T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 11, 2005, Vol. 9, No. 241 Headlines A NOVO BROADBAND: Trustee Has Until Oct. 31 to Object to Claims AES CORP: Senior Credit Facility Commitment Increased to $650 Mil. ANC RENTAL: Trust Has Until Dec. 15 to Object to Proofs of Claim ANCHOR GLASS: Inks New Long-Term Agreement with Snapple and Mott's ANCHOR GLASS: Wants To Reject Campbell Consulting Agreement ASARCO LLC: Section 341(a) Meeting Rescheduled to Nov. 17 ASARCO LLC: Wants to Sell Surplus Properties in Utah & New Mexico ASARCO LLC: Court Okays Assumption of Tucson Electric Service Pact ATKINS NUTRITIONALS: Gets Open-Ended Period to Decide on Leases BECKMAN COULTER: Inks Pact to Buy All of Diagnostic Systems' Stock BELLES AND BEAUS: Voluntary Chapter 11 Case Summary BETHLEHEM STEEL: ISG Wants Right to $1.6MM DOE Refund Distribution BLOCKBUSTER INC: Says 3rd Quarter Results Comply with Covenants BONUS STORES: Wants Until Feb. 13 to Remove Civil Actions BOWATER INC: Expects $35M to $40M Operating Income in 3rd Quarter BROOKFIELD PROPERTIES: O&Y Shareholders Okay Stock Acquisition CALPINE CORP: CCFC Unit Prices $300-Mil. Preferred Shares Offering C2 GLOBAL: Completes $19.2M Sale of Telecom Assets to N. Central CHAMPION HOME: Moody's Rates New $200 Million Facilities at B1 CHI-CHI'S: Court Permits Asset Sale to BR Acquisitions for $1.8MM CKE RESTAURANTS: Board Declares $0.04 Common Stock Dividend COLLEGE PROPERTIES: Brian Mullen Named as Chapter 11 Trustee COLLINS & AIKMAN: Resolves GECC's Objection to Access Agreement COLLINS & AIKMAN: Inks Customer Financing Agreement with OEMs COLLINS & AIKMAN: Proposes Cross-Border Insolvency Protocol CONSTELLATION BRANDS: Earns $98.1 Million in Second Quarter DELPHI CORP: Names Robert Dellinger as Chief Financial Officer DELTA AIR: Brings In BSI LLC as Claims Agent DELTA AIR: Appoints Domenico De Sole as New Director DELTA AIR: NYSE to Halt Common Stock Trading on Thursday, Oct. 13 DELTAGEN INC.: Plan Confirmation Hearing Set for November 14 DELTAGEN INC: Administrative Claims Bar Date Set on November 7 DENNIS STREETER: Case Summary & 20 Largest Unsecured Creditors DIGITAL LIGHTWAVE: Borrows $775,000 From Optel Capital DOANE PET: Moody's Junks $150 Million Senior Subordinated Notes DYKESWILL LTD: Trustee Wants Joe Adame as Real Estate Broker DYKESWILL LTD: Wants Wallace Gallup for Hawaiian Real Estate Work E*TRADE: Closes $700M Purchase of HARRISdirect from BMO Financial E*TRADE FINANCIAL: Closes on 3-Year $250 Million Credit Facility EMPLOYEE ACQUISITION: Involuntary Chapter 11 Case Summary ENRON CORP: Wants to Sell Centragas & EIDS Equity Interests ENRON CORP: Wants Court to Bless FERC Settlement Pact ENRON CORP: Court Nixes AEGON, et al.'s Amended Claims ENVIRONMENTAL TRUST: Confirmation Hearing Scheduled for Dec. 7 FALCON PRODUCTS: Court Confirms Second Amended Joint Plan FEDERAL-MOGUL: Inks Agreements to Amend Plan of Reorganization FEDERAL-MOGUL: In Compliance with $500 Million DIP Credit Facility FIBERMARK: Fourth Amended Disclosure Hearing Set for Oct. 27 FLYI INC: Names David Asai as New Chief Financial Officer FLYI INC: Cutting 600 Jobs & Halting Flights to East & West Coasts GARDEN STATE: Has Until Dec. 6 to File Notices of Removal GENCORP INC: Posts $29 Million Net Loss in Third Quarter 2005 GLOBAL ENVIRONMENTAL: Unsecured Creditors Want Case Dismissed GMAC COMMERCIAL: Fitch Holds Low-B Ratings on Eight Cert. Classes GRAPHIC PACKAGING: Moody's Affirms B1 Corporate Family Rating HAWS & TINGLE: Wants Neligan Tarpley as Bankruptcy Counsel HAWS & TINGLE: Wants Access to Cash Collateral Until Oct. 21 HOUSE2HOME: $6.4 Million of TJX Companies Claim is Senior Debt INDUSTRIAL ENTERPRISES: Liquidating 15 Million Power3 Shares INTERSTATE BAKERIES: 207 Creditors Sell $1.8 Million of Claims JOE PAULK: Case Summary & 15 Largest Unsecured Creditors JP MORGAN: Fitch Lifts $24 Million Class G Certs. One Notch to B+ KAISER ALUMINUM: Court Approves Modified UFWA Settlement Agreement LEHMAN BROTHERS: Poor Performance Cues Fitch to Downgrade Ratings LAFEYETTE'S EPOXY: Case Summary & 26 Largest Unsecured Creditors LONG ISLAND PHYSICIAN: PwC Raises Going Concern Doubt in Form 10K MERCURY INTERACTIVE: Nasdaq Extends Filing Deadline to Nov. 30 MERRILL LYNCH: Fitch Holds Low-B Ratings on Two Cert. Classes MIRANT CORP: Bankruptcy Court Approves NY-Gen's Consent Order MIRANT CORP: HVB Risk Management Holds $223 Mil. Unsecured Claim MIRANT CORP: Creditors Committee Objects to Use of PIRA Forecasts NATIONAL ENERGY: ET Power Wants Court Nod on CalPX Settlement Pact NATIONAL ENERGY: Inks Pact Resolving Citibank Claim OMNI CAPITAL: Foley Bryant Approved as Bankruptcy Counsel OMNI CAPITAL: Files Schedules of Assets and Liabilities OWENS CORNING: Plans to Acquire Wolverine Fabricating OWENS CORNING: Wants to Capitalize Non-Debtor Company in China PAETEC COMMS: Moody's Withdraws $200 Million Debts' B2 Ratings POLYONE CORP: Thomas Waltermire Steps Down as President & CEO PONDEROSA PINE: Files Joint Plan of Reorganization in New Jersey POP3 MEDIA: Can't File Annual Report on Time Due to Audit Review QUEEN'S SEAPORT: Wants Continued Access to Cash Collateral RADNOR HOLDINGS: Paul Ridder Replaces Michael Valenza as CFO RAYMOND PRYKE: Case Summary & 13 Largest Unsecured Creditors READING BROADCASTING: Case Summary & 20 Unsecured Creditors RELIANCE GROUP: Creditors Committee Files First Amended Plan REVLON INC: Registers Common Stock for $250 Million IPO RHODES COMPANIES: Moody's Rates Planned $150 Million Loan at B1 RISK MANAGEMENT: Has Until Nov. 4 to Decide on Leases RISK MANAGEMENT: Removal Period Stretched to April 7 S.S. SEEDING: Case Summary & 20 Largest Unsecured Creditors SAINT VINCENTS: Court Allows Govt. Fund Reallocation SAINT VINCENTS: K. Falk Wants St. Mary's Closure Order Stayed SAN BENITO HEALTH: Case Summary & 20 Largest Unsecured Creditors SATMEX: White & Case Partner Thomas Heather Appointed as Mediator SAVVIS INC: Has Until Apr. 3 to Regain Nasdaq Compliance SELF-SUFFICIENCY: Case Summary & 16 Largest Unsecured Creditors SOLUTIA INC: Expands Therminol Manufacturing in China SOLUTIA INC: Declares Force Majeure on Certain Nylon Products SOUPER SALAD: Wants to Employ Padgett Stratemann as Auditor SOUTHERN UNION: Amends Restated Revolving Credit Agreement SPIEGEL INC: Alvarez & Marsal Wins 'Turnaround of the Year' Award SPIKES ENTERPRISES: U.S. Trustee Wants Chapter 11 Case Dismissed STANDARD PACIFIC: Fitch Rates Sr. Unsecured Debt at BB STAR GAS: Commodity Price Concerns Prompt Fitch To Junk Ratings TAJ INVESTMENTS: Case Summary & 12 Largest Unsecured Creditors TARGA RESOURCES: Moody's Rates $350 Million Sr. Unsec. Notes at B2 TECHNEGLAS INC: Judge Hoffman Confirms Chapter 11 Plan TENNESSEE VALLEY: Case Summary & 20 Largest Unsecured Creditors TERAFORCE TECHNOLOGY: Court Okays Locke Liddell as Panel's Counsel TERAFORCE TECHNOLOGY: Ct. OKs GE Fanuc's Purchase of DNA's Assets TERAFORCE TECHNOLOGY: Court Okays BKR Cornwell as Tax Accountant TITAN CRUISE: Cascade Capital Approved as Financial Advisors TITAN CRUISE: Wants Open Ended Deadline to Decide on Leases TITAN GLOBAL: Case Summary & 10 Largest Unsecured Creditors TRUST ADVISORS: Wants to Hire Shipman & Goodwin as Bankr. Counsel TRUST ADVISORS: Taps Murray L. Becker as Financial Advisor UAL CORP: Court Grants Open-Ended Deadline to Decide on Leases UAL CORP: Says Wells Fargo Prevents Sr. Tranche Notes' Purchase UAL CORP: Court Sets Tentative Claims Resolutions Schedule USG CORP: Equity Panel Gets Court Nod to Hire Houlihan Lokey VARIG S.A.: Brazilian Court Refers GCAS Dispute to U.S. Court VARIG S.A.: Preliminary Injunction Expires on Nov. 11 W.R. GRACE: Battle Over Exclusivity to Continue on Dec. 19 W.R. GRACE: Wants Court to Enforce Stay on N.J. Civil Action WASTE SERVICES: Intends to Amend Existing Senior Credit Facility WELLSFORD REAL: Stockholders Meeting Set for Nov. 17 WESTERN WATER: Exclusive Plan Filing Period Stretched to Dec. 20 WORLDCOM INC: Provision of Net Proceeds to Underwriter Defendants WORLDCOM INC: Louisiana Right-of-Way Claims Hearing on Dec. 6 YU ZHENG ZHENG: Case Summary & 18 Largest Unsecured Creditors * Thomas Osmun Returns to AlixPartners * Large Companies with Insolvent Balance Sheets ********* A NOVO BROADBAND: Trustee Has Until Oct. 31 to Object to Claims --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Executive Sounding Board Associates, Inc. -- the Liquidating Trustee appointed under the confirmed Amended Plan of Liquidation of A Novo Broadband, Inc. -- a further extension, until Oct. 31, 2005, to object to proofs of claim filed against the Debtor's estate. As previously reported in the Troubled Company Reporter, the Court confirmed the Debtor's Plan on Jan. 8, 2004, and the Plan took effect on March 18, 2004. Pursuant to the Plan, Executive Sounding was appointed as the Liquidating Trustee to supervise the wind-down and dissolution of the former Debtor as a corporate and business entity. One of Executive Sounding's tasks is to file and prosecute objections to proofs of claim filed against the Debtor's estate. The Liquidating Trustee has determined that additional claims remain on the register are objectionable and an extension of the claims objection period is necessary. Headquartered in New Castle, Delaware, A Novo Broadband, Inc., was engaged primarily in the repair and servicing of broadband equipment for equipment manufacturers and operators of cable and other broadband systems in North America. The Company filed for chapter 11 protection on December 18, 2002 (Bankr. Del. Case No. 02-13708). Brendan Linehan Shannon, Esq., and M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor, LLP represent the Debtor. When the Company filed for protection from its creditors, it listed $12,356,533 in total assets and $10,577,977 in total debts. The Court confirmed the Debtor's chapter 11 Plan on Jan. 8, 2004, and the Plan took effect on March 18, 2004. Executive Sounding Board Associates, Inc., is the Liquidating Trustee for the Debtor's estate. James E. Hugget, Esq., at Harvey, Pennington Ltd., represents the Liquidating Trustee. AES CORP: Senior Credit Facility Commitment Increased to $650 Mil. ------------------------------------------------------------------ The AES Corporation amended its senior credit facility with: * Citicorp USA, Inc., as Administrative Agent; * Citibank, N.A., as Collateral Agent; * Citigroup Global Markets, Inc., as Lead Arranger and Book Runner; * Banc Of America Securities LLC, as Lead Arranger and Book Runner and as Co-Syndication Agent for the Initial Term Loan Facility; * Deutsche Bank Securities Inc., as Lead Arranger and Book Runner for the Initial Term Loan Facility; * Union Bank Of California, N.A., as Co-Syndication Agent for the Initial Term Loan Facility and as Lead Arranger and Book Runner and as Syndication Agent for the Revolving Credit Facility, * Lehman Commercial Paper Inc., as