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/raid1/www/Hosts/bankrupt/TCR_Public/051207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 7, 2005, Vol. 9, No. 290 Headlines ABRAXAS PETROLEUM: Discloses Planned $40 Million 2006 CapEx Budget ACE SECURITIES: Moody's Rates Class M-11 Sub. Certificates at Ba2 ALLIANCE IMAGING: Provides Financial Guidance for 2006 ALLIED HOLDINGS: Court Denies McConnells' Motion to Pursue Lawsuit AMACORE GROUP: Balance Sheet Upside-Down by $2.9 Mil. at Sept. 30 AMERICAN ITALIAN: A&Ms Jim Fogarty Replaces Timothy Webster as CEO AMERIQUEST'S MORTGAGE: Moody's Rates Class M-10 Sub. Certs. at Ba1 ARI NETWORK: Balance Sheet Upside-Down by $3.06 Mil. at Oct. 31 ATA AIRLINES: Plan Confirmation Period Extended to January 30 ATA AIRLINES: Liquidating Units Have Until Jan. 31 to File Plan BALLY TOTAL: Sues Liberation to Nullify Shareholder Proposal BALLY TOTAL: Clarifies Registration Docs. for 2.5M Common Shares BALLY TOTAL: Largest Shareholder Recommends Two Director Nominees BALLY TOTAL: Grants Stock Option to CFO C. Landeck Under 2005 Plan BANK OF AMERICA: Fitch Upgrades Low-B Ratings on 13 Cert. Classes C-BASS: Fitch Downgrades Rating on Class B-2 Certs. to BB from BBB CABLEVISION SYSTEMS: Loan Evaluation Prompts S&P to Review Ratings CALPINE CORP: Delisted from NYSE & New OTC Ticker Symbol is CPNL CENTURION GOLD: Incurs $2.04M Net Loss in Quarter Ending Sept. 30 CENVEO INC: S&P Holds CreditWatch Listing Until Strategies Review CIT RV: Net Losses Prompt S&P's Watch Negative on Class B Certs. CMS ENERGY: Fitch Affirms Low-B Debt Ratings After Routine Review COINMACH CORP: S&P Rates Proposed $645 Mil. Senior Sec. Loans at B COLLINS & AIKMAN: May Decide on Toyota Leases Until May 10 COOPER-STANDARD: ITT Acquisition Prompts S&P's Watch Negative DAYTON SUPERIOR: Sept. 30 Balance Sheet Upside-Down by $82 Million DELPHI CORP: Wants BofA's Motion for Adequate Protection Denied DELPHI CORP: Court Approves Supplier Contract Assumption Protocol DELPHI CORP: Court Denies Russell's Motion for Retainer Agreement DELTA AIR: Court Approves Sale of 11 Boeing Aircraft to ABX Air ENESCO GROUP: Appoints Lawrence Jennings as Head of European Unit ENTERPRISE PRODUCTS: Prices Public Offering of 4 Mil. Common Units FEMONE INC: Stockholders Deficit Tops $1 Million at Sept. 30 FEMONE INC: Amends Second Quarter Financial Statements FLYI INC: Receives Expressions of Interest in Auction Process FREEDOM COMMS: S&P Puts BB Rating on Planned $300M Tranche Loan GEORGETOWN STEEL: Plan Trust Pays Unsecured Creditors $7.5 Million GEOTEC THERMAL: Earns $3.4 Million of Net Income in Third Quarter GPS INDUSTRIES: Balance Sheet Upside-Down by $13 Mil. at Sept. 30 GREENPOINT NIM: Moody's Puts Ba2 Rating on Series 2005-HY1 Notes GSAA HOME: Moody's Puts Ba2 Rating on Class B-3 Sub. Certificates ICY SPLASH: Incurs $81,780 Net Loss in Quarter Ended September 30 IMAGEWARE SYSTEMS: Loss & Deficit Trigger Going Concern Doubt KAISER ALUMINUM: CII Carbon Balks at CNA & National Union Pact KMART CORP: Court Allows Angola Wire's Claim for $1.6 Million KMART CORP: Inks Expanded Agreement with Catalina Marketing KSBH LEADERS: Pays Unitholders Final Distribution of C$13.92/Unit LA PETITE: Case Summary & 17 Largest Unsecured Creditors LASALLE COMMERCIAL: S&P Places Low-B Ratings on $12.6 Mil. Certs. LE NATURE: S&P Assigns B Rating to $100 Mil. Senior Secured Loan LIFESTREAM TECH: Sept. 30 Balance Sheet Upside-Down by $7.6 Mil. LIQUIDMETAL TECH: Balance Sheet Upside-Down by $972K at Sept. 30 MCI INC: Fitch May Lift Senior Unsecured Debt Rating After Review MERRILL LYNCH: Moody's Rates Class B-5 Sub. Certificates at Ba2 MIRANT CORP: Court Okays Settlement Pact with City of Wyandotte MIRANT CORP: Names William P. von Blasingame as Caribbean SVP MQ ASSOCIATES: Moody's Cuts $97MM Discount Notes' Rating to Caa3 NOBEX CORPORATION: Biocon Eyes Intellectual Property Assets NTL INC: Virgin Mobile Buy-Out Plans Prompt S&P to Review Ratings OAK CREEK: FTI Consulting Approved as Financial Advisors PACER INTERNATIONAL: Moody's Raises Corporate Family Rating to Ba3 OAK CREEK: Wants to Hire Cushman & Wakefield as Appraisers PATHMARK STORES: Posts $18.3 Million Net Loss in Third Quarter PANTRY INC: Earns $25.4 Million of Net Income in Third Quarter PEACE ARCH: Aug. 31 Balance Sheet Upside-Down by CDN$4.2 Million PICK-UPS PLUS: Sept. 30 Balance Sheet Upside-Down by $3.9 Million PLIANT CORP: Proposed Exchange Offer Spurs S&P to Review Ratings QUICK MED: September 30 Balance Sheet Upside-Down by $480,388 ROBERT HARWELL: Case Summary & 7 Largest Unsecured Creditors SAINT VINCENTS: Can Use Sun Life's Cash Collateral Until Dec. 14 SAINT VINCENTS: Wants Open-Ended Deadline to Decide on Leases SAINT VINCENTS: May Assume National Union Insurance Policies SATELLITE ENT: Posts $729K Net Loss in Quarter Ended September 30 SPANSION TECHNOLOGY: Moody's Rates $400 Million Sr. Notes at Caa1 STAR GAS: Recapitalization Plan Prompts Fitch to Review Ratings STELCO INC: Board Approves Amended Restructuring Plan STELCO INC: Court Extends CCAA Stay Proceedings Until Dec. 12 STONE ENERGY: Davis Polk Releases Results of Independent Review STRUCTURED ASSET: S&P Affirms Low-B Ratings on Two Cert. Classes THINKPATH INC: Files 2005 Third Quarter Financial Results TSI TELSYS: Sells Assets to ProSync & Ceases All Operations TUPPERWARE CORP: Completes Buy of Sara Lee Direct Sell Business USURF AMERICA: Net Loss and Deficit Trigger Going Concern Doubt VENTAS INC: S&P Upgrades Corporate Credit Rating to BB+ from BB WET SEAL: Posts $6.5 Mil. Net Loss in 13-Weeks Ended Oct. 29, 2005 * Upcoming Meetings, Conferences and Seminars ********* ABRAXAS PETROLEUM: Discloses Planned $40 Million 2006 CapEx Budget ------------------------------------------------------------------ Abraxas Petroleum Corporation (AMEX:ABP) disclosed a 2006 capital expenditure budget of $40 million and issued guidance for the year. Individual projects that comprise the $40 million capital expenditure budget will be selected from the Company's large inventory of projects based on availability of drilling rigs and service equipment. Every project in inventory is located on existing leasehold in Texas and Wyoming and considered development in nature, with the vast majority being 100% owned and operated by the Company. Abraxas plans to fund the 2006 capital expenditure budget out of cash flow and availability under its revolving credit facility. Abraxas further provided the following operational and financial guidance for 2006: Production Annual 7.5 - 8.5 Bcfe Exit Rate (per day) 22 - 24 MMcfe Differentials off NYMEX Oil $ 1.00 Gas 5% Production Taxes 10% of revenue Direct Lease Operating Expenses (LOE) $ 1.10 per Mcfe General & Administrative (G&A) $ 0.55 per Mcfe Interest $ 2.00 per Mcfe Depreciation, Depletion & Amortization (D/D/A) $ 1.30 per Mcfe "Even though we remain in a tight environment in terms of available rigs and related services, we are optimistic about our ability to spend our 2006 capital expenditure budget of $40 million, a 25% increase over the 2005 budget. We will begin the year utilizing our own workover rigs for re-entry and re- completion projects, primarily in the Delaware Basin of West Texas, while we secure larger rigs for grass roots and deeper projects. As the selected projects are successfully completed and placed on-line, we anticipate a growing production profile in line with our guidance", commented Bob Watson, President and CEO. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploitation and production company with operations in Texas and Wyoming. At Sept. 30, 2005, Abraxas Petroleum Corporation's balance sheet showed a $27,185,000 stockholders' deficit compared to a $53,464,000 deficit at Dec. 31, 2004. ACE SECURITIES: Moody's Rates Class M-11 Sub. Certificates at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by ACE Securities Series 2005-HE7, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate (85%) and fixed-rate (15%) subprime mortgage loans originated by: * WMC (56%), * Countrywide (22%), and * others (22%, none of which originated more than 5%) and acquired by DB Structured Products. The ratings are based primarily on: * the credit quality of the loans; and * the protection from: -- subordination, -- overcollateralization, -- excess spread, and -- an interest rate swap agreement between the trust and Deutsche Bank, AG, as the swap provider (rated "Aa3" by Moody's). Moody's expects collateral losses to range from 5.45% to 5.95%. Wells Fargo Bank and Countrywide Home Loan Servicing will service the loans, and Wells Fargo Bank will act as master servicer. Moody's has assigned Wells Fargo Bank its servicer quality rating (SQ1) and Countrywide Home Loan Servicing its servicer quality rating (SQ1) as a primary servicer of subprime loans. The complete rating actions are: ACE Securities Home Equity Loan Trust Series 2005-HE7 Asset Backed Pass-Through Certificates * Class A-1A, rated Aaa * Class A-1B1, rated Aaa * Class A-1B2, rated Aaa * Class A-2A, rated Aaa * Class A-2B, rated Aaa * Class A-2C, rated Aaa * Class A-2D, rated Aaa * Class M-1, rated Aa1 * Class M-2, rated Aa2 * Class M-3, rated Aa3 * Class M-4, rated A1 * Class M-5, rated A2 * Class M-6, rated A3 * Class M-7, rated Baa1 * Class M-8, rated Baa2 * Class M-9, rated Baa3 * Class M-10, rated Ba1 * Class M-11, rated Ba2 ALLIANCE IMAGING: Provides Financial Guidance for 2006 ------------------------------------------------------ Alliance Imaging, Inc. (NYSE:AIQ) reported financial guidance for full year 2006. For full year 2006, the company expects revenue to range from $428 million to $438 million and Adjusted EBITDA to range from $138 million to $146 million. Paul S. Viviano, Chairman of the Board and Chief Executive Officer stated, "Alliance's 2006 performance will continue to be impacted by several industry-wide factors. Scan volumes are projected to continue to experience soft same store growth as acute care hospital volumes remain weak. Utilization management efforts by payers and insurers and increasing patient-related cost sharing programs are likely to persist through 2006 and will continue to impact demand. Further, Alliance's business will also continue to be impacted by overcapacity of imaging equipment in the marketplace, especially related to medical groups adding imaging capacity in their practice setting and to a lesser extent, the lingering effects of Hurricanes Katrina and Rita. Ongoing inflation pressures, including rising fuel costs and technologist transportation costs also impact our performance." Mr. Viviano also stated, "Alliance will continue to focus on efficiently operating our core mobile MRI business, expanding our national leading presence in providing PET and PET/CT services and adding new fixed site imaging centers. Alliance will continue to invest in clinical quality improvement programs and addressing the imaging related needs of our hospital partners and their medical staffs." Effective Jan. 1, 2006, Alliance will record stock option expense under the provisions of FAS 123(R). The Company estimates that net income will be reduced by approximately $0.03 per diluted share for non-cash stock-based compensation expense. Alliance expects 2006 capital expenditures to total approximately $75 million to $80 million. The 2006 capital expenditures guidance includes 10 to 15 fixed-site openings in 2006, a portion of which are planned to replace mobile service to the Company's current customers. In 2006, Alliance expects to purchase approximately 12 to 14 PET/CT systems, most of which will upgrade PET systems currently in service. In 2006, the Company expects to decrease long-term debt by approximately $40 million and decrease its cash and cash equivalents balance by approximately $13 million to $20 million. The Company's income tax rate for 2006 is expected to total approximately 42% of pretax income. Alliance's weighted average shares of common stock and common stock equivalents outstanding for 2006 is expected to be approximately 50.5 million shares. Reaffirming Full Year 2005 Guidance The Company reaffirms its financial guidance for full year 2005. Full year 2005 revenue is expected to range from $424.5 million to $428.5 million. Adjusted EBITDA is expected to range from $156.5 million to $161.0 million; and earnings per share to range from $0.34 to $0.40 per share. Capital expenditures are expected to range between $70 million and $75 million. The Company expects to open approximately 10 to 12 new fixed-sites during 2005. This guidance includes revenue and Adjusted EBITDA from the fixed-site center acquisitions in September 2005 and the PET Scans of America acquisition in October 2005. Alliance Imaging is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of systems deployed. Alliance provides imaging services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The Company had 497 diagnostic imaging systems, including 350 MRI systems and 58 PET or PET/CT systems, and over 1,000 clients in 44 states at September 30, 2005. At Sept. 30, 2005, Alliance Imaging, Inc.'s balance sheet showed a $43,334,000 stockholders' deficit compared to a $67,528,000 deficit at Dec. 31, 2004. ALLIED HOLDINGS: Court Denies McConnells' Motion to Pursue Lawsuit ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia denied Frederick and Norma McConnell's request to lift the automatic stay to allow their civil action against Allied Holdings, Inc., and its debtor-affiliates to proceed. The civil action, pending in the City of St. Louis Circuit Court, asserts product liability claims and seeks recovery of damages for severe personal injuries. Personal Injury Lawsuit On Jan. 26, 2000, Frederick McConnell, then age 62 and employed as a car hauler by Allied Systems, Ltd., was delivering vehicles to Riverport in St. Louis County, Missouri, for storage when he fell from the top of a Model 2877A Delavan car hauler while attempting to unload a Chevrolet Astro van. The 2877A Delavan car hauler was manufactured by Commercial Carriers, Inc., in 1996 and was owned by Allied Systems at the time of the accident. Before the Debtors' bankruptcy petition date, Frederick and Norma McConnell filed a civil action against the Debtors and other defendants in the City of St. Louis Circuit Court, asserting products liability claims and seeking recovery of damages for severe personal injuries. The McConnells allege the 2877A Delavan car hauler was defective and unreasonably dangerous and that various entities, including the Debtors, were negligent. Subsequently, the case was removed to the U.S. District Court for the Eastern District of Missouri. Rufus T. Dorsey, IV, Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, tells the Court that the Federal Court Action has been pending in the Missouri District Court for more than two and one-half years. "Substantial discovery has been conducted, and, at the time of Debtors' bankruptcy filing, discovery was 95% complete," Mr. Dorsey says. "The parties were in the process of submitting pretrial filings to the Missouri District Court, and a pretrial conference was set for August 10, 2005." However, Mr. Dorsey notes, as a result of the Debtors' Chapter 11 filing, the Federal Court Action has been stayed. Mr. Dorsey relates that no "great prejudice" will result to the Debtor from completion of the litigation process because continuing the stay will impose a hardship on the McConnells which considerably outweighs any hardship to the Debtor. Creditors Committee Objects The Official Committee of Unsecured Creditors believes that Frederick and Norma McConnell's request will divert the Debtors' resources and their senior management's attention, thus subjecting the Debtors to great liability early in the case based upon their insurance coverage. Jonathan B. Alter, Esq., at Bingham McCutchen, LLP, in Hartford, Connecticut, reminds Judge Drake that an overarching principle of the Bankruptcy Code is to provide for equitable and ratable distribution of the unsecured assets of the bankruptcy estate to all unsecured creditors of a debtor pursuant to a plan of reorganization. "However, where . . . a plan of reorganization has yet to be formulated, and litigating a prepetition claim of one unsecured creditor runs the risk of prematurely consuming material assets of the bankruptcy estate at the expense of other creditors, relief from the automatic stay should be denied," Mr. Alter contends. Mr. Alter argues that the insurance policy under which the McConnells assert their claim carries a $1,000,000 initial deductible. That is, he notes, the Debtors would need to pay from estate assets up to the first $1,000,000 of any judgment received by the McConnells in their prepetition litigation before the judgment would be otherwise covered by insurance. Clearly, Mr. Alter avers, the loss of substantial amounts this early in the Debtors' case would greatly prejudice the estates and potentially compromise any general unsecured recovery. In addition, Mr. Alter argues that the McConnells cite no evidence of potential hardship to them were the stay to remain in place other than the accompanying delay in pursuing its claim that would face any prepetition litigant. Mr. Alter reiterates that the insurance policy applicable to the McConnells' case carries an extremely high deductible, hence, the Debtors might have to self-insure against all or a substantial portion of any of its loss out of estate assets that would otherwise be employed toward equitably preserving value for all stakeholders. Given the nascence of the Debtors' Chapter 11 cases, Mr. Alter insists the balancing of the equities weighs in favor of preserving, rather than lifting, the automatic stay. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case No. 05-12515). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMACORE GROUP: Balance Sheet Upside-Down by $2.9 Mil. at Sept. 30 ----------------------------------------------------------------- The Amacore Group, Inc., delivered its quarterly report on Form 10-QSB for the quarter ending September 30, 2005, to the Securities and Exchange Commission on November 21, 2005. The company reported a $5,218,474 working capital deficiency at September 30, 2005, compared to a working capital deficiency of $6,045,646 at December 31, 2004. As of September 30, 2005, the company's balance sheet showed $2,552,034 in total assets and $5,470,959 in total liabilities. A full-text copy of the regulatory filing is available at no charge at http://researcharchives.com/t/s?39d Going Concern Doubt The company had incurred substantial losses in previous years, resulting in an accumulated deficit of $49.7 million at Sept. 30, 2005. These continuing losses raise substantial doubt about the company's ability to continue as a going concern. The notes to the company's 2004 financial statements included a statement to that effect. The company's auditors at Brimmer, Burek & Keelan LLP in Tampa, Florida, didn't disagree. The Amacore Group, Inc., markets vision care benefit plans and enhancements to plans provided by others. The Company's benefit plans and plan enhancements provide members and members of its plan sponsors (employers, associations and other organizations) the opportunity to obtain discounted eye care services and products from the Company's national network of ophthalmic physicians, optometrists, eyewear suppliers, etc. The Company changed its name from Eye Care International, Inc., to The Amacore Group, Inc. as of March 31, 2005. AMERICAN ITALIAN: A&Ms Jim Fogarty Replaces Timothy Webster as CEO ------------------------------------------------------------------ American Italian Pasta Company (NYSE: PLB) disclosed that Timothy S. Webster, Co-Chief Executive Officer, has resigned his employment with the Company and his membership on its Board of Directors, both effective Dec. 4, 2005. Jim Fogarty of Alvarez & Marsal, who has been serving as the company's Co-Chief Executive Officer since Sept. 29, 2005, has been designated Chief Executive Officer of the Company effective immediately. Mr. Fogarty joined Alvarez & Marsal in 1994 and currently serves as a Managing Director. Mr. Fogarty has worked in a variety of management and advisory roles in several industries, most recently serving in a senior executive position with Levi Strauss & Co. and prior to that as a senior executive of the Warnaco Group. Company Liquidity As of September 28, 2005, total debt was $281.5 million, including $276.7 million under its bank credit agreement. Total debt, less cash, stood at $273.4 million. As of September 28, 2005, the company had liquidity resources totaling approximately $20.9 million, reflecting availability of approximately $12.8 million under its revolving credit agreement and cash of approximately $8.1 million. The Company also notes that amounts owed to its suppliers and vendors are currently within established credit terms. The Company continues to expect that net cash flow to be generated from operations, combined with liquidity resources, will be sufficient to meet its expected operating needs for the upcoming fiscal year. In addition, the Company's core operations continued to generate positive cash flow during the fourth fiscal quarter ending September 30, 2005, not withstanding incremental costs incurred of approximately $3.5 million relating to the audit committee investigation and related matters disclosed by the Company in August 2005. Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- is a leading global professional services firm with expertise in guiding companies and public sector entities through complex financial, operational and organizational challenges. Employing a unique hands-on approach, the firm works closely with clients to improve performance, identify and resolve problems and unlock value for stakeholders. Founded in 1983, Alvarez & Marsal draws on a strong operational heritage in providing services including turnaround management consulting, crisis and interim management, performance improvement, creditor advisory, financial advisory, dispute analysis and forensics, tax advisory, real estate advisory and business consulting. A network of nearly 400 seasoned professionals in locations across the US, Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. Founded in 1988, Kansas-based American Italian Pasta Company is the largest producer and marketer of dry pasta in North America. The Company has five plants that are located in Excelsior Springs, Missouri; Columbia, South Carolina; Tolleson, Arizona; Kenosha, Wisconsin and Verolanuova, Italy. The Company has approximately 600 employees located in the United States and Italy. * * * On Sept. 15, 2005, the Company received a waiver from its lenders under its Credit Agreement dated July 16, 2001, as amended. AMERIQUEST'S MORTGAGE: Moody's Rates Class M-10 Sub. Certs. at Ba1 ------------------------------------------------------------------ Moody's Investors Service assigned a rating of Aaa to the senior certificates issued in Ameriquest's Mortgage Securities Inc., Pass-Through Certificates, Series 2005-R10 transaction, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by subprime mortgage loans originated through Ameriquest's retail channel -- Ameriquest Mortgage Company. The ratings are based primarily: * on the credit quality of the loans; and * on various forms of credit enhancement including: -- subordination, -- overcollateralization, -- excess interest, -- allocation of losses, and -- a swap agreement entered into for the benefit of the certificateholders. Moody's expects collateral losses to range from 4.00% to 4.50%. Ameriquest Mortgage Company will act as Master Servicer. Ameriquest had previously disclosed discussions with financial regulatory agencies or attorneys general offices of thirty states, regarding lending practices of AMC. ACC Capital Holdings Corporation, the parent of Argent and AMC, has recorded a provision of $325 million in its financial statements with respect to this matter. Moody's will continue to monitor the situation. The complete rating actions are: Issuer: Ameriquest Mortgage Securities Inc., Securities: Asset-Backed Pass-Through Certificates, Series 2005-R10. Master Servicer: Ameriquest Mortgage Company Issuer: Ameriquest Mortgage Securities Inc., Series 2005-R10 * Class A-1, Assigned Aaa * Class A-2A, Assigned Aaa * Class A-2B, Assigned Aaa * Class A-2C, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa2 * Class M-9, Assigned Baa3 * Class M-10, Assigned Ba1 ARI NETWORK: Balance Sheet Upside-Down by $3.06 Mil. at Oct. 31 --------------------------------------------------------------- ARI Network Services Inc. (OTCBB:ARIS) reported increased revenues for the first quarter ended October 31, 2005. First Quarter 2006 Highlights * revenues increased 7% to $3.5 million from $3.3 million for the first quarter of fiscal 2005; * operating income was $524,000 for the first quarter of fiscal 2006, a 7% decrease from operating income of $562,000 for the same period in the prior year; and * net income was $498,000 or $0.07 per diluted share in the first quarter of fiscal 2006, a 1% increase from net income of $494,000 or $0.08 per diluted share for the first quarter of fiscal 2005. "Our revenue growth was driven by a worldwide increase in our core catalog products and services, supported by a renewal rate of over 85%. And, although the numbers are still very small relative to the total business, we saw strong double-digit growth in our new Dealer Marketing Services area," said Brian E. Dearing, chairman and chief executive officer of ARI. Dearing said the lower operating income in the first quarter of fiscal 2006 was anticipated and reflected expenses for the marketing of new products, especially in the Dealer Marketing Services area, the expansion of the European operations and modest infrastructure investments. "We believe the expenses related to Dealer Marketing Services and our European operations are investments in our future growth. The Dealer Marketing Services product area leverages our strong customer base of manufactured equipment dealers by providing products that help these customers to market their businesses. In the European business, we have taken steps to strengthen the business and expand our presence in this major market, including introducing new products, adding experienced managers and staff, opening a new office in the Netherlands and repositioning the business to the dealer-centric model which has proven to be successful in North America," said Mr. Dearing. "Our financial position continues to be strong. We paid down debt by an additional $250,000 in the first quarter; our long-term debt will be paid off according to its terms on December 31, 2007. We have moved some of our cash into short-term commercial paper, and we have more cash and short-term securities than debt," added Mr. Dearing. Progress on Strategic Growth Initiatives "We are on track with our strategic growth initiatives for fiscal 2006. First, we are maintaining and enhancing our core electronic catalog business; our renewal rate remains over 85% and our recurring revenues are continuing to climb. Second, we are gaining traction with our new Dealer Marketing Services products, showing strong double-digit growth over last year. Third, our European operation showed 17% growth over last year and is positioned for continued growth in the future. Fourth, we are continually evaluating potential acquisition candidates that meet our criteria for accretive growth," added Mr. Dearing. Summary and Outlook "We had a good first quarter, with organic revenue growth and positive early signs on our growth initiatives. We continue to anticipate organic revenue growth in the high single digits for the balance of this fiscal year. We expect that operating income will be somewhat lower than last year as a result of our investments in initiatives to grow the business, primarily the Dealer Marketing Services product line and the European catalog business. We believe our investments in both of these areas will contribute to increased growth and profitability over the long term," said Mr. Dearing. ARI Network Services Inc. provides electronic parts catalogs and related technology and services to increase sales and profits for dealers in the manufactured equipment markets. ARI also provides dealer marketing services, including technology-enabled direct mail and a template-based dealer website service that makes it quick and easy for an equipment dealer to have a professional and attractive website. In addition, ARI e-Catalog systems support a variety of electronic pathways for parts orders, warranty claims and other transactions between manufacturers and their networks of sales and service points. ARI currently operates three offices in the United States and one in Europe and has sales and service agents in England and France providing marketing and support of its products and services. As of October 31, 2005, ARI Network's equity deficit narrowed to $3,057,000 from a $3,609,000 deficit at July 31, 2005. ATA AIRLINES: Plan Confirmation Period Extended to January 30 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana extends ATA Airlines, Inc., and its debtor-affiliates' exclusive period to seek confirmation for their plan to and including January 30, 2006. As previously reported in the Troubled Company Reporter on November 10, 2005, the Debtors sought the U.S. Bankruptcy Court for the Southern District of Indiana to extend their exclusive period to confirm their Joint Plan of Reorganization to and including January 30, 2006. The Reorganizing Debtors filed their Chapter 11 Plan and Disclosure Statement on September 30, 2005. Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, tells the Court that the Reorganizing Debtors remain engaged in arranging for new capital from a "New Investor" as referenced in the Plan and the Disclosure Statement. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Liquidating Units Have Until Jan. 31 to File Plan --------------------------------------------------------------- ATA Airlines debtor-affiliates, Ambassadair Travel Club, Inc., Amber Travel, Inc., and C8 Airlines, Inc., formerly known as Chicago Express Airlines, Inc., may file a plan or plans of liquidation to and including January 31, 2006, and the period for soliciting votes to accept or reject the Plans to and including April 3, 2006. The U.S. Bankruptcy Court for the Southern District of Indiana extended the exclusive periods at the Liquidating Debtors' behest. As previously reported in the Troubled Company Reporter on November 17, 2005, the Liquidating Debtors were currently focused on completing the transactions and financing associated with the Reorganizing Debtors' proposed reorganization. This task consumes most of the Reorganizing Debtors' resources and personnel. An administrative bar date has only recently passed for the estate of C8 and the Liquidating Debtors need time to analyze the claims to determine the administrative solvency of the estate. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) BALLY TOTAL: Sues Liberation to Nullify Shareholder Proposal ------------------------------------------------------------ Bally Total Fitness Corporation (NYSE:BFT) filed suit against Liberation Investments, L.P., Liberation Investments, Ltd., Liberation Investment Group LLC and Emanuel R. Pearlman in Delaware Chancery Court requesting that Liberation's recently announced stockholder proposal be declared illegal and invalid. The stockholder proposal, which the group has indicated it plans to introduce at the Company's annual shareholder meeting scheduled for January 26, 2006, seeks to, among other things, amend the Company's by-laws to give stockholders the power to remove the Company's chief executive officer. Bally's complaint alleges that the stockholder proposal, "purports to eliminate the ability of the Board of Directors . . . to appoint and remove management, violates the most fundamental concept of Delaware corporate law -- i.e., that boards of directors, not stockholders, manage the business and affairs of a corporation." The suit argues that in addition to violating Section 141(a) of the General Corporation Law which provides that the "business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors," the stockholder proposal also conflicts with Bally Total Fitness' Certificate of Incorporation, which explicitly authorizes the Board to amend the by-laws. Bally Total Fitness also filed a federal lawsuit in the U.S. District Court for the District of Delaware alleging that Liberation has filed various disclosure documents with the Securities and Exchange Commission that "contain materially false statements and fail to disclose material facts regarding (their) motives, intentions, and conflicts of interest resulting from their undisclosed associations" with prior management. As outlined in the complaint, "(t)hough Pearlman masquerades as a disinterested investor with the interests of all stockholders at heart," the fact is that he has long been associated with Bally's former CEO, Lee Hillman, including serving as a consultant to Bally's management during Mr. Hillman's tenure. It was during that tenure that Mr. Hillman has been deemed by Bally's Audit Committee to have created a "culture that encouraged aggressive accounting," which ultimately led to the Company's financial restatements issued on November 30, 2005. The Bally complaint contends that Mr. Pearlman and Mr. Hillman have remained business partners, with Mr. Hillman being part of an investment group that backed Liberation. Moreover, the complaint contends that Liberation's disclosure documents, which include the group's stockholder proposal, also "misrepresent the true purpose and effect of the Stockholder Proposal and fail to disclose the fact that the Stockholder Proposal is illegal on its face and invalid under Delaware law and Bally's certificate of incorporation." As such, the federal lawsuit seeks to, among other things, enjoin Liberation from continuing to disseminate false and misleading information in direct violation of federal securities laws, including applicable proxy laws. It also seeks to enjoin Liberation from representing to shareholders that the Liberation stockholder proposal is valid and from soliciting proxies for this proposal. According to the federal complaint, "Over the course of the last eighteen months, (Liberation) has engaged in a sustained operation to badger the Company and its Board of Directors, employing a letter-writing and public relations campaign to disparage the Company's management, structure, intentions, and business plans. (Liberation) has amended their Schedule 13D filings no less than fourteen times during that period to update their ever-evolving positions regarding the Company, and have employed proxy campaigns (both real and threatened), demand letters, and lawsuits to attempt to get their way." Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed the Caa1 corporate family (formerly senior implied) rating and debt ratings of Bally Total Fitness Holding Corporation. The affirmation reflects continued high risk of default and Moody's estimate of recovery values of the various classes of debt in a default scenario. Moody's said the ratings outlook remains negative. Moody's affirmed these ratings: * $175 million senior secured term loan B facility due 2009, rated B3 * $100 million senior secured revolving credit facility due 2008, rated B3 * $235 million 10.5% senior unsecured notes (guaranteed) due 2011, rated Caa1 * $300 million 9.875% senior subordinated notes due 2007, rated Ca * Corporate family rating, rated Caa1. BALLY TOTAL: Clarifies Registration Docs. for 2.5M Common Shares ---------------------------------------------------------------- Bally Total Fitness (NYSE:BFT) clarified its Form S-8 Registration Statement filed on Dec. 1, 2005, with the Securities and Exchange Commission with respect to the 2.5 million shares of common stock registered for resale under the Company's 1996 Long-Term Incentive Plan, and 600,000 shares of common stock registered for resale under the Bally Total Fitness Holding Corporation Employment Inducement Award Equity Incentive Plan. The Company said that all of the shares registered on the Form S-8, with the exception of 121,461 shares, had previously been issued or are subject to options previously issued under the plans. All issuances of shares under the plans to date are reflected in the Company's Annual Report on Form 10-K filed on Nov. 30, 2005. As stated in the 10-K, the total shares outstanding on Nov. 29, 2005 was 37,940,480. As of Friday, 62,000 shares remain available for issuance under the Inducement Plan and 59,461 shares remain available for issuance under the Incentive Plan. Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed the Caa1 corporate family (formerly senior implied) rating and debt ratings of Bally Total Fitness Holding Corporation. The affirmation reflects continued high risk of default and Moody's estimate of recovery values of the various classes of debt in a default scenario. Moody's said the ratings outlook remains negative. Moody's affirmed these ratings: * $175 million senior secured term loan B facility due 2009, rated B3 * $100 million senior secured revolving credit facility due 2008, rated B3 * $235 million 10.5% senior unsecured notes (guaranteed) due 2011, rated Caa1 * $300 million 9.875% senior subordinated notes due 2007, rated Ca * Corporate family rating, rated Caa1. BALLY TOTAL: Largest Shareholder Recommends Two Director Nominees ----------------------------------------------------------------- Bally Total Fitness Corporation (NYSE:BFT) intends to include two nominees for director, Charles Burdick and Barry R. Elson, who were referred to the company by Pardus Capital Management, on its slate for the January 2006 shareholder meeting. By slating two nominees recommended by its largest shareholder, the Company seeks to avoid the expense and distraction of a proxy fight. The Company said it is also re-nominating Eric Langshur, current board member since December 2004 and Chairman of its Audit Committee, for a three-year term that will expire in 2008. Mr. Langshur's leadership was a key factor in the completion of the Company's recent financial filings on Nov. 30, 2005. Bally also announced that its board of directors has appointed Steven S. Rogers and Adam Metz to serve on the board in seats left vacant by the resignation of two Bally directors earlier this year. Mr. Rogers and Mr. Metz have been appointed to fill vacancies in Classes I and II, respectively, of Bally's classified board of directors. These director classes are scheduled for election in late 2006 and in 2007. Mr. Rogers will serve on the Compensation Committee and Nominating and Corporate Governance Committee and Mr. Metz will serve on the Audit Committee. "Each of these candidates was evaluated by Russell Reynolds, and all of them bring outstanding backgrounds in business, and a wealth of knowledge and experience to the Bally board. We look forward to their perspective and independent guidance in supporting Bally's management team as we move the company forward," said James McAnally, M.D., chairman of the Nominating Committee. Background on Nominees and Appointments Charles Burdick is Chief Executive Officer of Hit Entertainment, a London-based production company of children's TV programming for distribution worldwide. From 1996 to 2004 he served as Chief Executive Officer of Telewest Communications Group Ltd. of Surrey, England and from 1996 to 2002 he was the company's Chief Financial Officer. From 1990 to 1996, he was Vice President, Finance and Assistant Treasurer at U.S. West in Englewood, CO, and from 1987 to 1990 he was Assistant Treasurer, International for Time Warner, Inc. Barry Elson is Acting Chief Executive Officer of Telewest Global, Inc. (NASDAQ:TLWT), the successor to Telewest Communications plc. He was Chief Operating Officer of UrbanMedia Communications Corporation in Alpharetta, Ga., between 2000 and 2003, and was president of ConectIV in Wilmington, Del., from 1997 to 2000. From 1983 to 1997, he was Executive Vice President at Cox Communications in Atlanta, Ga. Eric Langshur is the founder and CEO of TLContact, Inc., a privately held company that delivers innovative patient communications and education services to the healthcare industry. Prior to starting TLContact in 2000, he served as President of Bombardier Aerospace, CAS, where he lead commercial aerospace service operations for a world leader in the design and manufacture of innovative aviation products and services for the business, regional and amphibious aircraft markets. Before Bombardier, Langshur spent 13 years with United Technologies Corporation, where he held a variety of senior management and turnaround positions at Hamilton Sundstrand, Pratt & Whitney and UTC's corporate office. Steven Rogers is a professor of finance and management at the Kellogg Graduate School of Management at Northwestern University, Evanston, Ill. He is also a director at AMCORE Financial, Inc. (NASD:AMFI), Duquesne Light Holdings, Inc. (NYSE:DQE), S.C. Johnson & Son, Inc., and SUPERVALU, Inc. (NYSE:SVU). Mr. Rogers serves on the Finance and Audit Committees of Duquesne Light and SUPERVALU. He serves on the Finance Committee at AMCORE. Mr. Rogers has a nationwide reputation as a speaker on business topics and was named one of the top 12 entrepreneurship professors at U.S. graduate schools by BusinessWeek. From 1989 to 1995, he was owner and president of a lighting equipment and lampshade manufacturing company, which became a Harvard Case Study. He sold the company when he joined the Northwestern faculty. His earlier business experience includes work at Cummins Engine, Consolidated Diesel, and Bain Consulting Group. Mr. Rogers is a graduate of Harvard Business School and is a member of Harvard Business School's Visiting Committee. Adam Metz is co-founding partner of Polaris Capital, LLC, a Chicago-based consulting and real estate investment firm. He is also a director at General Growth Properties (NYSE:GGP), a real estate investment trust (REIT) and the second-largest owner/operator of malls in the U.S., and Chiasso, a contemporary home furnishing company. At General Growth Properties, he is a member of the Audit Committee, and from 2003 to 2004 served as Chairman of the Audit Committee at AMLI, a publicly traded REIT. Before founding Polaris, Mr. Metz was the Executive Vice President and Chief Investment Officer of Rodamco North America, which owned approximately $6.5 billion in real estate assets, primarily regional shopping malls. Prior to Rodamco, Mr. Metz was President of Urban Shopping Centers, a NYSE-listed real estate investment trust (REIT) that was purchased by Rodamco in November 2000. Prior to his position as President, Mr. Metz served as the Chief Financial Officer of Urban Shopping Centers. Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed the Caa1 corporate family (formerly senior implied) rating and debt ratings of Bally Total Fitness Holding Corporation. The affirmation reflects continued high risk of default and Moody's estimate of recovery values of the various classes of debt in a default scenario. Moody's said the ratings outlook remains negative. Moody's affirmed these ratings: * $175 million senior secured term loan B facility due 2009, rated B3 * $100 million senior secured revolving credit facility due 2008, rated B3 * $235 million 10.5% senior unsecured notes (guaranteed) due 2011, rated Caa1 * $300 million 9.875% senior subordinated notes due 2007, rated Ca * Corporate family rating, rated Caa1. BALLY TOTAL: Grants Stock Option to CFO C. Landeck Under 2005 Plan ------------------------------------------------------------------ Bally Total Fitness Holding Corporation (NYSE:BFT) granted stock options and restricted stock awards under Bally's 2005 Inducement Plan to Carl J. Landeck, Senior Vice President and Chief Financial Officer. Mr. Landeck was granted 23,000 options and 55,000 shares of restricted stock, subject to vesting conditions. The stock options vest in three equal annual installments on the anniversary of the grant date and are subject to forfeiture in the event of resignation or termination for cause prior to vesting. The restricted stock has a four-year cliff vesting provision and vests in full upon a change in control or termination of employment by the Company without cause. In accordance with NYSE Rule 303A.08, the restricted stock and stock option grants require a public announcement of the awards and written notice to the NYSE. Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed the Caa1 corporate family (formerly senior implied) rating and debt ratings of Bally Total Fitness Holding Corporation. The affirmation reflects continued high risk of default and Moody's estimate of recovery values of the various classes of debt in a default scenario. Moody's said the ratings outlook remains negative. Moody's affirmed these ratings: * $175 million senior secured term loan B facility due 2009, rated B3 * $100 million senior secured revolving credit facility due 2008, rated B3 * $235 million 10.5% senior unsecured notes (guaranteed) due 2011, rated Caa1 * $300 million 9.875% senior subordinated notes due 2007, rated Ca * Corporate family rating, rated Caa1. BANK OF AMERICA: Fitch Upgrades Low-B Ratings on 13 Cert. Classes ----------------------------------------------------------------- Fitch Ratings has taken rating actions on these Bank of America RESI mortgage pass-through certificates: Series 2002-A: -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AAA'; -- Class B-5 affirmed at 'AAA'; -- Class B-6 affirmed at 'AAA'; -- Class B-7 affirmed at 'AAA'; -- Class B-8 affirmed at 'AAA'; -- Class B-9 upgraded to 'AA+' from 'AA'; -- Class B-10 upgraded to 'AA-' from 'A+'; -- Class B-11 upgraded to 'A-' from 'BBB+'. Series 2003-A: -- Class B-3 upgraded to 'AAA' from 'AA+'; -- Class B-4 upgraded to 'AAA' from 'AA'; -- Class B-5 upgraded to 'AA' from 'AA-'; -- Class B-6 upgraded to 'AA-' from 'A'; -- Class B-7 upgraded to 'A' from 'BBB'; -- Class B-8 upgraded to 'A-' from 'BBB-'; -- Class B-9 upgraded to 'BBB+' from 'BB+'; -- Class B-10 upgraded to 'BBB' from 'BB'; -- Class B-11 upgraded to 'BB' from 'B'. Series 2003-B: -- Class B-3 upgraded to 'AA' from 'A'; -- Class B-4 upgraded to 'AA-' from 'A-'; -- Class B-5 upgraded to 'A' from 'BBB'; -- Class B-6 upgraded to 'A-' from 'BBB-'; -- Class B-7 upgraded to 'BBB' from 'BB'; -- Class B-8 upgraded to 'BBB-' from 'BB-'; -- Class B-9 upgraded to 'BB+' from 'B+'; -- Class B-10 upgraded to 'B+' from 'B'; -- Class B-11 upgraded to 'B' from 'B-'. Series 2003-C: -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'A-'; -- Class B-5 affirmed at 'BBB'; -- Class B-6 affirmed at 'BBB-'; -- Class B-7 affirmed at 'BB'; -- Class B-8 affirmed at 'BB-'; -- Class B-9 affirmed at 'B+'; -- Class B-10 affirmed at 'B'; -- Class B-11 affirmed at 'B-'. Series 2003-CB1: -- Class B-3 upgraded to 'AAA' from 'A'; -- Class B-4 upgraded to 'AA' from 'A-'; -- Class B-5 upgraded to 'AA-' from 'BBB'; -- Class B-6 upgraded to 'A' from 'BBB-'; -- Class B-7 upgraded to 'BBB' from 'BB'; -- Class B-8 upgraded to 'BBB-' from 'BB-'; -- Class B-9 upgraded to 'BB' from 'B+'; -- Class B-10 upgraded to 'B+' from 'B'; -- Class B-11 upgraded to 'B' from 'B-'. Series 2003-D: -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'A-'; -- Class B-5 affirmed at 'BBB'; -- Class B-6 affirmed at 'BBB-'; -- Class B-7 affirmed at 'BB'; -- Class B-8 affirmed at 'BB-'; -- Class B-9 affirmed at 'B+'; -- Class B-10 affirmed at 'B'; -- Class B-11 affirmed at 'B-'. The RESI (Real Estate Synthetic Investments) transactions are synthetic balance sheet credit-linked securitizations that reference diversified portfolios of primarily jumbo, A-quality, fixed-rate, first lien residential mortgage loans. The ratings are based on the credit quality of the respective referenced portfolio, credit enhancement provided by subordination for each tranche, the financial strength of Bank of America, N.A., as the swap counterparty, and the legal structure of the transaction. As of the November 2005 distribution date, the seasoning of the transactions range from 22 to 34 months and the pool factors range from 3% to 67%. At origination, the majority of the collateral in the reference portfolios was concentrated in the State of California, and the weighted average FICO score was approximately 735. The primary servicer for all transactions is Wells Fargo Home Mortgage, Inc., which has a servicer rating of 'RPS1' by Fitch. The collateral in the reference portfolios on these deals has performed well since origination. Despite moderate delinquency levels, realized losses have been minimal and credit enhancement levels have been consistently rising. As a result of this, many classes were upgraded. The upgrades reflect an improvement in the relationship between credit enhancement and future loss expectations and affect approximately $531.73 million in outstanding certificates. For all upgraded tranches, credit enhancement has increased, in some cases as much as 5 times initial levels. The affirmations reflect stable credit enhancement levels and future loss expectations and affect approximately $542.88 million in outstanding certificates. C-BASS: Fitch Downgrades Rating on Class B-2 Certs. to BB from BBB ------------------------------------------------------------------ Fitch Ratings has affirmed four and downgraded two classes from C-BASS mortgage loan asset-backed certificates, series 2003-RP1: -- Classes A, AIO affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class B-1 downgraded to 'BBB' from 'BBB+'; -- Class B-2 downgraded to 'BB' from 'BBB'. The trust consists primarily of one- to four-family, adjusted-rate and fixed-rate mortgage loans, FHA insured and VA guaranteed mortgage loans, manufacturing housing installment contracts or installment loan agreements secured by first liens and second liens on residential real properties. The mortgage loans include: * loans, which had defaulted in the past and are re-performing or are performing under the provisions of a bankruptcy plan or a forbearance plan, or * loans, which are performing under the terms of the related original notes or such notes as modified. At issuance, approximately 90% of the pool was identified as re-performing or sub-performing. The loans had a weighted average seasoning of 54 months at issuance. The affirmations reflect adequate relationships of credit enhancement consistent to future loss expectations and affect approximately $40 million in outstanding certificates. The negative rating actions: * reflect deterioration in the relationship of CE to future loss expectations and * affect approximately $4.3 million of outstanding certificates. For the past 12 months, losses have exceeded excess spread and as a result the overcollateralization has been steadily declining. While expectations were that excess spread would cover initial losses to the pool, the increasing LIBOR rates have resulted in a tighter spread and higher net monthly losses. Cumulative losses to date have been higher than expected and were 6.54% of the initial pool balance as of the November distribution date. Fitch expects losses to continue to generally exceed excess spread in future months. C-BASS ABS, LLC deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. Litton Loan Servicing LP, rated 'RSS1' by Fitch acts as servicer for this transaction. CABLEVISION SYSTEMS: Loan Evaluation Prompts S&P to Review Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its long-term ratings for Bethpage, New York-based cable TV operator Cablevision Systems Corp., including 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were placed June 20, 2005. The 'B-2' short-term rating on the company remains on CreditWatch with developing implications. This CreditWatch update follows Cablevision's Dec. 2 8K filing, announcing that it is evaluating a new CSC Holdings Inc. credit facility of up to $5.5 billion, secured by the stock of certain subsidiaries. The new credit facility would be used to refund and replace the existing CSC Holdings credit facility, provide the funds for the potential $3 billion special dividend, and provide for up to $1 billion of initially undrawn revolving credit availability. "We indicated on Dec. 2 that the current 'BB' corporate credit rating can absorb the fully debt-financed $3 billion special shareholder dividend that is being considered by the Cablevision board of directors, if the company addresses its approximate $1.3 billion June 2006 bank maturity," said Standard & Poor's credit analyst Catherine Cosentino. "When the company refinances this obligation, we expect the corporate rating to be affirmed and removed from CreditWatch. However, given the expected magnitude of additional secured debt, the unsecured debt at CSC Holdings Inc. -- currently rated 'BB-' -- would be lowered an additional notch below the corporate credit rating, to 'B+'." The rating outlook is expected to be negative, reflecting the significant increase in leverage due to the potential dividend, which would delay the previously anticipated improvement in Cablevision's financial profile due to ongoing growth in operating cash flows from its cable TV and other businesses. Pro forma for the potential special dividend, the company would have about $12 billion of total debt outstanding. The ratings reflect Cablevision's aggressive financial policy, with debt to EBITDA expected to be around 7.7x on an operating lease-adjusted basis for 2005, including contractual purchase commitments. This is partially offset by the high investment-grade business risk characteristics of the company's cable TV business, which comprises 3 million basic subscribers in the metropolitan New York/New Jersey area. CALPINE CORP: Delisted from NYSE & New OTC Ticker Symbol is CPNL ---------------------------------------------------------------- Calpine Corporation (NYSE: CPN) was notified by the New York Stock Exchange (NYSE) that the company's common stock will no longer be traded on the NYSE. Shares in Calpine now trade over the counter under the CPNL ticker symbol. The NYSE attributed its decision to suspend trading to the abnormally low selling price of Calpine's common stock and the company's current financial condition. 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 and in three Canadian provinces and is building a plant in Mexico. Calpine was founded in 1984. As reported in the Troubled Company Reporter, Calpine Corp. has until January 22, 2006, to restore a $313 million deposit. Calpine has suggested it won't have the funds available, and has warned that a chapter 11 filing is possible. Fitch, S&P and Moody's have placed their junk ratings on all of Calpine's second- lien and unsecured debt obligations. CENTURION GOLD: Incurs $2.04M Net Loss in Quarter Ending Sept. 30 ----------------------------------------------------------------- Centurion Gold Holdings, Inc., filed its second quarter financial statements for the three months ended Sept. 30, 2005. The company reported a $2,040,921 net loss on $502,380 of revenues for the three months ended Sept. 30, 2005. At Sept. 30, 2005, the company's balance sheet showed $21,518,196 in total assets, $12,100,573 in total liabilities and $9,417,623 in stockholders' equity. The company's Sept. 30 balance sheet also showed strained liquidity with $305,045 in current assets available to satisfy $3,152,338 of current liabilities coming due within the next 12 months. A full-text copy Centurion Gold Holdings, Inc.'s second quarter financial statements is available at no charge at http://ResearchArchives.com/t/s?3a1 Going Concern Doubt Webb & Company, PA, expressed substantial doubt about the Company's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended March 31, 2005. The auditor points to the Company's net loss from operations of $5,802,597, $985,134 of cash used in operations, and a working capital deficiency of $2,835,980. Despite the auditor's negative going-concern opinion, the Company's management believes there are sufficient financial resources to meet Company obligations for at least the next twelve months. Material Weakness Audit of the Company's financial records has revealed material weaknesses that require management attention. Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of June 30, 2005, based on relevant criteria. The Board of Directors has appointed an accounting firm, Horwath Leveton Boner in South Africa to implement a coordinated accounting strategy, ensuring continuity ,accuracy and controls, and to report to an SEC compliant accountant in the United States who will do the consolidation of the accountants for the auditing firm to audit. The Board will appoint the accountant in the United States shortly and will also appoint a full time accountant locally in South Africa with mining accounting experience to implement controls and procedures for all the operations as laid down by Horwath Leveton Boner. Centurion Gold Holdings, Inc. -- http://www.centuriongold.com/-- is the only South African junior gold mining company publicly listed in the United States. The Company is executing a roll-up strategy acquiring proven mineral assets, "growth through acquisition;" these assets consist of near revenue stream and existing low cost production operations with turnaround opportunities. Based in South Africa, the Company is ideally suited to exploit new legislation implemented by the government in May 2004. This legislation enforces a "use it or lose it" strategy, whereby all mining claims must be prospected within a designated time frame, otherwise, such prospects revert to the state, thereby creating never before seen opportunities, particularly for smaller companies like Centurion. CENVEO INC: S&P Holds CreditWatch Listing Until Strategies Review ----------------------------------------------------------------- The ratings on Cenveo Inc., including the 'B+' corporate credit rating, remain on CreditWatch with negative implications pending a review of the company's long-term operating and financial strategies. Following Cenveo's September 2005 announcement that it had reached an agreement with Burton Capital Management LLC and Goodwood Inc. to end the company's proxy contest, Cenveo: * approved a new board of directors, * hired a new management team, * publicly reported it plans to take meaningful additional cost-cutting actions over the intermediate term, and * potentially sell its profitable Canadian envelope business and repay debt balances with part of the proceeds. Still, the Englewood, Colorado-based commercial printer had almost $880 million in lease-adjusted debt outstanding as of September 2005. Standard & Poor's will resolve its CreditWatch listing following a review of the company's long-term strategic plan for operations and near-term plans for potential asset sales and debt reduction. If our review determines that a downgrade is appropriate, it would be limited to one notch. CIT RV: Net Losses Prompt S&P's Watch Negative on Class B Certs. ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class B and the certificate class issued by CIT RV Trust 1998-A on CreditWatch with negative implications. The CreditWatch placements reflect higher-than-expected net losses and the continued dissipation of credit support. As of Oct. 31, 2005, the series' reserve account balance stood at $573,786, which has been reduced on average by $256,375 per month over the past three months. The 'AAA' rating on the class A-5 remains unchanged and is not affected by these rating actions. Standard & Poor's will resolve these CreditWatch placements following a detailed review of the credit worthiness of each instrument. Ratings Placed On Creditwatch Negative CIT RV Trust 1998-A Rating Class To From ----- -- ---- B A/Watch Neg A Certs B-/Watch Neg B- Other Outstanding Rating CIT RV Trust 1998-A Class Rating ----- ------ A-5 AAA CMS ENERGY: Fitch Affirms Low-B Debt Ratings After Routine Review ----------------------------------------------------------------- Fitch Ratings has affirmed the outstanding debt ratings for CMS Energy Corp. and its regulated electric and gas subsidiary, Consumers Energy Co.: CMS -- Senior secured bank loan at 'BB+'; -- Senior unsecured debt at 'BB-'; -- Preferred stock at 'B-'; -- Issuer default rating at 'B+'. Consumers -- Senior secured debt at 'BBB-'; -- Senior unsecured debt at 'BB'; -- Preferred stock at 'BB-'. The Rating Outlook for both companies is Stable. Approximately $7.4 billion of debt is affected. The ratings affirmations are the result of a routine review. As a result of recently implemented IDR methodology and recovery analysis, Fitch revised upward the senior secured bank loan and unsecured debt ratings of CMS and revised downward the preferred stock rating on Nov. 7, 2005. This ratings revision reflects expected recovery of 100% on the secured bank loan and 62% for the unsecured bondholders. The ratings for CMS are primarily supported by the stable cash flows of Consumers, as CMS is highly dependent on the utility for cash distributions to service parent debt obligations. Consumers benefits from solid stand-alone credit metrics, a low business risk profile, and an improving regulatory environment in Michigan. Any deterioration of credit quality at the utility would have a negative ratings impact on CMS. The Stable Outlook for Consumers takes into consideration Fitch's expectation that the company will receive reasonable outcomes to its rate filings, including an increased billing factor for the gas cost recovery mechanism to accommodate higher gas costs. CMS continues to hold investments in various international assets, primarily power plants and natural gas pipelines in Latin America and the Middle East. While some of these projects, such as those in the UAE and Morocco, are cash flow positive and dividend up approximately $100 million in distributions per year, assets in Latin America have been written down and will be difficult to divest, due to the existing economic and political environment in the region. Rating concerns facing CMS and Consumers relate to: * the continued high levels of consolidated debt relative to cash flows, * the exposure of the regulated utility to a sluggish economy in Michigan - in particular the declining automotive sector, and * the increased business and financial risks associated with the international operations. Consumers receives about 3% of total electric revenues from a contract with GM and Delphi. The recent plant-closing announcement will shut down two customers from Consumers; however, this will be partially mitigated by expansions from other industrial customers. CMS' consolidated credit ratios are slightly weak for the 'BB-' category, with adjusted EBITDA to interest at 2.3 times and cash flow coverage at 2.4x for the 12 month period ended Sept. 30, 2005. Credit ratios are forecasted to remain at current levels over the next few years. Consolidated debt leverage, as measured by the ratio of debt to adjusted EBITDA, is high at 6.1x at Sept. 30, 2005, and is not projected to decline materially over the next few years. CMS has embarked on a program to lower parent debt levels over the next three years through subsidiary cash dividends, tax sharing, and restructuring efforts. A meaningful reduction in leverage and subsequent improvement in credit measures would lead to a positive rating action. CMS plans to sell the Palisades nuclear power plant and will establish a competitive bid process with an anticipated close in 2007. Fitch notes that Consumers plans to enter into a long-term purchase power agreement with the new owner to continue to receive power. A failure to do so would cause the company to seek alternative power procurement options. In the third quarter of 2005, CMS recorded a $385 million after-tax impairment charge related to Consumers' 49% ownership interest in Midland Cogeneration Venture. Fitch does not expect the charge to have an adverse effect on CMS' near-term liquidity position. The MCV charge will have an impact on the financing of and equity calculation for Consumers. The first mortgage debt the utility will be able to issue will be limited to $298 million over the next 12 months; however, Fitch expects Consumers to be able to address any liquidity needs with either second mortgage bonds, springing lien bonds, or even unsecured debt. While it is unlikely that the write-off will be addressed in the current electric rate case, given how far the case has progressed, going forward there is a potential risk that the Michigan Public Service Commission will factor in the adjusted capital structure in its rate making decisions. CMS is a holding company whose primary subsidiary is Consumers, a regulated electric and gas utility serving more than 3.4 million customers in Western Michigan. CMS also has operations in natural gas pipelines and independent power production. COINMACH CORP: S&P Rates Proposed $645 Mil. Senior Sec. Loans at B ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' rating and a recovery rating of '2' to Coinmach Corp.'s proposed $645 million senior secured credit facilities, indicating the expectation of substantial recovery of principal in the event of a payment default. Net proceeds from the credit facilities will be utilized to refinance the company's existing senior secured credit facilities and its outstanding $324.5 million senior unsecured notes due 2010, which are callable Feb. 1, 2006. The bank loan rating and accompanying analysis are based on preliminary documentation and subject to review once final documentation has been received. In addition, Standard & Poor's revised its outlook on Coinmach Service Corp. to stable from negative. At the same time, Standard & Poor's affirmed its existing ratings on the Plainview, New York-based laundry services supplier, including its 'B' corporate credit rating. The 'CCC+' rating on Coinmach's senior unsecured notes will be withdrawn upon completion of the proposed transaction. Pro forma for the transaction, CSC will have about $710 million of debt outstanding as of Sept. 30, 2005. For analytical purposes, Standard & Poor's consolidates Coinmach with its sister companies and bases its ratings conclusion on an operational and financial review of CSC. The outlook revision reflects CSC's: * improved financial flexibility following the refinancing because it will extend the company's debt maturities, * lower annual debt amortization requirements and interest expense, and * provide more cushion under its bank financial covenants. COLLINS & AIKMAN: May Decide on Toyota Leases Until May 10 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan directs Collins & Aikman Corporation and its debtor-affiliates to file pleadings necessary to assume or reject certain equipment leases on or before May 10, 2006. Toyota Motor Credit Corporation reserves the right to seek a reduction of the time within which the Debtors must assume or reject the Leases from the Court by filing a motion with proper notice to parties-in-interest. The Debtors reserve the right to seek an extension of the time within which they must assume or reject the Leases by filing a motion with the Court with proper notice to parties-in-interest. Toyota will have the right to inspect the equipment, which is subject to the Leases, prior to May 10, 2006, in accordance with the relevant terms and conditions of the Leases. As reported in the Troubled Company Reporter on Aug. 15, 2005, Toyota asks the Court to grant it administrative expense claims against the Debtors for their postpetition use of Toyota's Equipment: Equipment Rate per month --------- -------------- Forklifts $17,723 Forklifts 14,428 Forklifts 15,648 Forklifts and Walkie 10,011 Forklift 23,936 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. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) COOPER-STANDARD: ITT Acquisition Prompts S&P's Watch Negative ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Cooper-Standard Automotive Inc., including the company's 'BB-' corporate credit rating and its other debt ratings, on CreditWatch with negative implications. The listing follows the announcement that Cooper-Standard has signed a definitive agreement to acquire the fluid-handling systems business of ITT Industries Inc. (BBB+/Stable/A-2) in a transaction valued at $205 million. Standard & Poor's believes that Cooper-Standard's credit protection measures are already weak for the rating, notwithstanding the planned acquisition, and the company's credit profile will likely worsen, since this large transaction will be financed with debt. "The CreditWatch listing will be resolved after Standard & Poor's meets with management and analyzes the company's plans for financing the transaction, its future financial policy, and the cash flow implications of the acquisition," said Standard & Poor's credit analyst Nancy C. Messer. The transaction with ITT is expected to close in the first quarter of 2006. The proposed acquisition is consistent with Cooper-Standard's business strategy and its previously articulated objective to expand each of its three business segments through opportunistic acquisitions. ITT's fluid-handling business makes steel and plastic tubing for fuel and brake lines used by automobile manufacturers in the U.S. and Europe. In 2004, this business had revenues of $437 million. Cooper-Standard is a global manufacturer of fluid-handling systems, body-sealing systems, and active and passive vibration control systems for the automotive industry. It is the largest North American and global supplier of automotive sealing products, and more than half of its products hold No. 1 or No. 2 market positions. The company, which is controlled by unrated GS Capital Partners 2000 LP and Cypress Group LLC, had total balance-sheet debt of $905 million at Sept. 30, 2005. The current ratings on the company reflect its weak business risk profile and aggressive financial risk profile, characterized by high leverage and weak cash flow protection. Industry conditions will remain challenging in the fourth quarter of 2005 and next year. Nearly 60% of Cooper-Standard's existing revenue depends on sales to General Motors Corp. and Ford Motor Corp. Both of these companies are steadily losing market share and have produced significantly lower vehicle volumes than last year. The outlook for 2006 volumes remains uncertain, though they are not expected to significantly expand, if they do at all. Business risks arise from Cooper-Standard's participation in the highly competitive, price-sensitive, and cyclical automotive light-vehicle market, and in particular, from its exposure to GM and Ford. While the company's products are positioned on top-selling vehicle platforms, the sales mix lacks manufacturer and vehicle segment diversity. As a result, these platforms have been a negative factor this year, since light-truck sales have been flat and SUVs have experienced a double-digit drop in sales. DAYTON SUPERIOR: Sept. 30 Balance Sheet Upside-Down by $82 Million ------------------------------------------------------------------ Dayton Superior Corporation reported that sales for the third quarter of 2005 totaled $114.1 million, flat with third quarter 2004 sales. Product sales were $96.6 million for the third quarter of 2005, flat with the third quarter of 2004. Unit volume was lower compared to the third quarter of 2004 mainly due to the adverse effects of hurricanes Katrina and Rita. This volume shortfall was offset by price increases. Gross profit on product sales for the third quarter of 2005 was $21.5 million, or 22.3% of sales, a decrease from the $25.2 million, or 26.1% of sales, in the third quarter of 2004. The decline was primarily due to higher freight and raw material costs, and the effect of lower production volume. The company reported a net loss of $6.7 million for the third quarter of 2005, versus a net loss of $1.8 million for the third quarter of 2004. "While we are not pleased with our recovery rate, we do see the current construction market trends and our rental rate and utilization improvement from 2004 as very positive indicators," Rick Zimmerman, Dayton Superior's President and Chief Executive Officer said. "Additionally, we know that the hurricanes adversely affected revenues in the Gulf Coast markets and caused cost spikes in freight. All in all, we currently expect improving markets with material cost stability. Early fourth quarter sales results support this view. Our challenge will be ensuring that we have the proper resources to improve our performance while we implement our cost reduction plans." Sales for the nine months ended Sept. 30, 2005 totaled $317.6 million, a slight decrease from a year earlier nine-month sales of $318.9 million. Product sales were $269.6 million for the first nine months of 2005, a decrease of 1.3% from the same period of 2004. The decrease in sales was due to a decrease in unit volume due to lower demand in our markets from the adverse weather effects -- hurricanes Katrina and Rita and snow into April in the Northeast and Midwest as well as some geographical market share losses due to selected competitors' willingness to sacrifice gross margin and give away freight costs to increase their unit volumes. Gross profit on product sales for the first nine months of 2005 was $61.6 million, or 22.8% of sales, a decrease from $68.2, or 25% of sales, in the first nine months of 2004. The decline was primarily due to the decline in sales, higher raw material and freight costs, and the effects of lower production volume. The company reported a net loss of $26.9 million for the first nine months of 2005, versus a net loss of $20.4 million for the first nine months of 2004. Dayton Superior Corporation -- http://www.daytonsuperior.com/-- is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction, and a leading manufacturer of metal accessories used in masonry construction in terms of revenues. The company's products are used in two segments of the construction industry: infrastructure construction, such as highways, bridges, utilities, water and waste treatment facilities and airport runways, and non- residential building, such as schools, stadiums, prisons, retail sites, commercial offices, hotels and manufacturing facilities. The company sells most products under the registered trade names Dayton Superior(R), Dayton/Richmond(R), Symons(R), Aztec(R), BarLock(R), Conspec(R), Edoco(R), Dur-O-Wal(R) and American Highway Technology(R). At Sept. 30, 2005, Dayton Superior Corporation's balance sheet showed a $82,070,000 stockholders' deficit, compared to a $55,530,000 deficit at Dec. 31, 2004. DELPHI CORP: Wants BofA's Motion for Adequate Protection Denied --------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Nov. 28, 2005, Bank of America, N.A., asks the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to: (1) grant adequate protection of its interests in collateral relating to two aircraft being leased to Delphi Automotive Systems Human Resources, LLC, including the grant of replacement liens in any similar, after-acquired collateral, including cash collateral; and (2) terminate the automatic stay and direct Delphi Corporation and its debtor-affiliates to immediately turn over the Cash Collateral to Bank of America immediately upon receipt. Debtors' Objection The Debtors remind the Court that Bank of America objected to entry of the Final Order authorizing the Debtors to, inter alia, obtain postpetition financing and to use cash collateral. Bank of America sought replacement liens and delivery of the Cash Collateral as a form of periodic payments. The Debtors point out that the Final DIP and Cash Collateral Order did not impair the liens asserted by Bank of America. Bank of America's present request for adequate protection is an improper, the Debtors assert, because it wants the Court to revisit its Objection that has already been overruled and addressed in the Final DIP and Cash Collateral Order. The Debtors disclose that the forms of protection that are already provided to Bank of America pursuant to the Learjet and Challenger Agreements, and the others forms of protection proposed by the Debtors, but rejected by Bank of America, include: (i) monthly payments pursuant to the Agreements, which are paid on cash in advance terms on the 20th of each month; (ii) segregation of the net proceeds of the charter revenue in a separate account, from which the Debtors cannot disburse sums without either Bank of America's prior consent or Bankruptcy Court Order upon prior notice and a hearing; (iii) the payment over time for the use of the Aircraft during the first 60 days of the Debtors' cases; (iv) advance prorated payment for the use of the Aircraft from December 7, 2005, the 61st day after the Filing Date, though December 19, 2005; and (v) preparation and submission to Bank of America of monthly reports regarding the expenses and income regarding the Aircraft and account activity in the segregated account. Bank of America has failed (1) to establish at this early stage any basis for relief from the automatic stay, and (2) to demonstrate that the value of the Collateral has declined, the Debtors assert. Therefore, the Debtors contend, Bank of America is not entitled to adequate protection at this time or to periodic payments retroactively. Accordingly, the Debtors ask the Court to deny Bank of America's request. Bank of America Talks Back As to the Debtors' Objection, Patrick E. Mears, Esq., at Barnes & Thornburg LLP, in Grand Rapids, Michigan, recounts that at the hearing on the DIP Motion, the Court did not rule on whether Bank of America was entitled to replacement liens on its cash collateral but reserved decision for another day on a subsequent motion. Mr. Mears notes that the Debtors have flatly refused to grant any replacement liens to Bank of America, which refusal has caused Bank of America to proceed with the preliminary hearing. "This refusal was made even though, as the Debtors concede, neither the DIP lenders nor any other entity hold a security interest or other lien in [certain] ancillary property." "It is evident that, because of the subordination of Bank of America's administrative expense claims, Bank of America may suffer losses in the event that these replacement liens are not granted by [the] Court. If Delphi HR rejects the Charter Agreements and enters into similar agreements with another air carrier, then Bank of America's prepetition security interests may arguably not extend to the new agreements and charter revenues derived therefrom in the absence of replacement liens. If Delphi HR thereafter rejects the leases and Bank of America's disposition of the leased property results in a deficiency claim, these newly generated revenues might be deemed free and clear from Bank of America's security interests," Mr. Mears states. Bank of America believes that the value of its interests in the two aircraft and the ancillary property, including the charter revenue, is depreciating and will be subject to an additional decline in value in the event the Court won't grant their request. Bank of America does not dispute the fact that adequate protection should be granted prospectively. Rather, Bank of America is simply requesting that the Petition Date be used to determine the appropriate adequate protection necessary to preserve its interests in the Aircraft Cash Collateral and Aircraft Collateral. Bank of America reasserts its claim that the automatic stay should be terminated to authorize a turnover of the charter and other revenues by the Debtors and to apply these monies against its claims against the Debtors. "No other entity holds a security interest in these revenues, which the Debtors have advised amount to approximately $80,000 per month. Neither the DIP lenders nor the Creditors Committee have objected to the Adequate Protection Motion," Mr. Mears points out. At the very least, Bank of America contends, the Court should enter an order at the preliminary hearing requiring Delphi HR: (i) to establish a separate account at a financial institution acceptable to Bank of America into which all revenues derived from ancillary property must be deposited subject to the continuing, perfected and first priority security interests of Bank of America; and (ii) to require Delphi HR to submit accountings to Bank of America on a monthly basis, the first accounting to be due on December 1, 2005. Headquartered in Troy, Michigan, Delphi Corporation -- 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. (Delphi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Court Approves Supplier Contract Assumption Protocol ----------------------------------------------------------------- To address and reasonably dispose of all of the cognizable objections filed in opposition to their request to approve uniform procedures to assume certain agreements with their suppliers, Delphi Corporation and its debtor-affiliates modify the proposed Procedures to implement these principal acknowledgments, limitations and modifications: -- For the avoidance of doubt, supply agreements that are not related to the continuation of the supply chain at the Debtors' automotive manufacturing facilities, except with respect to agreements related to the Debtors' obligations to provide manufactured goods on account of direct and indirect government contracts, are excluded from the scope of the Procedures. -- The Creditors' Committee is authorized to monitor the Debtors' conduct and performance by providing continuing access during regular business hours to the global supply management group at Delphi's worldwide headquarters by a designated representative of Mesirow Financial. -- The Prepetition Agent is afforded the same right of review as the Creditors Committee. In addition, the definition of Non-Conforming Assumption has been expanded to include any Assumable Agreement or Agreements, which include a waiver under Section 547 of the Bankruptcy Code with respect to any later-expiring Assumable Contracts that are not part of the proposed Assumption as well as any Assumable Agreement that is classified by the Debtors as an indirect supply agreement. These additional categories of Agreements will now be subject the specific review and objection of the Committee and the Prepetition Agent. -- The Required Minimum Provisions of an Assumable Agreement has been further limited to require that Covered Suppliers grant the most favorable trade terms, practices and programs in effect between the supplier and the Debtors in the twelve months prior to the Petition Date consistent with and subject to current market conditions as of the Assumption Date. The Cure costs payment schedule has been refined so that the first installment is paid as soon as reasonably practicable following the Assumption Date of an Assumable Agreement and the remaining five installments are paid at the end of the five calendar quarters beginning with the first calendar quarter following the calendar quarter in which the Assumption Date occurs. -- A Covered Supplier will be conclusively deemed to consent to an be irrevocably bound by the terms of the Revised Procedures only in the event that the Covered Supplier actually executes and delivers to the Debtors an Assumption Agreement or similar document. -- The Committee, as well as the Prepetition Agent, are granted a reservation of rights to file a supplemental objection as to the prospective application of the Revised Procedures on or after March 1, 2006, or at any other time prior to March 1 should the aggregate amount of Cure contractually committed to be paid by the Debtors pursuant to the Revised Procedures exceed $150,000,000 exclusive of Cure amounts associated with Non-Conforming Assumptions. -- To the extent that the Court subsequently authorizes the Debtors to implement a Key Executive Compensation Program, which includes any component that would exclude restructuring expenses from the calculation of incentive payments under the program, the Revised Procedures require that the Debtors not classify any expenses under generally accepted accounting principles incurred by the Debtors as a result of the assumption of an Assumable Agreement as restructuring expenses under a KECP. Additionally, the Procedures have been modified so that all: (i) proposed assumptions including a grant of a Preference Waiver with respect to any later-expiring Assumable Agreements that are not part of the proposed assumption; or (ii) proposed assumptions of Assumable Agreements classified by the Debtors as indirect supply agreements, will constitute Non-Conforming Assumptions and will be subject to scrutiny by the Creditors Committee, the Prepetition Agent or the U.S. Bankruptcy Court for the Southern District of New York on a contract-by-contract basis. The Debtors have further limited the scope of their request to exclude any agreements that are not related to the continuation of the supply chain at the Debtors' automotive manufacturing facilities, except with respect to agreements related to the their obligations to provide manufactured goods on account of direct and indirect government contracts. Court Order The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court grants the Debtors' request, as amended. The Court also allowed the Debtors to pay prepetition claims of suppliers that agree to contract extensions. As previously reported, the Debtors preliminarily estimate that over 11,000 of sole source supply agreements are due to expire on December 31, 2005. Delphi, Bloomberg News reports, wants to renew more than 8,000 of these contracts. Delphi expects that about 250 suppliers will agree to its terms, according to The Associated Press citing the company's lawyer John Wm. Butler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP. Headquartered in Troy, Michigan, Delphi Corporation -- 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. (Delphi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Court Denies Russell's Motion for Retainer Agreement ----------------------------------------------------------------- Charles E. Boulbol, Esq., in New York, relates that on July 12, 2005, Russell Reynolds Associates, Inc., and the Debtors entered into a written agreement, whereby RRA agreed to lead an executive recruiting search for the Debtors' Director of Global Architecture and Infrastructure, conducted under the direct supervision and control of Matt Aiello, a member of RRA. The Retainer Agreement provides, among others, that RRA's fee for the Executive Search is one-third of the total compensation required to attract a candidate to the Director of Global Architecture and Infrastructure position. Moreover, the minimum fee for the Executive Search, without regard to its outcome, is $106,300, of which $6,300 is denominated as a "communications charge." The Minimum Fee was to be paid in three monthly retainers, all of which were billed prepetition. In addition to the Minimum Fee and any fee that may be due to RRA based on the compensation given to the successful candidate, the Debtors are obligated to reimburse RRA for all of its out-of-pocket recruiting related expenses without mark-up. The Debtors currently owe RRA $71,505 in connection with the Executive Search. Postpetition out-of-pocket candidate expenses have been incurred by RRA but they have not yet been billed to the Debtors. The Debtors also owe RRA $73,056 in connection with a prepetition executive search for the Debtors' Director of Global Accounting, and $4,653 in connection with a prepetition executive search for the Debtors' Vice President of Audit. The Retainer Agreement further provides that: -- RRA will continue the Executive Search until it is completed, charging only for expenses, and that the Debtors may cancel the Executive Search at any time; -- if a "successful candidate leaves Delphi during the first 12 months of employment for any reason other than just cause, RRA will conduct the search again billing only for out-of-pocket recruiting related expenses; and -- where the Debtors have failed to pay the Minimum Fee, RRA is entitled to suspend the Executive Search; Since the execution of the Retainer Agreement, RRA has considered scores of candidates for employment as Delphi's Director of Global Architecture and Infrastructure, and the Debtors have interviewed six prospective candidates, including two interviewed during the postpetition period, Mr. Boulbol reports. The Debtors conducted the most recent interview on Nov. 3, 2005. Since the Petition Date, the Debtors have also asked RRA to take on two additional executive searches. According to Mr. Boulbol, RRA has declined to accept these engagements because the Debtors earlier represented to RRA that it would be included in their First Day Orders as an Ordinary Course Professional. But that representation has proven to be false and the Debtors have refused to seek the U.S. Bankruptcy Court for the Southern District of New York's approval to assume or reject the Retainer Agreement, Mr. Boulbol says. Without any assurance that it will be paid either for the Executive Search or any future search, RRA, Mr. Boulbol says, is unwilling to provide any services to the Debtors that it is not already obligated to provide. Mr. Boulbol emphasizes that the Retainer Agreement presents several unique circumstances, which militate strongly in favor of compelling the Debtors to make a prompt decision whether to assume or reject it. Accordingly, RRA asked the Court to: (1) compel the Debtors to either assume or reject the Retainer Agreement; and (2) fix a deadline for assumption or rejection. Court Order The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court denies Russell Reynolds Associates, Inc.'s request, provided, that RRA will not be precluded from asserting a claim under Section 503(b) of the Bankruptcy Code in the Debtors' Chapter 11 cases for the services that it is performing postpetition under the executory contract by the fact that it has not been retained under Section 327 of the Bankruptcy Code. Headquartered in Troy, Michigan, Delphi Corporation -- 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. (Delphi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Court Approves Sale of 11 Boeing Aircraft to ABX Air --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the sale by Delta Air Lines of eleven Boeing 767-200 passenger aircraft to ABX Air, Inc. On Sept. 7, 2005, ABX Air said that it had entered into an agreement with Delta for the purchase of the 11 aircraft, shortly before Delta filed for Chapter 11 bankruptcy protection on September 14, 2005. Delta thereafter filed a motion with the Court requesting the approval of the sale of the aircraft, subject to higher bids at an auction. No bids were received. On Nov. 29, 2005, the Honorable Prudence Carter Beatty signed an order approving the sale of the 11 aircraft in accordance with the agreement. About ABX Air ABX Air, Inc. is a cargo airline with a fleet of 111 in-service aircraft that operates out of Wilmington, Ohio, and 18 hubs throughout the United States. ABX Air became an independent public company effective Aug. 16, 2003, as a result of the separation from its former parent company, Airborne, Inc., which was acquired by DHL Worldwide Express B.V. In addition to providing airlift capacity and sort center staffing to DHL Express (USA), Inc., ABX Air provides charter and maintenance services to a diverse group of customers. With over 10,000 employees, ABX Air is the largest employer in a several county area in southwestern Ohio. About Delta Air Lines 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. ENESCO GROUP: Appoints Lawrence Jennings as Head of European Unit ----------------------------------------------------------------- Enesco Group, Inc. (NYSE:ENC), appoints Lawrence Jennings Managing Director for Enesco Limited, the wholly owned European subsidiary of Enesco Group, Inc. Mr. Jennings, 58, most recently was Enesco Limited's Chief Operating Officer, overseeing the finance, I.T., distribution and production functional areas. Effective immediately, Mr. Jennings will assume the management of the U.K. operations. Christophe Jeannin, from Keystone Consulting Group, will remain in an interim role to focus on strategic initiatives and special projects through the fourth quarter of 2005. "I am very pleased to announce Lawrence Jenning's appointment as the Managing Director of Enesco Limited," said Cynthia Passmore-McLaughlin, president and CEO of Enesco Group, Inc. "Lawrence will be a key member of Enesco management as he leads Enesco's European subsidiary to improve growth and profitability." Prior to joining Enesco Limited in 1997, Mr. Jennings, a Qualified Chartered Accountant, spent 18 years in the publishing industry, including Macmillan Distribution Ltd, where he served as Managing Director. Enesco Group, Inc. -- http://www.enesco.com/-- is a world leader in the giftware, and home and garden decor industries. Serving more than 30,000 customers globally, Enesco distributes products to a wide variety of specialty card and gift retailers, home decor boutiques as well as mass-market chains and direct mail retailers. Internationally, Enesco serves markets operating in Europe, Canada, Australia, Mexico, and Asia. With subsidiaries located in Europe and Canada, and a business unit in Hong Kong, Enesco's international distribution network is a leader in the industry. The company's product lines include some of the world's most recognizable brands, including Heartwood Creek, Walt Disney Company, Walt Disney Classics Collection, Pooh & Friends, Jim Shore, Foundations, Circle of Love, Nickelodeon, Bratz, Halcyon Days, Lilliput Lane and Border Fine Arts, among others. * * * As reported in the Troubled Company Reporter on Sept. 2, 2005, Enesco Group, Inc. amended its current U.S. credit facility, effective as of Aug. 31, 2005. The ninth amendment reset the Company's minimum EBITDA and capital expenditure covenants through the facility termination date, Dec. 31, 2005, based on the Company's reforecast and long-term partnership with Bank of America, as successor to Fleet National Bank, and LaSalle Bank. The company is aggressively pursuing a replacement senior credit facility. What Happened to Precious Moments? On May 17, 2005, pursuant to a Seventh Amendment and Termination Agreement, Enesco, Inc., terminated its license agreement with Precious Moments, Inc., to sell Precious Moments licensed products. As part of the PM Termination Agreement, the Company also entered into a Transitional Services Agreement with PMI in which the Company agreed to provide transitional services to PMI related to its licensed inventory for a period of time, but ending not later than Dec. 31, 2006. ENTERPRISE PRODUCTS: Prices Public Offering of 4 Mil. Common Units ------------------------------------------------------------------ Enterprise Products Partners L.P. (NYSE:EPD) has priced a public offering of 4,000,000 common units representing limited partner interests at a price of $25.54 per unit. The gross proceeds of approximately $104.2 million include the general partner's proportionate capital contribution. Enterprise has granted the underwriter an option to purchase up to 600,000 additional common units to cover over-allotments, if any. Enterprise will use the net proceeds from this offering to reduce borrowings and commitments outstanding under its revolving credit facility. UBS Investment Bank acted as sole bookrunner and underwriter. A copy of the prospectus supplement can be obtained from: UBS Investment Bank 299 Park Avenue, 29th Floor New York, New York, 10171 Enterprise Products Partners L.P. -- http://www.epplp.com/-- is one of the largest publicly traded energy partnerships with an enterprise value of more than $14 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs) and crude oil. Enterprise transports natural gas, NGLs and crude oil through 31,000 miles of onshore and offshore pipelines and is an industry leader in the development of midstream infrastructure in the Deepwater Trend of the Gulf of Mexico. Services include natural gas transportation, gathering, processing and storage; NGL and propylene fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation and offshore production platform services. * * * As reported in the Troubled Company Reporter on May 27, 2005, Standard & Poor's Rating Services assigned its 'BB+' rating to Enterprise Products Operating L.P.'s (BB+/Positive/--) $500 million senior unsecured notes due 2010. Enterprise Products Partners L.P. (BB+/Positive/--) does not issue debt but does guarantee Enterprise Products Operating's debt; therefore, Enterprise Products Partners carries the same rating as Enterprise Products Operating. FEMONE INC: Stockholders Deficit Tops $1 Million at Sept. 30 ------------------------------------------------------------ FemOne, Inc. (OTCBB: FEMO), a publicly held Nevada corporation, reported consolidated sales for the third quarter of 2005. FemOne reported consolidated net sales of $2,035,035 for the three months ended Sept. 30, 2005, an increase of approximately 328%, from $475,357 for the three months ended Sept. 30, 2004. The increases in sales are primarily attributable to the continued growth of FemOne's technology division, BIOPRO Technology. The consolidated net loss attributable to common stockholders for the three months ended September 30, 2005 was $879,213, compared to a consolidated net loss of $600,658 for the three months ended Sept. 30, 2004. The consolidated net loss attributable to stockholders for the nine months ended Sept. 30, 2005, was $2,215,541 compared to a consolidated net loss of $1,699,839 for the same period in 2004. The increase in net loss in 2005 over 2004 was directly attributable to an increase in expenses associated with the Company's expanded operations and efforts to continue its business growth. Included in the net loss for the three and nine month periods ended Sept. 30, 2005, are net non cash expenses of $374,965 and $797,244, respectively, representing the