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/raid1/www/Hosts/bankrupt/TCR_Public/060125.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, January 25, 2006, Vol. 10, No. 21 Headlines 1557 PARK PLACE: Case Summary & 20 Largest Unsecured Creditors AMR CORP: Posts $604 Million Net Loss in Fourth Quarter of 2005 B&D FOOD: Appoints Yaron Arbell as Chief Executive Officer BEAR STEARNS: Moody's Rates Class M-7 Certificates at Ba1 CALPINE CORP: U.S. Trustee Appoints 7-Member Creditors Committee CALPINE CORP: Wants to Hire Thelen Reid as Special Counsel CALPINE CORP: Gets Court OK to Hire PA Consulting as Consultants COLLINS & AIKMAN: Wants to Reject Two Becker Ventures Leases COLLINS & AIKMAN: Obtains Premium Financing from Cananwill COLLINS & AIKMAN: Active Moulds Wants to Recover Molds COPANO ENERGY: Moody's Rates Proposed $225 Million Notes at B2 CRIIMI MAE: Moody's Lifts Preferred Stock Ratings to Baa2 from B3 DANA CORP: Posts $1.2 Billion Net Loss in Third Quarter of 2005 DATICON INC: Gets Interim OK to Access $300,000 of Cash Collateral DATICON INC: Wants Mirus Capital to Continue as Financial Advisor DELTA AIRLINES: Has Until June 12 to Remove Civil Actions DELTA AIRLINES: Court Orders Return of Three Planes to Creditors DELTA AIRLINES: CEO Anticipates Bankruptcy Emergence in 2007 EES COKE: Mittal Steel Action Cues S&P to Lift $75MM Notes' Rating EPIXTAR CORP: Panel Hires Mesirow Financial as Financial Advisor FAIRCHILD SEMICONDUCTOR: Posts $4.7 Mil. Net Loss in 4th Quarter FIBERCORE INC: Trustee Wants to Sell Assets to Silica for $1.1MM FLYI INC: Wants Court to Set March 31 as Claims Bar Date FLYI INC: Wants to Walk Away from Unnecessary Contracts & Leases FLYI INC: Sandra Hassen Wants Stay Lifted to Pursue PI Claim GENESIS WORLDWIDE: Has Until April 28 to File Chapter 11 Plan GENEVA STEEL: Makes $23.6 Million Pre-Confirmation Distribution GENEVA STEEL: Chapter 11 Trustee Gets OK to Hire Tanner as Auditor GLOBAL CASH: Moody's Lifts $153 Million Senior Notes' Rating to B3 GSAMP TRUST: Moody's Rates Class B-4 Sub. Certificates at Ba1 HANOVER COMPRESSION: Moody's Withdraws $350 Mil. Loan's Ba3 Rating HIGH VOLTAGE: Ch. 11 Trustee, EAG Agree on Escrow Amount Allotment HILB ROGAL: S&P Affirms BB Ratings & Revises Outlook to Stable HOME INTERIORS: Lack of Info Cues Moody's to Withdraw Junk Ratings IMPERIAL HOME: Trustee Can Hire Heiman Gouge as Conflicts Counsel INDALEX HOLDING: Moody's Rates Proposed $280 Million Notes at B3 JB OXFORD: Subsidiary Agrees to Pay $1 Mil. Civil Penalty to SEC KERR-MCGEE CORP: Cancelled Debt Cues Moody's to Withdraw Rating LIFECARE HOLDINGS: Moody's Maintains B2 Rating With Stable Outlook LIFECARE HOLDINGS: S&P Places B Corporate Credit Rating on Watch LOCKHEED MARTIN: Moody's Puts Sub. Shelf's (P)Ba1 Rating on Review MARSHALL CREEK: Voluntary Chapter 9 Case Summary MAULDIN-DORFMEIER: Amended Plan Confirmation Hearing Set on Feb. 1 MESABA AVIATION: Wants Exclusive Period Stretched to August 10 MESABA AVIATION: Judge Kishel Approves LECG LLC as Consultant MESABA AVIATION: Wells Fargo Backs L/Cs for Customs Fees & Duties MORTON'S RESTAURANT: Prices 7.5% Senior Secured Notes Offering MUSICLAND HOLDING: Can Maintain Existing Bank Accounts MUSICLAND HOLDING: Can Continue Using Existing Business Forms NOBLE DREW: M.R. Beal Retention Draws Fire from Creditors Panel NOBLE DREW: Panel Wants Mahoney Cohen as Financial Advisors NOMURA ASSET: Moody's Rates Two Sub. Certificate Classes at Low-B NORD RESOURCES: Mayer Hoffman Raises Going Concern Doubt NORTHWEST AIR: Retiree Committee Wants Segal Co. as Consultants NORTHWEST AIR: Gets Court Nod to Amend Aircraft Financing NORTHWEST AIR: Has Until May 13 to Decide on Four Airport Leases NRG ENERGY: Discloses Details on Texas Genco Acquisition Financing O'SULLIVAN IND: Lamar Wants Immediate Payment for Utility Services OAKWOOD HOMES: S&P Junks 27 Housing Transaction Classes' Ratings PLAZA PROPERTIES: Case Summary & Largest Unsecured Creditor PONDERLODGE INC: Court Approves First Amended Disclosure Statement PRESIDENT CASINOS: Earns $1.7MM of Net Income in 3rd Quarter REAL MEX: Moody's Affirms Ratings at B2 with Developing Outlook RICHARD RUTTER: Case Summary & 9 Largest Unsecured Creditors RURAL CELLULAR: Undeclared Dividends Cue S&P's Rating Downgrade SAINT VINCENTS: Inks Agreement Limiting Recovery of Five Claimants SELECT MEDICAL: Moody's Maintains B1 Rating With Negative Outlook STELCO INC: Ontario Superior Court Approves Restructuring Plan STELCO INC: Comments on Allegations Made by Two Former Directors STRUCTURED ASSET: Moody's Rates Class B1 Mezzanine Certs. at Ba1 SUNCOM WIRELESS: S&P Puts CCC+ Corporate Credit Rating on Watch SWIFT & COMPANY: Poor Performance Cues Moody's to Lower Ratings TENET HEALTHCARE: Moody's Affirms B3 Rating With Negative Outlook TIGER TELEMATICS: Gizmondo Unit Files for Administration in UK TOWER AUTOMOTIVE: Wants Plan Filing Period Stretched to April 28 TOWER AUTOMOTIVE: R.J. Tower Wants to Assume QAD Licensing Pacts UAL CORP: Twelve Directors Named for Reorganized Board VALCOM INC: Losses Trigger Auditor's Going-Concern Doubt VENTURE HOLDINGS: Creditors Must File Proofs of Claim by May 17 WOODWORKERS WAREHOUSE: Buckley Group Wants Chapter 11 Case Closed WORLDCOM INC: Has Until March 2 to Object to Tax Claims WORLDCOM INC: Court OKs Portion of Mississippi Power's Cure Claim XYBERNAUT CORP: Equity Panel Taps Henry O'Donnell as Legal Counsel XYBERNAUT CORP: Wants to Move Office to Chantilly, Virginia * Upcoming Meetings, Conferences and Seminars ********* 1557 PARK PLACE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 1557 Park Place Realty Corp. 198 Westwood Drive Brentwood, New York 11717 Bankruptcy Case No.: 06-70122 Type of Business: The Debtor is a real estate holding company. The Debtor previously filed for chapter 11 protection on Apr. 21, 2004 (Bankr. E.D.N.Y. Case No. 04-82669). Chapter 11 Petition Date: January 24, 2006 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Joseph J. Fontanetta, Esq. 484 West Main Street Babylon, New York 11702 Tel: (631) 661-3540 Fax: (631) 661-2722 Total Assets: $28,000 Total Debts: $1,048,000 The Debtor does not have unsecured creditors who are not insiders. AMR CORP: Posts $604 Million Net Loss in Fourth Quarter of 2005 --------------------------------------------------------------- AMR Corporation (NYSE: AMR) reports a net loss of $604 million in the fourth quarter of 2005, as compared to a net loss of $387 million in the fourth quarter of 2004. For the year 2005, AMR posted a $93 million operating loss and a net loss of $861 million, as compared to 2004's full-year operating loss of $144 million and net loss of $761 million. "Our fourth quarter results close the book on another very difficult year," said AMR Chairman and CEO Gerard Arpey. "But while we are dissatisfied with our financial results, we did make progress in a number of important areas during the year, including our first annual operating profit, excluding special items, since the year 2000." During the fourth quarter, the Company paid $433 million more for fuel than it would have paid at 2004 prices and, on a year over year basis, American's mainline cost per available seat mile was up by 12.9%. Excluding fuel and special items, mainline unit costs increased 2.8% versus the fourth quarter of 2004. For the full year, mainline unit costs increased 7.9%; however, excluding fuel and special items, these unit costs decreased 2%. AMR ended the year with $4.3 billion in cash and short-term investments, including a restricted balance of $510 million. Based in Fort Worth, Texas, AMR Corporation -- http://www.amrcorp.com/-- is the parent company of American Airlines and American Eagle Airlines. The company's stock is listed on the New York Stock Exchange under the trading symbol AMR. American Airlines is the world's largest carrier. American, American Eagle and the AmericanConnection regional carriers serve more than 250 cities in over 40 countries with more than 3,900 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's award-winning Web site -- http://www.AA.com/ -- provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld Alliance. * * * As reported in the Troubled Company Reporter on Nov. 02, 2005, Standard & Poor's Ratings Services assigned its 'B-' rating to $800 million of New York City Industrial Development Agency special facility revenue bonds, series 2005 -- American Airlines Inc., John F. Kennedy International Airport Project, which mature at various dates. At the same time, the ratings on existing series 2002 bonds were raised to 'B-' from 'CCC', reflecting changes in the security arrangements that apply to those bonds. Both series of bonds will be serviced by payments made by AMR Corp. unit American Airlines Inc. under a lease between the airline and the agency. B&D FOOD: Appoints Yaron Arbell as Chief Executive Officer ---------------------------------------------------------- B&D Food Corp. (OTC Bulletin Board: BDFC) appointed Yaron Arbell as Chief Executive Officer, Yossi Haras as Chief Financial Officer and Jacques Ollech as Executive Vice President, effective as of Jan. 12, 2006. The company also reported that Mr. Arbell and Jacques Ollech would be joining Daniel Ollech on the company's Board of Directors. Mr. Arbell has 14 years of executive management experience. Most recently, he headed the reform of Israel's pension funds serving as CEO of Mivtachim -- The Workers Social Insurance Pension Fund Ltd., the largest pension fund in Israel and four other smaller pension funds with total assets of more than $22 billion, and more than 400 employees. Throughout his career, Mr. Arbell has served as CEO for a variety of companies. Mr. Arbell has also participated in the restructuring of various companies including three banks, El Al - Israel airlines, and other companies in various sectors. Mr. Haras has over nine years of finance experience. Most recently, Mr. Haras served as Senior Account Manager for Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global. Besides managing the audit of financial statements of foreign companies traded on the U.S. stock exchanges, he worked on the initial public offerings of major companies on various international stock exchanges. Mr. Ollech has 20 years of experience in the coffee industry as a manufacturer, broker and distributor in Brazil, Russia, China, Europe and Israel. He is also the developer of "Brazilian Best," the second largest selling coffee brand in Russia from 1997-2001. Mr. Ollech also serves as a director of the Livorno Group, an international holding company with holdings in various world- trading companies in the