonstrate how Bozeman's central factor of "political authority" is applied to understand any particular organization engaged in such research. It's a matter of where an organization falls in the spectrum of degrees of being affected by political authority, not the uninformative, sterile decision as to whether an organization should be labeled public or private. Bozeman's view of organizations takes into account the reality that the term "private" has little meaning with respect to organizations. All organizations, like all citizens, are subject to the political authority somehow, notably the laws and regulations. But Bozeman is not interested simply in arguing for a new theory of organizations. His "multidimensional view of publicness" in tune with the complexity, diversity, and changes among today's organizations can help readers more effectively steer and develop their own organization and work with other organizations. ********* 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 ***