non cash amortization expense related to the Company's convertible debt financing and non cash gains related to the valuation of warrant derivatives in the period. Operating expenses for the three months ended Sept. 30, 2005, were $2,208,788, compared to $800,198 for the same period in 2004. Operating expenses for the nine months ended Sept. 30, 2005, were $5,792,242, compared to $2,219,593 for the same period in 2004. Operating expenses as a percentage of sales for the three and nine months ended Sept. 30, 2005, decreased to 109% and 104%, respectively, compared to 168% and 232%, respectively, in the 2004 periods. The significant decrease of operating expenses as a percentage of sales has been predominantly a result of the 328% increase in sales. The increase in operating expenses in the 2005 periods was the result of increases in commission expenses incurred on the increased sales, as well as increases in promotion and marketing expenses, and our expanded operations in Australia, New Zealand and the Philippines. Included in the Company's consolidated results for the three and nine months ended Sept. 30, 2005, are revenues and expenses from its three controlled subsidiaries: -- BIOPRO Australasia Pty., Ltd., which operates the Company's direct sales effort in Australia, New Zealand, -- BIOPRO Asia, Inc, which operates the Company's direct sales effort in the Philippines, and -- SRA Marketing, Inc., which is responsible for all sales made over the Direct Response Shopping network. BIOPRO Australia and SRA Marketing began their operations in the fourth quarter of 2004, and BIOPRO Asia began operations in the third quarter of 2005 and launched its sales efforts on Oct. 1, 2005. Revenues during the three and nine months ended Sept. 30, 2005, from BIOPRO Australasia Pty, Ltd., represented 19% and 22%, respectively, of the Company's consolidated revenues for those periods. Revenues from SRA Marketing during the three and nine months ended Sept. 30, 2005, represent 1% and 8%, respectively, of the Company's consolidated revenues for those periods. "We continue to see substantial growth in North America in our BIOPRO Technology division due to the market becoming aware of the hazards of electro-pollution, Ray W. Grimm, Jr., the Company's chief executive officer, stated. "Our new product introductions in recent months have helped create the sales momentum we experienced in the third quarter. We will continue to keep this sales momentum going with our main focus towards expanding our market presence and achieving profitability", Mr. Grimm added. A full-text copy of FemOne, Inc.'s third quarter results is available at no charge at http://ResearchArchives.com/t/s?39f Going Concern Doubt Peterson & Co., LLP, in San Diego, California, raised substantial doubt about Femone, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. Peterson & Co. pointed to the company's recurring losses from operations since inception and dependence on raising additional capital. Headquartered in Carlsbad, California, FemOne, Inc. (OTCBB: FEMO) -- http://www.femone.comor http://www.bioprotechnology.com-- is a sales and marketing company with distribution in the United States, Canada, Australia and New Zealand. At Sept. 30, 2005, the company's balance sheet showed a $1,035,838 stockholders' equity deficit compared to $336,804 of positive equity at Dec. 31, 2004. FEMONE INC: Amends Second Quarter Financial Statements ------------------------------------------------------ FemOne, Inc., filed amended financial statements for the second quarter ending June 30, 2005, to the Securities and Exchange Commission. The company stated three reasons for the restatements: -- to correct errors in the accounting records of the Company's BIOPRO Australasia Pty., Ltd., subsidiary that were discovered subsequent to the filing with the commission of its original Form 10-QSB filing for that period on Aug. 22, 2005; -- to reclassify certain transactions associated with the Company's convertible notes; and -- to update footnote disclosures and Management's Discussion and Analysis to reflect the "as restated" amounts. The company reported a restated $48,081 net loss on $1,796,627 of sales for the quarter ended June 30, 2005. At June 30, 2005, the company's restated balance sheet showed $2,909,236 in total assets, $3,159,958 in total liabilities resulting in a $348,452 stockholders' equity deficit. The company's restated June 30 balance sheet also showed strained liquidity with $2,217,127 in current assets available to satisfy $2,861,233 of current liabilities coming due within the next 12 months. A full-text copy of FemOne, Inc.'s amended second quarter financial statements is available at no charge at http://ResearchArchives.com/t/s?3a0 Going Concern Doubt Peterson & Co., LLP, in San Diego, California, raised substantial doubt about Femone, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. Peterson & Co. pointed to the company's recurring losses from operations since inception and dependence on raising additional capital. Headquartered in Carlsbad, California, FemOne, Inc. (OTCBB: FEMO) -- http://www.femone.comor http://www.bioprotechnology.com-- is a sales and marketing company with distribution in the United States, Canada, Australia and New Zealand. At Sept. 30, 2005, the company's balance sheet showed a $1,035,838 stockholders' equity deficit compared to $336,804 of positive equity at Dec. 31, 2004. FLYI INC: Receives Expressions of Interest in Auction Process ------------------------------------------------------------- FLYi, Inc. (Nasdaq: FLYIQ), parent of low-fare airline Independence Air reported that it has received a number of expressions of interest from parties interested in participating in its court-supervised auction process. The various expressions of interest include proposals: * to acquire the company as a going concern, * to invest in the company, and * to acquire specific assets. The company is working with its financial advisors in consultation with its Creditors Committee to evaluate these expressions of interest and to consider alternatives that will maximize the value of the estate. As previously stated, the company believes that the value of its estate will be maximized in a going concern transaction, whether pursuant to an investment proposal or a going concern sale proposal. The company is entering a period of negotiations with select interested parties, and will issue further public statements regarding the process when it believes it is appropriate to do so. While this process continues, the company intends to take steps to ensure that its operations during the upcoming holiday period will continue to deliver Independence Air's acclaimed level of customer service to our customers. The company appreciates the continued support of its loyal customers and employees during this period. The company credits its employees for its remarkable operational performance and service during the Thanksgiving holiday, and is confident that its employees will continue to deliver their special brand of Tender Loving Service(TM) just as always. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. FREEDOM COMMS: S&P Puts BB Rating on Planned $300M Tranche Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan rating and recovery rating of '2' to Freedom Communications Inc.'s planned $300 million tranche A-1 term loan facility due December 2012, indicating the expectation of a substantial recovery of principal in the event of a payment default. At the same time, Standard & Poor's affirmed its ratings on the Irvine, California-headquartered newspaper publisher, including the 'BB' corporate credit. The outlook is stable. Freedom Communications is in the process of amending its senior secured credit facilities. Under the amendment, the total facilities will be reduced to $950 million from the current $1 billion. There will be no change in the existing $300 million revolving credit and $350 million tranche A term loan facilities. The planned $300 million tranche A-1 term loan facility, along with borrowings under the revolver, will be used to repay the tranche B term loan facility, which has about $348 million outstanding. Upon closing of the amendment, the rating on the tranche B term loan facility will be withdrawn and the recovery ratings on the revolving credit and tranche A term loan facilities will be raised to '2' from '3'. The higher recovery ratings would reflect the improved principal recovery prospects resulting from a reduction in the size of the total credit facilities. GEORGETOWN STEEL: Plan Trust Pays Unsecured Creditors $7.5 Million ------------------------------------------------------------------ Georgetown Steel Company, LLC Liquidating Trust made initial distributions of up to $7.5 million to its unsecured creditors, which represented 13.62% of allowed claims, Tommy Howard of Georgetown Times cited Michael Beal, Esq., at McNair Law Firm. The Trust was created under the company's confirmed Amended Plan of Liquidation. The U.S. Bankruptcy Court for the District of South Carolina confirmed the Debtor's plan on Oct. 20, 2004, and the plan took effect on Nov. 2, 2004. Headquartered in Georgetown, South Carolina, Georgetown Steel Company, LLC, manufactured high-carbon steel wire rod products using the Direct Reduced Iron (DRI) process. The Company filed for chapter 11 protection on October 21, 2003 (Bankr. S.C. Case No. 03-13156). When the Company filed for protection from its creditors, it listed estimated debts and assets of over $50 million. On Oct. 20, 2004, the Court confirmed the Debtor's Amended Plan of Liquidation and that Plan became effective on Nov. 2, 2004. David O. Shelley is the Liquidating Trustee for the Debtor's estate. Robin C. Stanton, Esq., at McNair Law Firm, P.A., represents the Liquidating Trustee. GEOTEC THERMAL: Earns $3.4 Million of Net Income in Third Quarter ----------------------------------------------------------------- Geotec Thermal Generators, Inc., delivered its financial statements for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. For the three months ended Sept. 30, 2005, the company earned $3,450,123 on $4,600,000 of revenues. At Sept. 30, 2005, the company's balance sheet showed $24,473,223 in total assets and $3,592,782 in total liabilities. Solvency Restored Geotec raised $18,429,816 from a sale of equity securities earlier this year, restoring solvency to its balance sheet. Given the company's now-profitable operations coverage about this company in the Troubled Company Reporter is suspended unless another trigger event suggesting declining credit quality occurs. Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about Geotec Thermal's ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. The auditors pointed to the company's recurring losses from operations and cash deficits. The Firm resigned as the company's auditors on Apr. 22, 2005. The company disclosed that it is in the process of obtaining a replacement for the position left by Sherb & Co. A full-text copy of the company's third quarter results is available at no charge at http://ResearchArchives.com/t/s?39e Headquartered in Delray Beach, Florida, Geotec Thermal Generators, Inc., has obtained a ten-year exclusive license to market and sell a unique oil treatment service to customers in North, Central, and South America. This technology, Gas Generators(TM), is designed to produce a thermo-chemical treatment of oil and gas wells, thereby restoring and increasing output capacities, yielding increased production of oil. GPS INDUSTRIES: Balance Sheet Upside-Down by $13 Mil. at Sept. 30 ----------------------------------------------------------------- GPS Industries, Inc., reported a $2,175,823 net loss on $810,766 of revenues for the three months ended Sept. 30, 2005, in contrast to a $1,279,760 net loss on $722,784 of revenues for the comparable period in 2004. GPS' net loss was $7,497,263 for the nine months ended Sept. 30, 2005, as compared to a $2,578,193 net loss for the nine months ended Sept. 30, 2004. The increase in net loss is a reflection of the increased expenses incurred in bringing the Inforemer portable product to the market as well as financing costs and costs in setting up a sales and distribution organization. Inforemer is the first patented communications network that utilizes advanced Internet protocols to provide a wireless information system to enhance recreational value, increase golf course profits and improve player safety. The Company's balance sheet showed $4,525,893 in total assets at Sept. 30, 2004, and liabilities of $17,893,386, resulting in a stockholders deficit of $13,367,493. The Company had a working capital deficit of $12,969,246 at Sept. 30, 2005, as compared to a working capital deficit of $14,210,188 at Dec. 31, 2004. Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about GPS Industries' ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's significant losses, working capital deficiency and need for additional funding to sustain operations. GPS Industries, Inc. -- http://www.gpsindustries.com/-- develops and markets GPS and Wi-Fi wireless multimedia solutions to enable managers of golf facilities, resorts, sporting events, and residential communities worldwide to generate significant new revenue streams and improve operational efficiencies. The company's unique and patented Inforemer(TM) product line provides a complete GPS golf business solution, combining a powerful backend management information system and revenue generating modules with mobile color handheld or cart-mounted Differential GPS units, seamlessly connected via a wireless, high-speed Wi-Fi network. GREENPOINT NIM: Moody's Puts Ba2 Rating on Series 2005-HY1 Notes ---------------------------------------------------------------- Moody's Investors Service assigned a rating of Ba2 to Greenpoint NIM Trust 2005-HY1 Notes, Series 2005-HY1. The notes are backed by cash flows from the residual (Class C) and prepayment penalty (Class P) certificates issued by Greenpoint Mortgage Funding Trust 2005-HY1, Asset-Backed Certificates, Series 2005-HY1. The cash flows available to repay the notes are most significantly impacted by the level of prepayments, as well as the timing and amount of losses on the underlying mortgage pool. Moody's applied various combinations of loss and prepayment scenarios to evaluate the adequacy of cash flows to fully amortize the rated notes. The complete rating action is: Issuer: Greenpoint NIM Trust 2005-HY1 Securities: Greenpoint NIM Trust 2005-HY1 Notes * Rating: Ba2 The notes are being offered in privately negotiated transactions without registration under the 1933 Act. The issuance was designed to permit resale under Rule 144A. GSAA HOME: Moody's Puts Ba2 Rating on Class B-3 Sub. Certificates ----------------------------------------------------------------- Moody's Investors Service assigned ratings of Aaa to the senior certificates issued by GSAA Home Equity Trust 2005-14 and ratings ranging from Aa1 to Ba2 to the subordinated certificates in the deal. The certificates are secured by quality 30-year adjustable-rate mortgages that were primarily originated by: * GreenPoint Mortgage Funding, Inc. (25.44%), * SunTrust Mortgage, Inc. (15.91%), * Goldman Sachs Residential Mortgage Conduit (47.71%), and * others. The ratings are based primarily on: * the credit quality of the loans; and * the protection from: -- subordination, -- excess spread, -- overcollateralization, and -- the structural and legal protections in the transaction. The pool is expected to loss between 0.95 and 1.15%. The loans will be serviced by: * Countrywide Home Loans Servicing, L.P., * GreenPoint Mortgage Funding, Inc., * SunTrust, and * National City Mortgage Corporation. JP Morgan Chase Bank, National Association will be the master servicer. The complete rating actions are: Issuer: GSAA Home Equity Trust 2005-14 * Class 1A1, rated Aaa * Class 1A2, rated Aaa * Class 2A1, rated Aaa * Class 2A2, rated Aaa * Class 2A3, rated Aaa * Class 2A4, rated Aaa * Class M-1, rated Aa1 * Class M-2, rated Aa2 * Class M-3, rated Aa3 * Class M-4, rated A1 * Class M-5, rated A2 * Class M-6, rated A3 * Class B-1, rated Baa1 * Class B-2, rated Baa3 * Class B-3, rated Ba2 ICY SPLASH: Incurs $81,780 Net Loss in Quarter Ended September 30 ----------------------------------------------------------------- Icy Splash Food & Beverage Inc. delivered its financial results for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Dec. 2, 2005. Icy Splash incurred a $81,780 net loss for the three months ended Sept. 30, 2005, compared with a $31,522 net loss for the same period in 2004. Management attributes higher losses to costs associated with the development of facilities and new product lines, which more than offset the increased net revenue and gross profit during the quarter. As of Sept. 30, 2005, the Company's balance sheet showed $1,213,290 in total assets and liabilities of $947,981. The Company had a $72,904 cash balance, $143,633 in working capital and a $1,468,592 accumulated deficit at Sept. 30, 2005. Going Concern Doubt Lazar Levine & Felix LLP expressed substantial doubt about Icy Splash's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations. Icy Splash Food & Beverage, Inc. -- http://www.icysplash.com/-- produces and distributes food, beverages, dairy, health and beauty aids, and other consumer goods. The Company carries over 500 products that come from its outsourced production facilities and from domestic and overseas manufacturers. IMAGEWARE SYSTEMS: Loss & Deficit Trigger Going Concern Doubt ------------------------------------------------------------- ImageWare Systems, Inc.'s management expressed substantial doubt about the Company's ability to continue as a going concern in the Form 10-QSB filed with the Securities and Exchange Commission on November 21, 2005, due to losses and negative cash flows from operations. The company reported $1.4 million net loss from operations on $2.5 million of revenues from the quarter ending September 30, 2005. As of September 30, 2005, the company's balance sheet reflected a $60.1 million accumulated deficit compared to a $55.9 million deficit at December 31, 2004. A full-text copy of the regulatory filing is available at no charge at http://researcharchives.com/t/s?39a The company's auditors at Stonefield Josephson, Inc., issued a clean opinion after completing their audit of the ImageWare's 2004 financial statements on February 18, 2005. ImageWare Systems, Inc. (AMEX:IW) -- http://www.iwsinc.com/-- is the leading global developer of digital imaging, identification and biometric software solutions for the corporate, government, law enforcement, professional photography, transportation, education and healthcare markets, among others. ImageWare's secure credential and biometric product lines are used to produce ID cards, driver licenses, passports, national medical health cards, national IDs and more. The Company's law enforcement and biometric product lines provide the public safety market with booking, investigative and identification solutions that can be accessed and shared via PC, Web and wireless platforms. ImageWare's professional digital imaging product line provides professional photographers with automated, in-studio and mobile solutions to facilitate the transition from film-based photography to digital imaging. Founded in 1987, ImageWare is headquartered in San Diego, with offices in Canada, Europe and Asia. KAISER ALUMINUM: CII Carbon Balks at CNA & National Union Pact -------------------------------------------------------------- As previously reported in the Troubled Company Reporter on November 30, 2005, Kaiser Aluminum & Chemical Corporation and the Insurers met on several occasions and exchanged extensive information regarding the Disputed Litigation Costs that KACC might be entitled to collect. The parties subsequently reached a settlement that resolves all of the issues in the Adversary Proceeding and provides for an equitable distribution of the Third-Party Recoveries and the Buy-Out Proceeds. The salient terms of the parties' Settlement Agreement are: (a) KACC will be entitled to $7,300,000 of the Total Funds plus half of the Total Funds exceeding $16,100,000; (b) CNA will be entitled to $8,800,000 of the Total Funds plus half of the Total Funds exceeding $16,100,000; (c) KACC, CNA and National Union will immediately request the District Court to turn over the Landry Funds to Heller Ehrman, which will maintain the funds in a separate client trust account for the benefit of all of the parties to the Settlement Agreement and disburse the funds in accordance with the distribution procedures set forth in the Settlement Agreement; (d) National Union will not be entitled to any portion of the KACC Funds and will only be entitled to a portion of the CNA Funds to the extent the funds exceed the amounts necessary to fully replenish the limits of coverage under the CNA Policy. Any CNA Funds received by either CNA or National Union will replenish coverage under the CAN Policy or National Union Policy, as applicable; and (e) CNA will set aside $31,429 of the CNA Funds to reimburse KACC for CII Carbon's property damage claim, if the claim is allowed by the Court. The Insurers and certain other insurance companies of KACC, including Reliance Insurance Company, Chubb Insurance Company, Great American Insurance Company, Old Republic Insurance Company and TIG Insurance Company will be released from any obligations under their policies to pay for any of CII Carbon's claims against KACC related to the Gramercy Explosion. Mr. DeFranceschi tells Judge Fitzgerald that the Settlement Agreement allows KACC to recoup a substantial portion of the Disputed Litigation Costs, which have bee the subject of a factually intensive and costly dispute with the Insurers. KACC believes that that Settlement Agreement, including the recoveries it will receive, is fair and reasonable and will substantially benefit its estate. The Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve the Settlement Agreement. CII Carbon Objects The Gramercy Explosion on July 5, 1999, damaged CII Carbon, L.L.C.'s coke plant, as well as certain equipment and portions of a powerhouse complex in an area called Gramercy Works where CII, the Debtors, and La Roche Chemicals Inc. were operating. Jeffrey C. Wisler, Esq., at Connolly, Bove, Lodge & Hutz LLP, in Wilmington, Delaware, relates that CII holds a valid and enforceable property damage claim against the Debtors and other parties determined to be at fault in causing the explosion for the cost of repairing the property damage to the coke plant and the equipment. CII also holds a valid and enforceable additional claim for extra expenses CII incurred in transporting and processing raw materials for resale to its customers, as well as lost profits from inability to operate its boiler following the explosion. On January 29, 2003, CII filed its proof of claim for $16,368,682 against the Debtors, which includes, among others, the Property Damage Claim for $31,429 plus the Additional Claim. Mr. Wisler notes that under the Debtors' settlement agreement with Transcontinental Insurance Company and National Union Fire Insurance Company of Pittsburgh, P.A.: (a) only CII's property damage claim may be covered under the Insurers' Policies; (b) an amount equal to the property damage claim will be set aside by CNA to reimburse Debtors for the Property Damage Claim if the claim is allowed; and (c) the Insurers and certain of the Debtors' other insurance companies will be released from any obligation under their respective policies to pay for any of CII's claims against the Debtors related to the Explosion. While it was not revealed in the request, Mr. Wisler says the Debtors also seek an order from the Court that provides the Insurers with a release as to CII claims that is broader than the release included in the Settlement Agreement. Specifically, the proposed form of order expressly releases the Insurers "from any obligations under their respective insurance policies to provide insurance coverage for any claims asserted by CII related to the Gramercy Explosion." Mr. Wisler contends that the Agreement is unenforceable under applicable law and cannot be approved. Under applicable Louisiana Law, he notes that no agreement between Kaiser and its liability insurers can prejudice CII's rights against the insurers. Louisiana's Direct Action Statute grants a plaintiff injured by an insured party's conduct in Louisiana a direct action against that party's insurers. In line with this, CII has a right to assert a claim directly against the Debtors' insurers in the premises of CII's damages incurred from the explosion of the Gramercy plant. Mr. Wisler also argues that the Debtors and the Insurers purport to "agree" in the Settlement Agreement that the insurers provide no coverage for CII's claims. The use of a proposed settlement of other, unrelated claims between the Debtors and the Insurers as a vehicle to deprive CII of direct action rights that vested at the time of the Explosion is a bald attempt by Kaiser to collude with the Insurers against CII. Because of this, he notes that "the spectre of abuse is present." Kaiser conspired with its insurers to eliminate CII's claims through the settlement of an adversary proceeding to which CII is not a party. Mr. Wisler also points out that the Court lacks authority to release CII's claims against the non-debtor insurers. A bankruptcy court cannot presume that it has jurisdiction to affect third-party claims against non-debtors. To determine jurisdiction, the Court must determine whether the issue presently before it is one that arises under the Bankruptcy Code, or arises in, or is related to, cases under the Bankruptcy Code. However, according to Mr. Wisler, CII's claims arise neither under the Bankruptcy Code, nor in the chapter 11 cases. Even if the Court had jurisdiction over CII's claims against the Insurers, it has no independent statutory authority to approve the Settlement Agreement as it relates to the nonconsensual release of the Insurers from any and all claims, present or future, asserted by CII. Moreover, Mr. Wisler says there is no factual basis upon which the Court can approve the release of CII's claims against the non- debtor Insurers. The Court must both scrutinize whether the proposed release is fair and made in exchange for reasonable consideration, and determine that the Settlement Agreement is necessary to the Debtors' reorganization. The Settlement Agreement is not in the best interests of the estate, Mr. Wisler adds. The Debtors have failed to meet their burden to establish that releasing their Insurers from liability for more than $16,000,000 of claims asserted by CII is in the best interests of the estate. For these reasons, CII asks the Court to deny the Debtors' request. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Court Allows Angola Wire's Claim for $1.6 Million ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Illinois allows Claim No. 34123 filed by Angola Wire Products, Inc., as an unsecured non-priority claim for $1,153,964. As previously reported in the Troubled Company Reporter on July 20, 2005, Bruce E. Lithgow, Esq., at Bell, Boyd & Lloyd LLC, in Chicago,Illinois, argued that Kmart presented no evidence rebutting Angola Wire's proof of course of dealing between the parties, supporting a usage of trade, or contesting Angola Wire's mitigation of damages. Kmart disputed only Angola Wire's $20,250 claim for storage costs, but introduced no evidence on this point. Kmart's defenses to liability for the entire $1,112,086 in Claimed Inventory should be rejected because they: (a) are contradicted by the remaining plain language of the Contracts; (b) would render the provisions of the Contract inconsistent with one another; and (c) are entirely inconsistent with the unrebutted proof of the parties' course of dealing and applicable usage of trade, all contrary to Michigan's Uniform Commercial Code. Mr. Lithgow asserted that since the remainder of Angola Wire's claim is otherwise undisputed, Angola Wire would be entitled to the allowance of its claim in the full amount of $1,152,964. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Inks Expanded Agreement with Catalina Marketing ----------------------------------------------------------- Catalina Marketing Corporation has signed an agreement with Kmart Corporation to install the Catalina Marketing Network(R), a consumer checkout communication system, at the registers of an additional 1,000 Kmart stores nationwide. The system will deliver relevant manufacturer communications to Kmart customers. "We are looking forward to the expansion and a successful partnership with Kmart, one of the largest mass retailers in the country," L. Dick Buell, chief executive officer of Catalina Marketing Corporation, said in a press release. "By utilizing the Catalina Marketing Network(R) system in all Super Kmarts, and now most Kmart stores, the retailer will quickly see the benefits of offering high value incentives and messages to the consumer, which will motivate repeat visits, build loyalty and generate a trial of new products, departments and services." The expansion in Kmart stores provides Catalina with a larger presence in a mass-market retailer. Companies that manufacture and market products sold in Kmart can utilize the consumer checkout communication system to reach the right consumer at the right time with the right message. Catalina Marketing anticipates that the installation of the Kmart stores will be completed by fall 2006. "This agreement will give our customers the ability to make their shopping dollars go further," said Peter Whitsett, senior vice president and general merchandising manager for Kmart. "We also see this as the perfect vehicle to promote all parts of our stores, including non-food areas, as well as cross-promote to other formats." Based in St. Petersburg, Florida, Catalina Marketing offers an array of behavior-based promotional messaging, loyalty programs and direct-to-patient information. Personally identifiable data that may be collected from the company's targeted marketing programs, as well as its research programs, are never sold or provided to any outside party without the express permission of the consumer. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., 215/945-7000) KSBH LEADERS: Pays Unitholders Final Distribution of C$13.92/Unit ----------------------------------------------------------------- KBSH Leaders Trust (TSX:KLT.UN) reported that a distribution of C$13.92 per unit was been paid on Dec. 5, 2005, to the Trust's unitholders of record as of the close of business on Nov. 30, 2005. This distribution represents substantially all of the net assets following the liquidation of the Trust's portfolio. An additional distribution will be made on or about Dec. 12, 2005 once the final accounting for all of the Trust's liabilities is completed. Units of the Trust were de-listed from the TSX at the close of business on Nov. 25, 2005. KBSH Capital Management Inc. is a Canadian based asset manager with a proven track record of success in a variety of portfolio types and asset classes since 1980. At Oct. 31, 2005, KBSH had approximately $5.5 billion in assets under management on behalf of pension funds, foundations, managed accounts, mutual funds and private clients, and manages in excess of $2.5 billion in income based portfolios. LA PETITE: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------- Debtor: La Petite E'cole, Inc. 2115 Rockbridge Road Stone Mountain, Georgia 30087 Tel: (770) 939-4881 Bankruptcy Case No.: 05-86092 Type of Business: The Debtor is a child development center. Chapter 11 Petition Date: December 5, 2005 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: David G. Bisbee, Esq. Law Office of David G. Bisbee 2929 Tall Pines Way Atlanta, Georgia 30345 Tel: (770) 939-4881 Fax: (770) 939-4881 Total Assets: $2,368,810 Total Debts: $977,970 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ McDonald Insurance Agency Trade debt $7,000 90 Whitlock Place Marietta, GA 30060 American Express Company $3,791 P.O. Box 650448 Dallas, TX 75265 Capital One Visa Trade debt $3,087 P.O. Box 70885 Charlotte, NC 28272 Kilco Food Service Trade debt $1,790 455 Highway 138 West Bldg. 1, Suite A Jonesboro, GA 30238 Walton Electric Trade debt $1,505 3645 Lenora Church Road Snellville, GA 30278 T & G Automotive Trade debt $1,240 5207 Highway 78 Stone Mountain, GA 30087 Omni Financial Trade debt $1,002 380 Interlocken Crescent Suite 800 Broomhill, CO 80021 Parent Magazine Trade debt $996 2346 Perimeter Park Drive Suite 200 Atlanta, GA 30341 West Georgia Fire Extinguisher $610 770 Kingsbrudge Road Carrollton, GA 30117 Premium Finance Co. Trade debt $472 P.O. Box 100207 Columbia, SC 29202 IKON Financial Services Trade debt $465 P.O. Box 740540 Atlanta, GA 30374 Rockbridge Swim & Tennis Club $423 P.O. Box 870006 Stone Mountain, GA 30087 Aire Master of Atlanta Trade debt $168 P.O. Box 2229 Cartersville, GA 30120 Gwinnett County Water Trade debt $167 684 Winder Highway Lawrenceville, GA 30045 Terminex International $135 3990 Flowers Road, Suite 500 Doraville, GA 30360 IKON Office Solutions $78 6700 Sugarloaf Parkway Duluth, GA 30097 Federal Express Trade debt $24 P.O. Box 94515 Palatine, IL 60094 LASALLE COMMERCIAL: S&P Places Low-B Ratings on $12.6 Mil. Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to LaSalle Commercial Mortgage Securities Inc.'s $389 million commercial mortgage pass-through certificates series 2005-MF1. The preliminary ratings are based on information as of Dec. 5, 2005. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic diversity of the loans. All of the classes of certificates are currently being offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.33x, a beginning LTV of 91.5%, and an ending LTV of 82.3%. Preliminary Ratings Assigned LaSalle Commercial Mortgage Securities Inc. Recommended Class Rating Amount credit support ----- ------ ------ -------------- A AAA $340,381,000 12.500% B AA $7,294,000 10.625% C A $10,212,000 8.000% D BBB+ $6,807,000 6.250% E BBB $2,918,000 5.500% F BBB- $2,918,000 4.750% G BB+ $4,862,000 3.500% H BB $1,945,000 3.000% J BB- $1,945,000 2.500% K B+ $973,000 2.250% L B $1,945,000 1.750% M B- $972,000 1.500% N NR $5,835,996 0.000% X* AAA $389,007,996 N/A R** NR N/A N/A LR** NR N/A N/A *Interest-only class with notional dollar amount. **Residual certificates. NR - Not rated. N/A - Not applicable. LE NATURE: S&P Assigns B Rating to $100 Mil. Senior Secured Loan ---------------------------------------------------------------- Standard & Poor's assigned its 'B' bank loan rating and recovery rating of '4' to Le Nature's Inc.'s new $100 million senior secured term loan B due 2010, indicating an expected marginal recovery of principal in the event of a payment default. Standard & Poor's also affirmed its existing ratings on the Latrobe, Pennsylvania-based alternative beverage producer, including its 'B' corporate credit rating. The incremental $100 million term loan will be added to the company's existing $175 million senior secured credit facility through an amendment. Proceeds from the new term loan will be used to refinance about $83.8 million of outstanding borrowings on the company's revolving credit facility. The transaction serves to term-out borrowings on Le Nature's revolving credit facility, thereby increasing the company's layer of permanent debt. The ratings are based on preliminary terms and are subject to review upon final documentation. The outlook is stable. Pro forma total debt outstanding at Sept. 30, 2005, was about $329 million. Given the company's relative size disadvantage and vulnerable business risk profile, we expect Le Nature's to achieve and maintain strong credit protection measures," said Standard & Poor's credit analyst Alison Sullivan. Despite the additional debt, operating performance and credit metrics should improve from current levels now that the Phoenix facility is operational. The outlook could be revised to positive if Le Nature's sustains strong operating performance, reduces leverage as expected, and maintains appropriate covenant cushion. LIFESTREAM TECH: Sept. 30 Balance Sheet Upside-Down by $7.6 Mil. ---------------------------------------------------------------- Lifestream Technologies Inc. delivered its quarterly report on Form 10-QSB for the quarterly period ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Lifestream Technologies reported that it incurred a net loss of $1,281,125 for the three months ended September 30, 2005, compared to a net loss of $2,487,469 for the three months ended Sept. 30, 2004. At Sept. 30, 2005, the Company had a working capital deficit of $7,130,438 and an accumulated deficit of $65,165,816. Going Concern Doubt Lifestream's independent registered public accountants, BDO Seidman, LLP, expressed substantial doubt about the Company's ability to continue as a going concern after it audited Lifestream's consolidated financial statements for its most recently completed fiscal years ended June 30, 2005, and 2004. The Company currently does not have sufficient operating revenues or cash to fund its operations beyond February 2006. The Company has been unable to meet its debt service obligations and has relied upon waivers and deferrals from its lenders in order to avoid defaulting on secured loans. The Company has current obligations totaling approximately $4,517,000 due on Feb. 1, 2006, including $2,869,740 owed to Master Fund, for which substantially all of the Company's assets serve as collateral. The Company has no current ability to repay those obligations. Without restructuring of the current indebtedness or the receipt of additional financing, the Company will be in default of its debt repayment obligations and may be forced to cease operations and its assets may be subject to foreclosure by both secured and unsecured investors. The Company says that those conditions raise substantial doubt as to its ability to continue as a going concern. Lifestream Technologies Inc. -- http://www.lifestreamtech.com/-- markets a proprietary over-the-counter, total cholesterol- monitoring device for at-home use by both health-conscious and at- risk consumers. The Company's cholesterol monitor enables an individual, through regular at-home monitoring of their total cholesterol level, to continually assess their susceptibility to developing cardiovascular disease, the single largest cause of premature death and permanent disability among adult men and women in the U.S. As of Sept. 30, 2005, Lifestream Technologies' balance sheet shows a $7,597,476 stockholders' deficit compared to a $6,398,851 stockholders' deficit at June 30, 2005. LIQUIDMETAL TECH: Balance Sheet Upside-Down by $972K at Sept. 30 ---------------------------------------------------------------- Liquidmetal Technologies Inc. (OTC:LQMT) reported its financial results for the three months ended Sept. 30, 2005. Liquidmetal incurred a $3.3 million net loss for the quarter ended Sept. 30, 2005, compared to a $6.2 million net loss for the same period in 2004. Revenue decreased $300,000 to $4.3 million for the three months ended Sept. 30, 2005 from $4.6 million for the three months ended Sept. 30, 2004. The decrease consisted of an $800,000 decrease from the sales and prototyping of parts manufactured from bulk Liquidmetal alloys to consumer electronics customers as a result of decreased demand for conventional hinge components used in certain cellular phone models. The decrease was offset by an increase of $600,000 from coatings products sales. The Company's balance sheet showed $23.0 million in total assets and liabilities of $23.9 million, resulting in a stockholders' deficit of approximately $972,000. Liquidmetal has experienced losses from continuing operations during the last two fiscal years and has an accumulated deficit of $139 million as of Sept. 30, 2005. In addition, the Company had a $9.8 million working capital deficit at Sept. 30, 2005. Material Weakness Stonefield Josephson, Inc., Liquidmetal's independent auditor, advised the Company that there are material weaknesses in its internal controls, related to internal controls of its South Korean operations. Because of the material weaknesses discovered, Stonefield has expanded the scope of its review of the Company's interim financial statements for the period ended Sept. 30, 2005. The material deficiencies in the Company's internal controls over financial reporting include: a) lack of adequate segregation of duties in the Company's South Korean operations in accounts receivable, involving cash receipts, shipping, delivery of products, and customer invoice reconciliations; b) lack of adequate segregation of duties in the Company's Coatings Division in Texas in order processing and invoicing; c) lack of adequate controls and documentation in the Company's South Korean operations to evidence proper customer invoicing and revenue recognition in the proper period; d) lack of progress in documenting, assessing and evaluating the Company's internal controls in our South Korean Operations evidenced by aforementioned deficiencies of which remediations will need to be completed as of Dec. 31, 2005. e) lack of sufficient controls over internal access to the Company's SAP system of reporting by unauthorized users; and f) the manual performance of numerous procedures that could be automated using current reporting systems. Going Concern Doubt Stonefield Josephson expressed substantial doubt about Liquidmetal's ability to continue as a going concern after it audited the Company's 2003 and 2004 financial statements. The auditing firm pointed to the Company's significant operating losses and working capital deficit. On Nov. 23, 2005, Stonefield Josephson informed Liquidmetal that it will cease to act as the Company's independent registered public accounting firm upon the completion of their review of the Company's interim unaudited financial statements as of and for the three and nine-month periods ended Sept. 30, 2005. About Liquidmetal Liquidmetal Technologies -- http://www.liquidmetal.com/-- is the leading developer, manufacturer, and marketer of products made from amorphous alloys. Amorphous alloys are unique materials that are characterized by a random atomic structure, in contrast to the crystalline atomic structure possessed by ordinary metals and alloys. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. The combination of a super alloy's performance coupled with unique processing advantages positions Liquidmetal alloys for what the company believes will be The Third Revolution(TM) in material science. MCI INC: Fitch May Lift Senior Unsecured Debt Rating After Review ----------------------------------------------------------------- The ratings for Verizon Communications, Inc., and subsidiaries remain on Rating Watch Negative by Fitch Ratings following the announcement that Verizon plans to consider the divestiture of Verizon Information Services, its directories publishing business, through a sale, spin-off or other strategic transaction. Fitch also has MCI, Inc.'s 'B' senior unsecured debt rating on Rating Watch Positive. The securities of both companies were placed on Rating Watch on Feb. 14, 2005, following the announcement that Verizon Communications, Inc., planned to acquire MCI. Fitch plans to incorporate the potential effects of this transaction into its evaluation of Verizon's acquisition of MCI Inc. Verizon plans to evaluate a number of alternatives in the divestiture of the directory business. The company states that a potential transaction will be used to create value for shareowners, maintain financial flexibility and to pursue opportunities to reduce debt. In order to maintain a similar level of financial flexibility after the sale of the directory business, Fitch would like to see the effect of the transaction to be deleveraging, as Verizon will lose the significant level of free cash flow provided by the directory business. Over the last twelve months ending Sept. 30, 2005, Verizon's Information Services segment generated $1.74 billion in EBITDA, and a significant level of EBITDA is converted into free cash flow, as capital expenditures are typically nominal in this business. While Fitch acknowledges the strong cash flows that have been historically generated by the directory business, Fitch also believes that the business is not materially core to Verizon's operations after it closes the acquisition of MCI, and focuses on providing bundled wireline and wireless services to its business and residential customer base. The transaction will be subject to certain regulatory approval, which could take up to a year to complete. With regard to the MCI transaction, Verizon has obtained the necessary approvals from the Federal Communications Commission and the U.S. Department of Justice. Several state regulatory jurisdictions have yet to approve the transaction. Thus far, a majority of the company's state regulatory jurisdictions have approved the transaction, including New York and California. Fitch anticipates finalizing its ratings on Verizon concurrent with the close of the transaction, which is expected to be by the end of 2005 or in January 2006. The long-term debt of other Verizon subsidiaries also remains on Rating Watch Negative, as well as on the implied senior unsecured rating of Verizon Communications. The 'F1' ratings assigned to Verizon Global Funding and Verizon Network Funding are not on Rating Watch Negative. Verizon Global Funding primarily funds the non-regulated operations of Verizon. Verizon Global Funding is a subsidiary of Verizon, and benefits from a support agreement with Verizon. These subsidiary ratings remain on Rating Watch Negative by Fitch: Verizon Global Funding -- Long-term debt 'A+'. Cellco Partnership (Verizon Wireless) -- Notes 'A+'. GTE Corp. -- Debentures/notes 'A+'. NYNEX Corp. -- Debentures 'A+'. Verizon New York -- Debentures 'A+'. Verizon Credit Corp. -- Notes 'A+'. Verizon Florida -- Senior unsecured debentures 'A+'. Verizon New England -- Senior unsecured bonds 'A+'; -- Debentures 'A+'; -- Notes 'A+'. Verizon South -- Senior unsecured debentures 'A+'. GTE Southwest -- Senior unsecured debentures 'A+'. Verizon California -- First mortgage bonds 'A+'; -- Senior unsecured debentures 'A+'. Verizon Delaware -- Senior unsecured debentures 'A+'. Verizon Maryland -- Senior unsecured debentures 'A+'. Verizon New Jersey -- Senior unsecured debentures 'A+'. Verizon North -- First mortgage bonds 'A+' -- Senior unsecured debentures 'A+'. Verizon Northwest -- First mortgage bonds 'A+'; -- Senior unsecured debentures 'A+'. Verizon Pennsylvania -- Senior unsecured debentures 'A+'. Verizon Virginia -- Senior unsecured debentures 'A+'. Verizon West Virginia -- Senior unsecured debentures 'A+'. MCI also remains on Rating Watch Positive: MCI Inc. -- Senior unsecured debt 'B'. These ratings are affirmed by Fitch: Verizon Global Funding -- Commercial paper 'F1'. Verizon Network Funding -- Commercial paper 'F1'. MERRILL LYNCH: Moody's Rates Class B-5 Sub. Certificates at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Merrill Lynch Mortgage Investors Trust Series 2005-SL3, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by: * Option One Mortgage Corporation (28%), * Accredited Home Lenders (18%), * Acoustic Home Loans (16%), and * nine other (38%, not exceeding 10% each) originated fixed- rate (100%) closed-end seconds mortgage loans acquired by Merrill Lynch Mortgage Capital and Merrill Lynch Mortgage Lending. The ratings are based primarily on: * the credit quality of the loans; and * the protection from: -- subordination, -- overcollateralization, and -- excess spread. Moody's expects collateral losses to range from 9.00% to 9.50%. Wilshire Credit Corporation will service the loans. Moody's has assigned Wilshire Credit Corporation its servicer quality rating (SQ1-) as a primary servicer of second lien loans. The complete rating actions are: Merrill Lynch Mortgage Investors Trust Series 2005-SL3 * Class A-1, rated Aaa * Class A-2A, rated Aaa * Class A-2B, rated Aaa * Class M-1, rated Aa2 * Class M-2, rated A2 * Class B-1, rated Baa1 * Class B-2, rated Baa2 * Class B-3, rated Baa3 * Class B-4, rated Ba1 * Class B-5, rated Ba2 MIRANT CORP: Court Okays Settlement Pact with City of Wyandotte --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the settlement agreement Mirant Corporation and its debtor-affiliates inked with the City of Wyandotte. As reported in the Troubled Company Reporter on Dec. 1, 2005, Jason D. Schauer, Esq., at White & Case LLP, in Miami, Florida, related that Mirant Wyandotte, LLC, a Mirant Corporation debtor-affiliate and the City of Wyandotte are parties to these agreements: a. the Lease Agreement dated December 21, 2000, pursuant to which Mirant Wyandotte leased from the City 24 acres of land to develop and operate an electrical generating facility; b. the Environmental Indemnity Agreement dated December 21, 2000, along with BASF Corporation; and c. the Development Agreement and the Project Output Agreement, all dated December 21, 2000, along with the Municipal Services Commission of Wyandotte. According to Mr. Schauer, out of these agreements, disputes arose among the parties including those that involve tax obligations, which Mirant Wyandotte allegedly owes to the City. On August 9, 2004, Mirant Wyandotte sought a third extension of its time to assume or reject certain executory contracts and leases, including the Lease with the City. The City objected and argued that Mirant Wyandotte should not be permitted additional time to assume or reject the Lease because Mirant Wyandotte had failed to pay property taxes attributable to the Property for the 2003 and 2004 tax years. Nevertheless, the Court granted the extension. The City asked the U.S. Bankruptcy Court for the Northern District of Texas to compel Mirant Wyandotte to pay for the property taxes but the Court denied its request. The City filed five proofs of claim based on unpaid ad valorem taxes -- Claim Nos. 8013, 5867, 6041, 5868 and 5855. Claim Nos. 5855, 5868 and 6041 were expunged and disallowed, while the Court adjourned the Debtors' objection with respect to Claim No. 8013. To resolve all outstanding issues between Mirant Wyandotte and the City relating to the leased premises and the Agreements, the parties entered into a Settlement Agreement and Release. The important terms of the Settlement Agreement are: A. Lease Agreement a. The City and Mirant Wyandotte have agreed to amend the Lease Agreement. Under the Lease Amendment, the Lease will terminate automatically on June 30, 2006; b. In the event that Mirant Wyandotte will terminate the Lease prior to June 30, it must notify and pay the City these amounts for the rent due: Month and Year Rent Payment -------------- ------------ November 2005 $5,000 December 2005 5,000 January 2006 6,000 February 2006 7,000 March 2006 8,000 April 2006 10,000 May 2006 12,000 June 2006 14,000 c. Mirant Wyandotte may also extend the term of the Lease beyond June 30, 2006, upon written notice to the City; d. The Lease Amendment also provides a list of specific activities or Restoration Obligations that Mirant Wyandotte must perform to comply with Section 4.7 of the Lease; and e. Mirant Wyandotte will assume the Lease, as amended. The parties have agreed that the cure obligation is $10,000. B. The Environmental Indemnity Agreement a. The City, Mirant Wyandotte, and BASF have agreed to an amendment to the Environmental Indemnity Agreement. The Environmental Indemnity Amendment provides that, if Mirant Wyandotte terminates the Lease pursuant to the Lease Amendment, Mirant Wyandotte's obligations under the Environmental Indemnity Agreement will be limited to: * performing certain Restoration Obligations; and * responding to any future indemnification claims; and b. Mirant Wyandotte will assume the Environmental Indemnification Agreement, as amended, with $0 as cure amount. C. Tax Stipulation a. The City and Mirant Wyandotte have entered into a Stipulation to Entry of Consent Judgment. The Tax Stipulation provides for the assessed value of Mirant Wyandotte's 2005 taxes, which will result in a reduction of the taxes on the Wyandotte Facility for 2005 totaling $150,000 to $250,000; and b. The tax reduction for 2006 is estimated to be even greater. The Debtors have agreed that current and future taxes may be paid without further Court order. D. Other Principal Terms a. The City and Mirant Wyandotte agree and acknowledge that: * the Project Output Agreement and the Development Agreement have terminated pursuant to their own terms; and * Claim Nos. 5855, 5868, and 6041 have been disallowed and expunged, and the City is not entitled to vote on any plan of reorganization of the Debtors or receive any distributions in relation to the those Claims; b. Claim No. 5867 and 8013 will be disallowed and expunged in their entirety and the City will not be entitled to vote those claims in connection with any plan of reorganization of the Debtors or receive any distributions in relation to those Claims; and c. Each of the City and Mirant Wyandotte has agreed to release and forever discharge the other of, and from, claims, demands, actions, or causes of action arising from Agreements prior to the date of the Settlement Agreement as well as from any obligation for the property taxes, except as provided in the Settlement Agreement. The Court also: a. approved the Lease Amendment, the Environmental Indemnity Amendment, and the Tax Stipulation; b. permitted Mirant Wyandotte to assume the Lease, as amended, and the Environmental Indemnity Agreement, as amended, pursuant to Section 365 of the Bankruptcy Code; and d. expunged and disallow the Claims in their entirety. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 86 Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Names William P. von Blasingame as Caribbean SVP ------------------------------------------------------------- Mirant Corp. (Pink Sheets: MIRKQ) reported that William P. von Blasingame, 47, has joined the company as senior vice president and general manager, Caribbean. Mr. von Blasingame will be responsible for all Mirant assets and businesses in the region. Mr. von Blasingame will report to Chairman and Chief Executive Officer Edward R. Muller. "William's extensive experience in international operations and financing makes him a terrific addition to our global team," said Muller. "I'm delighted to attract an executive of his caliber to the new Mirant." Mr. von Blasingame brings nearly 20 years of power industry experience to Mirant. The bulk of his career was with independent power producer Edison Mission Energy. For the last nine years, he was a vice president of Edison Mission, and lived in Singapore. Mr. von Blasingame also served as vice president, project finance, of Edison Mission's Asia region, and for the last five years, as vice president and chief financial officer of the region. During his tenure, Mr. von Blasingame was responsible for accounting, budgeting, tax structuring and project finance. Among other accomplishments, Mr. von Blasingame oversaw $8 billion in financings and played a critical role in developing the first, large-scale independent power projects in Indonesia and Thailand. Mr. von Blasingame also has banking experience gained by managing the restructuring of energy loans while working at Continental Illinois National Bank in Chicago. Mr. von Blasingame holds a BS in business administration from Clark-Atlanta University as well as an MBA from the University of California at Berkeley. Mirant's investments in the Caribbean include three integrated utilities and assets in Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mr. von Blasingame joins two other Mirant executives in managing the company's electricity business. Curt Morgan heads Mirant's U.S. operations and J.R. Harris leads its Philippines business. Both executives also report to Muller. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. MQ ASSOCIATES: Moody's Cuts $97MM Discount Notes' Rating to Caa3 ---------------------------------------------------------------- Moody's Investors Service confirmed the ratings of MedQuest, Inc. the operating subsidiary of MQ Associates, Inc. Moody's also downgraded the rating of the senior discount notes of MQ Associates to Caa3. The outlook for the ratings is negative. This action concludes the review initiated on March 16, 2005, following the company's announcement that the Board of Directors had placed three company executives on paid administrative leave in connection with the Audit Committee's review of the valuation of net patient receivables. Those executives subsequently resigned from their positions with the company. The company was not able to file its fiscal 2004 Form 10-K until September 22, 2005 and recently became a current filer by submitting its subsequent quarterly information on Form 10-Q on November 14, 2005. The company's current filings included the restatement of prior years' financial statements. These ratings have been confirmed: MQ Associates (parent): * Corporate family rating, B2 MedQuest: * $80 million senior secured revolving credit facility due 2007, B2 * $60 million senior secured term loan due 2009, B2 * $180 million senior subordinated notes due 2012, Caa1 These ratings have been downgraded: MQ Associates: * $97 million ($136 million aggregate principle amount) senior discount notes due 2012, to Caa3 from Caa2 The conclusion of the review and the confirmation of the corporate family rating and the ratings of MedQuest reflect the company's ability to successfully file its restated financial statements with the SEC. During this period, the company also amended the terms of its credit facility and raised additional capital in the form of $20 million in preferred stock issued to affiliates of the company's capital sponsor, JP Morgan Partners. These developments have eliminated the potential for default related to the inability to provide financial statements of the company and ensure adequate liquidity for the continued operations of the company in the near term. The downgrade of the ratings of the senior discount notes of MQ Associates reflects Moody's belief that these instruments will bear the preponderance of loss given a credit event. More specifically, Moody's believes that the expected loss on these instruments has deteriorated when considering estimates of enterprise value based on current operating results and under reasonable distress scenarios. Moody's believes the debt financing of an $80 million pro rata dividend to stockholders in the third quarter of 2004 with the proceeds of these notes has resulted in excessive leverage and challenges in servicing the outstanding debt without adequate growth Moody's is concerned about the competitive nature of the industry, characterized by regional and national companies as well as individual and group physician practices with access to reasonable equipment financing. Continuing concerns about over-utilization of diagnostic imaging services from the Centers for Medicare and Medicaid Services and managed care payors could also strain the company's cash flow. These concerns could result in pricing pressure, mandatory pre-authorizations that would limit volume growth, or mandatory center certifications that would require additional capital expenditures to add modalities. The ratings also reflect continuing high leverage. For the twelve months ended September 30, 2005, Moody's estimates that adjusted cash flow from operations to lease adjusted debt was approximately 11%, which is strong for the B2 rating category. Adjusted free cash flow from operations to adjusted debt was approximately 4%, which is moderate for the B2 rating category. However, as noted below, Moody's does not expect adjusted free cash flow to remain at this level. Moody's adjusts cash flow and debt amounts to reflect estimates of the incremental debt not included in reported results related to operating leases. The negative outlook reflects Moody's belief that the company may have deferred capital expenditures during the period of uncertainty related to the restatement of the financial statements. Investment in equipment is particularly important in the diagnostic imaging services sector. As a result, Moody's expects free cash flow to be constrained as the company increases spending over the next 12 to 18 months. In addition, Moody's believes that the disruption to the company's business caused by the restatements and departure of three key executives over the past eight months will continue to affect the company's operations in the near term. Moody's notes, however, that the company recently filled the CEO position with a permanent replacement. Moody's also notes that the company remains exposed to an ongoing investigations by the SEC and the U.S. Attorney's Office in Atlanta, Georgia. In support of the ratings, Moody's notes: * the company's geographic diversity and clustered market approach; * a diversified payor mix with limited exposure to government payors, which minimizes reimbursement concentration risk; * the company's growth strategy that historically included a mix of de novo development and acquisitions; and * the overall healthcare industry trend toward outpatient services. For the twelve months ended September 30, 2005, adjusted EBIT coverage of cash interest expense was weak, at approximately 0.8 times. Moody's estimates that lease adjusted debt to adjusted EBITDA was high at approximately 5.7 times. Moody's also notes that the company has not reported positive quarterly net income since the third quarter of 2003. If the company experiences pressure on margins as a result of decreased volume and pricing through competition, managed care initiatives or changes in reimbursement, Moody's could lower the ratings. Likewise, if the company must spend more than expected to renew its equipment or address a possible requirement by payors to add modalities, there could be downward pressure on the ratings. Specifically, if adjusted free cash flow to adjusted debt is expected to be negative for a prolonged period of time, Moody's could consider downgrading the ratings. Moody's expects the company's new management team to focus on improving operations and increasing market share; if the company were to engage in a debt-financed acquisition or dividend over the next 12 months, the ratings could also come under pressure. However, if the company is able to successfully return operations to Moody's former expectations, there could be upward pressure on the outlook. Specifically, if Moody's expected adjusted cash flow to adjusted debt to stabilize in the mid-teens, with adjusted free cash flow to adjusted debt of at least 5%, Moody's could move the outlook to stable. Moody's does not foresee an upgrade in the ratings in the near-term because of the significant challenges the company faces. Moody's expects the company to have adequate liquidity over the next four quarters. Although internal cash flow is strong for the B2 category, the rating agency expects free cash flow to be constrained by increased capital expenditures for which the company may have to use its currently undrawn $80 million revolver. Covenant levels in the amended credit agreement are very generous, and Moody's expects the company to remain in compliance in the near term. Since all assets are secured under the credit agreement, there is little opportunity for alternate sources of liquidity. The ratings of the senior secured credit facilities are held at the level of the corporate family rating to reflect the lack of adequate collateral coverage. The senior subordinated notes are notched two levels below the corporate family rating to reflect the lack of adequate collateral coverage and contractual subordination of the notes to the senior secured credit facilities. The senior discount notes at the holding company are notched four levels below the corporate family rating to reflect their structural subordination to the senior subordinated notes at the operating company and the expectation of minimal recovery in a distress scenario. MQ Associates, Inc., through its wholly owned subsidiary, MedQuest, Inc., operates 92 fixed-site outpatient diagnostic centers in 13 states. For the twelve months ended September 30, 2005, the company recognized net revenue of approximately $294 million. NOBEX CORPORATION: Biocon Eyes Intellectual Property Assets ----------------------------------------------------------- Bangalore-based Biocon will try to acquire Nobex Corporation's intellectual property assets following the bankruptcy filing of its research partner, The Indian Express reports. Biocon has eyed the purchase of Nobex's intellectual property for an oral insulin drug, which it has partnered with in October 2004, according to published reports. To date, Biocon's investment in Nobex totals $1 million in common stock and $4.8 million in convertible loans. As of March 31, 2005, Biocon had a 4.4% ownership interest in Nobex, The Indian Express reports. Headquartered in Durham, North Carolina, Nobex Corporation -- http://www.nobexcorp.com/-- is a drug delivery company developing modified drug molecules to improve medications for chronic diseases. The company filed for chapter 11 protection on Dec. 1, 2005 (Bankr. D. Del. 05-20050). Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell, and Ben Hawfield, Esq., at Moore & Van Allen PLLC, represent the Debtor in its chapter 11 proceedings. When the Debtor filed for protection from its creditors, it estimated between $1 million to $10 million in assets and $10 million to $50 million in liabilities. NTL INC: Virgin Mobile Buy-Out Plans Prompt S&P to Review Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for NTL Inc., including the 'B+' corporate credit rating, on CreditWatch with developing implications, following the company's announcement of its cash and equity bid for Virgin Mobile PLC. The developing CreditWatch implications indicate that ratings can be raised, lowered, or affirmed following Standard & Poor's review of the transaction. "Potential for a negative action exists considering the cumulative risks that NTL would have to manage in integrating a business with a different customer base, product, and culture, as well as in developing a compelling quadruple-play offering," said Standard & Poor's credit analyst Simon Redmond. "In addition, the company has shown an appetite for a potential further increase in debt. Conversely, the developing CreditWatch implications also recognize the potential upside for the NTL rating, as Virgin is a strong consumer brand, the combined entity may be better positioned over the longer term, and Virgin Mobile is presently a cash-generative, dividend-paying business." The ratings on U.K.-based telephony, cable TV, and Internet service provider NTL are constrained by the company's: * competitive operating environment, * weak financial performance, and * significant gross leverage. NTL benefits, however, from a high-bandwidth two-way network, an established residential customer base, and ongoing operational improvements. NTL's offer for Virgin Mobile follows its announced acquisition of Telewest Communications Networks Ltd. (BB-/Watch Neg/--) and shows a willingness to invest in a long-term strategy. The combination of NTL and Virgin Mobile would seek to offer bundled services, adding mobile communications to the current cable triple play of fixed calls, broadband Internet, and TV. The combined company is negotiating to use the Virgin brand name. Total debt at NTL of GBP2.3 billion at Sept.30, 2005, could increase to about GBP6.3 billion pro forma for the Telewest acquisition and potential Virgin Mobile transaction. Virgin Mobile operates under a reselling agreement with T-Mobile Ltd., the U.K. operation of Deutsche Telekom (A-/Stable/A-2). It has grown strongly since its launch in November 1999 with an attractive prepaid offering. It is currently using contracts in an attempt to increase its revenue market share of about 3% toward its customer share of 7%. The combination would add 4.2 million users to NTL's 6.3 million revenue-generating units. The customer overlap and implications for margins and cash generation will form part of the review. Standard & Poor's will consider the implications for the announcement, particularly with respect to a combined company's business risk and deleveraging profile. From a business perspective, potential benefits will be set against internal and external challenges. If the combined entity were to assimilate Virgin Mobile's strengths, such as growth, positive brand perception, and good customer service, this could address some of NTL's weaknesses, including exposure to fixed-to-mobile substitution. If not, the net effect could be negative. If the Virgin Group, as a 72% owner of Virgin Mobile, elects to accept equity consideration, the change in credit metrics is currently expected to be small after NTL's re-leveraging for Telewest. Following S&P's review, the ratings on NTL are likely to be affirmed, with a low probability of an upgrade. A downgrade is also seen as unlikely, unless a significant part of the consideration is paid in cash. OAK CREEK: FTI Consulting Approved as Financial Advisors -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized Oak Creek Park, LLC, to employ FTI Consulting, Inc. as its financial advisors. FTI Consulting will: 1) assist the Debtor in the preparation of information and analysis necessary for the confirmation of a plan of reorganization, including: a) determining the appropriate treatment of secured claims against the Debtor and establishing the feasibility of its proposed chapter 11 plan, and b) opining on the adequacy of any proposed amount of new value to be contributed by the Debtor; 2) assist the Debtor in preparing of financial related disclosures required by the Bankruptcy Court or the Debtor's creditors and assist in analyzing creditors' claims; and 3) render other financial and general business advisory services to the Debtor that are necessary in its chapter 11 case. Ronald F. Greenspan, a member of FTI Consulting, reports the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Senior Managing Directors $560 - $625 Managing Directors & Directors $415 - $560 Associates $ Consultants $205 - $385 Paraprofessionals $95 - $168 FTI Consulting assures the Court that it does not represent any interest materially adverse to the Debtor and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in San Francisco, California, Oak Creek Park, LLC, filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D. Calif. Case No. 05-56102). Desmond Cussen, Esq., Gibson, Dunn & Crutcher LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. PACER INTERNATIONAL: Moody's Raises Corporate Family Rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service upgraded Pacer International, Inc.'s Corporate Family Rating to Ba3 from B1, and changed the company's rating outlook to stable from positive. The upgrade was prompted by recent improvements in Pacer's operating results concurrent with its on-going program of debt reduction. The Corporate Family Rating considers steady improvements in Pacer's operating results owing to sustained strong economic fundamentals in the intermodal rail transportation sector. The resulting robust positive free cash flow generation has continued to facilitate debt reduction. These strengths are balanced by: * Pacer's relatively heavy lease-adjusted leverage; * cash flow implications of the company's recently announced dividend; and * the modest level of tangible assets inherent in the company's agency-oriented business model. The stable ratings outlook reflects expectations of continued favorable financial performance due to the over-all strength in the intermodal rail sector. Moody's expects Pacer will continue to generate strong positive cash flows over the next 12-18 months, allowing the company to further reduce its existing balance sheet debt. Ratings or their outlook could be subject to upward revision if Pacer were to continue to grow revenue and maintain current operating margins, while further reducing debt and limiting material shareholder enhancements, such as additional dividend distributions or share repurchase programs. For ratings improvement, Pacer would have to sustain: * free cash flow in excess of 20% of debt; * leverage (debt/EBITDA, as measured per Moody's standard methodology) of less than 3.0 times; and * EBIT/interest coverage in excess of 3.0 times over a longer, normal-growth market environment. Conversely, ratings or their outlook could face downward revision: * if the company were to increase balance sheet debt or operating lease levels appreciably; * if leverage were to exceed 4.0 times; * if free cash flow were to fall below 10% of debt; or * if the company pursues a more aggressive financial strategy. In an improving intermodal transportation market, Pacer has been able to take advantage of a strong and diversified customer base in both its retail and wholesale operations to grow revenue and profits, while repaying a significant amount of balance sheet debt from generated cash flow. Since 2002, revenue had grown about 17%, to $1.9 billion in the LTM period ending September 2005, while the company maintained gross profit margins at about 22%. On light capital expenditure levels (averaging about $5 million over this period) owing to the company's asset-light and lease- oriented business model, Pacer generated a fairly robust level of free cash flow. As a result, the company was able to repay balance sheet debt by about 56%, from $247 million as of December 2002 to $108 million as of September 2005. Nonetheless, the company's operating leases remained high with annual lease expense in the range of $90-100 million annually. Leverage improved substantially, as debt/EBITDA fell from about 4.5 times to about 3.0 times as of September 2005. Free cash flow is similarly strong at about 23% of total debt. However, Moody's notes that Pacer's recently-announced dividend will result in a $20-25 million reduction in free cash flow annually. As such, LTM September 2005 free cash flow, pro forma for the new dividend, is estimated to be approximately 19% of total debt. Although this still represents robust cash generation, it illustrated the effects that more aggressive financial policies could have on the company's credit fundamentals. Moody's notes that a large majority of the debt for the leverage calculations results from adjustments for the operating leases, as a substantial portion of the company's operating assets are financed through such leases. Hence, any material increase in operating lease levels could substantially increase leverage, heightening the importance that the company maintains its operating margins while growing its fleet. To assure access to rail capacity for cargo booked through its wholesale segment operations, Pacer has secured long term contracts with key Class 1 railroads. These contracts comprise the majority of the company's purchased transportation costs. In particular, Pacer has large slot arrangements with both CSX and Union Pacific under long-term contracts. Moody's believes that provides the company a degree of competitive advantage over smaller agency-based intermodal services. However, Moody's also notes that this implies a concentration of reliance on these two carriers, leaving Pacer exposed to any difficulties that these customers may experience in their operations. Moody's believes that, given expectation for positive free cash generation over the near-term, Pacer's liquidity position should be adequate to cover unexpected market swings or working capital requirements. The company has a $75 million senior secured revolving credit facility in place, of which about $15 million was used in September 2005 for letters of credit, and no current drawings under its overdraft facility. But since Pacer maintains only minimal cash balances, Moody's expects some temporary usage of the revolving credit facility for working capital or CAPEX purposes, although this should be modest due to the asset-light and agency-oriented aspects of the company's business model. Moreover, the revolver does not mature until June 2008, while the term loan has no scheduled payments until December 2009. The senior secured credit facilities are rated Ba3, the same as the Corporate Family Rating, reflecting both level of debt relative to the company's tangible asset base and that all of Pacer's debt is secured. Pacer reported a total asset balance of $571 million in September 2005, half of which was represented by goodwill ($288 million). About 35% of the assets were accounts receivable ($200 million), which varies with gross sales volume, but only 6% ($36 million) of the company's assets were comprised of fixed assets that would provide more reliable coverage to secured debt in the event of liquidation. This implies relatively weak tangible asset protection for the company's balance sheet indebtedness. These ratings have been upgraded: Pacer International, Inc.: * Senior secured term loan due 2010, to Ba3 from B1; * Senior secured revolving credit facility due 2008, to Ba3 from B1; and * Corporate Family Rating to Ba3 from B1. Headquartered in Concord, California, Pacer International, Inc. is a leading non-asset based North American third-party logistics and transportation provider, offering logistics and other services to facilitate the movement of freight from origin to destination. Pacer International's services include: * wholesale stacktrain, * retail trucking, * intermodal marketing, * warehousing and distribution, * international freight forwarding, and * supply-chain management services. Pacer had LTM September 2005 revenue of $1.9 billion. OAK CREEK: Wants to Hire Cushman & Wakefield as Appraisers ---------------------------------------------------------- Oak Creek Park, LLC asks the U.S. Bankruptcy Court for the Northern District of California for permission to employ Cushman & Wakefield California Inc., as its appraisers. Cushman & Wakefield will appraise the Debtor's real estate properties and express its opinion on the fair market value of those properties in order to provide the Debtor with an independent and supportable basis in formulating a proposed plan of reorganization. Michael G. Davis, a member of Cushman & Wakefield, reports that the Firm will be paid: a) an appraisal fee of $9,000 to be paid in two installments, with $4,500 to be paid with the commencing of the appraisal and the remaining $4,500 to be paid upon completion and delivery of the appraisal report pursuant to the Engagement Letter between Cushman & Wakefield and the Debtor; and b) an additional fee of $300 per hour for any subsequent meetings, depositions and testimonies that Cushman & Wakefield will provide for the Debtor. Cushman & Wakefield assures the Court that it does not represent any interest materially adverse to the Debtor and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in San Francisco, California, Oak Creek Park, LLC, filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D. Calif. Case No. 05-56102). Desmond Cussen, Esq., Gibson, Dunn & Crutcher LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. PATHMARK STORES: Posts $18.3 Million Net Loss in Third Quarter -------------------------------------------------------------- Pathmark Stores, Inc. (Nasdaq: PTMK), reported unaudited results for its third quarter and nine-month period ended Oct. 29, 2005. Sales for the third quarter of fiscal 2005 were $980.5 million, an increase of 0.1% from $979.9 million in the prior year's third quarter. Same-store sales decreased 0.6% in the third quarter. The company reported a net loss of $18.3 million in the third quarter of fiscal 2005 compared to a net loss of $3.6 million in the prior year's third quarter. The decrease was due to an $11.8 million decrease in Adjusted EBITDA, a merchandising and store initiative charge of $4.2 million, a store labor buyout charge of $3.6 million, and a separation agreement charge of $1.6 million. "Pathmark made significant progress in the quarter by completing its initial merchandising and store initiative," John Standley, Chief Executive Officer, said. "In each of our 142 stores, we expanded our perishable selections, introduced new merchandise categories such as party goods, kitchen items, dollar merchandise, and toys, and improved the appearance of our stores both inside and out. While we are confident that our increased focus on perishables will be beneficial, significantly higher inventory shrink in the perishable departments impacted our quarter's results. We believe this shrink result is transitory and have taken steps to normalize it by the end of the current quarter. Additionally, we continue to evaluate and challenge all elements of our business to improve operating performance." Capital investments in the first nine months of fiscal 2005 were $43.8 million. During the first nine months of fiscal 2005, the company opened one new store, closed two stores and renovated six stores. The new store was a replacement for one of the stores closed. During the remainder of fiscal 2005, the company plans to open one new store and complete two store renovations. Total capital investments for fiscal 2005 are expected to be approximately $70 million. Pathmark Stores, Inc. -- http://www/pathmark.com/-- is a regional supermarket currently operating 142 supermarkets primarily in the New York - New Jersey and Philadelphia metropolitan areas. The Company filed for chapter 11 protection on July 12, 2000 (Bankr. Case 00-02963). The Court confirmed its prepackaged Plan of Reorganization on Sept. 7, 2004. Standard & Poor's currently rates Pathmark's $350 million issue of 8-3/4% Senior Subordinated Notes due 2012 at CCC+. PANTRY INC: Earns $25.4 Million of Net Income in Third Quarter -------------------------------------------------------------- The Pantry, Inc. (NASDAQ: PTRY), reported its financial results for fourth fiscal quarter and year ended September 29, 2005. Total revenues for the fourth quarter of fiscal 2005 were approximately $1.4 billion, a 33.0% increase from last year's fourth quarter, which included an extra week of operations. Net income for the quarter was $25.4 million compared with $12.6 million. The results included charges totaling approximately $0.22 per share related to store closings, impairment charges and uninsured losses associated with Hurricane Katrina. Results for last year's fourth quarter included a net negative impact of approximately $0.07 per share from uninsured hurricane-related property losses, partially offset by gains on real estate transactions. For the full fiscal year, revenues totaled approximately $4.4 billion, a 26.8% increase from fiscal 2004. Net income for the year was $57.8 million, or $2.64 per share, compared with $15.7 million, or $0.76 per share, in fiscal 2004. Excluding a number of financing-related charges, diluted earnings per share for fiscal 2004 were $1.54. President and Chief Executive Officer Peter J. Sodini commented, "Fiscal 2005 was an exceptional year for The Pantry, underscoring the success of our strategic initiatives over the last few years. While fourth quarter operating results were boosted by an unusually strong contribution from the Company's gasoline operations, we remained very competitive, as evidenced by our increases in year-over-year comparable gasoline gallons sold. With comparable store merchandise sales and gasoline gallons both up approximately 5% for the year, our core store base is clearly performing well. We believe this reflects the benefits from our store conversion and rebranding program, as well as our ongoing focus on appealing, higher-margin merchandise categories such as food service and private label products. In addition, we believe our fourth quarter results, in particular, highlighted the benefits of the long-term gasoline supply contracts we have negotiated in recent years, which gave us the flexibility and relative certainty of supply to continue serving our customers through the uncertain market environment in the wake of Hurricanes Katrina and Rita." Merchandise revenues for the fourth quarter increased 1.1% from a year ago, or 8.7% adjusting for the extra week in the prior period, and were up 4.7% on a comparable store basis. The merchandise gross margin was 36.2%, compared with 35.6% a year ago. Total merchandise gross profits for the fourth quarter were $120.9 million, a 2.8% increase from a year ago. For the full fiscal year, comparable store merchandise revenues increased 5.3%, while total merchandise gross profit rose 5.6% on a 30 basis-point improvement in the gross margin to 36.6%. Comparable store gasoline gallons for the quarter increased 3.1% from a year ago, with total gallons sold up 8.4%, or 16.8% adjusting for the extra week in the prior year. Gasoline revenues rose 48.0%, in part reflecting a 36.8% increase in the average retail price per gallon, to $2.49. The gross margin per gallon was 19.4 cents, compared with 12.0 cents a year ago. Gasoline gross profit for the quarter totaled $81.4 million, a 76.0% increase from last year's fourth quarter. For the full fiscal year, comparable store gasoline gallons rose 4.7% and total gasoline gross profit increased 29.3%. The gasoline margin per gallon for the year was 14.3 cents, compared with 12.0 cents in fiscal 2004. During fiscal 2005, the Company acquired 96 convenience stores through three major acquisitions and several smaller transactions. The largest and most strategically significant transaction was the purchase of 53 Cowboys stores (April 2005) located mostly in Georgia and Alabama. The Company also acquired 23 Sentry convenience stores (August 2005) in Virginia and 13 Speedmart stores (September 2005) in Alabama. Mr. Sodini commented, "These deals all represented attractive opportunities to 'tuck-in' modern, high-volume stores that complement our strengths in existing markets, with an immediate positive contribution to earnings per share." Mr. Sodini concluded, "We continue to have very strong momentum carrying into our first quarter to date. As such we are today announcing an increase in our fiscal 2006 EPS guidance to between $2.80 and $2.90, up from our previously reported guidance of between $2.55 and $2.65. This new guidance reflects an increase in our annual gasoline margin assumption to approximately 13 cents per gallon, and a projected negative impact totaling $0.15 to $0.20 per share from a variety of financial items, including the expensing of stock options for the first time, an increase in the number of shares outstanding and a higher income tax rate. Lastly, the new guidance ($2.80-$2.90) does not include expected accretion from any future and/or pending acquisitions. Longer term, with our substantial cash flow and the additional flexibility provided by our recent convertible debt financing, we believe we are very well-positioned to continue building on our strong market presence across the Southeast." Headquartered in Sanford, North Carolina, The Pantry, Inc. -- http://www.thepantry.com/-- is the leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country, with net sales for fiscal 2004 of approximately $3.5 billion. As of June 30, 2005, the Company operated 1,386 stores in 11 states under a number of banners including Kangaroo Express(SM), The Pantry(R), Golden Gallon(R), Cowboys and Lil Champ Food Store(R). The Pantry's stores offer a broad selection of merchandise, as well as gasoline and other ancillary services designed to appeal to the convenience needs of its customers. * * * As reported in the Troubled Company Reporter on Nov. 17, 2005, Moody's Investors Service rated the proposed secured bank loan and senior subordinated convertible notes of The Pantry, Inc. at Ba3 and B3 and affirmed the existing senior subordinated notes at B3 and the corporate family rating at B1. Proceeds from the new debt principally will be used to repay the existing term loan. The rating outlook remains stable. As reported in the Troubled Company Reporter on Nov. 16, 2005 Standard & Poor's Ratings Services affirmed leading convenience store operator The Pantry Inc.'s 'B+' corporate credit rating and changed the outlook to positive from stable. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating to The Pantry's proposed $205 million senior secured term loan due 2012 and $125 million revolving credit facility due 2012. The recovery rating on the loan is '1', indicating the expectation for full recovery of principal in the event of payment default. At the same time, Standard & Poor's assigned its 'B-' rating to the company's proposed $130 million convertible senior subordinated debentures due 2012 to be issued under Rule 144A. Ratings on the company's existing senior subordinated notes were affirmed at 'B-'. Proceeds from refinancing transaction will be used to pay down existing senior secured debt. Pro forma for the transaction, the company will have about $798 million of debt outstanding. PEACE ARCH: Aug. 31 Balance Sheet Upside-Down by CDN$4.2 Million ---------------------------------------------------------------- Peace Arch Entertainment Group Inc. (TSX:PAE.LV)(AMEX:PAE) reported operating results for fiscal 2005, the twelve-month period ended Aug. 31, 2005. The company's full-year revenue totalled CDN$10.7 million, compared to CDN$21.2 million for fiscal 2004. The decrease in revenues compared to the same period of the prior year primarily reflects the lower number of projects produced by Peace Arch and is associated with the Company's strategy to prioritize the strengthening of its infrastructure and the packaging, financing, and distribution of higher quality, more commercial projects. Peace Arch reported net earnings of CDN$1.4 million in fiscal 2005, versus a net loss of CDN$500,000 for fiscal 2004. The net earnings for the year was favorably impacted by a one-time, approximate $2.6 million gain on settlement of obligation related to the previously announced conversion of debt to equity by FremantleMedia. During fiscal 2005, the company delivered six feature films and 26 episodes of two television series. The company also commenced production on two additional motion pictures, one television series and one television pilot during the twelve-month period. During fiscal 2004, Peace Arch delivered seven feature films, 13 episodes of a television series, one documentary, and it also commenced production on one motion picture and two television lifestyle series during the year. "Peace Arch has made demonstrable progress in recent months to position the Company for what we believe will be a very exciting and productive fiscal 2006," Peace Arch Chief Executive Officer Gary Howsam, stated. "We added seasoned veterans, Penny Wolf, Fred Fuchs and Michael Taylor to our management team. The company raised working capital from a group of prominent entertainment industry leaders, closed a pre-production credit facility to facilitate our production financing activities, added several high profile feature films to our forthcoming slate, launched a new genre films division, had several popular television series renewed and garnered awards and nominations for a number of our feature films and television productions." At Aug. 31, 2005, Peace Arch Entertainment's balance sheet showed a stockholders' deficit of CDN$4,255,000, compared to a CDN$35,442,000 deficit at Aug 31, 2004. Based in Toronto, Vancouver, Los Angeles and London, England, Peace Arch Entertainment Group Inc. -- http://www.peacearch.com-- together with its subsidiaries, is an integrated company that creates, develops, produces and distributes film, television and video programming for worldwide markets. * * * Going Concern Doubt As reported in the Troubled Company Reporter on April 14, 2005, the company has undergone substantial financial restructuring and requires additional financing until it can generate positive cash flows from operations. While the company continues to maintain its day-to-day activities and produce films and television programming, its working capital situation is severely constrained. Furthermore, the company operates in an industry that has long operating cycles, which require cash injections into new projects significantly ahead of the delivery and exploitation of the final production. These conditions cast substantial doubt on the company's ability to continue as a going concern. PICK-UPS PLUS: Sept. 30 Balance Sheet Upside-Down by $3.9 Million ----------------------------------------------------------------- Pick-Ups Plus, Inc., delivered its financial statements for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. For the three months ended Sept. 30, 2005, the company posted a $267,144 net loss on $454,769 of revenues, compared to a $120,937 net loss on $525,679 of revenues for the same period in 2004. At Sept. 30, 2005, the company's balance sheet showed $1,691,620 in total assets and $3,903,957 in total liabilities, resulting in a $2,212,337 stockholders' deficit. Going Concern Doubt Lazar Levine & Felix Llp expressed substantial doubt about Pick-Ups Plus' ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. The auditing firm pointed to the company's losses and deficits. Merritt Jesson, the company's chief executive officer, disclosed that the company currently has insufficient funds available for operations and needs to seek additional financing to supplement cash generated from the operation of the Company's retail stores, automotive market sales and services and ongoing franchise operations. A full-text copy of the company's third quarter results is available at no charge at http://ResearchArchives.com/t/s?39c Pick-Ups Plus, Inc., operates and franchises retail automotive parts and accessories stores catering to the light truck market. PLIANT CORP: Proposed Exchange Offer Spurs S&P to Review Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings, including the 'CC' corporate credit rating, on Pliant Corp. remain on CreditWatch with negative implications, where they were placed Nov. 23, 2005. The CreditWatch update follows the company's announcement that it has reached an agreement in principle with a committee representing the holders of the company's 13% senior subordinated notes and with a majority of the company's current equity holders. If completed, the transaction will result in the exchange of the company's $320 million of 13% senior subordinated notes and $278 million of mandatorily redeemable preferred stock. Under the terms of the proposed plan, these securities would be exchanged for a combination of shares of Pliant common stock and shares of a new Pliant preferred stock, which will not be subject to mandatory redemption, and $20 million of new debt. Completion of the exchange transaction is subject to a number of conditions, including definitive documentation and receipt of requisite approvals from 97% of the subordinated noteholders and approval by preferred and common stockholders. "We will view completion of the proposed exchange offer as tantamount to a default on the original debt issue terms, since the consideration received would be deemed to be less than par value," said Standard & Poor's credit analyst Liley Mehta. Upon completion of the exchange transaction, the corporate credit rating on Pliant will be lowered to 'SD' to indicate a selective default, and the rating on the subordinated debt will be lowered to 'D'. 