areas of coffee, sugar, and oil. Daniel Ollech, Chairman and President of B&D Food Corp stated, "We are excited to have Yaron, Yossi and Jacque on board. Their management and financial expertise will prove to be valuable as we continue to grow as a company." Headquartered in New York, New York, B&D Food Corporation -- http://www.bdfcorp.com/-- is a holding company, which as of today holds a subsidiary coffee manufacturing company in Brazil. The company's subsidiary is one of the largest coffee manufacturing facilities in Brazil, and manufactures coffee products such as roasted ground and soluble coffee with the best basic key ingredient of Brazilian coffee beans. Quality is at the forefront of their mission of producing new and innovative coffee products. As of September 30, 2005, B&D Food Corp.'s balance sheet showed a stockholders deficit of $12,683,157, compared to the $374,515 deficit at Dec. 31, 2004. BEAR STEARNS: Moody's Rates Class M-7 Certificates at Ba1 --------------------------------------------------------- Moody's Investors Service assigned ratings of Aaa to the senior certificates issued by Bear Stearns Asset Backed Securities Trust 2005-4 and ratings ranging from Aa2 to Ba1 to the subordinate certificates offered in the transaction. The ratings are based on: * the expected performance of the loans; * the credit enhancement provided by: -- the subordination of the subordinate certificates, -- excess spread, and -- overcollateralization; and * the structural and legal protection in the transaction. The ratings of the subordinate certificates are also based on the respective subordination of the junior most certificates. The certificates are secured by subprime seasoned scratch and dent mortgages. Moody's expects collateral losses to range from 7.60% to 8.10%. The complete rating actions are: Issuer: Bear Stearns Asset Backed Securities Trust 2005-4 * Class A, rated Aaa * Class M-1, rated Aa2 * Class M-2, rated A2 * Class M-3, rated A3 * Class M-4, rated Baa1 * Class M-5, rated Baa2 * Class M-6, rated Baa3 * Class M-7, rated Ba1 EMC Mortgage Corporation, rated SQ2+ for special servicer and SQ1 as primary servicer of subprime 1st lien loans, and will act as master servicer. CALPINE CORP: U.S. Trustee Appoints 7-Member Creditors Committee ---------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Deirdre A. Martini, the U.S Trustee for Region 2, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Chapter 11 cases of Calpine Corporation and its debtor-affiliates: 1. Wilmington Trust Co. Attn: James McGinley 520 Madison Avenue New York, NY 10022 Tel. No. (212) 415-0522 2. HSBC Bank USA, National Association Attn: Sandra E. Horwitz 10 East 40th Street New York, NY 10016-0200 Tel. No. (212) 525-1300 3. Franklin Advisers, Inc. Attn: Richard Kuersteiner One Franklin Parkway San Mateo, CA 94403 Tel. No. (650) 312-4525 4. SPO Partners & Co. Attn: William J. Patterson 591 Redwood Highway, Suite 3215 Mil Valley, CA 94941 Tel. No. (415) 383-6600 5. Amerada Hess Corporation Attn: Jonathan C. Stein & Charles F. Cenia 1185 Avenue of the Americas New York, NY 10036 Tel. No. (212) 536-8252 6. TransCanada Pipelines Limited Attn: Garry Lamb TransCanada Pipelines Tower 450 First Street, S.W. Calgary, Alberta Canada T2P 5Hl Tel. No. (403) 920-2727 7. Acadia Power Partners, LLC Attn: S. H. Chariton, III 2030 Donahue Ferry Road Pineville, LA 71360 Tel. No. (3 18) 484-7729 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Official committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in San Jose, California, 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. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Wants to Hire Thelen Reid as Special Counsel ---------------------------------------------------------- Calpine Corporation and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to employ Thelen Reid & Priest LLP, as their special counsel, nunc pro tunc to the Petition Date. Thelen Reid has represented the Debtors and certain of their subsidiaries for more than 15 years in connection with project finance, securities and disclosure, tax, employee benefits, labor and employment, construction, bankruptcy, litigation, intellectual property, environmental, insurance, real estate, and other areas, Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York, relates. Thus, Thelen Reid has considerable and intimate knowledge concerning the Debtors and is already familiar with the Debtors' business affairs to the extent necessary for the scope of the proposed and anticipated services. As special counsel, Thelen Reid will: (a) advise the Debtors and assist the Debtors' bankruptcy and reorganization counsel in connection with any financings, refinancings, monetizations, restructurings or purchases or sales of assets or business entities as they will arise from time to time and are assigned by the Debtors to Thelen Reid provided that Debtors' bankruptcy and reorganization counsel will be responsible, in consultation with the creditors, for selecting the assets or business entities for sale and determining the timing and context of their sale. Thelen Reid will play no role in those decisions except to provide requested information; (b) advise the Debtors in connection with securities law reporting and disclosure solely in connection with current and periodic reporting obligations under the Securities Exchange Act of 1934 and compliance related to disclosure controls and procedures; (c) advise the Debtors in connection with labor and employment, employee benefits, executive compensation, ERISA and tax matters; (d) in coordination with the Debtors' bankruptcy and reorganization counsel and at the Debtors' request, provide non-bankruptcy advice to the Debtors with respect to legal matters arising in or relating to the Debtors' business, including intellectual property, environmental, insurance, project contract, regulatory and real estate matters; and (e) represent the Debtors in any litigation, arbitration or third party insolvency matters in which Thelen Reid has appeared as of the Petition Date, and other matters as will arise from time to time assigned by the Debtors to Thelen Reid, including appearing before state or federal courts and agencies with respect to those matters. Thelen Reid will be the Debtors' principal counsel on employee benefits and executive compensation. Nevertheless, Thelen Reid understands that from time to time the Debtors may wish to consult with Amy Moore, the principal lawyer with Covington & Burling, who provided the employee benefits services in the Covington Retention Application. Thelen Reid also understands that although Covington will be the Debtors' principal counsel advising on matters relating to the federal securities laws, Eulalia Mack, who is now a partner at Thelen Reid but who was with Covington until November 2005, will continue through Thelen Reid to supplement Covington's advice to the Debtors with respect to periodic and other reports filed with the Securities and Exchange Commission and will provide related advice on disclosure and disclosure compliance issues. Mr. Cantor assures the Court that Thelen Reid and Covington & Burling have extensive experience coordinating their efforts with each other and that their services do not and will not overlap. Effective January 1, 2006, the firm's current hourly rates are: Designation Hourly Rate ----------- ----------- Partners $395 - $695 Counsel $320 - $675 Associates $205 - $480 Paraprofessionals $75 - $250 Richard A. Lapping, Esq., a member of Thelen Reid, assures the Court that the firm does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which Thelen Reid is to be employed. Headquartered in San Jose, California, 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. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Gets Court OK to Hire PA Consulting as Consultants ---------------------------------------------------------------- Calpine Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's approval to employ PA Consulting Group, Inc., as their energy industry consultants, effective as of the Petition Date, on an interim basis. Richard M. Cieri, Esq., at Kirkland & Ellis LLP., in New York, New York, relates that PA Consulting is a leader in providing analysis of market structure, generation, transmission, environmental, contractual, and risk management and trading issues, often in the context of financial restructuring and business corporate strategies during the downturn of the industry over the past few years. As industry consultant to the Debtors, PA Consulting will: (a) review the Debtors' inventory of assets to determine the impacts of detailed asset operating characteristics; (b) examine the Debtors' long-term contracts, trading positions and risk management activities; (c) provide strategic advice with respect to energy industry specific issues related to the Debtors' Chapter 11 cases; (d) provide forecasts of commodity prices including fuel prices, electric supply and demand conditions, transmission constraints, hydro generation conditions, emissions allowance costs and new construction costs; (e) analyze technical aspects of the Debtors' business plans and models, with a particular emphasis on the Debtors' energy business plans; (f) analyze the Debtors' energy business strengths, weaknesses and risks from the creditors' viewpoint; (g) provide advice on restructuring issues and options; (h) provide power marketing advice and analysis with respect to the Debtors' management, credit policy, hedging contracts and credit support; and (i) provide EBITDA and cash flow forecasts of the Debtors' businesses. The Debtors will pay for PA Consulting's services according to the firm's standard hourly rates: Designation Hourly Rate ----------- ----------- Partner $545 - $620 Managing Consultant $465 Principal Consultant $350 Consultant $300 Consultant Analyst/Analyst $245 Technical Associate $120 Administrator $65 The Debtors will also reimburse PA Consulting for all reasonable out-of-pocket expenses it will incur in connection with the performance of its services. Todd Filsinger, a member of PA Consulting, assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Debtors or their estates. Headquartered in San Jose, California, 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. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Wants to Reject Two Becker Ventures Leases ------------------------------------------------------------ Collins & Aikman Corporation and its debtor affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan for authority to reject two leases with Becker Ventures: Contract Description Rejection Effective Date -------------------- ------------------------ Lease at 6385 Wall Street, May 31, 2006 Sterling Heights, Michigan Lease at 660 Massman, September 30, 2006 Davidson County, Tennessee Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors would be closing their plants in Sterling Heights, Michigan, and Davidson County, Tennessee. Thus, the Debtors will no longer need the leases after the closing of these plants. The effective dates of rejection are consistent with the Debtors' expectations regarding the timing of the plant closures, Mr. Schrock explains. The Debtors believe that the rejection dates will provide them sufficient time to wind down their operations at the plants and surrender the premises. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Obtains Premium Financing from Cananwill ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Collins & Aikman Corporation and its debtor-affiliates to enter into an Insurance Premium Financing Agreement with Cananwill, Inc. The Debtors' insurance policies require them to pay entire annual premiums in one lump sum. Since it is not always economically advantageous or feasible to pay the entire insurance premiums, the Debtors finance the premiums by entering into premium financing agreements with third-party lenders. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors have recently decided to enter into a premium financing agreement with Cananwill, Inc. Under the Insurance Premium Financing Agreement, Cananwill will finance premiums owed by the Debtors for $7,451,551 under certain insurance policies. However, due to the Debtors' Chapter 11 cases, Cananwill has stated that it will offer financing on the condition that the Debtors grant it a first priority security interest for any amount of unearned premium payable to the Debtors, as a result of the cancellation of any of the Insurance Polices described in the Insurance Premium Financing Agreement. Mr. Carmel asserts that without the Insurance Premium Financing Agreement, the Debtors would be compelled to either attempt to pursue proposals from other insurance premium financing companies at greater cost and less convenience, or pay the entire annual premium in one lump sum. The Court rules that: (a) Cananwill will reimburse the Debtors for all payments -- up to $5,327,665 -- made by the Debtors for insurance premiums on December 23, 26, 27, 28, 29 or 30, 2005, on account of the Policies that are the subject of the Insurance Premium Finance Agreement; (b) Cananwill is granted a first priority security interest in any gross unearned premiums payable to the Debtors pursuant to the Policies financed under the Insurance Premium Financing Agreement. The security interest will be senior to any prepetition and postpetition security interest in the Collateral and senior to any future security interest in the Collateral. The Debtors will not grant any lien or security interest in the Collateral that is or may be senior to or pari passu with the security interest of Cananwill in the Collateral; (c) In the event that the Debtors default in the timely repayment of any amounts due, the automatic stay provisions of Section 362 of the Bankruptcy Code will be lifted and Cananwill may cancel the insurance policies financed under the Insurance Premium Financing Agreement after giving any notice required by applicable state law. Cananwill may apply any unearned premiums payable to the Debtors upon cancellation, to any amount owing by the Debtors, all without further Court order; (d) In the event that upon cancellation of the insurance policies financed by Cananwill, the unearned or returned premiums are insufficient to pay the Debtors' total amount due to Cananwill under the Insurance Premium Financing Agreement, then any remaining amount owing to Cananwill will be administrative expenses under Section 503; (e) The Debtors are authorized and directed to execute and deliver the documents and amendments to the Insurance Premium Financing Agreement as the Debtors may deem necessary or desirable to carry out the Court's order; (f) The reversal or modification on appeal of the authorization under the order approving the financing and Section 364 of the Bankruptcy Code will not effect the validity of the debt, priority or lien granted to Cananwill under the order approving the financing; (g) Upon the Debtors' default, Cananwill will not be hindered of its rights and remedies under the Insurance Premium Financing Agreement and applicable law, including but not limited to, an action under the Bankruptcy Code; and (h) Cananwill's rights under the Insurance Premium Financing Agreement and applicable state law will not be impaired by the bankruptcy proceeding, the appointment of a trustee, the conversion of the proceeding to one under Chapter 7 of the Bankruptcy Code or any other provisions of the Bankruptcy Code. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Active Moulds Wants to Recover Molds ------------------------------------------------------ Active Mould & Design Ltd. asks the U.S. Bankruptcy Court for the Eastern District of Michigan to compel Collins & Aikman Corporation and its debtor-affiliates to return certain molds used in the production of automotive parts and components or provide adequate protection of its interests. Active Mould built and delivered to the Debtors various molds for use in their operations. Active Mould has properly perfected first priority liens on the Molds pursuant to Section 445.619 of Michigan Compiled Laws, dealing with ownership rights in dies, molds, and forms. Ryan D. Heilman, Esq., at Schafer and Weiner, PLLC, argues that the Debtors have not informed Active Mould of the programs for which the Molds are used. Active Mould also believes that at least some of the programs for which the Molds are used are nearing conclusion. The continued use of the Molds by the Debtors substantially impairs the value of the Molds, Mr. Heilman says. Once the Debtors have produced sufficient parts of the relevant program is concluded, the Molds will lose almost all value. Mr. Heilman further asserts that the Debtors currently owe no less than $1,262,815 for the purchase of the Molds, which the Debtors continue to use in their operations. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) COPANO ENERGY: Moody's Rates Proposed $225 Million Notes at B2 -------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Copano Energy, L.L.C., a midstream natural gas company. With a stable outlook, Moody's assigned: * a B1 Corporate Family Rating to Copano; and * a B2 rating to its proposed $225 million of senior unsecured notes. Proceeds from the offering will be used primarily to repay a $170 million senior term loan facility and borrowings under the company's senior secured revolving credit facility. Moody's also assigned a Speculative Grade Liquidity rating of SGL-3 to Copano, which indicates adequate liquidity over the next 12 months. The ratings are restrained by: * Copano's small size relative to many of its competitors, several of whom have significant financial resources; * the rapid growth of the company over the last couple of years and the short amount of time that it has been a public company; * its relative lack of geographic diversification, although it does have a degree of reservoir diversification; and * its aggressive posture with respect to its growth prospects including expectations of high volume growth from recently acquired assets as well as further acquisitions in a market characterized by what many consider to be high valuations. The ratings are supported by: * Copano's position in major natural gas supply areas; * relatively moderate downside risk to changes in commodity prices over the next several years due to its contract profile and hedging positions; * a lower level of distributions relative to its similarly rated peers, many of which are MLPs; and * management's track record in successfully integrating over 30 acquisitions since 1992 under the Copano name. The rating outlook is stable. Copano's ratings may improve over the medium term if it can demonstrate successful implementation of its operational plan, including growing volumes in the areas where it operates, and following through on its stated financial policies of maintaining: * debt/EBITDA of approximately 4.0x, and * distribution coverage of at least 1.4x-1.5x. Copano's ratings could be negatively affected by: * poor integration of acquisitions, * lower-than-anticipated volume growth, or * a large debt-financed acquisition. On Aug. 1, 2005, Copano completed the acquisition of ScissorTail Energy, L.P., a midstream natural gas company that provides gathering and processing services in central and eastern Oklahoma, for approximately $500 million. Rationale for the acquisition includes: * expectations of high growth in wellhead volumes in the areas where ScissorTail operates; * expectations of a continued favorable commodity price environment; and * contract portfolio diversification benefits. On a pro forma basis for 2005, Moody's estimates that Copano had EBITDA of approximately $94 million (excluding an adjustment for the company's G&A cap and payments to certain key employees under profit participation agreements at ScissorTail). Relative to pro forma debt as of Dec. 31, 2005 of $378 million, debt/EBITDA was 4.0x, which is in line with its similarly rated peers. Moody's estimates that pro forma EBITDA for 2006 will be $90-$115 million (excluding an adjustment for the G&A cap), which should put debt/EBITDA in the 3.3x-4.2x range. EBITDA/interest is expected to fall within the 3.2x-4.1x range. Debt/capital, based on book values, was approximately 54% as of Dec. 31, 2005 and is expected to remain at or about that level for the foreseeable future. If capital is adjusted for the $137 million difference between book value and market value at the time of Copano's IPO in November 2004, debt/capital is approximately 45%. Distribution coverage (EBITDA - interest - maintenance capex/distributions) is expected to range 1.4x-1.5x or higher, which is higher than its similarly rated peers, many of which have distribution coverage ratios closer to 1.0x. Copano has relatively moderate exposure to changes in commodity prices. Copano's margins prior to the acquisition of ScissorTail generally benefited from lower gas prices relative to NGL prices because of the company's keep-whole exposure whereas ScissorTail's margins generally benefited from higher gas prices because the majority of its contracts are on a percentage-of-proceeds basis. Copano's keep-whole exposure is relatively modest because it has the option