Co-Documentation Agent for the Initial Term Loan Facility; * Ubs Securities LLC, as Co-Documentation Agent for the Initial Term Loan Facility; * Societe Generale, as Co-Documentation Agent for the Revolving Credit Facility; * Credit Lyonnaise New York Branch, as Co-Documentation Agent; and * a consortium of lenders comprised of: Revolving Credit Loan Bank Commitment -------------------------- ---------- Bank of America, N.A. $60,000,000 Citicorp USA, Inc. 60,000,000 Credit Suisse, Cayman Islands Branch 60,000,000 Deutsche Bank Trust Company Americas 60,000,000 JPMorgan Chase Bank, N.A. 60,000,000 Lehman Commercial Paper Inc. 60,000,000 Union Bank of California, N.A. 60,000,000 UBS AG, Stamford Branch 40,000,000 CALYON New York Branch 35,000,000 Merrill Lynch Capital Corporation 35,000,000 Societe Generale - New York Branch 35,000,000 ABN Amro Bank N.V. 25,000,000 BNP Paribas 25,000,000 United Overseas Bank Ltd. 20,000,000 WestLB AG, New York Branch 15,000,000 ------------ Total $650,000,000 ============ The amendments increased the size of the revolving credit facility from $450 million to $650 million. A full-text copy of Amendment No. 4 is available for free at http://ResearchArchives.com/t/s?235 A full-text copy of Amendment No. 5 is available for free at http://ResearchArchives.com/t/s?236 AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. AES operates in 27 countries, generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings has upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005 pending review of the company's year-end financial results. Fitch said the Rating Outlook is Stable. Following the completion of its review, Fitch's upgrade reflects the significant progress AES had made in retiring parent company recourse debt and improving liquidity. In addition, AES has refinanced several near term debt maturities and extended the company's debt maturity profile. The company has successfully accessed both the debt and equity markets in 2004 and 2003. ANC RENTAL: Trust Has Until Dec. 15 to Object to Proofs of Claim ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended the deadline for ANC Liquidating Trust, as successor to ANC Rental Corporation and its debtor-affiliates, to file objections to proofs of claims to Dec. 15, 2005. As previously reported, the Debtors have filed 14 omnibus objections to claims, Joseph Grey, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, relates. The Debtors have asked the Court to expunge, reduce, reclassify or settle over 6,700 claims. About 4,800 claims are still subject to resettlement process. Mr. Grey states that 2,000 of the remaining claims may be characterized as personal injury or wrongful death claims. The Trust intends to seek leave to file an omnibus objection with respect to the Personal Injury or Wrongful Death Claims and compel the claimants to participate in mediation or voluntary arbitration programs. The Trust asserts that the requested extension will enable them to conclude the claims reconciliation process in a timely, cost- efficient and complete manner. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath confirmed the Debtors' 3rd Amended Chapter 11 Liquidation Plan, in accordance with Section 1129(a) and (b) of the Bankruptcy Code. Upon confirmation, Blank Rome LLP and Fried, Frank, Harris, Shriver & Jacobson LLP withdrew as the Debtors' counsel. Gazes & Associates LLP and Stevens & Lee PC serve as substitute counsel to represent the Debtors' post-confirmation interests. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Inks New Long-Term Agreement with Snapple and Mott's ------------------------------------------------------------------ Anchor Glass Container Corporation (Pink Sheets:AGCCQ) entered into a new long-term agreement with Snapple Beverage Corp. and Mott's LLP to continue to supply their glass requirements through the year 2008 for certain items in their product lines including Snapple, Yoo Hoo, Nantucket Nectars, Mistic and Mott's items. "Completing this contract is an extremely important step in our restructuring process," said Mark Burgess, CEO of Anchor. "We are excited about continuing our relationship with this very important customer and look forward to supplying quality glass containers to Mott's and Snapple for the next several years." Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. ANCHOR GLASS: Wants To Reject Campbell Consulting Agreement ----------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to reject its Consulting Services Agreement and General Release dated March 9, 2005, with Darrin J. Campbell. Pursuant to the Campbell Contract, Mr. Campbell is to provide consulting services as to business strategy, customer relations and union relations as reasonably requested by Anchor's Board of Directors, for a term commencing April 2005, through December 31, 2005. In exchange, Anchor will pay $350,000 to Campbell in nine substantially equal monthly installments, commencing April 1, 2005. Kathleen S. McLeroy, Esq., at Carlton Fields PA, in Tampa, Florida, tells the Court that Mr. Campbell has not preformed any services pursuant to the Campbell Contract since the Petition Date. The Debtor believes it no longer needs Mr. Campbell's services. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts.(Anchor Glass Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASARCO LLC: Section 341(a) Meeting Rescheduled to Nov. 17 --------------------------------------------------------- The United States Trustee has rescheduled the statutory meeting of ASARCO LLC's creditors pursuant to Section 341 of the U.S. Bankruptcy Code to Nov. 17, 2005, at 10:30 a.m. The meeting will be held on the 16th floor of the Wilson Plaza Building located at 606 North Carancahua in Corpus Christi, Texas. 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 officer 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 Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants to Sell Surplus Properties in Utah & New Mexico ----------------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, to sell surplus real estate in Salt Lake County, Utah, and Deming, New Mexico, free and clear of liens, claims, encumbrances and interests. ASARCO also seeks to assume the executory real estate contracts relating to the surplus real estate. Salt Lake Property Western States Lodging and ASARCO, LLC, entered into a Real Estate Purchase Contract dated July 15, 2005, for the sale of 6.9 acres known as 3422 South 700 West, located in Salt Lake County for $2,000,000. ASARCO holds a $5,000 earnest money deposit from Western States. While the Utah Transit Authority appraised the property at $2.15 million in July 2005, ASARCO relates that it has had the property on the market for four years, and has not received a better offer from a serious buyer. The closing date for the sale is Oct. 31, 2005. Deming Property As of July 13, 2005, ABC Mining, LLC, and ASARCO entered into a Purchase and Sale Agreement for the sale "as is, where is" to ABC Mining of ASARCO's mill site located on Peru Mill Road, in Town of Deming, in County of Luna, New Mexico. The property, consisting of 200 acres of permitted land for facility operations and an additional 80 acres of unpermitted land adjacent to the facility, is to be sold for $500,000, and the buyer has given ASARCO a $50,000 earnest money contract. The site value is estimated at $224,800, using appraisal comparables on Aug. 18, 2005. ASARCO says the offer from ABC Mining is the best one received from a serious buyer in eight years of marketing the property. $2.5-Mil. Cash Injection to ASARCO's Estate Jack L. Kinzie, Esq., at Baker Botts, L.L.P., in Dallas, Texas, tells the Court that the sale of both properties will bring in $2.5 million for assets that are not necessary to the Debtors' reorganization, and which is decreasing in value. Mr. Kinzie asserts that the net effect of the transactions, if approved, will be the divestiture of real property that has been on the market for several years for fair and reasonable prices. Under Section 363(f) of the Bankruptcy Code, a debtor may sell property free and clear of any lien, claim or interest if: (1) applicable non-bankruptcy law permits sale of the property free and clear of that interest; (2) the entity consents; (3) the interest is a lien and the price at which that property is sold is greater than the aggregate value of all liens on that property; (4) the interest is in bona fide dispute; or (5) that entity could be compelled, in a legal or equitable proceeding to accept money satisfaction of that interest. Mr. Kinzie attests that the Debtors satisfy the requirements because all Encumbrances will to attach to the proceeds from the sale of assets with the same force and effect as those liens previously had on the assets, subject to the Debtors' rights and defenses, if any. Moreover, the Debtors are not aware of any Encumbrances on the Surplus Property, Mr. Kinzie says. Mr. Kinzie further notes that the Real Estate Contracts will bring valuable consideration into the estate. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Court Okays Assumption of Tucson Electric Service Pact ------------------------------------------------------------------ On Aug. 12, 2005, the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, issued an order restraining certain utilities from discontinuing, altering or refusing service and establishing procedures for determining that adequate assurance has been provided to utilities. The Injunction Order provides that any utility company may request additional assurances of payment in the form of deposits or other security. Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., in Corpus Christi, Texas, informs the Court that Tucson Electric Power Company provides electrical services to ASARCO, LLC, pursuant to an Electric Service Agreement dated July 21, 1999, for ASARCO's Mission Complex operations in Pima County, Arizona. Mr. Holzer relates that ASARCO and Tucson Electric have entered into a Third Amended and Restated Memorandum of Understanding dated effective Sept. 1, 2005, which amends the payment terms of the Electrical Service Agreement. ASARCO is in default under the Agreement for $25,715. Mr. Holzer notes that Tucson Electric timely requested additional adequate assurance from ASARCO. ASARCO believes that the Electrical Service Agreement reflects special pricing for electricity that is tied to copper's price. A pricing arrangement has been and will continue to be a financial benefit to ASARCO during the term of the contract. Accordingly, ASARCO sought and obtained the Court's authority to assume the Electrical Service Agreement with Tucson Electric. ASARCO and Tucson will follow weekly billing procedures for its Mission Complex. In the event payment is not received for the Mission Account in accordance with the Memorandum of Understanding, Tucson Electric will have the right to terminate its service to ASARCO without further Court order. In addition, the parties agreed that Account No. 6837563881 for service at ASARCO's office in Tucson will be billed monthly. ASARCO will deposit with Tucson Electric $20,600 for the Office Account, representing 2-1/2 times ASARCO's estimated maximum monthly bill for the Office Account. Tucson Electric will also be entitled to an administrative priority claim for all postpetition electrical services provided. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. (ASARCO Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATKINS NUTRITIONALS: Gets Open-Ended Period to Decide on Leases --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended until the confirmation of a plan of reorganization, the period within which Atkins Nutritionals, Inc., and its debtor- affiliates can elect to assume, assume and assign or reject their unexpired leases on four non-residential real properties. The Debtors told the Bankruptcy Court that they have been unable to evaluate the unexpired leases because they have concentrated on securing debtor-in-possession financing, formulating a plan of reorganization and disclosure statement and other pressing matters in their bankruptcy cases. The Debtors assured the court that the proposed extension will not prejudice their lessors, as they remain current on their obligations under the leases. A list of the four unexpired leases is available for free at http://researcharchives.com/t/s?175 Headquartered in New York, New York, Atkins Nutritionals, Inc. -- http://atkins.com/-- sells 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. BECKMAN COULTER: Inks Pact to Buy All of Diagnostic Systems' Stock ------------------------------------------------------------------ Beckman Coulter, Inc., (NYSE:BEC) has signed an agreement to acquire all of the stock of Diagnostic Systems Laboratories Corporation of Webster, Texas, a leading provider of specialty immunoassays including proprietary technology for reproductive endocrinology and cardiovascular risk assessment. Subject to customary closing conditions, the acquisition is expected to close in mid-October. The acquisition is presently estimated to be $0.01 dilutive to Beckman Coulter's fourth quarter EPS and $0.06 dilutive in 2006 becoming accretive to earnings in the fourth quarter of 2006. "Coupling DSL's expertise and proprietary tests with Beckman Coulter's industry leading immunoassay platforms should be a winning combination," said Michael Whelan, group vice president of Beckman Coulter's immunoassay business. "DSL is a mature organization with significant scientific and clinical collaboration skills. Together we aim to quickly broaden our immunoassay menu and strategically advance our already successful immunoassay franchise." With 2004 sales of approximately $34 million, DSL competes in the specialty endocrinology segment of the immunoassay market. DSL markets three proprietary reproductive endocrinology tests, including Inhibin A and B, and anti-Mullerian hormone. In addition, DSL holds exclusive rights to PAPP-A, a marker being evaluated for cardiovascular risk assessment. Recently growing at about 15 percent per year, specialty endocrinology makes up about 10 percent of the $5 billion immunoassay market. "By joining Beckman Coulter and taking advantage of their established infrastructure, we believe we can boost our position in specialty immunoassay testing and enable our group to reach its full potential in the marketplace," said Gopal Savjani, president and founder of Diagnostic Systems Laboratories. DSL has a proven history of collaboration with clinical research leaders to identify new and innovative immunoassays to improve patient care. DSL has successfully combined these relationships with a rapid product development process to quickly deliver novel tests to the pharmaceutical and life science research community as well as the traditional clinical laboratory. DSL provides products in multiple formats and methodologies to meet a diverse variety of testing needs. Beckman Coulter, Inc., headquartered in Fullerton, California, is a leading provider of instrument systems and complementary products that simplify and automate processes in biomedical research and clinical laboratories. * * * As reported in the Troubled Company Reporter on May 27, 2005, Moody's Investors Service placed the ratings of Beckman Coulter, Inc. under review for possible upgrade reflecting double digit revenue growth and an expansion in free cash flow generated by the core business. In particular, the company continues to gain share in the immunodiagnostic market and will launch several new products including two new analyzers for its routine chemistry business. Moody's anticipates that continued growth in its core business will lead to higher free cash flow over the next few years. These ratings were placed under review for a possible upgrade: -- $500 Million Universal Shelf Registration (Senior and Subordinate) at (P) Baa3/ (P) Ba1 -- $240 Million 7.45% Senior Notes due 2008 at Baa3 -- $235 Million 6.875% Senior Notes due 2011 at Baa3 -- $100 Million 7.05% Senior Debentures due 2026 at Baa3 BELLES AND BEAUS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Belles and Beaus, Inc. 282 Highway 314 Fayetteville, Georgia 30214 Bankruptcy Case No.: 05-13614 Type of Business: The Debtor sells bridal wear and tuxedos. See http://www.belles-beaus.com/ Chapter 11 Petition Date: October 7, 2005 Court: Northern District of Georgia (Newman) Judge: W. Homer Drake Debtor's Counsel: John C. Pennington, Esq. John C. Pennington, P.C. P.O. Box 275 Helen, Georgia 30545 Tel: (706) 878-0033 Fax: (706) 878-9916 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. BETHLEHEM STEEL: ISG Wants Right to $1.6MM DOE Refund Distribution ------------------------------------------------------------------ As reported in the Troubled Company Reporter on August 4, 2005, The Bethlehem Steel Corporation Liquidating Trust asked Judge Lifland to enforce the terms of the Asset Purchase Agreement and find that the Refund is an "Excluded Asset" as defined in the APA to be distributed to the beneficiaries of the Trust. In connection with the Refund Program, Bethlehem Steel Corporation duly submitted an application for a refund based on its refined petroleum purchases made during the program years. Mr. Kibler asserts that the refund process was delayed and prolonged because the DOE continued to collect crude oil overcharges into the 21st century. In May 2004, the DOE promulgated procedures for the final round of payments to successful claimants in the Refund Program. The DOE Notice was sent to all claimants purchasing a certain amount of refined petroleum products during the controls period, including Bethlehem Steel. The notice informed claimants of the availability of the final crude oil refund payment and sought verification of the information contained in the DOE's database for each claimant. Claimants were required to confirm by December 31, 2004, if they should receive the refund or not, for any reason, including their dissolution. The DOE Notice published in the Federal Register reflected the calculation of the final refund amounts. The published refund to which Bethlehem Steel is entitled to receive equaled $1.6 million. According to the Procedures, the DOE was tohave begun distributing refunds by February 1, 2005. International Steel Group Inc. advised The Bethlehem Steel Corporation Liquidating Trust of its position that the Refund was an Acquired Asset under the APA among Bethlehem, ISG and ISG Acquisition Inc., dated March 12, 2003, as subsequently amended on April 22, 2003, and May 6, 2003. Hence, ISG asserted that the Refund was an asset transferred to it under the APA. In response, the Liquidating Trust argued that the Refund was an Excluded Asset under the APA and that, accordingly, the Liquidating Trust intended to file the appropriate documentation with the DOE requesting the Refund. Subsequently, ISG filed a request with the DOE that ISG be listed as the beneficiary of the Refund. On December 22, 2004, the Liquidating Trust sent a Verification of the information contained in the DOE records seeking to establish the Liquidating Trust, the successor-in-interest to Bethlehem Steel, as the entity to which the Refund distribution should be made. ISG Responds Philip P. Kalodner, Esq., in Gladwyne, Pennsylvania, argues that the right to further crude oil refunds was conveyed to International Steel Group Inc., now known as Mittal Steel USA ISG Inc., pursuant to the Asset Purchase Agreement because: -- the Refund was an asset of Bethlehem Steel Corporation and the APA conveyed to ISG all assets of Bethlehem Steel; -- the Refund was an "account receivable" of Bethlehem Steel, and thus was explicitly conveyed; and -- even if the Refund could be categorized merely as a "claim," it was not an excluded claim, and was therefore part of "all claims" of Bethlehem Steel conveyed to ISG. Even if the right to the Refund was in the first instance excluded from the assets conveyed to ISG as an "excluded claim" and was retained by Bethlehem Steel, the right to further crude oil refund distributions, and any cash received in the distribution, are part of the "excess purchase price," which must be conveyed or paid to ISG pursuant to the APA, Mr. Kalodner says. Accordingly, ISG asks the Court to: (a) deny Bethlehem Steel Liquidating Trust's request; (b) declare that ISG has the right to the Refund; (c) direct the Liquidating Trust to advise the U.S. Department of Energy that the Liquidating Trust has no right to the further refunds to be distributed on the Bethlehem claim, and that the right is vested in ISG. 