'SD' is assigned when an issuer can be expected to default selectively and will continue to pay certain issues or classes of obligations while not paying others. Standard & Poor's will assign a new corporate credit rating to Pliant upon completion of the debt-to-equity exchange and following a review of the company's business prospects and restructured balance sheet. The new rating will reflect the improved capital structure, although debt leverage will remain very aggressive and Pliant will continue to face the challenges of limited cash generation from operations and weak operating results in the face of still elevated raw-material costs. While the proposed exchange offer would eliminate about $42 million of annual cash interest payments and reduce Pliant's onerous debt burden somewhat, debt leverage would remain very high with total debt to EBITDA in the 7x area from about 10x at Sept. 30, 2005. In November 2005, the company completed a new $140 million revolving credit facility maturing in May 2007 and had about $22 million in availability under the credit facility as of Nov. 21, 2005. If the company is unable to complete the exchange transaction through an out-of-court exchange offer, it intends to pursue the exchange transaction through a plan of reorganization in bankruptcy. If Pliant is not able to successfully complete the debt for equity exchange with the subordinated noteholders or elects to file for bankruptcy protection, the corporate credit rating and other issue ratings would be lowered to 'D'. With annual revenues of about $1 billion, Schaumburg, Illinois-based Pliant is a domestic producer of extruded film and flexible-packaging products for food, personal care, medical, industrial, and agricultural markets. QUICK MED: September 30 Balance Sheet Upside-Down by $480,388 ------------------------------------------------------------- Quick Med Technologies Inc. delivered its financial statements for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. For the three months ended Sept. 30, 2005, the company posted a $536,281 net loss, compared to a $504,072 net loss for the same period in 2004. At Sept. 30, 2005, the company's balance sheet showed $1,139,04 in total assets and $1,619,429 resulting in a $480,388 stockholders' deficit. Quick Med's Sept. 30 balance sheet also showed a strained liquidity with $815,086 available to pay $1,459,429 in liabilities coming due in the next 12 months. Going Concern Doubt Daszkal Bolton, LLP, of Boca Raton, Florida, expressed substantial doubt about Quick Med's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005 and 2004. The auditing firm points to the Company's recurring losses, net capital deficiency, and negative cash flows from operations for the years ended June 30, 2005, and 2004. Quick-Med Technologies, Inc., (OTC Bulletin Board: QMDT) -- http://www.quickmedtech.com/-- is a life sciences company focused on developing proprietary, broad-based technologies for consumer, industrial, and healthcare use, as well as for advanced military and civilian medical applications. The Company's two core products under development are: a) MultiStat(TM) - a family of advanced compounds shown to be effective in broad-based skin therapy applications; and b) NIMBUS(TM) - a family of advanced polymers that can be used in a wide range of applications from advanced wound care to industrial and consumer preservatives. ROBERT HARWELL: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Robert L. Harwell, II 184 Peachtree Battle Avenue, N.W. Atlanta, Georgia 30305 Bankruptcy Case No.: 05-86024 Type of Business: The Debtor is the president and director of C&M Clearing Corp., which buys and sells numismatic coins. He is also the treasurer and director of Stratum Global Networks, Inc., and IpTel, Inc., which provide telecom services. Additionally, he is the president and director of Harwell & Company, a real estate broker. Chapter 11 Petition Date: December 5, 2005 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Frank B. Wilensky, Esq. Macey, Wilensky, Cohen, Wittner & Kessler LLP 285 Peachtree Center Avenue, NE Marquis Two Tower, Suite 600 Atlanta, Georgia 30303 Tel: (404) 584-1200 Fax: (404) 681-4355 Total Assets: $1,894,100 Total Debts: $1,818,454 Debtor's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ William Woulfin and Guarantees of IPTel $250,000 Woulfin Family Trust LLP Direct, Inc., and 5013 Forestglade Court Stratum Global Stone Mountain, GA 30087 Networks, Inc. Regions Bank Guarantee of IPTel $187,982 6637 Roswell Road Direct, Inc., Loans Atlanta, GA 30328 Fulton County Tax Commissioner Property Tax $17,134 P.O. Box 105052 Atlanta, GA 30348-5052 Bank One Credit Card $10,606 P.O. Box 15153 Purchases Wilmington, DE 19886 Bankcard Services Credit Card $8,698 P.O. Box 15137 Purchases Wilmington, DE 19886 Chase Platinum Mastercard Credit Card $1,500 P.O. Box 17202 Purchases Wilmington, DE 19886 Hall County Tax Commissioner Property Taxes for $1,045 P.O. Box 1579 3562 Nancy Creek Gainesville, GA 30503 Road in Gainesville SAINT VINCENTS: Can Use Sun Life's Cash Collateral Until Dec. 14 ---------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York, its debtor- affiliates, Sun Life Assurance Company of Canada, and Sun Life Assurance Company of Canada (U.S.) agree to extend the Debtors' use of the Sun Life Cash Collateral through and including Dec. 14, 2005, provided, however, that all other terms and conditions of the Sun Life Stipulations remain in full force and effect. In a separate stipulation, the Official Committee of Unsecured Creditors and Sun Life agree to further extend through and including January 13, 2006, the Committee's deadline to challenge: (a) the validity, extent, perfection or priority of the liens and security interests asserted by Sun Life; (b) the validity, allowability, priority, status or the amount of the Sun Life Claim and any claim for interest, fees, commissions, costs or expenses; and (c) any and all claims for alleged damages of the estates arising out of the actions or inactions of Sun Life or otherwise asserting claims of the estates against Sun Life. As reported in the Troubled Company Reporter on Sept. 27, 2005, Saint Vincent Catholic Medical Centers of New York issued $78.3 million in promissory notes to the order of Sun Life Assurance Company of Canada and Sun Life Assurance Company of Canada (U.S.) prior to its bankruptcy filing. The Promissory Notes are secured by first priority liens to the Debtors' various properties. On July 1, 2005, SVCMC defaulted on its obligation to pay Sun Life $500,214 under the Loan Documents. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Wants Open-Ended Deadline to Decide on Leases ------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend the period within which they can assume, assume or assign or reject unexpired non-residential real property leases until the date an order is entered confirming a plan of reorganization in their chapter 11 cases. The Debtors were party to 50 Leases as of their bankruptcy petition date. George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New York, explains that the Debtors recently appointed Guy Sansone, a principal at Alvarez & Marsal, LLC, as their chief restructuring officer. Mr. Sansone is reviewing the Debtors' current business plan and has until January 31, 2006, to finalize it. The Debtors have also recently entered into an agreement with General Electric Capital Corporation for replacement DIP financing. Mr. Davis tells the Court that the Debtors' business plan may include dispositions of certain of the Debtors' hospitals, including Mary Immaculate Hospital, St. John's Hospital and Saint Vincent's Staten Island and other assets. The disposition of these hospitals and other assets will necessarily affect the Leases. Potential acquirers of the Debtors' hospitals and other assets may or may not include within their offers, requests for the assumption and assignment of Leases to them. Furthermore, until the assets to be retained by the Debtors are fixed, the Debtors' own need to retain Leases is not fully known. Mr. Davis asserts that the decisions about assuming Leases should be made only after Mr. Sansone has reviewed and finalized the Debtors' business plan, and the contours of the dispositions of certain of the Debtors' hospitals is better defined. The extension will not prejudice the counterparties to the Leases, Mr. Davis says. In compliance with Section 365(d)(3) of the Bankruptcy Code, the Debtors have remained current and intend to remain current with respect to all outstanding postpetition obligations under the Leases. The Debtors do not intend to wait until the end of the proposed extension period to make a determination as to the assumption or rejection of the Leases. Mr. Davis says that since significant retention and financing issues have been substantially resolved, the Debtors are able to turn to and focus on a critical examination of the Leases in the context of the potential disposition of certain assets. Going forward, the Debtors intend to undertake the Lease review process as expeditiously as practicable and will file appropriate notices or motions as soon as informed decisions can be made, Mr. Davis assures the Court. Mr. Davis asserts that the extension will maximize the value of their estates and avoid incurring needless administrative expenses by minimizing the likelihood of a premature assumption of a burdensome lease or an inadvertent rejection of a valuable lease. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: May Assume National Union Insurance Policies ------------------------------------------------------------ The Hon. Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York authorized Saint Vincents Catholic Medical Centers of New York and its debtor affiliates to assume certain insurance programs in their entirety. The Debtors are further authorized to enter into the Medical Malpractice Program Extension and pay the Extension Premium. The Debtors currently obtain medical malpractice insurance and other insurance through National Union Fire Insurance Company of Pittsburgh, PA, on behalf of itself and the other subsidiaries of American International Group, Inc., for 197 physicians in Brooklyn and Queens, as well as certain other physicians at Saint Vincent Catholic Medical Centers' other hospitals. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court that the Medical Malpractice Program was set to expire on November 1, 2005, but the Debtors were able to obtain a short-term extension with National Union through December 31, 2005. The Debtors paid National Union a $783,169 premium for the extended coverage. Judge Beatty declares that there are no known defaults under the Insurance Programs, thus, there is no payment required from the Debtors pursuant to Section 363(b) of the Bankruptcy Code before assuming the Insurance Programs. Judge Beatty directs the Debtors to pay all of their obligations arising under the Insurance Programs, including, without limitation, premium and losses, in the ordinary course of business, in accordance with the relevant terms of the Insurance Programs, without further Court order. The Court modifies the automatic stay to the extent necessary such that, in the event of a default by the Debtors under the Insurance Programs, National Union may exercise all contractual rights in accordance with the terms of the Insurance Programs without further Court order, including, without limitation, its rights to: (a) cancel the Insurance Programs; (b) foreclose on any collateral, in part or in full, in which it has a security interest and which may be subject to the automatic stay; and (c) receive and apply the unearned or returned premiums to the Debtors' outstanding obligations to National Union. All of the Debtors' obligations under the Insurance Programs will be administrative obligations entitled to priority under Section 503(b). National Union is exempt from any bar date that may be issued for filing any proof of claim relating to administrative expenses, and the Debtors will oppose any other party's attempt to enforce the bar date. National Union may adjust, settle and pay insured claims, utilize funds provided for that purpose, and otherwise carry out the terms and conditions of the Insurance Programs, without further order of the Court. However, the Order will not be deemed to grant relief from the stay to any party to pursue any claim in a non-bankruptcy court other than the relief from stay granted to National Union. A confirmed Plan of Reorganization will not impair National Union's interest in the current, or any future, collateral held by National Union pursuant to the Insurance Programs. The Debtors' rights against all collateral held by National Union, in whatever form, will be governed by the terms of the Insurance Programs and related security documentation, and the Debtors will not take any action against National Union in the Court that is inconsistent with the terms of the documentation, including, without limitation, actions for turnover or estimation. Judge Beatty declares that during the pendency of the Debtors' Chapter 11 cases, National Union will not be required, except as otherwise provided in the Insurance Programs, to return any part of the security it currently holds for the Insurance Programs without adequate protection for its interest in the security pursuant to Section 361. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, represent the Debtors in their restructuring efforts. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) SATELLITE ENT: Posts $729K Net Loss in Quarter Ended September 30 ----------------------------------------------------------------- Satellite Enterprises Corporation (OTCCBB:SNWPE.OB) incurred a $729,498 net loss for the three months ended Sept. 30, 2005, compared to a $847,995 net loss for the same period in the prior year. For the nine-months ended Sept. 30, 2005, the Company reported a $1,561,980 net loss versus a $2,539,315 net loss for the same period in 2004. Satellite Enterprises' balance sheet showed $2,340,034 in total assets at Sept. 30, 2005, and liabilities of $5,647,223, resulting in a stockholders' deficit of $3,307,189. At Sept. 30, 2005, the Company's principal stockholders have advanced a total of $2,923,000. One loan of $325,000 is past due. At Sept. 30, 2005, Satellite Enterprises had working capital deficit of $1,225,738. Going Concern Doubt Meyler & Company, LLC, expressed substantial doubt about Satellite Enterprises' ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's cumulative losses since inception, negative working capital and stockholders' deficit. Satellite Enterprises receives, distributes and sells newspaper data on a daily basis through multiple outlets or Kiosks. The Company produces and sells the Kiosks on an international basis. The Company changed its name to Satellite Newspapers Corp. effective Nov. 30, 2005. SPANSION TECHNOLOGY: Moody's Rates $400 Million Sr. Notes at Caa1 ----------------------------------------------------------------- Moody's Investors Service assigned first time corporate family rating of B3 to Spansion Technology Inc., a leading provider of flash memory semiconductors. Spansion, currently owned 60% by Advanced Micro Devices and 40% by Fujitsu Limited, is expected to execute an initial public offering with approximately one third of the company being held publicly upon completion. The rating outlook is stable. These first time ratings have been assigned to Spansion: * Corporate Family Rating -- B3 * $400 million senior unsecured note due 2015 -- Caa1 * Speculative Grade Liquidity rating -- SGL-2 Concurrent with the initial public offering, Spansion expects to issue $400 million senior unsecured notes in a private placement under Rule 144A without registration rights. Net proceeds from the note issuance will be used to repay approximately $300 million of borrowings owed to its current owners, AMD and Fujitsu, with the remainder going to its balance sheet, which when combined with expected IPO proceeds of about $667 million before fees and expenses will constitute Spansion's opening balance sheet cash of approximately $780 million. The ratings reflect: 1) the high degree of business risk inherent to the capital intensive, volatile, and technologically evolving flash memory market; 2) the prospect that, despite strong bit demand driven by the cell phone market, continued aggressive pricing could cause Spansion's free cash flow to be negative over the near to intermediate and trigger the need for additional debt financing; 3) fairly limited financial flexibility notwithstanding good balance sheet liquidity pro forma the pending IPO and note issuance; 4) Spansion's limited ability to weather sustained market weakness or technological or manufacturing missteps; 5) the significantly larger financial resources and business diversity of some of its key competitors; and 6) the company's impending stand alone status, although Moody's recognizes that Spansion has been migrating to a stand alone operation over the last several quarters and service agreements with its current owners are in place through 2006. The ratings also consider: 1) Spansion's strong position in the NOR flash memory market, although this traditional, $8 billion market directed primarily at the cell phone and embedded end markets is mature and slow growing; 2) strong customer relationships among a range of end market customers including all of the top cell phone, consumer electronics, and automotive OEM's; and 3) the potential for Spansion's proprietary flash architecture called MirrorBit, which effectively doubles the density of each memory cell, to gain increased market acceptance as electronic devices require greater data density at lower cost per bit. The stable outlook reflects our expectation that Spansion will be able to continue good execution of its manufacturing and technology roadmap, including the continued market penetration of its MirrorBit technology whose richer average selling prices could help to improve its profit profile. The ratings are not likely to experience upward pressure until Spansion is able to achieve operating profitability, with the prospect that such performance can be sustained through cycles. This in turn would improve its ability to internally fund the significant capital expenditure requirements that are necessary to remain technologically and cost competitive and bolster its financial flexibility so that it can continue to sustain critical R&D and process technology advances even during sector downturns. The ratings could face negative pressure if: 1) the company struggles to move towards profitability, which Moody's believes would be driven by a combination of top line growth and more importantly, gross margin expansion given the relatively fixed nature of R&D and SG&A costs; 2) fails to advance its MirrorBit technology with cell phone OEM's and other applications; 3) experiences increased competitive pressures from the very fast growing NAND flash technology; or 4) the company's liquidity profile weakens. Pro forma the pending IPO and note issuance, Spansion will have cash of about $784 million and $740 million of debt, including the proposed $400 million senior unsecured note issuance and about $340 million of secured credit facilities and capital leases that mature at various points over the next three years. Given Spansion's liquidity and free cash flow prospects during this time, Moody's believes it will need to refinance this debt. Pro forma debt to latest twelve month EBITDA measures about 2.7 times. As noted above, a critical challenge for Spansion relates to its ability to improve cash flow generation to fund the significant capital expenditures that are necessary to remain competitive. For the latest twelve months ended September, EBITDA of $271 million compared to about $427 million of capital expenditures. Over the near to intermediate term, Moody's expects about double the level of capital expenditures. The SGL-2 reflects: 1) Spansion's good balance sheet liquidity following the IPO that when combined with cash flow from operations should be sufficient to fund necessary capital expenditures over the next twelve months; 2) external liquidity in the form of its undrawn $175 million borrowing base revolving credit facility that matures September 2010, that should maintain good room under its one financial covenant, a minimum EBITDA; and 3) Moody's view that Spansion has limited non core assets that could be readily sold if liquidity pressures were to develop. Spansion Technology Inc., headquartered in Sunnyvale, California, is one of the largest Flash memory providers and the largest company in the world dedicated exclusively to developing, designing and manufacturing Flash memory. For fiscal 2004 and the first nine months of fiscal 2005, net sales were $2.3 billion and $1.4 billion. STAR GAS: Recapitalization Plan Prompts Fitch to Review Ratings --------------------------------------------------------------- Fitch Ratings has placed Star Gas Partners, L.P.'s outstanding 'CCC' $265 million principal amount of 10.25% senior unsecured notes due 2013, co-issued with its special purpose financing subsidiary Star Gas Finance Company, on Rating Watch Evolving. Fitch's action follows the company's announcement that it had reached agreement with its noteholders to a proposed plan of recapitalization. Execution of the plan requires the approval of its unitholders and the lenders to the secured bank facility with its operating subsidiary, Petroleum Heat and Power Co. The Rating Outlook for the notes had been Negative. The recapitalization plan includes a commitment by Kestrel Energy Partners, LLC to purchase $15 million of new common units and provide a standby commitment in a $35 million common rights offering. Star will use the equity proceeds and additional funds to purchase at least $60 million of the notes at par. In addition, certain noteholders have agreed to convert nearly $27 million of the notes into common units. As a result of the transactions, the amount of outstanding notes will be reduced by between $87 million and $100 million. Subject to the transaction closing, noteholders have agreed not to accelerate the notes or initiate any litigation with respect to the notes and wave any default under the note indenture. The agreements relating to the recapitalization will terminate if the transaction does not close prior to April 30, 2006. Fitch has been concerned that high prices for home heating oil entering the winter heating season would put additional strain on the company's already weak financial profile and inhibit ongoing efforts to improve operating results. Fitch has also been concerned with the adequacy of Star Gas' liquidity position given its supply and collateral needs and the status of the remaining cash proceeds from its sale in December 2004 of its propane operations. Future rating actions will depend on: * the status and execution of the recapitalization plan, * operating results at Petro, * the adequacy of Star Gas' liquidity, and * Fitch's ongoing assessment of recovery prospects for the noteholders. Successful completion of the recapitalization plan will result in a material reduction in debt and new equity, improving the credit and the operating profile of Star Gas and could result in higher ratings. In the absence of the successful execution of its recapitalization plan, ratings will likely move lower. In the interim, fiscal year-end financial results are expected to be released on Dec. 13, 2005. Currently, Star Gas has an issuer default rating of 'CCC', and the notes have a recovery rating of 'RR4', which indicates average recovery prospects. STELCO INC: Board Approves Amended Restructuring Plan ----------------------------------------------------- The Board of Directors for Stelco Inc. (TSX:STE) has approved an amended restructuring plan for consideration by its creditors. Since the stay period is extended, affected creditors will be asked to consider and vote on the amended plan at the meetings to be resumed on Friday, Dec. 9, 2005, or as otherwise ordered by the Court. "The Board has approved an amended plan taking into account, among other things, the interests of the Company and fairness to our stakeholders," Courtney Pratt, Stelco President and Chief Executive Officer, said. "We believe the amended plan addresses those concerns in a fair, reasonable and responsible manner. While the amended plan contains certain new and positive features, including significant cash for our creditors, we are not in a position to say that it is supported by all stakeholders at this time. "The amended plan is the result of discussions that have taken place among a number of stakeholder groups in recent days and weeks. Our goal remains, as it has from the outset, to achieve a plan that will enable Stelco to emerge a viable and competitive steel producer for the long term. It's time to bring this matter to a vote." The amended plan reflects the terms of the stakeholder agreement announced by Stelco on Nov. 23, 2005, with one major exception. The proposed amended plan does not include what had been 9% Unsecured Convertible Notes converting into 25 million common shares of the Company. Those Notes are replaced by a proposed cash component under which affected creditors will receive a pro rata share of $137.5 million. The funding for this is to come from a proposed subscription for common shares from Tricap Management Limited and other equity investors discussed later in this news release. This subscription will be made under a plan sponsor agreement to be entered into by Stelco, Tricap Management Limited and the other subscribers noted below, all of which are acting independently. This cash component would amount to approximately 55% of the face value of what had been anticipated to be an issuance of Unsecured Convertible Notes in the face amount of $250 million. The amended plan is based on: -- The availability of a $600 million asset-based revolving loan facility. -- The availability of a $375 million revolving bridge facility being negotiated with Tricap Management Limited. -- A $150 million Unsecured Subordinated 1% Note, issued to the Province of Ontario in exchange for a $150 million cash contribution. If the pension solvency deficiency is fully funded by year 10, then 75% of the Note would be forgiven at maturity, with the balance payable in cash or shares. -- Warrants, with a seven-year maturity, issued to the Province of Ontario to purchase up to approximately 8% of the fully diluted equity (or approximately 2.3 million new common shares) at an exercise price of $11.00 per new common share. Existing secured operating lenders will be repaid in full. Unsecured creditors will receive a pro rata share of: -- Secured Floating Rate Notes: $275 million; interest of LIBOR (London Interbank Offering Rate) plus 500 basis points if paid in cash or LIBOR plus 800 basis points if paid in Secured Floating Rate Notes at the Company's option; 10-year term, payable in cash on maturity. -- $137.5 million in cash that will be provided by the above- noted equity investors in return for approximately 88% of the equity in the Company on a fully diluted basis. Of that percentage, 40% will be underwritten by Tricap Management Limited, 30% by Sunrise Partners Limited Partnership, and 30% by Appaloosa Management LP. -- 1.1 million new common shares, representing approximately 4% of the fully diluted common shares of the Company. The Stelco Pension Plans will receive: -- An upfront cash contribution of $400 million. -- Fixed annual cash funding payments of $65 million each year between 2006-2010 and $70 million each year between 2011- 2015. -- There may be increased payments through annual cash sweep payments, commencing in 2007, based on cash flow and liquidity tests. -- Any solvency deficiency at the end of 2015 will be funded through the normal 5-year pension funding rules. A six-month grace period on cash funding payments will be provided during the first half of 2006, increasing Stelco's liquidity on emerging from Court protection. The existing shares will be effectively cancelled. As the Company has stated for some time, there is insufficient value to provide full recovery to unsecured creditors. Factors affecting the Company, its value and the recovery for unsecured creditors include volatile steel prices, reduced production and shipments, and increased costs. Under the proposed plan sponsor agreement, the size of Stelco's Board of Directors will be fixed at nine members. Tricap Management Limited will have the right to name four of the directors. The other capital providers subscribing for common shares will have the right to nominate one each. The remaining directors will be chosen through a consultative process. Board nominees will be elected on the basis of cumulative voting. This means that shareholders may allocate the total number of votes they're entitled to cast in any way they wish, i.e. all for one nominee, among several nominees, or divided among all nominees. The plan sponsor agreement requires plan implementation to occur not later than March 31, 2006. Subject to creditors approving and the Court sanctioning the plan, Stelco expects to implement the plan early in 2006 and, if possible, before March 31, 2006 . Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. STELCO INC: Court Extends CCAA Stay Proceedings Until Dec. 12 ------------------------------------------------------------- The Superior Court of Justice (Ontario) extended the stay period under Stelco Inc.'s (TSX:STE) Court-supervised restructuring from today until Dec. 12, 2005. The Court also directed that the previously adjourned meetings of affected creditors will resume on Friday, Dec. 9, 2005, for the purpose of considering and voting on the restructuring plan announced on Dec. 5, 2005, with or without amendment. "We'll do everything we can to achieve an agreement among stakeholder groups by the time of Friday's vote," Courtney Pratt, Stelco President and Chief Executive Officer, said. "We believe that a creditor-supported plan receiving a positive vote is much better for all concerned than the alternatives if the plan is defeated." Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. STONE ENERGY: Davis Polk Releases Results of Independent Review --------------------------------------------------------------- Stone Energy Corporation (NYSE: SGY) reported the findings of the independent review by the audit committee of Stone's board of directors concerning the downward revisions to its proved reserves. On Oct. 6, 2005, Stone reported a downward revision of its proved reserves of approximately 171 billion cubic feet of natural gas equivalent, and on Nov. 8, 2005, Stone reported that it will restate certain historical financial statements. In addition, Stone had previously disclosed that the law firm of Davis Polk & Wardwell, which had been engaged by the audit committee to assist in its investigations of reserve revisions, had issued a preliminary report to the audit committee. On Nov. 28, 2005, Davis Polk presented its final report to the Stone audit committee and board of directors. The report reiterated a number of findings in Davis Polk's preliminary report, and found that a number of factors at Stone contributed to the write-down of reserves, including: * Stone lacked adequate internal guidance or training on the SEC standard for estimating proved reserves; * There is evidence that some former members of Stone management failed to fully grasp the conservatism of the SEC's "reasonable certainty" standard of booking reserves; and * There is also evidence that there was an optimistic and aggressive "tone from the top" with respect to estimating reserves. Some on the Stone technical staff felt pressure to interpret the geological and engineering data in an aggressive manner; and there were several factors that may have prevented or discouraged the technical staff from pushing back against the optimistic tone from the top and the pressure that some perceived with respect to reserve estimation. In addition, there was evidence of a reluctance to write down proved reserves. As part of its final report, Davis Polk made recommendations, including: * Adopt and distribute written guidelines to its staff on the SEC reserve reporting requirements; * Provide training for employees on the SEC requirements; * Continue to emphasize the difference between SEC's standard of measuring proved reserves and the criteria that Stone might use in making business decisions; and * Institute and cultivate a culture of compliance to ensure that the foregoing contributing factors do not recur. Davis Polk also advised that Stone's board of directors must review, understand and have confidence in the process of reserve estimation, and in view of the reserves issue, has a heightened obligation to exercise supervisory responsibilities. Davis Polk acknowledged as positive developments and consistent with some of its recommendations certain recent changes in Stone's reserves estimation process, including the intention to expand the use and scope of reviews and evaluations by outside consulting firms, approval by the CEO of bookings over 5 Bcfe, mandatory training, the reorganization of management responsibilities for the supervision of the reserve estimation process and the formation of a reserves committee of the board of directors. The Stone audit committee and board of directors have accepted the Davis Polk final report, and the Stone board of directors has resolved to implement all of the recommendations promptly. In addition to implementing the Davis Polk recommendations, Stone will engage outside consulting firms to independently evaluate 100% of Stone's reserves. Stone expects that effort to be completed in 2006. Stone anticipates that all of its estimated proved reserves in the Rocky Mountains and approximately 50% of its Gulf Coast estimated proved reserves will be independently evaluated by outside consulting firms in connection with the preparation of its 2005 audited financial statements. Outside consulting firms will be engaged to review the procedures used by Stone's internal staff in estimating proved reserves for those properties not independently evaluated. The remainder of the Gulf Coast reserves will be independently evaluated by outside consulting firms as soon as practicable in 2006. Following the delivery of the Davis Polk final report, D. Peter Canty submitted his resignation as a director, which was accepted by the Stone board of directors. In addition, the board of directors directed management to request the resignations of an officer and a senior manager associated with the reserve estimation process. Restatement of Financial Reports Since the Oct. 6, 2005 announcement of a downward reserve revision, Stone has been reviewing whether portions of the revision should be applied to prior years, which might result in a restatement of prior years' financial statements and related supplemental oil and gas reserve disclosures. Based on Stone's internal review, a restatement of the financial statements will be required for the periods from 2001 to 2004 and for the first six months of 