under all of the contracts that supply its Houston Central Processing Plant to condition natural gas instead of processing it during times when processing is uneconomic. Even though the company makes less money when the plant runs in conditioning mode, it avoids losses due to negative processing margins. To help mitigate its commodity price risk for the next several years, Copano has entered into a number of hedging arrangements, primarily put options, on: * crude oil, * natural gas, and * NGL products. In July 2005, Copano purchased crude oil put options for expiring in December 2007 as a hedge to provide a floor on its exposure to NGL prices related to its percentage-of-proceeds volumes. While such hedges are not perfect, they do offer protection in the event crude oil prices decrease, bringing NGL prices down. In December 2005, Copano purchased put options on natural gas extending through 2009 and put options on specific NGL products extending through 2008. As a result, Copano has now hedged a significant portion of its net position of NGLs through the end of 2008 and most of its net position for natural gas through the end of 2007, as well as a significant portion of its position for natural gas for 2008 and 2009. Taking into account its hedging positions, Copano's anticipated results fall within a tighter range than would otherwise be the case. Using assumptions of $50-$60 per barrel for crude oil and $8-$10 per MMBtu for natural gas in 2006, Copano could be expected to generate EBITDA between $95 million (assuming $50 per barrel for crude oil and $10 per MMBtu for natural gas, which would be a negative frac spread) and $135 million (assuming $60 per barrel for crude oil and $8 per MMBtu for natural gas). For ratings purposes, Moody's assumes that Copano's EBITDA for 2006 will fall within the $90-$115 million range. Copano's senior unsecured notes are rated B2, one notch below the Corporate Family Rating. This notching reflects effective subordination to a meaningful amount of senior secured debt in the company's capital structure. At closing, senior secured debt will consist of borrowings of approximately $156 million under the company's $350 million senior secured revolving credit facility. Copano's Speculative Grade Liquidity rating of SGL-3 reflects Moody's assessment that the company possesses adequate liquidity. Moody's believes that there is some uncertainty about whether Copano will be able to cover all cash requirements, including distributions, from internal sources over the next 12 months. However, any shortfall is expected to be minimal and Copano is expected to have full access to external sources of financing during this time period. Moody's expects that Copano will generate $70-$90 million of operating cash flow over the next 12 months which may fall short of planned capital expenditures of $35-$45 million and distributions of $45-$55 million. Working capital requirements are expected to be minimal and low maintenance capital expenditures (less than $10 million per year) afford a level of flexibility. Copano's external sources appear to be adequate. At closing, Copano should have approximately $194 million available under its $350 million senior secured credit facility. Copano is expected to adequately meet its financial covenants during the forecast period which include: * a maximum funded debt/EBITDA ratio of 5.0x at closing (reducing to 4.75x after June 30, 2006); * a maximum senior secured debt/EBITDA ratio of 3.5x; and * a minimum EBITDA/interest ratio of 2.75x at closing (increasing to 3.0x after June 30, 2006). Copano's "back-door" liquidity, or the ability to sell assets to raise cash, is limited due to the secured nature of its credit facilities. Copano Energy, L.L.C. is headquartered in Houston, Texas. CRIIMI MAE: Moody's Lifts Preferred Stock Ratings to Baa2 from B3 ----------------------------------------------------------------- Moody's Investors Service upgraded the preferred stock ratings of CRIIMI MAE Inc. to Baa2, from B3, with a stable outlook. This rating action follows the approval by CRIIMI MAE's shareholders of its acquisition by CDP Capital Financing Inc., a subsidiary of Caisse de dep"t et placement du Quebec. This concludes the Moody's review that commenced in October 2005. The preferred stock is callable by CRIIMI MAE on or after Aug. 13, 2006. The Baa2 rating incorporates Moody's view that the preferred stock enjoys a significant amount of implied support from CDP, as well as the expectation that the call option on the preferred stock will likely be exercised. In addition, the stand- alone creditworthiness of CRIIMI MAE has been enhanced by debt paydowns through the acquisition date. The approval of the acquisition is the culmination of a strategic review by CRIIMI MAE's Board of Directors beginning in February 2005. The rating action: CRIIMI MAE Inc.: * cumulative preferred stock Series B to Baa2, from B3 CRIIMI MAE Inc. is a commercial mortgage REIT headquartered in Rockville, Maryland, USA. It reported assets of US$1.0 billion and equity of US$413.5 million as of Sept. 30, 2005. DANA CORP: Posts $1.2 Billion Net Loss in Third Quarter of 2005 --------------------------------------------------------------- Dana Corporation (NYSE: DCN) filed its Form 10-Q for the third quarter of 2005 and reported financial results for both the quarter and nine months ended Sept. 30, 2005. The filing and delivery of the report eliminated any defaults related to late filing of the third-quarter financial statements under the company's financing agreements. Sales for the third quarter of 2005 were $2.396 billion compared to $2.114 billion during the same period in 2004. The company recorded a net loss of $1.272 billion for the quarter, compared to net income of $42 million in the third quarter of 2004. The third-quarter 2005 net loss included two significant unusual items that were previously announced. These two non-cash items account for 94% of the reported net loss: * The company provided a valuation allowance, as announced on Oct. 10, 2005, against its net U.S. deferred tax assets during the third quarter. The one-time impact of providing this allowance was a reduction in net income of $918 million in the period, which represents the restated net U.S. deferred tax assets at the beginning of the third quarter and also includes $13 million for a similar allowance against the company's U.K. tax assets. The valuation allowance was recorded because, based on its current outlook, Dana believes it is no longer more likely than not that the company will be able to utilize these tax assets. This action does not affect the company's ability to use these tax assets later if justified by future profitability in the U.S. and U.K. * Additionally, on Oct. 20, 2005, the company announced its intention to divest its non-core engine hard parts, fluid products, and pump products businesses. An impairment charge to reduce the book value of certain assets of these businesses of $275 million after tax was recorded in the third quarter. Additional charges will be recorded in the fourth quarter of 2005 in connection with the classification of these businesses as discontinued operations. "Obviously, our results are far from acceptable, particularly the operating loss," said Dana Chairman and CEO Mike Burns. "Many of the challenges we are facing on the automotive side, including higher material costs and lower production levels, are industry-wide issues. However, the reduced income in our Heavy Vehicle unit reflects not only material cost increases, but also internal operating inefficiencies, which we are moving aggressively to address." Sales for the nine months ended Sept. 30, 2005 were $7.505 billion, which compares to $6.755 billion for the same period in 2004. For the first nine months of 2005, the company reported a net loss of $1.226 billion compared to net income of $200 million for the same period in 2004. Results for the quarter and nine months ended Sept. 30, 2004 have been restated, as previously disclosed in the 2004 Form 10-K/A filed on Dec. 30, 2005. A full-text copy of the Company's Form 10-Q is available at no charge at http://ResearchArchives.com/t/s?487 Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. A leading supplier of axle, driveshaft, engine, frame, chassis, and transmission technologies, Dana employs 46,000 people in 28 countries. * * * As reported in the Troubled Company Reporter on Jan. 13, 2006, Fitch Ratings has downgraded the ratings of Dana Corporation: -- Issuer default rating to 'B' from 'BB-'; -- Senior unsecured debt to 'B' from 'BB-'. Fitch has also upgraded this bank facility rating since Dana's banks have taken limited security with the bank line. -- Senior secured bank facility to 'BB' from 'BB-'. The ratings for Dana remain on Rating Watch Negative by Fitch, focusing on: * the company's accounting practices, * the ability of Dana to file its third-quarter financial statements, and * the resolution of the reporting requirement violation under its existing bond indentures. DATICON INC: Gets Interim OK to Access $300,000 of Cash Collateral ------------------------------------------------------------------ The Honorable Lorraine Murphy Weil of the U.S. Bankruptcy Court for the District of Connecticut in New Haven gave Daticon, Inc., access to up to $300,000 of CapitalSource Finance LLC's cash collateral. The Debtor's obligation to CapitalSource stems from a Revolving Credit, Term Loan and Security Agreement dated Sept. 5, 2003. The Agreement has been amended twice, on Nov. 24, 2004, and Jan. 3, 2006. When Daticon filed for chapter 11 protection, the Debtor owed $15,430,398 in principal, $91,038 in accrued interest, $1,334,734 in accrued fees, plus other fees and expenses. CapitalSource holds liens on substantially all the Debtor's assets, including cash, accounts receivable, inventory, machinery, equipment, furniture and fixtures, and general intangible assets. To provide CapitalSource with adequate protection required under Section 363 of the U.S. Bankruptcy Code for any diminution in the value of its collateral, the Debtor will grant CapitalSource a replacement lien to the same extent, validity and priority as the prepetition liens. The Debtor will use the cash collateral to fund its operations, payroll, and other operating expenses that are necessary to maintain the value of the estate while selling its business. CapitalSource has agreed to a $50,000 carve-out for allowed professional fees. A full-text copy of Daticon, Inc.'s seven-week budget is available for free at http://ResearchArchives.com/t/s?48c Howard L. Siegel, Esq., at Brown Rudnick