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) BLOCKBUSTER INC: Says 3rd Quarter Results Comply with Covenants --------------------------------------------------------------- Blockbuster Inc. (NYSE: BBI, BBI.B) reported that its third quarter reported results would reflect that the Company is in compliance with its debt covenants for the third quarter. The Company also disclosed that its domestic same-store rental revenues for the third quarter of 2005 outperformed the industry, which according to Rentrak estimates was down 11.7% for the quarter, including both store-based and online rental revenues. By contrast, Blockbuster preliminarily estimates domestic same- store rental revenues for the third quarter of 2005 to be down approximately 1%, including online rental revenues and after the impact of the elimination of extended viewing fees, which accounted for approximately 13% of the Company's third quarter 2004 rental revenues. Additionally, the Company said it remains committed to growing the online business, but that it expects to reach its goal of two million subscribers to BLOCKBUSTER Online(TM) later in 2006 than originally anticipated. "In the face of a challenging rental industry, we believe we will continue to outperform the store-based rental industry as a result of the elimination of extended viewing fees, and we see significant growth opportunities in the online rental business that we intend to aggressively pursue," said John Antioco, Blockbuster Chairman and CEO. The Company expects to announce its full third quarter results in early November. Blockbuster Inc. -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with more than 9,100 stores throughout the Americas, Europe, Asia and Australia. * * * As reported in the Troubled Company Reporter on Aug 15, 2005, Fitch has downgraded Blockbuster Inc. to: -- Issuer default rating (IDR) to 'CCC' from 'B+'; -- Senior secured credit facility to 'CCC' from 'B+' with an 'R4' recovery rating; -- Senior subordinated notes to 'CC' from 'B-' with an 'R6' recovery rating. Fitch said the Rating Outlook remains Negative. Also, Moody's Investors Service downgraded the long term debt ratings of Blockbuster Inc. (corporate family to B3 and subordinated notes to Caa3) and the Speculative Grade Liquidity Rating to SGL-4. The outlook is negative. These ratings are downgraded: * Corporate family rating to B3 from B1; * Senior secured bank credit facilities to B3 from B1; * Senior subordinated notes to Caa3 from B3. * Speculative grade liquidity rating to SGL-4 from SGL-3. BONUS STORES: Wants Until Feb. 13 to Remove Civil Actions --------------------------------------------------------- William Kaye, the liquidating agent of Bonus Stores, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to extend until February 13, 2006, the deadline to remove civil actions. Mr. Kaye tells the Court that the Debtor is a party to various actions currently pending in different state courts. He believes that an additional time to decide whether any state court actions remain with the Debtor's estate or removal of those actions is necessary. Furthermore, the extension of the removal period will protect the Debtor's right to remove any of the state court actions and any additional actions discovered through an investigation and review of claims asserted against the Debtor's estate. Headquartered in Columbia, Mississippi, Bonus Stores, Inc., operated a chain of over 360 stores in 13 Southeastern states offering everyday deep discount prices on basic everyday items. The Company filed for chapter 11 protection on July 25, 2003 (Bankr. Del. Case No. 03-12284). Joel A. Waite, Esq., at Young Conaway Stargatt & Taylor, LLP represents the Debtor. When the Company filed for protection from its creditors, it estimated assets and debts of more than $100 million. Bonus Stores, Inc. (fka Bill's Dollar Stores) declared its First Amended Liquidating Chapter 11 Plan effective on September 20, 2004. William Kaye is the Liquidating Agent under the Debtors' confirmed Plan. Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP represents the Liquidating Agent. BOWATER INC: Expects $35M to $40M Operating Income in 3rd Quarter ----------------------------------------------------------------- Bowater Incorporated (NYSE: BOW) expects third quarter operating income, excluding a gain of approximately $9 million on the sale of assets, to be in the range of $35 million to $40 million. Higher transaction prices for the company's paper products were offset by higher manufacturing and distribution costs, related to Hurricane Katrina, a stronger Canadian dollar and higher maintenance expenses. Prices of pulp and lumber in the third quarter were also lower than the second quarter. The company also disclosed a program, which is expected to reduce annual operating costs by $80 million. This program will be fully implemented by the end of 2006 and driven by operating and distribution cost savings. "The sharp rise in the Canadian dollar and energy prices requires us to be even more aggressive at reducing costs," said Arnold M. Nemirow, Chairman, President and Chief Executive Officer. "We have been very successful in implementing significant cost reduction programs in the past, and I expect we will execute this program in the same manner." Bowater will release third quarter financial results before the market opens on Wednesday, Oct. 26, 2005. A management conference call will be held to discuss these financial results at 10:00 a.m. EDT, October 26, 2005. The conference call number is 800-288-8967 or 612-234-9960 (international). The call will also be broadcast via the Internet. Interested parties may connect to the Bowater Web site at http://www.bowater.com/then follow the on-screen instructions for access to the call and related information. A replay of the call will be available from 1:30 p.m. EDT on Wednesday, October 26, through Wednesday, November 2, on the website or by dialing 800-475-6701 or 320-365-3844 (international) and using the access code 798866. Headquartered in Greenville, South Carolina, Bowater Incorporated is a leading producer of newsprint and coated mechanical papers. In addition, the company makes uncoated mechanical papers, bleached kraft pulp and lumber products. The company has 12 pulp and paper mills in the United States, Canada and South Korea and 12 North American sawmills that produce softwood lumber. Bowater also operates two facilities that convert a mechanical base sheet to coated products. Bowater's operations are supported by approximately 1.4 million acres of timberlands owned or leased in the United States and Canada and 30 million acres of timber cutting rights in Canada. Bowater is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange, the Pacific Exchange and the London Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange (TSX: BWX). * * * As reported in the Troubled Company Reporter on Apr. 22, 2005, Moody's Investors Service affirmed Bowater Incorporated's senior implied, senior unsecured and issuer ratings at Ba3, and concurrently, also affirmed the speculative grade liquidity rating as SGL-2 (indicating good liquidity). Moody's says the outlook remains negative. Ratings affirmed: -- Bowater Incorporated * Outlook: negative * Senior Implied: Ba3 * Senior Unsecured: Ba3 * Industrial and PC revenue bonds: Ba3 * Issuer: Ba3 * Speculative Grade Liquidity Rating: SGL-2 -- Bowater Canada Finance Corp. * Outlook: negative * Senior unsecured guaranteed notes: Ba3 As reported in the Troubled Company Reporter on Mar. 30, 2005, Fitch has rated Bowater's senior unsecured bonds and bank debt 'BB-'. Fitch says the Rating Outlook is Stable. Nearly $2.5 billion of debt is subject to the rating. As reported in the Troubled Company Reporter on May 14, 2004, Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to newsprint producer Bowater Inc.'s $435 million senior unsecured revolving credit facility due 2007. All other ratings were affirmed at 'BB'. S&P says the outlook is stable. BROOKFIELD PROPERTIES: O&Y Shareholders Okay Stock Acquisition -------------------------------------------------------------- Brookfield Properties Corporation (BPO: NYSE, TSX) and its Canadian based subsidiary, BPO Properties Ltd. (BPP: TSX), reported that its bidding consortium, which includes BPO Properties, CPP Investment Board and Arca Investments Inc., received approval from the shareholders of O&Y Properties Corporation (OYP:TSX) to proceed with an arrangement whereby a newly formed company owned by the Consortium will acquire all of the issued and outstanding shares of O&Y Properties for C$12.72 per share in cash. Shareholders voted 99.9% in favor of the Arrangement. The transaction is conditional on Newco acquiring more than 50% of the issued and outstanding limited voting units of O&Y REIT, other than those owned by O&Y Properties, for C$16.25 per limited voting unit under a takeover bid that expires on Oct. 17, 2005. Institutional unitholders of O&Y REIT, who collectively hold an aggregate of 12.6 million limited voting units representing 72% of the limited voting units required to satisfy the minimum condition, have agreed to tender their limited voting units to the offer. "We, along with our partners, are pleased with the outcome of the vote by O&Y Properties' shareholders and look forward to a similarly successful completion of the tendering process for O&Y REIT unitholders," commented Ric Clark, President and CEO of Brookfield Properties Corporation. Listed on both the New York and Toronto Stock Exchanges under the symbol BPO, Brookfield Properties Corporation -- http://www.brookfieldproperties.com/-- owns, develops and manages premier North American office properties. The Brookfield portfolio comprises 47 commercial properties and development sites totaling 46 million square feet, including landmark properties such as the World Financial Center in New York City and BCE Place in Toronto. * * * As reported in the Troubled Company Reporter on Oct. 6, 2004, Standard & Poor's Ratings Services assigned its 'P-3(High)' Canadian national scale and 'BB+' global scale preferred share ratings to Brookfield Properties Corp.'s C$150 million -- with an underwriter's option of up to an additional C$50 million -- 5.20% cumulative class AAA redeemable preferred shares, series K. At the same time, Standard & Poor's affirmed its ratings outstanding on the company, including the 'BBB' long-term issuer credit rating. S&P said the outlook is stable. CALPINE CORP: CCFC Unit Prices $300-Mil. Preferred Shares Offering ------------------------------------------------------------------ Calpine Corporation's [NYSE:CPN] indirect subsidiary, CCFC Preferred Holdings, LLC, has priced its $300 million offering of 6-Year Redeemable Preferred Shares due 2011 at LIBOR plus 950 basis points. Net proceeds from the offering of the Redeemable Preferred Shares will be used as permitted by Calpine's existing bond indentures. Calpine expects the transaction to close within the next two weeks. The Redeemable Preferred Shares have not been registered under the Securities Act of 1933, as amended, and may not be offered in the United States or any state absent registration or an applicable exemption from registration requirements. The Redeemable Preferred Shares were offered in a private placement in the United States under Section 4(2) and Regulation D under the Securities Act of 1933. Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states, three Canadian provinces and the United Kingdom. Its customized products and services include wholesale and retail electricity, natural gas, gas turbine components and services, energy management, and a wide range of power plant engineering, construction and operations services. Calpine was founded in 1984. It is included in the S&P 500 Index and is publicly traded on the New York Stock Exchange under the symbol CPN. * * * As reported in the Troubled Company Reporter on June 23, 2005, Standard & Poor's Ratings Services assigned its 'CCC' rating to Calpine Corp.'s (B-/Negative/--) planned $650 million contingent convertible notes due 2015. The proceeds from that convertible debt issue will be used to redeem in full its High Tides III preferred securities. The company will use the remaining net proceeds to repurchase a portion of the outstanding principal amount of its 8.5% senior unsecured notes due 2011. S&P said its rating outlook is negative on Calpine's $18 billion of total debt outstanding. As reported in the Troubled Company Reporter on May 16, 2005, Moody's Investors Service downgraded the debt ratings of Calpine Corporation (Calpine: Senior Implied to B3 from B2) and its subsidiaries, including Calpine Generating Company (CalGen: first priority credit facilities to B2 from B1). C2 GLOBAL: Completes $19.2M Sale of Telecom Assets to N. Central ---------------------------------------------------------------- C2 Global Technologies Inc. (OTC-BB: COBT.OB) (f/k/a Acceris Communications Inc.) has completed the sale of its telecommunications assets and operations to North Central Equity LLC and its subsidiary, Acceris Management and Acquisition LLC. The asset sale transaction included substantially all of the assets of the telecommunications segment with a book value of approximately US$19.2 million, and the transfer of certain designated liabilities of the telecommunications segment in the aggregate amount of approximately US$24.2 million. "With the transaction of our telecommunications operations complete, we can fully focus our efforts on realizing value from our intellectual property, which includes two foundational patents in Voice over Internet Protocol (VoIP)," said Allan Silber, Chairman and Chief Executive Officer of C2 Global Technologies. "We believe that the acquisition of Acceris gives us a solid platform for further acquisitions in the telecommunications industry," said Elam Baer, Chief Executive Officer of North Central Equity LLC. About North Central Equity LLC North Central Equity LLC is a Minneapolis, Minnesota based privately owned holding company, established in 2004, with experience in the telecommunications industry. About C2 Global Technologies C2 Global Technologies -- http://www.c-2technologies.com/-- is a broad based communications company serving residential, small- and medium-sized business and large enterprise customers in the United States. A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services. C2 offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing and commercial agent programs. C2 also offers a proven network convergence solution for voice and data in Voice over Internet Protocol communications technology and holds two foundational patents in the VoIP space. As of June 30, 2005, C2 Global's stockholders' deficit widen to $77,442,000, compared to a $61,965,000 deficit at Dec. 31, 2004. CHAMPION HOME: Moody's Rates New $200 Million Facilities at B1 -------------------------------------------------------------- Moody's Investors Services assigned a B1 rating to Champion Home Builders Co.'s new $200 million credit facilities and affirmed the corporate family rating of Champion Enterprises, Inc. at B1 as well as a B3 rating on the company's $89 million senior notes. Additionally, Moody's changed Champion's outlook to positive from stable. The ratings and change in outlook reflect: * the company's reduced leverage; * improvement in free cash flow and operating margins; and * Champion's recent strong revenue growth due to an improving product mix and favorable pricing. Moody's has also affirmed the company's speculative grade liquidity rating at SGL-2 indicating expected good liquidity for the coming 12 month period. Moody's has assigned these ratings to Champion Home Builders Co.: * $100 million senior secured term loan facility, due 2012, rated B1 * $40 million senior secured revolving credit facility, due 2010, rated B1 * $60 million senior secured synthetic letter-of-credit back-up facility, due 2012, rated B1 Moody's has affirmed these ratings for Champion Enterprises, Inc.: * $89 million 7.625% senior notes, due 2009, rated B3 * $400 million multiple seniority shelf registration, rated P(B3)/(P)Caa1/(P)Caa2 * Corporate Family Rating, rated B1 * Speculative Grade Liquidity Rating, rated SGL-2 Moody's has withdrawn this rating for Champion Home Builders Co.: * $98 million 11.250% senior notes, due 2007 Moody's changed Champion's ratings outlook to positive from stable. The new $200 million credit facilities are comprised of: * a $100 million term loan; * $60 million unfunded letters of credit facility; and * $40 million revolving credit facility. The facilities are being issued by Champion Home Builders Co. to be used primarily to finance the company's tender offer and related consent solicitation for all of the company's 11.25% Senior Notes due 2007 and to refinance the company's previous undrawn credit facility. Moody's notes that prior to the refinancing, the company had approximately $52 million in letters of credit issued. The new facilities will be guaranteed by Champion Enterprises, Inc. and each existing and subsequently acquired or organized domestic and, with certain limitations, foreign subsidiary of the company and secured by substantially all the assets of Champion Enterprises, Inc., Champion Home Builders Co., and each other guarantor, subject to certain exceptions. The B1 rating on the new credit facilities is affected by the company's relatively high leverage and driven by the uncertainty in the company's ability to pass on higher input prices to customers in an increasing interest rate environment. Moody's notes that the company's strong recent revenue growth is primarily attributable to increasing unit prices and not to increasing unit volumes. The company's revenues could decline significantly were the economy, including manufactured housing segment, to soften. Moody's projects the company's total debt to EBITDA for the LTM period September 30, 2005 to be approximately 3.1 times. Interest coverage ratio for the same period is projected to be around 4 times. The change in outlook reflects the company's improving credit profile including, but not limited to, decreasing leverage relative to the company's past leverage levels and good cash flow generation. The positive outlook was primarily driven by the recent improvement in the company's free cash flow generation, for LTM period ended June 30, 2005 the company's free cash flow to total debt as adjusted by Moody's was 13% compared with negative 7.7% FYE 2004. Additionally, the upgrade in outlook considers the company's expanding margins and higher sales in dollar terms. Champion's second quarter 2005 manufacturing segment margin increased to 8.5% versus 6.5% in the second quarter of 2004. The increase represents the highest segment margin since the third quarter of 1998. The company's profitability is expected to improve further as the company is continuing to expand into the modular home segment. The ratings and/or outlook could improve if the company sustains and/or exceeds its current cash flow generation relative to debt and if there is improvement in unit sales. Moody's notes that while the company's free cash flow to debt ratio, as adjusted by Moody's, is an indicative of a Ba3 rating, the company's weak track record and industry's volatility calls for a sustainable improvement before upgrading the rating. In Moody's opinion the company is well positioned in its ratings category. The ratings and/or outlook could deteriorate if the company is not able to pass through input price increases thereby lowering its profitability and cash flow generation. Moody's also has affirmed Champion's SGL-2 rating. The rating considers the company's good liquidity as evidenced by: * recent good free cash flow generation, * expected revolver availability, and * sufficient covenant coverage. The company's internal cash generation is expected to cover the company's working capital needs and planned capital expenditures. The new financing structure will provide Champion with access to a $40 million revolving credit facility that is expected to remain mostly undrawn and a $60 million letters of credit facility that has approximately $52 million letters of credit issued. The covenants on the credit facilities are expected to include a maximum total debt ratio set initially at 4 times with step-down provisions to 2.75 times and minimum interest coverage covenant set at 3 times. Moody's notes that the company's capital expenditures will also be limited by the covenants. The SGL-2 rating is negatively impacted by significant seasonal working capital swings and limited sources of alternative liquidity. Headquartered in Auburn Hills, Michigan, Champion Enterprises, Inc. is the manufactured housing industry's leading producer, with 2004 revenues of $1,150 million. CHI-CHI'S: Court Permits Asset Sale to BR Acquisitions for $1.8MM ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Chi-Chi's, Inc., to : a) sell its interest in a parcel of commercial property located in Greenfield, Wisconsin, to BR Acquisitions, LLC free and clear of all liens, claims, rights interests and encumbrances; and b) pay brokerage commissions to The Polacheck Company, Inc., and Mid-America Real Estate-WI, LLC, pursuant to the Commercial Listing Contract entered into between the Debtor, Polacheck, OS Realy, Inc., and Emerald Realty, Inc. The Court approved the Debtor's request on Oct. 7, 2005. In June 2005, the Debtor and Polacheck entered into the Listing Contract for purposes of marketing and selling the commercial property. The Debtor originally obtained approval from the Court to sell the commercial property to WI QSL, LLC for $1.7 million. But one of the contingencies in the purchase agreement between the Debtor and WI was not fulfilled, and WI was permitted to back out of the asset sale and obtained the return of its deposit. As a result of Polacheck's renewed marketing efforts, the Debtor and BR Acquisitions entered into a Sale Agreement on Sept. 13, 2005, calling for the sale of the commercial property to BR Acquisitions for a total price of $1.8 million. The Debtor's 25% interest in the property accounts for $450,000 of the purchase price, and the Debtor will receive $423,000 of the net sale proceeds after payment of the applicable brokerage commissions. Pursuant to the terms of the Listing Contract, Polacheck will receive a brokerage commission of $108,000 to be split 50% with Mid-America, BR Acquisitions' broker. The Court orders that Polacheck's commission is subject to disgorgement if the Debtor's pending motion to employ Polacheck as an Ordinary Course Professional is not authorized in accordance with the procedures provided for by the Court's Ordinary Course Professional Order dated Feb. 14, 2004. A full-text copy of the Sale Agreement is available for free at http://bankrupt.com/misc/Chi-Chi'sSaleAgreement.pdf The Court orders that in the event that the current sale of the property to BR Acquisitions is not consummated, the Debtor is authorized to sell the property to any purchaser for a sale price greater than or equal to $1.7 million. The Court orders that if the Official Committee of Unsecured Creditors and the U.S. Trustee fail to object to the sale of the property to BR Acquisitions within 15 days of the Sale Notice sent to the Committee and the U.S. Trustee, the asset sale can then close without further action of the Court and its order authorizing the Debtor's motion will be the final order approving the asset sale. Headquartered in Irvine California, Chi-Chi's, Inc., is a direct or indirect operating subsidiary of Prandium and FRI-MRD Corporation and each is engaged in the restaurant business. The Debtors filed for chapter 11 protection on October 8, 2003 (Bankr. Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they estimated $50 million to $100 million in assets and more than $100 million in liabilities. CKE RESTAURANTS: Board Declares $0.04 Common Stock Dividend ----------------------------------------------------------- CKE Restaurants, Inc.'s (NYSE: CKR) Board of Directors declared a third quarter dividend of $0.04 per share of common stock to be paid on Nov. 28, 2005, to its stockholders of record at the close of business on Nov. 7, 2005. The Company had 59,531,941 shares of common stock issued and outstanding as of Sept. 9, 2005. As reported in the Troubled Company Reporter on Sept. 23, 2005, net income for the second quarter of fiscal 2006 increased to $8.4 million, compared to a net loss of $12.7 million in the prior year quarter. This year's results include an $11.0 million charge to purchase stock options from the Company's former Chairman of the Board of Directors who retired during the quarter. Prior year results included $22.3 million of charges primarily related to legal settlements and early debt extinguishment. CKE Restaurants, Inc., through its subsidiaries, franchisees and licensees, operates some of the most popular U.S. regional brands in quick-service and fast-casual dining, including the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and Green Burrito(R) restaurant brands. The CKE system includes more than 3,200 locations in 44 states and in 13 countries. CKE is publicly traded on the New York Stock Exchange under the symbol "CKR" and is headquartered in Carpinteria, California. * * * As reported in the Troubled Company Reporter on July 13, 2005, Standard & Poor's Ratings Services raised its ratings on quick- service restaurant operator CKE Restaurants Inc. The corporate credit and senior secured debt ratings were raised to 'B+' from 'B', and the subordinated debt rating was elevated to 'B-' from 'CCC+'. The outlook is stable. COLLEGE PROPERTIES: Brian Mullen Named as Chapter 11 Trustee ------------------------------------------------------------ The Honorable Charles G. Case II approved the request of the U.S. Trustee for Region 14 to appoint a chapter 11 trustee to take control of College Properties 1 & 2 Limited Partners' restructuring. The U.S. Trustee reports that he consulted with these parties-in- interest regarding the appointment of Brian Mullen to serve as the Chapter 11 Trustee: (a) Howard Meyers, Esq. Attorney for Loren Jessen, trustee, holder of 86% interest in the secured claim; (b) Cliff Altfeld, Esq. Attorney for Equity Security Holders Landis Mitchell, Anthony DePetris and Patricia Palmer; and (c) John Ryan, Esq. Attorney for the Debtor. Headquartered in Phoenix, Arizona, College Properties 1 & 2 Limited Partners filed for chapter 11 protection on June 3, 2005 (Bankr. D. Ariz. Case No. 05-10095). John T. Ryan, Esq., of Phoenix, Arizona, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million to $10 million. COLLINS & AIKMAN: Resolves GECC's Objection to Access Agreement --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved the stipulation resolving General Electric Capital Corporation's objection to the inclusion of Collins & Aikman Corporation's Hermosillo facility in an exhibit to an Access Agreement. The Bankruptcy Court had approved a Customer Financing Agreement between the Debtors and certain Original Equipment Manufacturer customers and a related Access Agreement on August 11, 2005, that gives the Customers the right to access and take control over the Debtors' facilities for the Customers' sole benefit. The Stipulation clarifies that none of the Customer Financing Order, the Customer Agreement, the Access Agreement nor any related agreement in any way affects the rights of GECC or GE Mexico with regard to an existing Construction Agency Agreement. This includes, without limitation, any right GE Mexico has to prohibit Ford or any other third party from operating the equipment at the Hermosillo facility without GE Mexico's consent. Construction Agency Agreement Collins & Aikman Automotive Hermosillo, S.A. de C.V., a Mexican sociedad anonima de capital variable, and GE Capital De Mexico, S. de R.L. de C.V., a Mexican sociedad de responsabilidad Limitada de capital variable, are parties to a Construction Agency Agreement on November 8, 2004, for the construction and operation of an automotive facility in Hermosillo, Mexico. Although the Debtors and Ford Motor Company intended that the Access Agreement would extend to the Hermosillo, Mexico facility, GECC and GE Mexico did not understand that the Access Agreement would grant access to Ford with respect to the Hermosillo facility. GECC informed the Debtors and Ford that it intended to object to the inclusion of the Hermosillo facility in an exhibit to the Access Agreement. The Debtors and Ford explained that it was always their understanding that the Hermosillo facility was supposed to be included on the exhibit to the Access Agreement. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Inks Customer Financing Agreement with OEMs ------------------------------------------------------------- As reported in the Troubled Company Reporter, Collins & Aikman Corporation and its debtor affiliates obtained approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to enter into a Customer Financing Agreement with certain Original Equipment Manufacturer customers that provided them with, among other things, $82.5 million in immediate price increases, $82.5 million in additional financing and a definitive timetable for the renegotiation of contracts. Pursuant to the Customer Financing Agreement, the Debtors established an aggressive schedule for the analysis and renegotiation of unprofitable contracts with their customers. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, relates that to accomplish this task, the Debtors' senior management and advisors dedicated extensive resources to the task of identifying the product lines they manufacture for their customers and determining the profitability and strategic benefit of each of those product lines. This required a detailed and extensive analysis of numerous contracts. As a result of their analyses, the Debtors determined that many of the Contracts under their current terms and conditions were no longer economical, profitable or beneficial to ongoing operations. Mr. Schrock explains that the Contracts contained unfavorable pricing, payment or raw materials pricing terms and did not provide any ongoing benefits to the Debtors' estates sufficient for them to justify continuing to honor their obligations thereunder. The terms precluded the Debtors from generating any profit, or in some cases, sufficient profit relative to the risks involved, which caused the Debtors to continue to suffer significant financial losses, Mr. Schrock says. To stem the incurrence of those losses, the Debtors negotiated pricing and payment terms under the Contracts and other benefits relevant to their relationship with the Customers to a level that would justify continued performance under the Contracts. As a result of the negotiations, the Debtors have reached an agreement with each of these Customers: -- Honda of America Manufacturing Inc., -- Toyota Motor Manufacturing North America Inc., -- Nissan North America Inc., -- DaimlerChrysler Corporation, -- General Motors Corporation, and -- Ford Motor Company. Accordingly, the Debtors seek the Court's authority to enter into the Agreements. The Debtors believe that the terms of the Agreements will achieve substantial benefits to their ongoing business operations and estates. The basic terms of the Agreements include: (a) increases in interim or permanent pricing terms for certain or all programs; (b) the Customers' commitment not to re-source for a certain period; (c) continued acceleration of payment terms; and (d) certain confidential, customer-specific terms that inure to the benefit of the Debtors' estates. According to Mr. Schrock, much of the Debtors' liquidity problems are exacerbated by the business model of "Tier 1" suppliers to the automotive industry, which requires that the supplier advance certain capital expenditures, launch costs and tooling costs months, or even years, prior to recovering those costs from the customer once component parts are ready to ship. The Customers' willingness to continue funding capital expenditures, launch costs and tooling for a certain period could greatly improve the Debtors' liquidity, Mr. Schrock notes. "The Agreement a major accomplishment that provides immensely valuable benefits to the Debtors' estates, the Agreement demonstrates that the Debtors and the Customer are willing to work together to try to find a consensual resolution and reorganize the Debtors' operations," Mr. Schrock says. "Indeed, the Agreement is necessary for the Debtors to achieve stability and have a reasonable prospect of a stable business environment, which will maximize value for these estates through a plan of reorganization or sale." The Debtors also seek permission to file copies of the term sheets under seal. Each Term Sheet includes specific pricing information that, if revealed to the Debtors' competitors, would give the competitors an advantage in negotiating terms with the Customer. In addition, if the Customer's other suppliers knew the terms of the Agreement, this would provide the suppliers with a competitive advantage in negotiating contracts with the Customer. By harming the Customer, revealing the terms of the Agreement would also harm the Debtors' relationship with the Customer, and consequently, the Debtors' reorganization efforts. JPMorgan Responds Under the final order approving the DIP Financing Agreement, the stipulated principal amount of the bank debt owing to the prepetition secured lenders is about $748 million. That senior indebtedness is secured by liens and security interests held by JPMorgan Chase Bank, N.A., as administrative agent for the prepetition senior secured lenders, on substantially all of the