2005. Accordingly, the 2004 financial statements and the independent registered public accounting firm's report related to the fiscal 2004 period contained in Stone's prior filings with the Securities and Exchange Commission should no longer be relied upon. Stone will amend its: * Form 10-K for the year ended December 31, 2004 * quarterly report for the period ended Mar. 31, 2005, and * quarterly report for the period ended June 30, 2005. Stone hopes to file the amended reports and the Form 10-Q for the period ended Sept. 30, 2005 by mid-December 2005, but no assurance can be given that the filings will be made by that date. SEC Inquiry As previously announced, Stone has received notice that the staff of the SEC is conducting an informal inquiry into the revision of Stone's proved reserves and the financial statement restatement. Stone is continuing to cooperate with the SEC. In addition, Stone has received an inquiry from the Philadelphia Stock Exchange with respect to matters including trading activity prior to Stone's Oct. 6, 2005 announcement. Stone intends to cooperate with the Philadelphia Stock Exchange inquiry. Lawsuits Finally, Stone has been advised that class action lawsuits have been or will be filed in connection with the reserve revisions. Stone is evaluating the complaints and intends to vigorously defend any lawsuits that are filed. Stone Energy is an independent oil and gas company headquartered in Lafayette, Louisiana, and is engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties located in the conventional shelf of the Gulf of Mexico, deep shelf of the GOM, deep water of the GOM, Rocky Mountain basins and the Williston Basin. * * * As reported in the Troubled Company Reporter on Oct. 10, 2005, Moody's lowered the Corporate Family Rating for Stone Energy Corp. to B1 from Ba3 and the ratings on the senior subordinated notes from B2 to B3 following the company's announcement that it is taking a significant reserve write-down and that the majority of its production remains shut-in from the hurricanes. However, Moody's is still evaluating the company's Speculative Grade Liquidity Rating of SGL-2 in order to assess the amount and length of the cash flow impact of the shut-in production as well as what the impact of the reserve revision will have on Stone's borrowing base driven revolving credit facility. The ratings downgrade reflects the write-down of approximately 171 Bcfe (28.5mmboe) of proved reserves following a review of the company's reserves by a new third party engineering firm. Notably, the majority of the revisions are in the Proven Developed (PD) categories, highlighting the inherent subjectivity in the estimates of all reserves. Moody's ratings actions for Stone Energy are: * Downgraded to B1 from Ba3 -- Corporate Family Rating * Downgraded to B3 from B2 -- $200 million 8.25% senior sub. notes due 2011 * Downgraded to B3 from B2 -$200 million 6.75% senior sub. notes due 2014 STRUCTURED ASSET: S&P Affirms Low-B Ratings on Two Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 102 classes from 10 series of mortgage-backed securities issued by Structured Asset Securities Corp. Mortgage Loan Trust. The affirmed ratings reflect adequate actual and projected credit support percentages for the respective classes. In addition, the transactions are at their respective overcollateralization targets. The collateral for the four transactions with the "NP" suffix in the series number consists primarily of fixed-rate nonperforming residential mortgage loans with FHA or VA insurance guarantees. Therefore, almost the entire mortgage pool for each of these transactions is at least 30 days delinquent. Furthermore, it is expected that the properties will be liquidated once they are in foreclosure, with the proceeds used to make interest and principal payments on the certificates. As of October 2005, these transactions had cumulative realized losses that ranged from 0.54% (series 2004-NP2) to 1.56% (series 2003-NP1). The collateral for the three transactions with the "XS" suffix in the series number consists of 30-year, fixed-rate, first-lien, Alt-A residential mortgage loans. Total delinquencies were 0.82% for series 2005-4XS, 1.07% for series 2005-7XS, and 1.18% for series 2005-9XS. These transactions have no cumulative realized losses to date. Series 2002-9 consists of fixed- or adjustable-rate, first-lien, Alt-A residential mortgage loans. Total delinquencies were 7%, with 0.19% in cumulative realized losses. The collateral for series 2005-NC2 and 2005-WF2 consists of fixed- or adjustable-rate, subprime, first-lien residential mortgage loans. Total delinquencies for series 2005-NC2 and series 2005-WF2 were 3.00% and 2.29%, respectively. These transactions have experienced no losses to date. Ratings Affirmed Structured Asset Securities Corp. Mortgage Loan Trust Mortgage-backed Securities Series Class Rating ------ ----- ------ 2002-9 A1, A2 AAA 2002-9 M1 AA 2002-9 M2 A 2003-NP1 A AAA 2003-NP1 M1 AA 2003-NP1 M2 A 2003-NP1 B BBB 2003-NP2 A2 AAA 2003-NP2 M1 AA 2003-NP2 M2 A 2003-NP2 B BBB 2003-NP3 A1, A2, A3 AAA 2003-NP3 M1 AA 2003-NP3 M2 A 2003-NP3 B BBB 2004-NP2 A AAA 2004-NP2 M1 AA 2004-NP2 M2 A 2004-NP2 B BBB 2005-4XS 1-A1, 1-A2A, 1-A2B, 1-A3, 1-A4A, 1-A4B AAA 2005-4XS 1-A5A, 1-A5B, 2-A1A, 2-A1B AAA 2005-4XS M1 AA 2005-4XS M2 A+ 2005-4XS M3 BBB 2005-4XS 3-A1, 3-A2, 3-A3, 3-A4, 3-A5 AAA 2005-4XS 3-M1 AA+ 2005-4XS 3-M2 A+ 2005-4XS 3-M3 A- 2005-7XS 1-A1A, 1-A1B, 1-A1C, 1-A2A, 1-A2B, 1-A3 AAA 2005-7XS 1-A4A, 1-A4B, 2-A1A, 2-A1B AAA 2005-7XS M1 AA 2005-7XS M2 A 2005-7XS M3 BBB- 2005-9XS 1-A1A, 1-A1B, 1-A2A, 1-A2B, 1-A2C, 1-A3A AAA 2005-9XS 1-A3B, 1-A3C, 1-A3D, 1-A4, 2-A1, 2-A2 AAA 2005-9XS 2-A3, 2-A4 AAA 2005-9XS M1 AA 2005-9XS M2 A+ 2005-9XS M3 BBB- 2005-NC2 A1, A2, A3, A4, M1 AAA 2005-NC2 M2, M3 AA+ 2005-NC2 M4, M5 AA 2005-NC2 M6 A+ 2005-NC2 M7 A 2005-NC2 M8 A- 2005-NC2 M9 BBB+ 2005-NC2 M10 BBB 2005-NC2 B BBB- 2005-WF2 A1, A2, A3 AAA 2005-WF2 M1 AA+ 2005-WF2 M2 AA 2005-WF2 M3 AA- 2005-WF2 M4 A+ 2005-WF2 M5 A 2005-WF2 M6 A- 2005-WF2 M7 BBB+ 2005-WF2 M8 BBB 2005-WF2 M9 BBB- 2005-WF2 B1 BB+ 2005-WF2 B2 BB- THINKPATH INC: Files 2005 Third Quarter Financial Results --------------------------------------------------------- Thinkpath Inc. delivered its financial statements for the quarter ended Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. For the three months ended Sept. 30, 2005, the company posted a $534,335 net loss on $3,169,632 of revenues, compared to a $1,039,732 net loss on $3,125,899. At Sept. 30, 2005, the company's balance sheet showed $7,908,537 in total assets and $2,809,329 in total liabilities. Going Concern Doubt The company's management indicated that there could be substantial doubt about the Company's ability to continue as a going concern due to the company's significant recurring operating losses and working capital deficiencies. At Sept. 30, 2005, the Company had a $45,704,887 deficit and has suffered recurring losses from operations. Credit Facility With insufficient working capital from operations, the Company's primary source of cash is a $3,500,000 convertible financing facility with Laurus Master Fund, Ltd. At Sept. 30, 2005, the balance on the facility was $2,958,117. The convertible financing facility consists of a revolving line of credit based on 90% of eligible accounts receivable which matures on June 27, 2008, and bears interest at an annual rate equal to The Wall Street Journal prime rate plus 3%. The principal outstanding on the secured convertible note is convertible into common stock at a fixed conversion price ranging from 80% to 110% of the average closing price for the previous ten days, subject to certain conditions. Thinkpath Inc. (OTCBB:THTHF) is a global provider of technological solutions and services in engineering knowledge management, including design, drafting, technical publishing, and consulting. Thinkpath enables corporations to reinvent themselves structurally; drive strategies of innovation, speed to market, globalization and focus in new and bold ways. TSI TELSYS: Sells Assets to ProSync & Ceases All Operations ----------------------------------------------------------- The Boards of Directors of TSI TelSys, Corp. and TSI TelSys, Inc., voted at the Nov. 25, 2005 Board meeting to accept an offer submitted on Nov. 15, 2005, as amended on November 23, 2005, by ProSync Technology Group "to purchase all the remaining assets of TSI TelSys, Inc." The decision of the Board was made effective close of business Tuesday, Nov. 29, 2005, at which time TSI TelSys, Inc., and TSI TelSys, Corp. ceased all corporate operations and functions, effective midnight, Nov. 29 2005, except for those steps necessary to formally end corporate operations. This decision, taken with great reluctance by the Boards, was made due to: * the companies' lack of financial resources, * the companies' inability to meet their financial commitments, * lack of operating capital, * no income or prospective income, * no staff, and * the companies' inability to raise additional cash resources that would enable the companies to continue operation. The Boards have had a series of meetings, formal and informal, over this past summer and autumn exploring a variety of ways of continuing operations ranging from finding new sources of capital to merging with other companies. With the exception of the offer received by ProSync, all efforts were to no avail. The companies' financial difficulties were compounded this past summer by the filing by a former employee of two lawsuits claiming millions of dollars in damages. Regardless of the merits of the suits, the cost of defending them is a cost the companies cannot meet. TSI TelSys, Inc. has debts of approximately one million, three hundred thousand dollars and no income, no cash reserves, no capital, and no ongoing business. Effectively, all business activities ceased in the late spring-early summer of 2005 and since that time all efforts have been expended in an effort to obtain financing, or find a merger partner, or buyer of the assets. All staff but the CEO and General Counsel have either resigned or have been furloughed because of the companies inability to pay staff salaries since late spring of 2005. Neither the CEO nor GC has received any salaries for their ongoing efforts during this same period of time. In April 2005, TSI announced it had made an agreement with an investor to receive a major investment in the company, but the agreement was never consummated due to the inability of the investor to have funds available to make the investment. Under the terms of the sale of assets, the resolution approving the sale agreed to by the Board provides, in part, "(b)e it resolved that, acting in their capacity as Members of the Board of Inc., the Board accepts the offer of ProSync to purchase the assets of Inc. for an up front payment of $80,000, plus an additional payment of $96,000 contingent upon ProSync" receiving within six months after the closing, a payment from a customer for an order for SBIRS systems and fulfilling said order. Further, its decision was to become effective close of business, Tuesday, Nov. 29, 2005 and was made contingent upon the pending offer from an investor being formalized and submitted to the Board. The other said offer was not formally submitted and, hence, the acceptance of ProSync's offer became final. No finder's fees are to be paid as a result of ProSync's offer and acceptance. Further there is no relationship between TSI TelSys, Inc. or its parent company or with any of their officers or employees (former or current) and ProSync or any of its officers and employees. The Board asked Mr. Gary Bohlke, the company's General Counsel to assume the role of general administrator overseeing the transfer of assets, distribution of funds, overseeing pending litigation, and ceasing of all corporation operations including all facets both in the U.S. and Canada wherein the stock of TSI TelSys Corp. is registered and traded. As to the proceeds recognized from the sale, the Board directed that the net proceeds of the sale be distributed "in accordance with the priorities set forth in Title 11 of the United States Code and the Federal Rules of Bankruptcy Procedures. It is the understanding of the Board, through advice received from retained bankruptcy counsel that the first relevant priority applicable to TSI TelSys in this matter is for payment of employee outstanding, unpaid compensation. The monies owed to staff has priority ahead of general unsecured creditors and covers back pay for the past 180 days for a maximum payment for each employee of ten thousand dollars." For any funds that may remain after distribution to employees as noted above, the Board provided that such funds will be paid to all unsecured creditors, including employees for amounts that did not qualify as a priority claim, on a pro rata basis. Headquartered in Columbia, Maryland, TSI TelSys -- http://www.tsi-telsys.com/-- designed, manufactured and marketed high-performance range data receivers, data acquisition, simulation and communication systems for the test range and aerospace communities and provides related engineering services. The companies were pioneers in utilizing reconfigurable architectures (Adaptive Computing) for communications and data processing, and has incorporated this technology into its product line since 1996. The company was a leader in providing multi- mission satellite communications systems adaptable to virtually any protocol format and that support data rates up to a gigabit per second. TUPPERWARE CORP: Completes Buy of Sara Lee Direct Sell Business --------------------------------------------------------------- Tupperware Corporation (NYSE: TUP) changed its corporate name to Tupperware Brands Corporation from Tupperware Corporation in conjunction with the completion of its acquisition of Sara Lee Corporation's direct selling businesses. "This name change will reinforce that we are a multi-brand, multi-category direct sales company," said Rick Goings, Chairman and CEO. "Additionally, it will make it easier for our numerous new beauty companies to communicate that they are part of a family of direct selling companies, including those acquired today from Sara Lee Corporation, and that, in most cases, they will not be selling Tupperware products," Goings continued. Sara Lee Corporation's direct selling businesses are concentrated primarily in Latin America and Asia Pacific and sell beauty and personal care products. This acquisition is expected to provide top-line growth opportunity and reduce risk by diversifying the product line to more consumables and balancing geographic contribution. As a result of the transaction, Tupperware Brands Corporation now has a combined independent sales force of 1.9 million and annualized revenue of $1.8 billion. The purchase price was $556 million, subject to a post-closing working capital adjustment. The acquisition, retirement of $250 million of existing debt and related fees and expenses are being funded through cash on hand and borrowings under the Company's new 5-year $200 million secured revolving credit facility and $775 million secured term loan. The term loan will carry an interest rate of LIBOR plus 150 basis points. Mandatory principal repayments of 0.25% per quarter, or about $2 million are required, with the remaining $723 million due seven years from the date of the closing. The company expects to continue to pay the current annual dividend of 88 cents per share, and the new debtcovenant structure allows the payment. Tupperware Brands Corporation -- http://www.tupperware.com/-- is a global direct seller of premium, innovative products across multiple brands and categories through an independent sales force of approximately 1.9 million. Tupperware's product brands and categories include design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware brand and beauty and personal care products through its Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo and Swissgarde brands. * * * As reported in the Troubled Company Reporter on Oct. 6, 2005, Moody's Investors Service assigned a new corporate family rating of Ba2 to Tupperware Corporation, rated its proposed $975 million senior secured credit facilities at Ba2, and left the Baa3 rating on the $100 million of guaranteed, senior unsecured notes due in 2006 (issued by its financing subsidiary) on review for downgrade. The new ratings, which are two notches lower than the rating on the notes issued by its financing subsidiary, reflect the substantial weakening of TUP's balance sheet and financial metrics due to the predominately debt-financed acquisition of Sara Lee Corporation's direct selling businesses. The new rating levels also recognize ongoing challenges in the legacy Tupperware business and requisite integration and execution risks going forward. Moderating these concerns are the improved product and geographic diversification afforded by: * the addition of SLD's leading consumable brands; * the complementary nature of the businesses; and * the alignment of management teams. The rating outlook is stable. These ratings were assigned: Tupperware Corporation: * Corporate family rating, Ba2; * $200 million senior secured revolving credit facility due 2010, Ba2; * $775 million senior secured term loan facility due 2012, Ba2. These rating remains on review for downgrade: Tupperware Finance Company B.V.: * Baa3 rating on senior unsecured notes due in 2006 guaranteed by Tupperware Corporation Proceeds from the new term loan, along with cash and revolver usage will fund: * the $557 million acquisition of SLD; * the discharging of the $100 million of 7.25% senior notes issued by Tupperware Finance Company B.V.; and * the prepayment of its unrated $150 million 7.91% senior notes (plus related fees and expenses). The Baa3 rating on TUP's 7.25% senior notes, which remains on review for possible downgrade, will be withdrawn upon completion of the proposed transactions. USURF AMERICA: Net Loss and Deficit Trigger Going Concern Doubt --------------------------------------------------------------- Cardinal Communications, Inc., delivered its quarterly report on Form 10-Q for the quarterly period ending Sept. 30, 2005, to the Securities and Exchange Commission on Nov. 21, 2005. Cardinal Communications incurred a net loss of $3,440,183 for the three months ended September 30, 2005, compared to a $7,865,536 net loss for the three months ended September 30, 2004. The decrease in net loss for the period is directly attributable to the Sovereign Partners, LLC acquisition, which added net income to the Company and in 2004, the Company recorded large expenses for debt modification and large expenses related to the failed acquisition of Sunwest Communications, Inc. The Company stated in its report that is has incurred annual operating losses since its inception and as of at Sept. 30, 2005, it had an accumulated deficit of $68,019,478. Going Concern Doubt Cardinal Communications' independent auditors, A.J. Robbins PC, in its opinion on Cardinal's financial statements for the year ended December 31, 2004, expressed substantial doubt about the Company's ability to continue as a going concern because of its recurring losses and negative working capital. The Company says in its report that its ability to implement its business plan and grow is dependent on raising a significant amount of capital. The Company has sustained its operations in large part from sales of its equity, but it may not be able to successfully generate revenues or raise additional funds sufficient to finance its continued operations. In the long term, failure to generate sufficient revenues or obtain financing would have a material adverse effect on its business and would jeopardize its ability to continue as a going concern. Cardinal Communications, Inc., fka Usurf America Inc., is a provider of enhanced telephone (voice) services, cable television (video) and Internet (data) services to business and residential customers. Since the completion of the acquisition of Sovereign Partners, LLC in February 2005, the Company also offers integrated construction and construction management services, as well as broadband communications design, implementation, and operations services to other large developers and municipalities seeking to deploy broadband services. VENTAS INC: S&P Upgrades Corporate Credit Rating to BB+ from BB --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit ratings on Ventas Inc., its operating partnership Ventas Realty L.P., and Ventas Capital Corp. to 'BB+' from 'BB'. In addition, ratings are raised on the company's senior unsecured debt, which totals roughly $891 million. Concurrently, the outlook is revised to stable from positive. "The upgrades reflect the company's commitment to improve its financial profile and pursue an unsecured financing strategy, as well as its steady progress toward that goal," said credit analyst George Skoufis. "Ventas expects to repay $210 million of CMBS debt before its late 2006 maturity, which would result in an improved liquidity position. While Ventas' has reduced reliance on Kindred Healthcare and diversified its payer mix, its tenant base does remain somewhat concentrated." Ventas' quality portfolio, supported by an improved facility and payer mix, should continue to generate stable cash flow to support debt service needs, as well as generate $30 million-$40 million of free cash flow. Cash flow would also benefit from the resolution of a rent-reset of its Kindred master leases in 2006, which could increase annual rent by at least $35 million annually. Positive ratings momentum would be driven by continued improvement to the financial profile, combined with further diversification of the tenant roster. Conversely, ratings could be negatively affected by additional acquisitions/combinations that are pursued in a highly leveraged manner. WET SEAL: Posts $6.5 Mil. Net Loss in 13-Weeks Ended Oct. 29, 2005 ------------------------------------------------------------------ The Wet Seal, Inc. (Nasdaq:WTSLA) reported results for the third fiscal quarter, ended Oct. 29, 2005. The company reported a quarterly net loss from continuing operations of $6.5 million, including $2.5 million in non-cash stock compensation charges and $6.9 million in non-cash interest charges. This compares to a net loss from continuing operations of $24.2 million in the year-ago quarter. Net sales for the 13 weeks ended Oct. 29, 2005 increased 16.7% to $129.3 million versus net sales of $110.8 million for the same period last year. This increase was driven by a 46.6% increase in comparable store sales, but offset by a significant reduction in store count that resulted from the closure of 153 stores since the close of the year-ago third quarter. The company noted that results for the 13-week period ended Oct. 30, 2004, have been restated in connection with the Company's previous review of lease accounting transactions. The company was pleased to note that it generated operating income of $300,000 for the third quarter, its first quarterly positive operating income since the second quarter of fiscal 2002. "We continue to make excellent progress in repositioning our merchandise assortment and our competitive posture, as well as in achieving acceptable levels of financial performance," Mr. Joel Waller, Chief Executive Officer, commented. "Our strong comparable store sales, improving margins versus the prior year, and disciplined planning have enabled us to post our first quarterly positive operating income since fiscal 2002, even considering non-cash stock compensation charges of $2.5 million. As we go forward, we are satisfied that we are once again in a position to begin to open new locations to drive growth in sales and profits and to deliver value to our shareholders." During the 13 weeks ended Oct. 29, 2005, investors converted $6.7 million of the company's convertible notes into 4,487,967 shares of Class A Common Stock. Investors in the company's Series C Preferred Stock converted $14.1 million of such preferred stock into 4,699,000 shares of Class A Common Stock during the 13 weeks ended Oct. 29, 2005, resulting in $10.5 million of Series C Preferred Stock remaining outstanding as of the end of the period. Investors also exercised portions of outstanding Series B, C and D Warrants during the fiscal quarter, resulting in issuance of 379,894 Class A Common shares in exchange for $900,000 of cash proceeds to the company. During the 13-week period ended Oct. 29, 2005, the company opened 4 Wet Seal stores and 2 Arden B. stores. At Oct. 29, 2005, the company operated 309 Wet Seal stores and 93 Arden B. stores. The company has completed its previously announced store closure effort and has nearly completed all related lease terminations. The Company reduced its remaining store closure reserve by $100,000 during the 13-week period ended Oct. 29, 2005, which reflects the company's most recent estimate of future payments necessary to complete its lease terminations. Risks & Warnings Deloitte & Touche LLP expressed an unqualified opinion on management's assessment of the effectiveness of the Company's internal control over financial reporting and an adverse opinion on the effectiveness of the Company's internal control over financial reporting because of material weaknesses after reviewing the company's financial statements for the fiscal year ending January 29, 2005. Last year, in light of its poor operating performance, diminished liquidity and poor credit standing, the Company initiated a series of steps to maximize shareholder value. This began with the appointment of a special committee of its board of directors mandated to engage a financial advisor and evaluate strategic alternatives (including, Wet Seal said, a potential reorganization under Chapter 11 of the United States Bankruptcy Code). In May 2005, Wet Seal received an $18.0 million infusion after closing on an equity financing transaction with: * S.A.C. CAPITAL ASSOCIATES, LLC * PRENTICE CAPITAL PARTNERS QP, LP * PRENTICE CAPITAL PARTNERS, LP * PRENTICE CAPITAL OFFSHORE, LTD * GMM CAPITAL, LLC * GOLDFARB CAPITAL PARTNERS LLC * UBS FINANCIAL SERVICES AS CUSTODIAN F/B/O CHARLES G. PHILLIPS ROLLOVER IRA * WLSS CAPITAL PARTNERS, LLC * SMITHFIELD FIDUCIARY, LLC * D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P. * D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, LTD. and * RIVERVIEW GROUP, LLC The company obtained legal advice in this transaction from: Alan Siegel, Esq. Ackneil M. Muldrow III, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 590 Madison Avenue New York, New York 10022 The investors obtained legal counsel from: Eleazer N. Klein, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Under the terms of its Securities Purchase Agreement with these investors, the Company issued a new class of preferred stock that is convertible into 8,200,000 shares of the Company's Class A common stock and stock purchase warrants to acquire 7,500,000 shares of Class A common stock, in each case subject to certain anti-dilution provisions, for an aggregate purchase price of $24.6 million. In addition, certain of the investors in the financing acquired 3,359,997 shares of Class A common stock for an aggregate purchase price of approximately $6.41 million through the exercise of all of their outstanding Series A Warrants and a pro rata portion of their outstanding Series B Warrants issued in the Company's January 2005 financing. The Company's outstanding bridge financing facility was retired at the closing. Those investors in the financing who were lenders under the facility applied the outstanding principal and interest, which was approximately $12.0 million, as partial consideration for the acquisition of the convertible preferred stock and the warrants. Headquartered in Foothill Ranch, California, The Wet Seal, Inc. -- http://www.wetsealinc.com/-- is a leading specialty retailer of fashionable and contemporary apparel and accessory items. The Company currently operates a total of 396 stores in 46 states, the District of Columbia and Puerto Rico, including 305 Wet Seal stores and 91 Arden B. stores. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- December 7, 2005 TURNAROUND MANAGEMENT ASSOCIATION Evening Drinks GE Commercial Finance, Sydney, Australia Contact: 9299-8477 or http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Networking Breakfast Woodbridge Hilton, Iselin, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION TMA/CFA Holiday Party J.W. Marriott, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering & Help for the Needy *FREE to Members* Mack Hall at Hofstra University, Hempstead, New York Contact: 516-465-2356; http://www.turnaround.org/ December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Annual Board of Directors Meeting Rochester, New York Contact: 716-440-6615; http://www.turnaround.org/ December 12-13, 2005 PRACTISING LAW INSTITUTE Understanding the Basics of Bankruptcy & Reorganization New York, New York Contact: http://www.pli.edu/ December 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Hotel, Tyson's Corner, Virginia Contact: 703-912-3309; http://www.turnaround.org/ January 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Holiday Party Iberia Tavern & Restaurant, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ January 14, 2005 CEB Drafting & Negotiating Office Leases San Francisco, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 14, 2005 CEB Real Property Financing Los Angeles, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 21, 2005 CEB Drafting & Negotiating Office Leases Sacramento, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 21, 2005 CEB Drafting & Negotiating Office Leases San Diego, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 21, 2005 CEB Real Property Financing Sacramento, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 21, 2005 CEB Real Property Financing San Diego, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION PowerPlay - TMA Night at the Thrashers Philips Arena, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ January 28, 2005 CEB Drafting & Negotiating Office Leases Anaheim, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 28, 2005 CEB Drafting & Negotiating Office Leases Santa Clara, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 28, 2005 CEB Real Property Financing Anaheim, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 28, 2005 CEB Real Property Financing Santa Clara, California Contact: customer_service@ceb.ucop.edu or 1-800-232-3444 January 26-28, 2006 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ February 9-10, 2006 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Eden Roc, Miami, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ February 27-28, 2006 PRACTISING LAW INSTITUTE 8th Annual Real Estate Tax Forum New York, New York Contact: http://www.pli.edu/ March 2-3, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Legal and Financial Perspectives on Business Valuations & Restructuring (VALCON) Four Seasons Hotel, Las Vegas, Nevada Contact: http://www.airacira.org/ March 2-5, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES 2006 NABT Spring Seminar Sheraton Crescent Hotel, Phoenix, Arizona Contact: http://www.pli.edu/ March 4-6, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Marriott, Park City, Utah Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ March 9, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 10, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/ March 30-31, 2006 PRACTISING LAW INSTITUTE Commercial Real Estate Financing: What Borrowers & Lenders Need to Know Now Chicago, Illinois Contact: http://www.pli.edu/ March 30 - April 1, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 1-4, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute The Flamingo, Las Vegas, Nevada Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ April 5-8, 2006 MEALEYS PUBLICATIONS Insurance Insolvency and Reinsurance Roundtable Fairmont Scottsdale Princess, Scottsdale, Arizona Contact: http://www.mealeys.com/ April 6-7, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES The Seventh Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ April 19, 2006 PRACTISING LAW INSTITUTE Residential Real Estate Contracts & Closings New York, New York Contact: http://www.pli.edu/ May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 25-28, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 22-25, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott, New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., Tara Marie Martin, and Peter A. Chapman, Editors. Copyright 2005. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***