Berlack Israels LLP in Hartford, Connecticut, and Jeffrey L. Jonas, Esq., and Mary D. Bucci, Esq., in Boston, Massachusetts, represent CapitalSource Finance LLC. A full-text copy of the Court's interim order to use cash collateral is available for a fee at http://www.researcharchives.com/bin/download?id=060124045036 Headquartered in Norwich, Connecticut, Daticon, Inc. -- http://www.daticon.com/-- works with law firms, corporations and government agencies to capture, review and manage the volumes of electronic data and paper documents generated by complex litigation, merger and acquisition transactions, and investigations. The Debtor filed for chapter 11 protection on Jan. 17, 2006 (Bankr. D. Conn. Case No. 06-30034). Douglas S. Skalka, Esq., and Nancy Bohan Kinsella, Esq., at Neubert, Pepe & Monteith, PC, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,089,033 in assets and $18,997,028 in debts as of Dec. 31, 2005. DATICON INC: Wants Mirus Capital to Continue as Financial Advisor ----------------------------------------------------------------- Daticon, Inc., asks the U.S. Bankruptcy Court for the District of Connecticut in New Haven for permission to continue Mirus Capital Advisors, Inc.'s employment as its financial consultant and investment banker. Mirus Capital will continue to market and sell all or substantially all of the Debtor's assets. Mirus Capital already distributed an Offering Memorandum to 43 potential bidders that resulted in four written offers. Mirus Capital will: (a) develop an appropriate transaction strategy; (b) prepare and manage due diligence information for potential purchasers; (c) negotiate final terms with the bidders; (d) advise the Debtor concerning transaction options and deal structure; and (e) facilitate a competitive auction of the Debtor's assets. David Hoffer, the managing director and shareholder of Mirus Capital, discloses that the Firm will receive an Accomplishment Fee of $100,000 plus a percentage of the Aggregate Gross Consideration: (1) 2.5% of the Aggregate Gross Consideration up to $5 million; (2) 4.0% of the Aggregate Gross Consideration between $5 million and $10 million; or (3) 5.0% of the Aggregate Gross Consideration in excess of $10 million and payable from the proceeds of the sale. If the Aggregate Gross Consideration totals $19 million, Mirus Capital's Accomplishment Fee will be $875,000. The Aggregate Gross Consideration is the sum of cash, property, stock, non-cash payments, interest due on payments on or after closing, assumed liabilities, cash and accounts receivables not acquired by buyer, deferred installments of the purchase price plus interest, royalty payments, license fees and others. A full-text copy of Daticon's seven-page engagement letter with Mirus Capital is available for a fee at: http://www.researcharchives.com/bin/download?id=060123044104 About Mirus Capital Advisors Inc. Founded in 1987, Mirus Capital Advisors, Inc. -- http://www.merger.com/-- delivers exceptional merger advisory, financings, valuation and consulting services to middle-market public and private technology and business service companies and family-owned businesses. The company can be contacted at: Mirus Capital Advisors, Inc. 200 Wheeler Road, 4th Floor South Burlington, MA 01803 Tel: (781) 418-5900 Fax: (781) 418-5999 http://www.merger.com/ About Daticon Inc. Headquartered in Norwich, Connecticut, Daticon, Inc. -- http://www.daticon.com/-- works with law firms, corporations and government agencies to capture, review and manage the volumes of electronic data and paper documents generated by complex litigation, merger and acquisition transactions, and investigations. The Debtor filed for chapter 11 protection on Jan. 17, 2006 (Bankr. D. Conn. Case No. 06-30034). Douglas S. Skalka, Esq., at Neubert, Pepe & Monteith, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,089,033 in assets and $18,997,028 in debts as of Dec. 31, 2005. DELTA AIRLINES: Has Until June 12 to Remove Civil Actions --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the time period within which Delta Air Lines, Inc., and its debtor affiliates may file notices of removal with respect to any civil actions pending as of the Petition Date and covered by 28 U.S.C. Section 1452 through and including the later to occur of: (a) June 12, 2006; or (b) 30 days after the entry of an order terminating the automatic stay with respect to any particular action sought to be removed. As reported in the Troubled Company Reporter on Dec. 26, 2005, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, relates that, as of the Petition Date, one or more of the Debtors were party to numerous judicial and administrative proceedings involving a diverse assortment of claims. Given the number of Prepetition Actions and the variety of claims, as well as the enormous amount of time and effort the Debtors have had to devote since the Petition Date to resolving other significant aspects of these Chapter 11 cases, the Debtors have not been able to analyze and make a determination regarding the removal of each Prepetition Action, Mr. Huebner states. Consequently, the Debtors believe that it is advisable to seek an extension to allow them the opportunity to carefully consider the possible removal of each Prepetition Action and to ensure that they do not forfeit valuable rights under Section 1452. The Debtors submit that the extension is in the best interests of their estates, their creditors and all parties-in-interest. Mr. Huebner explains that the extension will permit the Debtors to make a full assessment of the possible removal of Prepetition Actions and thereby maximize the potential recovery for their creditors while protecting their rights under Section 1452. He adds that the Debtors' adversaries will not be prejudiced by the extension because the adversaries may not prosecute a Prepetition Action absent relief from the automatic stay. Moreover, any party whose proceeding is removed may seek to have it remanded under Section 1452(b). Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIRLINES: Court Orders Return of Three Planes to Creditors ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York granted Morgan Stanley & Co. Inc., Tokyo Leasing (USA) Inc., and Natexis Banques Populaires SA, and HSH Nordbank AG's request to compel Delta Air Lines, Inc. and its debtor affiliates, to comply with the "immediately surrender and return" requirements of Section 1110(c) of the Bankruptcy Code with respect to three Boeing 767-332 aircraft bearing FAA registration numbers N116DL, N118DL and N119DL. The Court directs the Debtors to: (1) return the three Boeing 767-332 aircraft bearing U.S. Registration Nos. N116DL, N118DL and N119DL to the Aircraft Creditors; (2) the extent that the Engines are not attached to the Airframes, to reattach as soon as reasonably practicable the six Engines to the three Airframes in this manner: (a) the four Engines currently located at Atlanta Hartsfield-Jackson International Airport will be reattached, at the Debtors' sole expense, to the Airframes located at AHIA; and (b) the two Engines currently located at Southern California Aviation, Victorville, California will be reattached, at the Debtors' sole expense, to the Airframe located at SCA; and (3) ferry or fly, at their sole expense, the two Aircraft located at AHIA from AHIA to SCA, provided that Delta Air Lines, Inc., has the option to use each the Aircraft in a revenue service flight from AHIA to California as a means to reduce the cost of the return of the Aircraft to the SCA storage facility. If any of the Airframes or Engines happen to be non-serviceable, the Debtors are under no obligation to repair the Airframe or Engines to make them serviceable, subject, however, to the reservation of rights provisions regarding the assertion of administrative priority claims or general unsecured claims for damages. The Debtors are directed, at their sole expense, to store, maintain and insure the Aircraft until the date that both (i) N116DL and N119DL arrive at SCA and (ii) the Engines currently located at SCA are reattached to N118DL; provided that the Debtors will endeavor to provide the Aircraft Creditors with as much advance notice as reasonably practicable of the date upon which both conditions are anticipated to be satisfied so that a smooth transition for the insurance, maintenance and storage can be effected. To facilitate the surrender and return of the Aircraft at SCA, SCA is directed to provide full access to the Aircraft Creditors and their representatives to the Aircraft delivered to or stored at SCA. The Basic Rent on the Aircraft will stop accruing from and after January 5, 2006; provided, however, that if the Debtors fail to return all of the Aircraft to SCA by January 19, 2006, for each day after January 19, 2006, that the Debtors fail to return all of the Aircraft to the Aircraft Creditors at SCA, the January 5, 2006 date will be extended by the same number of days. The Debtors will agree to cooperate reasonably with the Aircraft Parties with respect to the execution of or provision of information required for a lease termination document to be filed with the Federal Aviation Administration in connection with the Aircraft; provided that the Aircraft Parties will be responsible for the preparation and filing of documentation with the FAA. To the extent applicable, the Aircraft Creditors, along with all other parties-in-interest, are granted relief from the automatic stay under Section 362(a) of the Bankruptcy Code to take possession of, and to enforce any and all of their rights or remedies under the Leases with respect to, the Aircraft Equipment. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIRLINES: CEO Anticipates Bankruptcy Emergence in 2007 ------------------------------------------------------------ Delta Air Lines and its debtor-affiliates could emerge from bankruptcy next year, Gerald Grinstein, the company's CEO told the Atlanta Journal-Constitution. Mr. Grinstein also added that Delta has achieved 70% of their financial goals in its recovery plan. Mr. Grinstein told the newspaper that he's looking for the carrier to emerge from bankruptcy in the spring or summer of 2007. Mr. Grinstein also told the paper that: -- Delta is not in merger talks with Northwest Airlines, which has been speculated since the two carriers filed for Chapter 11 bankruptcy protection on the same day; -- The carrier should show positive cash flow and other financial benefits from its recovery plan by late this year; -- Delta still wants a permanent cost-cutting deal with pilots worth $325 million a year, which is far higher than the tentative deal reached last month; and -- Service is improving despite the hard times. As previously reported in the Troubled Company Reporter on Jan. 24, 2006, the U.S. Bankruptcy Court for the Southern District of New York extended until July 11, 2006, the period within which Delta Air Lines Inc. and its debtor-affiliates have the exclusive right to file a chapter 11 plan. The Court also extended the Debtors' period to solicit acceptances of that plan until Sept. 9, 2006. As reported in the Troubled Company Reporter on Jan. 3, 2006, the Debtors want to avoid the necessity of formulating a Reorganization Plan prematurely and to ensure that their Reorganization Plan best addresses the interests of their estates, employees, and creditors. 