prepetition assets of the Debtors' estates. Thus, the Prepetition Secured Lenders are the predominant creditor constituency in the Debtors' Chapter 11 cases, Brendan G. Best, Esq., at Dykema Gossett PLLC, Detroit, Michigan, tells the Court. JPMorgan's legal and financial advisors have had an opportunity to review the term sheets entered into by the Debtors and their principal Original Equipment Manufacturer customers. Mr. Best relates that while JPMorgan believes that the Debtors have made significant progress in their negotiations with the OEMs, there remains a looming and significant liquidity concern that the Court should require the Debtors and the OEMs to address through modification of the Term Sheets, as a condition to the Court's approval. Under the Customer Financing Agreement, the OEMs agreed that "the Customers' respective payment terms will be 'instant net' (net 5 days) or equivalent terms." In their current form, the Term Sheets fail to provide for the continuation of these critical payment terms beyond March 31, 2006. Thus, absent modification of the Term Sheets, not later than March 31, 2006, the Debtors potentially face an increase in their working capital requirements in an amount estimated by JPMorgan's financial advisor to be between $150 to $175 million. Mr. Best notes that it is readily apparent that the Debtors lack any source to fund a massive increase in working capital. As a condition to approval of the Term Sheets, Mr. Best suggests that the Court should require the OEMs and the Debtors to avert a potential liquidity crisis by agreeing that the critical "net 5-day" payment terms be continued through the conclusion of the Debtors' Chapter 11 cases. In addition, JPMorgan notes that under the "Protocol for Customer Funding of Capital Expenditure, Launch and Tooling Costs" between the Debtors and the OEMs, the Debtors are having difficulty obtaining payments on purchase orders for in-house tooling work performed by the Debtors for the benefit of the OEMs. The Debtors' inability to obtain timely payments for in-house tooling is having a significant negative impact on the Debtors' liquidity. The Debtors have informed JPMorgan that they are attempting to negotiate an addendum to the Protocol to address the prompt collection of in-house tooling payments from the OEMs. The Court should require the Debtors and the OEMs to reach a satisfactory addendum to the Protocol as a condition to approval of the Motions, Mr. Best says. Absent JPMorgan's consent, Mr. Best argues that the Debtors and the OEMs do not have the ability to agree to any terms that interfere with the liens and security interests held by JPMorgan for the benefit of the Prepetition Secured Lenders. Accordingly, JPMorgan asks the Court to condition the approval of the Motions upon the modification of the agreements reached between the Debtors and the OEMs to: (i) require the OEMs to continue to adhere to the previously agreed payment terms for component parts of "'net instant' (net 5 days) or equivalent terms" throughout the duration of the Debtors' Chapter 11 cases; and (ii) resolve the liquidity problems associated with the collection of in-house tooling payment orders under the Protocol. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Proposes Cross-Border Insolvency Protocol ----------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to approve a cross-border insolvency protocol to facilitate the efficient administration of their Chapter 11 cases and the administrative proceedings of their European units. As previously reported, the Debtors' European units commenced administration proceedings before the Companies Court of the High Court of Justice, Chancery Division in London, England in accordance with the English Insolvency Law. The English Court has appointed, among others, Simon Appell and Alastair Beveridge at Kroll Talbot Hughes, also known as Kroll Ltd., as joint administrators of the European Debtors. In an administration in England, the administrators act for the debtors as their agent with a fiduciary duty to creditors and parties-in-interest. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in New York, explains that the Protocol will ensure that the counsel, retained professionals and management for each of the U.S. Debtors and the European Debtors work cooperatively and effectively with minimal friction or duplication of efforts. The Administrators have approved the Protocol and have had the Protocol approved by the English Court. Although the Protocol has not yet been formally approved, the Debtors have been acting in accordance with the terms of the Protocol since it was developed on July 15, 2005. The Official Committee of Unsecured Creditors has been kept apprised at all times regarding the development and terms of the Protocol. Given the complex nature of the Insolvency Proceedings, Mr. Carmel asserts that a protocol is required to facilitate the efficient administration of the Debtors' cases. There are 38 U.S. Debtors and 24 European Debtors, with a total of 23,000 employees and operations covering nearly a dozen countries. In addition, having two parallel proceedings with jurisdictional issues like intercompany creditors and intercompany, cross-border debt further substantiates the need for a cross-border protocol. A protocol will help protect the rights of the Debtors and the Administrators, as well as the rights of creditors and other interested parties in the United States, England and other countries. The terms of the Protocol are designed to: (a) promote the orderly and efficient administration of the Insolvency Proceedings; (b) harmonize and coordinate activities undertaken and information exchanged in connection with the Insolvency Proceedings; (c) honor the independence and integrity of the US and English Courts; and (d) promote international cooperation and respect for comity among the U.S. and English Courts. Mr. Carmel says that the Protocol is designed to accomplish these goals while attempting to harmonize certain potentially conflicting concepts existing under the Bankruptcy Code and English Insolvency Law. Mr. Carmel assures the Court that the Protocol is the result of lengthy discussion and negotiation between the Debtors and the Administrators to balance the two different insolvency regimes while continuing to respect the independent jurisdiction of each of the Courts, all with a view toward maximizing the value of the Debtors' estates for the benefit of their creditors and other parties-in-interest. A full-text copy of the 15-page Protocol is available for free at http://bankrupt.com/misc/collins_protocol.pdf Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONSTELLATION BRANDS: Earns $98.1 Million in Second Quarter ----------------------------------------------------------- Constellation Brands, Inc. (NYSE: STZ, ASX: CBR) reported net sales of $1.2 billion for the second quarter of fiscal 2006, up 15% over prior year. "Strong performance by our U.S. branded wine and imported beers businesses, together with the addition of Robert Mondavi brands, resulted in another solid quarter of financial performance," stated Richard Sands, Constellation Brands chairman and chief executive officer. Net sales for the second quarter of fiscal 2006 included $110.2 million from sales of brands from the December 2004 acquisition of The Robert Mondavi Corporation and $11.8 million from sales of Ruffino brands. In December 2004, the company purchased a 40 percent interest in Ruffino S.r.l. and on Feb. 1, 2005, the company began distributing Ruffino's products in the United States. Excluding Robert Mondavi and Ruffino brands, net sales grew three percent. "While this growth was a little lower than expected, it reflects tougher trading conditions in the U.K. market, impacting both our U.K. wholesale and branded business," stated Mr. Sands. "We are addressing this by focusing on margin improvements in other areas of our business." Operating income, as reported under generally accepted accounting principles, totaled $174.2 million, for the second quarter of fiscal 2006, or 14.6 percent of net sales, compared with $156.2 million or 15.1 percent of net sales for the second quarter of fiscal 2005. Reported net income for the second quarter increased two percent to $82.4 million, while diluted earnings per share for the second quarter totaled $0.34 compared with $0.35 for the prior year second quarter. Second quarter fiscal 2006 diluted earnings per share were impacted by additional shares outstanding. Second quarter fiscal 2006 and 2005 reported results include acquisition-related integration costs, restructuring and related charges and unusual items. Net income and diluted earnings per share, on a comparable basis, exclude these costs, charges and items. Second quarter operating income, on a comparable basis, was $197.0 million or 16.5 percent of net sales, compared with $158.3 million or 15.3 percent for the prior year period. Second quarter net income and diluted earnings per share, on a comparable basis, increased 20 percent to $98.1 million and 17 percent to $0.41. "We are pleased by the excellent operating margin expansion in the quarter," stated Mr. Sands. "The margin expansion and solid bottom line performance were driven by true growth in the right categories, and demonstrates the benefits of our diversified product portfolio and geographic markets." "During the second quarter of our fiscal 2006 the price of petroleum products moved into uncharted territory, tragic and senseless terrorist attacks rocked London and Hurricane Katrina ravaged the U.S. Gulf Coast. Our hearts go out to those impacted by these adversities. While these current events could have become distractions, Constellation's 8,500 employees around the world remained focused on delivering results and additional true growth opportunities to increase shareholder value," stated Mr. Sands. "We believe that in turbulent times the best course is always a steady one." Outlook Full-year guidance includes these assumptions: * Consolidated net sales growth in the mid-teens, including the benefit of 10 additional months of Robert Mondavi; * Interest expense in the range of $190-$195 million; * Tax rate of approximately 33 percent on a reported basis, which includes a benefit of three percent as a result of adjustments to income tax accruals in connection with the completion of various income tax examinations, and 36 percent on a comparable basis, which excludes the aforementioned three percent benefit; * Approximately 240 million weighted average diluted shares. * Cash provided by operating activities in the range of $380 to $400 million; * Capital expenditures to approximate $140 million; and * Debt of approximately $2.9 billion at Feb. 28, 2006. Constellation Brands, Inc. -- http://www.cbrands.com/-- is a leading international producer and marketer of beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well-known brands in Constellation's portfolio include: Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl, Tsingtao, Black Velvet, Fleischmann's, Mr. Boston, Paul Masson Grande Amber Brandy, Chi- Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Stowells, Blackthorn, Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Nobilo, Alice White, Ruffino, Robert Mondavi Private Selection, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Simi and Robert Mondavi Winery brands. * * * As reported in the Troubled Company Reporter on Oct. 4, 2005, Moody's Investors Service placed the long-term ratings of Constellation Brands, Inc. under review for possible downgrade and lowered the company's speculative grade liquidity rating to SGL-2 from SGL-1. The review of Constellation's long-term ratings follows its announcement that it has offered to purchase all of the outstanding common shares of Vincor International Inc. in a transaction currently valued at approximately C$1.4 (US$1.2) billion, including approximately C$305 (US$260) million of assumed Vincor net debt. Ratings placed on review for possible downgrade: * Ba2 corporate family rating formerly senior implied rating) * Ba2 on the $2.9 billion senior secured credit facility consisting of a $500 million revolver, $600 million tranche A term loans and $1.8 billion tranche B term loans * Ba2 $200 million 8.625% senior unsecured notes, due 2006 * Ba2 $200 million 8% senior unsecured notes, due 2008 * Ba2 GBP 80 million 8.5% senior unsecured notes, due 2009 * Ba2 GBP 75 million 8.5% senior unsecured notes, due 2009 * Ba3 $250 million 8.125% senior subordinated notes, due 2012 Rating lowered: * Speculative grade liquidity rating to SGL-2 from SGL-1 As reported in the Troubled Company Reporter on Oct. 4, 2005, Standard & Poor's Ratings Services placed its 'BB' corporate credit rating and other ratings on beverage alcohol producer and distributor Constellation Brands Inc. on CreditWatch with negative implications. DELPHI CORP: Names Robert Dellinger as Chief Financial Officer -------------------------------------------------------------- The Board of Directors of Delphi Corp. (NYSE: DPH) named Robert J. Dellinger as the company's executive vice president and chief financial officer effective immediately. Mr. Dellinger, 45, most recently was the executive vice president and chief financial officer for Sprint Corp. He succeeds John D. Sheehan, who was named Delphi's vice president and chief restructuring officer and had served as acting CFO since March 4, 2005. Mr. Sheehan will retain his responsibilities as chief accounting officer and controller on an interim basis but his primary focus will be on leading Delphi's restructuring activities. Both Messrs. Dellinger and Sheehan will be members of the Delphi Strategy Board, the company's top policy-making group. "Bob's sound financial judgment, international experience and strength of leadership will be critical as we move ahead with our global transformation," said Robert S. "Steve" Miller, Delphi's chairman and chief executive officer. "John's leadership as acting CFO has been vital during this transition time and he will bring the necessary focus to Delphi's restructuring efforts in his new role." Prior to joining Sprint in June 2002, Mr. Dellinger was president and chief executive officer of GE Frankona Re based in Munich, Germany, with responsibility for General Electric's(GE) Employers Reinsurance Corporations (ERC) European and Asian operations. In his 19-year career at GE, he had diverse financial and operational experiences in both industrial and financial services. In March 1997, he was named an officer of GE and executive vice president and chief financial officer of ERC. He served as manager of finance for GE Motors and Industrial Systems from 1995 to 1997 and was director of finance and business development for GE Plastics Pacific based in Singapore from 1993 to 1995. He spent five years on the GE Corporate Audit Staff and completed the GE Financial Management Program. Mr. Dellinger graduated from Ohio Wesleyan University in 1982 with a bachelor of arts in economics and a minor in accounting. He serves on the board of directors of SIRVA, Inc., a NYSE- listed company. Headquartered in Troy, Michigan, Delphi Corp. -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DELTA AIR: Brings In BSI LLC as Claims Agent -------------------------------------------- Edward H. Bastian, executive vice president and chief financial officer of Delta Air Lines, Inc., relates that the thousands of creditors and other parties-in-interest involved in the Debtors' Chapter 11 cases may impose heavy administrative and other burdens on the Court and the Office of the Clerk of the Court. To relieve the Clerk's Office of these burdens, Delta Air Lines Inc. and its debtor-affiliates asks permission from the U.S. Bankruptcy Court for the Southern District of New York to engage Bankruptcy Services LLC as notice agent and claims agent in their Chapter 11 cases. According to Mr. Bastian, BSI is one of the country's leading Chapter 11 administrators with experience in noticing, claims processing, claims reconciliation and distribution. BSI has substantial experience in the matters upon which it is to be engaged. BSI has acted or is acting as official notice agent and claims agent in recent notable cases including Enron Corp., WorldCom Inc., Global Crossing, Ltd., Adelphia Communications Corporation and Bethlehem Steel Corp. BSI, at the request of the Debtors or the Clerk's Office, will: (a) prepare and serve required notices in the Debtors' cases, including: * a notice of the Petition Date and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; * a notice of the claims bar date; * notices of objections to claims; * notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and * other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the Debtors' Chapter 11 Cases; (b) after the mailing of a particular notice, file with the Clerk's Office a certificate or declaration of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was mailed and the date and manner of mailing; (c) maintain copies of all proofs of claim and proofs of interest filed; (d) maintain official claims registers; (e) implement necessary security measures to ensure the completeness and integrity of the claims registers; (f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; (g) maintain an up-to-date mailing list for all entities that have filed a proof of claim or proof of interest, which list will be available upon request of a party in interest or the Clerk's Office; (h) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; (i) record all transfers of claims and provide notice of the transfers in accordance with Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; (j) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; (k) provide temporary employees to process claims, as necessary; (l) at the close of the Debtors' cases, box and transport all original documents in proper format, as provided by the Clerk's Office, to the Federal Records Center; and (m) promptly comply with further conditions and requirements as the Clerk s Office or the Court may at any time prescribe. The Debtors propose to pay BSI in accordance with a Fee Schedule. A full-text copy of that Fee Schedule is available for free at: http://bankrupt.com/misc/delta_bsi_fees1.pdf Ron Jacobs, president of BSI, assures the Court that his firm will not seek any compensation from the U.S. Government in its capacity as notice agent and claims agent in the Debtors' cases. Mr. Jacobs attests that BSI is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. * * * The Court approved the application on an interim basis. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Appoints Domenico De Sole as New Director ---------------------------------------------------- Delta Air Lines (NYSE:DAL) reported the election of Domenico De Sole to its Board of Directors, effective immediately. "We are delighted that Domenico De Sole is joining Delta's Board of Directors," said Jerry Grinstein, Delta's Chief Executive Officer. "He possesses a wealth of experience that will be very beneficial to Delta's Board." Mr. De Sole, 61, served as the President and Chief Executive Officer of Gucci Group, N.V., and Chairman of the Group's Management Board from 1995 to 2004, where he played a leading role in reestablishing the exclusivity and profitability of the Gucci brand. He joined Gucci in 1984 as Chief Executive Officer of Gucci America and in 1994 became Chief Operating Officer of Gucci Group. Prior to joining Gucci, Mr. De Sole was a partner with the law firm Patton, Boggs L.L.P. Mr. De Sole is a graduate of the University of Rome with a Law degree and earned a Master's Degree from Harvard Law School. Mr. De Sole serves on the Board of Directors of Bausch & Lomb, Incorporated, The Gap, Inc., TelecomItalia S.p.A. and is a member of the Harvard Law School Advisory Board. 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. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: NYSE to Halt Common Stock Trading on Thursday, Oct. 13 ----------------------------------------------------------------- Delta Air Lines has been advised by the New York Stock Exchange (NYSE) that its common stock -- ticker symbol DAL -- and its 8-1/8% Notes due July 1, 2039 -- ticker symbol DNT -- will be suspended from trading on the NYSE on Thursday, Oct. 13, 2005, and that the NYSE will submit an application to the Securities and Exchange Commission to delist these securities. Delta received written notification from the NYSE on Oct. 4, 2005, that the average closing price of Delta's common stock fell below the NYSE's continued listing minimum share price standard of $1.00 over a consecutive 30-trading-day period as of Oct. 3, 2005. This condition subjected Delta's securities to the NYSE's suspension and delisting procedures. Delta has informed the NYSE that, due to its recent Chapter 11 filing, it does not intend to attempt to cure this deficiency and will not oppose the suspension and delisting of its common stock and its 8-1/8% Notes due July 1, 2039. The Company expects these securities to be delisted from the NYSE upon approval by the Securities and Exchange Commission. Once suspended from trading on the NYSE, Delta's securities may be quoted in the "over-the- counter" market. Delta cannot predict what the ultimate value of its securities may be or whether security owners should expect any financial recovery in Delta's Chapter 11 proceedings. However, in most Chapter 11 cases, owners of equity securities receive little or no recovery of value from their investment. As a result, Delta urges that appropriate caution be exercised with respect to existing and future investments in Delta's securities. 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 li