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. EES COKE: Mittal Steel Action Cues S&P to Lift $75MM Notes' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating on EES Coke Battery LLC's series B $75 million ($18.3 million outstanding) senior secured notes due 2007 to 'BBB-' from 'BB'. The rating action follows an upgrade of EES Coke's primary offtaker, Mittal Steel USA Inc. to 'BBB' from 'BB' and a review of the recent financial performance of EES Coke. The Mittal Steel USA rating action follows the merger between that entity and Ispat Inland Inc., with Mittal Steel USA as the surviving entity. The outlook on EES Coke's notes is stable, while the outlook on Mittal Steel USA is negative. EES Coke has an agreement with Mittal Steel USA for 100% of production from 2006 to 2015. However, from 2006 to 2010, the contract is a requirements contract, meaning Mittal Steel USA would only be required to buy the coke if it needs it. "Standard & Poor's believes that EES Coke likely will sell all of its production to Mittal Steel USA under terms of the contract through debt maturity," said Standard & Poor's credit analyst Scott Taylor. "Also, EES Coke remains fully contracted well beyond the debt's maturity, resulting in an asset value that is many multiples of the company's debt," he continued. EES Coke's stable outlook reflects: * its strong cash flow, * minimal debt relative to that cash flow, and * the demonstrated demand for its product. The potential for rating changes through the term of the debt is limited. EPIXTAR CORP: Panel Hires Mesirow Financial as Financial Advisor ---------------------------------------------------------------- The Honorable A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida gave the Official Committee of Unsecured Creditors of Epixtar Corp. and its debtor-affiliates permission to employ Mesirow Financial Consulting LLC as its financial advisor. As previously reported in the Troubled Company Reporter on Dec. 26, 2005, Mesirow Financial will: 1) prepare a valuation for the Debtors' ISP Subsidiaries in support of the Committee's efforts to analyze the Debtors' proposed settlement with Laurus Master Fund, Ltd.; and 2) perform all other financial advisory services to the Committee or its counsel to assist the Committee in the Debtors' chapter 11 cases. James Feltman, a Senior Managing Director of Mesirow Financial, reported that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Sr. Managing Directors $590 - $650 & Managing Directors Sr. Vice-Presidents $480 - $570 Vice-Presidents $390 - $450 Senior Associates $300 - $360 Associates $190 - $270 Paraprofessionals $140 Headquartered in Miami, Florida, Epixtar Corp. fdba Global Assets Holding Inc. -- http://www.epixtar.com/-- aggregates contact center capacity and robust telephony infrastructure to deliver comprehensive, turnkey services to the enterprise market. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. FAIRCHILD SEMICONDUCTOR: Posts $4.7 Mil. Net Loss in 4th Quarter ---------------------------------------------------------------- Fairchild Semiconductor (NYSE: FCS) reported results for the fourth quarter and full year ended Dec. 25, 2005. Fairchild reported fourth quarter sales of $370.8 million, a 7% increase from the prior quarter and 2% lower than the fourth quarter of 2004. Fairchild reported a fourth quarter net loss of $4.7 million, compared to a net loss of $20.8 million in the prior quarter and net income of $15.8 million in the fourth quarter of 2004. Gross margin was 24.2%, 340 basis points higher sequentially and 140 basis points lower than in the fourth quarter of 2004. "We had a strong finish to 2005, a year of major transition for Fairchild, by delivering solid fourth quarter sales and gross margin growth," Mark Thompson, Fairchild's president and CEO, siad. "During 2005, we improved the management of our distribution supply chain by focusing primarily on channel sell-through, which has helped us to reduce internal inventories by more than 20% and channel inventories about 16% compared to 2004. Our tighter management of the channel has allowed us to increase sell-through approximately 4% sequentially in the fourth quarter, to the highest level in more than four years. Inventories entering 2006 are now at or below our targets with internal inventories at about 9 weeks of supply and channel inventories at approximately 11 weeks. We also significantly reduced our capital expenditures during 2005 to $97 million, or slightly less than 7% of sales, well below the $190 million or 12% of sales we spent in 2004." Full year revenues for 2005 were $1,425.1 million, a decrease of 11% compared to $1,603.1 million in 2004. Fairchild reported a net loss of $241.2 million, compared to net income of $59.2 million in 2004. Headquartered in South Portland, Maine, Fairchild Semiconductor (NYSE: FCS) -- http://www.fairchildsemi.com/-- is the leading global supplier of high-performance power products critical to today's leading electronic applications in the computing, communications, consumer, industrial and automotive segments. As The Power Franchise(R), Fairchild offers the industry's broadest portfolio of components that optimize system power. Fairchild's 9,000 employees design, manufacture and market power, analog & mixed signal, interface, logic, and optoelectronics products. Fairchild Semiconductor Corp.'s 5% Convertible Senior Subordinated Notes due 2008 carry Standard & Poor's single-B rating. FIBERCORE INC: Trustee Wants to Sell Assets to Silica for $1.1MM ---------------------------------------------------------------- Steven Weiss, the Chapter 7 Trustee of FiberCore, Inc., asks the U.S. Bankruptcy Court for the District of Massachusetts to approve the sale of the Debtor's assets to Silica Tech, LLC, free and clear of all liens, claims, interests and other encumbrances. Mr. Weiss and Silica entered into a sale agreement with an initial purchase price of $1.1 million. Under the sale agreement, the estate retains: * $200,000 from the proceeds of the Commscope claim, * an interest in the proceeds of claims pertaining to FiberCore Jena, and * an interest in the Brightwave claim. In the event a party other than Silica is the successful bidder at the Auction, Silica will receive the excess proceeds of the sale, up to the amount of its secured claim. The Trustee also seeks the Court's authority to assume and assign the certain executory contracts and unexpired leases to the successful bidder. A full-text copy of the Asset Purchase Agreement is available for free at http://ResearchArchives.com/t/s?492 The Court will convene a final sale hearing at 11:30 a.m., on February 1, 2006. Headquartered in Charlton, Massachusetts, FiberCore, Inc., is a manufacturer and global supplier of optical fiber and preform for the telecommunication and data communications markets. The Company filed for chapter 11 protection on November 14, 2003 (Bankr. Mass. Case No.: 03-46551). Carl D. Aframe, Esq., at Aframe & Barnhill, P.A., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $10 million each. On October 6, 2004, the Debtor's case was converted to chapter 7 liquidation. The Court appointed Steven Weiss as the Debtor's Chapter 7 Trustee. FLYI INC: Wants Court to Set March 31 as Claims Bar Date -------------------------------------------------------- FLYi, Inc., and its debtor-affiliates anticipate filing a plan of liquidation in the second quarter of 2006. In connection with the Plan, the Debtors must obtain accurate information about the nature, validity and amount of the various claims being asserted against each of their estates to understand and analyze the liabilities that must be addressed in the Plan or other wind down of their estates. Bar Dates Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to establish March 31, 2006, as the last day for all creditors, other than governmental units, to file prepetition claims. Pursuant to Section 502(b)(9) of the Bankruptcy Code, the Debtors ask the Court to establish May 8, 2006, as last day for all governmental units to file prepetition claims. The Debtors anticipate that some entities may assert claims in connection with the Debtors' rejection of executory contracts and unexpired leases pursuant to Section 365 of the Bankruptcy Code. The Debtors propose that the Bar Date for rejection damage claims will be the later of the General Bar Date or 30 days after the date of the Rejection Order. The Debtors want to retain the right to: (a) dispute, assert offsets or defenses to, any claim filed, listed or reflected in the Schedules as to nature, amount, liability or classification; (b) subsequently designate any claim as disputed, contingent, or unliquidated; and (c) amend their Schedules of Assets and Liabilities. The Debtors ask Judge Walrath to establish the Amended Schedule Bar Date as the later of the General Bar Date or 20 days after the notice of the Schedules amendment is served on the claimant. In light of the discontinuation of scheduled flight operations and their other major operations, the Debtors believe that the most significant portion of their Administrative Claims will relate to the period from November 7, 2005, through February 28, 2006. Thus, the Debtors ask the Court to establish March 31, 2006, as the last day by which all entities, including governmental units, must file a proof of claim against any Debtor with respect to any Administrative Claim that arose from Nov. 7, 2005 to February 28, 2006. The Debtors will seek to establish a separate bar date for Administrative Claims that arise after the First Administrative Period. Filing Claims The Debtors require these persons or entities to file a Proof of Claim on or before the Bar Date: (a) any entity whose prepetition claim against a Debtor is not listed in the applicable Debtor's Schedules or is listed as disputed, contingent, or unliquidated and that desires to participate in any of the Debtors' chapter 11 cases or share in any distribution in any of the Debtors' chapter 11 cases; and (b) any entity that believes that its prepetition claim is improperly classified in the Schedules or is listed in an incorrect amount and that desires to have its claim allowed in a classification or amount other than that identified in the Schedules. Any entity holding an interest in any Debtor, which is based exclusively upon: * the ownership of common or preferred stock in a corporation; * a membership interest in a limited liability company; or * warrants or rights to purchase, sell, or subscribe to that security or interest, need not file a proof of interest on or before the General Bar Date. Any entity that is required to file a proof of claim but fails to timely do so by the applicable Bar Date should be: (a) forever barred, estopped and enjoined from asserting any claim that: * exceeds the amount identified in the Schedules as undisputed, non-contingent, and liquidated; or * is of a different nature, classification or priority than any claim identified in the Schedules; (b) barred from participating in any distribution from any Debtor's estate with respect to that Unscheduled Claim; and (c) bound by the terms of any chapter 11 plan that may be confirmed by the Court in any Debtor's chapter 11 case or any other order that authorizes the winding up of any Debtor's estate. 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. (FLYi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLYI INC: Wants to Walk Away from Unnecessary Contracts & Leases ---------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Jan. 3, 2006, Independence Air discontinued all scheduled flights planned to depart on the evening of Thursday, Jan. 5, 2006. As a result of the discontinuation of the Independence Air's scheduled flight operations, many of FLYi, Inc., and its debtor- affiliates' executory contracts and unexpired leases have become unnecessary to their estates. The Debtors believe that more than 200 contracts and leases have no value to their estates. In addition, the Debtors believe that the 200+ Contracts have no market value. Thus, pursuant to Section 365 of the Bankruptcy Code, the Debtors seek the U.S. Bankruptcy Court for the District of Delaware's authority to reject 200+ Contracts and Leases to relieve an undue burden on their estates. The Debtors want the rejection to be effective as of the later of: (a) January 14, 2006, or (b) the return or vacation of any property subject to the applicable Rejected Contract, but in no case later than January 31, 2006. A 13-page listing of the Rejected Contracts is available for free at http://ResearchArchives.com/t/s?48a 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. (FLYi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLYI INC: Sandra Hassen Wants Stay Lifted to Pursue PI Claim ------------------------------------------------------------ Sandra E. Hassen was a passenger on Independence Air, Inc. -- known at that time as Atlanta Coast Airlines -- Flight 6112, on November 1, 2001. John C. Phillips, Jr., Esq., at Phillips Goldman & Spence, P.A., in Wilmington, Delaware, relates that Ms. Hassen fell while exiting the Dornier 328-300 aircraft's attached staircase, which did not have a right-side handrail. As a result of that fall, Ms. Hassen suffered serious personal injuries including a broken nose, broken teeth, broken arm and derangement of her cervical spine, which ultimately led to a surgical intervention. Subsequently, Ms. Hassen and David Thomas Remata commenced a civil action in the Supreme Court of the State of New York on August 12, 2002, against The Port of New York and New Jersey, Delta Air Lines, Inc., and Atlantic Coast Airlines. They sought to recover monetary damages based on negligence and products liability claims. The litigation was then transferred to the U.S. District Court for the Eastern District of New York. The District Court, upon the parties' stipulation in the litigation, dismissed the Port Authority of New York and New Jersey as defendants. FLYi, Inc., and its debtor-affiliates responded to the allegations on September 30, 2002. Mr. Phillips relates that at that time, the Debtors were solvent. On Nov. 21, 2005, Judge Frederic Block stayed all proceedings against Atlantic Coast Airlines based on the injunction order issued by the U.S. Bankruptcy Court for the District of Delaware. Mr. Phillips says that, upon information and belief, the Debtors are insured by a policy issued by American Home Assurance Company, having a personal injury liability limit of $500,000. Mr. Phillips notes that the accident took place within the policy period. The Debtors' insurance carrier will be responsible for payment of any judgment in the litigation against the Debtors. Ms. Hassen and Mr. Remata seek to proceed with their claim against the Debtors in the pending litigation in the U.S. District Court for the Eastern District of New York to liquidate their claim to judgment and enforce that judgment against the insurance proceeds. In addition, Ms. Hassen and Mr. Remata waive their right to recover directly from the Debtors' assets any settlement awarded to them. Ms. Hassen and Mr. Remata agree that they will seek recovery for their Claim solely from the Debtors' insurance. According to Mr. Phillips, allowing Ms. Hassen and Mr. Remata to pursue their claims against the Debtors' insurance policies will not prejudice the Debtors or their bankruptcy estates because they will only seek recovery for their Claims from the Debtors' applicable insurance. Thus, Ms. Hassen and Mr. Remata ask the Court to lift the automatic stay to pursue their personal injury action against the Debtors. 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. (FLYi Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) GENESIS WORLDWIDE: Has Until April 28 to File Chapter 11 Plan ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio extended until April 28, 2006, the time within which Genesis Worldwide, Inc., and its debtor-affiliates alone have the right to file a chapter 11 plan. The Debtors also have until June 23, 2006, to solicit acceptances of that plan from their creditors. The Debtors and the Unsecured Creditors Committee are currently collaborating to pursue numerous avoidance actions, including the prosecution of an action against Three Cities Research, Inc., which is currently pending before the Bankruptcy Court. The Three Cities lawsuit seeks damages arising from an $80 million leveraged buy-out transaction, and that lawsuit represents the largest single asset remaining in the Debtors' estates. The Debtors gave the Court three reasons supporting the extension: 1) the recovery for unsecured creditors under a proposed chapter 11 plan largely depends on the Debtors and the Committee's successful resolution of the Three Cities litigation; 2) the Debtors' last monthly operating report shows that while they have cash on hand, the administrative claims exceed the cash on hand, making funding for a proposed plan difficult as of now; and 3) the Debtors are not using the extension as a leverage against creditors because it will not harm the Debtors' creditors and the Committee supports the extension of the exclusive period. Headquartered in Dayton, Ohio, Genesis Worldwide Inc., fka The Monarch Machine Tool Company, engineers and manufactures high quality metal coil processing and roll coating and electrostatic oiling equipment. Genesis Worldwide and its debtor-affiliates filed for chapter 11 protection on September 17, 2001 (Bankr. S.D. Ohio Case No. 01-36605). Nick V. Cavalieri, Esq., at Bailey Cavalieri LLC, represents the Debtors in their chapter 11 proceedings. GENEVA STEEL: Makes $23.6 Million Pre-Confirmation Distribution --------------------------------------------------------------- The Hon. Glen E. Clark of the U.S. Bankruptcy Court for the District of Utah authorized Geneva Steel LLC to make pre- confirmation distributions of: a) $19,913,639 to the Emergency Steel Loan Guaranty Board; b) $1,419,748 to Silver Point Capital LP; and c) $2,287,688 to Albert Fried & Co. The Bankruptcy Court allowed the pre-confirmation distributions in order to terminate continuing losses caused by a negative interest rate spread between the collective interest accruing on the secured debts and the interest earned from the proceeds of the collateral securing these debts. John F. Young, Esq., at Block Markus & Williams LLC, says that the Debtor's secured debts to ESLGB, Silver Point and Albert Fried accrue interest at the blended weighted rate of 11.15% per year. In contrast, the proceeds of the creditors' collateral held by the estate earn interest at just 4% per year. Albert Fried is currently the subject of an adversary proceeding filed by James T. Markus, the chapter 11 Trustee appointed in the Debtor's bankruptcy Case. Mr. Markus requires Albert Fried to post adequate security before any distributions are made to the company. These payments constitute the second batch of distributions on account of the $110 million financing provided by Citicorp USA, Inc. and Citicorp North America, Inc., on Dec. 8, 2000, that allowed the Debtors to exit a prior chapter 11 filing. The Bankruptcy Court approved the first batch of payments, totaling $114 million, on June 2, 2005. Citicorp Financing ESLGB partially guaranteed repayment of the Citicorp term loan. The loan is secured by substantially all of the Debtor's assets. When the Debtor defaulted on the term loan, ESLGB honored its guaranty obligations and became the holder of the guaranteed portion of the loan. In addition, Silver Point succeeded to Citicorp's remaining rights as a loan participant and agent. Alert Friede is the ultimate beneficiary of the Tranche C portion of the term loan (with a principal amount of $9,842,000) originally funded by Citicorp North America. The Debtor eventually returned under bankruptcy protection on Jan. 25, 2002. As of the petition date, the total amount due under the term loan was approximately $108,350,000, plus accrued interest and certain fees and expensed payable under the provisions of the term loan. The term loan matured on September 30, 2005. $1 Million Holdback The Bankruptcy Court further permits Mr. Markus to retain $500,000 each from the payments due to Silver Point and ESLGB pending the resolution of issues related to the reasonableness of professional fees added to the total amounts due under the term loan. Headquartered in Provo, Utah, Geneva Steel LLC owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its chapter 11 proceedings. James T. Markus was appointed as the chapter 11 Trustee for the Debtor's estate on June 22, 2005. John F. Young, Esq., at Block Markus & Williams, LLC represents the chapter 11 Trustee. When the Company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GENEVA STEEL: Chapter 11 Trustee Gets OK to Hire Tanner as Auditor ------------------------------------------------------------------ The Honorable Glen E. Clark of the U.S. Bankruptcy Court for the District of Utah gave James T. Markus, the Chapter 11 Trustee for Geneva Steel LLC, permission to employ Tanner LC as his accountant and auditor. As previously reported in the Troubled Company Reporter on Dec. 9, 2005, Tanner LC will: 1) prepare the 2004, 2005, and, if necessary, the 2006 tax returns for Geneva Steel Holdings Corporation and its subsidiaries; 2) complete the 2003 annual audits required for the Geneva Steel Union Employee Pension Plan, the Geneva Steel Union Employee Savings Plan, the Geneva Steel Management Employee Pension Plan and the Geneva Steel Management Employee Savings Plan; and 3) render all other accounting and auditing services to the chapter 11 Trustee in connection with the liquidation of the assets of the estate or the administration of the Debtor's chapter 11 case. Ray Ellison, a member of Tanner LC, discloses that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $240 - $310 Associates $85 - $190 Tanner LC assures the Court that it does not represent any interest materially adverse to the chapter 11 Trustee and the Debtor and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Provo, Utah, Geneva Steel LLC owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its chapter 11 proceedings. James T. Markus was appointed as the chapter 11 Trustee for the Debtor's estate on June 22, 2005. John F. Young, Esq., at Block Markus & Williams, LLC represents the chapter 11 Trustee. When the Company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GLOBAL CASH: Moody's Lifts $153 Million Senior Notes' Rating to B3 ------------------------------------------------------------------ Moody's Investors Service upgraded Global Cash Access Inc.'s corporate family rating to B1 from B2, senior secured bank credit facility rating to Ba3 from B2, and senior subordinated debt rating to B3 from Caa1. The upgrade concludes a review for possible upgrade initiated on Oct. 6, 2005. The ratings upgrade reflects the company's significant reduction in financial leverage since the initial rating assignment in February 2004. The upgrade also reflects the company's leading market share earnings predictability from exclusive, multi-year client contracts, and conservative acquisition appetite. On Oct. 31, 2005, the company completed the redemption of $82 million principal of senior subordinated notes with $130 million net initial public offering proceeds received in September and October of 2005. In addition, the company has prepaid approximately $91 million of its outstanding credit facilities balance since the company's initial borrowing in March 2004. As a result, outstanding debt at Dec. 31, 2005 approximates $321 million and debt to EBITDA is less than 3.5x, a substantial financial leverage reduction from the 5.6x level at the time of the initial rating assignment. Given the company's free cash flow generation and measured acquisition appetite, Moody's believes that the possibility for debt leverage to revert to initial rating assignment levels is remote. The stable rating outlook reflects Moody's expectation that over the course of the next 12 to 18 months, Global Cash Access will continue to repay debt and maintain client contract renewals. The stable outlook also incorporates the potential for a modest increase in customer concentration and the potential for increasing pricing pressure. Continued evidence of stable 18% operating margins and free cash flow growth such that the ratio of free cash flow (cash flow from operating activities before settlement assets and liabilities less capital expenditures) to debt in excess of 15% could result in upward rating pressure. Conversely, a scenario of margin and cash flow contraction from competitor share gains, accelerated pricing pressure, or acquisition spending, such that free cash flow to debt declines to less than 10% could result in downward rating pressure. The two-notch upgrade for the senior credit facilities to Ba3 considers the potential for a strong recovery of the facilities in a distressed scenario given the company's expanding business and growing franchise value. The B3 rating for the senior subordinated notes reflects the likelihood that this junior class of creditors would likely absorb a disproportionately larger share of any credit losses in a distress scenario. The credit facilities and senior subordinated notes receive subsidiary guarantees from subsidiaries, excluding wholly owned international subsidiaries and the QuikPlay joint venture. The guarantors generate predominantly all of the company's revenue and cash flow and the domicile of the vast majority of the company's intellectual property resides with the guarantors. Global Cash Access provides products and services to: * 9 of the 10 largest U.S. gaming operators, * the 4 largest U.K. gaming operators, and * approximately 960 gaming establishments worldwide, representing about 70% market share. Client concentration by casino owner remains moderate; the largest client represents about 18% of revenues and the top ten clients represent about 50% of revenues. The company also has a broad geographic footprint of casinos served, which mirrors that of the casino industry worldwide and provides credit support; Moody's expects the company's lost business from riverboat casinos which remain indefinitely closed as a result of Hurricane Katrina devastation will continue to be offset by new business, including MGM Mirage, signed during fiscal 2005. Moody's believes the company's cash flow visibility is supported by its relatively high client contract renewal rate of 97% for two year ended June 30, 2005 and by the nature of its client contracts, which are typically exclusive, of three to five year duration, and govern all of an operator's gaming establishments. In Moody's view, the company's: * mid to high single digit same store sales growth, * new client wins, and * control of operating expenses, support an outlook for profitable growth. Moody's believes the company will continue to manage rising credit card company interchange fees, which represent a pass through client charge, such that operating margins are not materially affected for the worse. For the trailing twelve months ended Sept. 30, 2005, free cash flow excluding settlement flows represented $44 million. The company's free cash flow benefits from a relatively large deferred tax asset, which the company expects will amortize over the next 15 years and represents approximately 36% of total assets. The company's actual cash taxes remain substantially lower than its 36% effective tax rate; for the trailing twelve months ended Sept. 30, 2005, cash taxes paid represented less than 10% of net income. The company's capital expenditures have traditionally been minimal at about 2% of revenue, but going forward, Moody's believes that capital expenditures could increase as a percentage of revenue, subject to the equipment spending requirements of new client contracts. Ratings upgraded: * Corporate Family Rating to B1 from B2 * $169 Million Outstanding Senior Secured Term Loan to Ba3 from B2 * $20 Million Senior Secured Revolver to Ba3 from B2 * $153 Million Outstanding Senior Subordinated notes to B3 from Caa1 Las Vegas-based Global Cash Access Inc., a wholly owned subsidiary of Global Cash Access Holdings Inc. (NYSE: GCA), is a leading provider of cash access products and related services to approximately 960 gaming properties and other clients in the: * United States, * the United Kingdom, * Canada, and * the Caribbean. GSAMP TRUST: Moody's Rates Class B-4 Sub. Certificates at Ba1 ------------------------------------------------------------- Moody's Investors Service assigned ratings of Aaa to certain mortgage pass-through certificates issued by GSAMP Trust 2006-SD1 and ratings ranging from Aa2 to Ba1 to the subordinate certificates in the transaction. The Aaa ratings are based on: * the expected performance of the mortgages; * the subordination of the subordinate certificates; * the excess spread; * the initial overcollateralization; and * the structural and legal protections in the transaction. The ratings of the subordinate certificates are also based on the respective subordination of the other subordinate classes. The pool is expected to lose between 7.75% and 8.25%. The certificates are secured by weaker than average subprime scratch and dent mortgages originated by: * Ameriquest (61.94%), * Acoustic (6.61%), * Equifirst (4.57%), * First Arizona (4.28%), * Freemont (3.92%), and * others. The complete rating actions are: Issuer: GSAMP Trust 2006-SD1 * Class A-1, rated Aaa * Class A-2, 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 Ocwen Loan Servicing, LLC, rated SQ2- as a primary servicer of subprime 1st lien loans, will service the loans. GS Mortgage Securities Corp. is a Delaware corporation, wholly- owned by Goldman Sachs Mortgage Company established to act as depositor. GSAMP Trust 2006-SD1 is a REMIC established for acquiring mortgage loans and issuing the certificates. HANOVER COMPRESSION: Moody's Withdraws $350 Mil. Loan's Ba3 Rating ------------------------------------------------------------------ Moody's Investors Service withdrawn the Ba3 rating on Hanover Compressor Company's core wholly-owned operating subsidiary Hanover Compression Limited Partnership's $350 million secured bank revolving credit facility. The credit facility due to mature in December 2006 was replaced with a new five-year $450 million senior secured revolving credit facility. Moody's does not rate the new facility. No other ratings are affected by this action. HIGH VOLTAGE: Ch. 11 Trustee, EAG Agree on Escrow Amount Allotment ------------------------------------------------------------------ EAG Acquisition, LLC, and Stephen S. Gray, the chapter 11 Trustee appointed in High Voltage Engineering Corporation and its debtor- affiliates' bankruptcy cases, inked a settlement agreement resolving their dispute over the allocation of certain amounts that have been held in escrow since the sale of the Debtor's Evans Analytical Group Division to EAG on Sept. 2, 2005. Mr. Gray asks the U.S Bankruptcy Court for the District of Massachusetts to approve the settlement with EAG. Holdback Escrow Amount The Trustee had agreed to sell all assets associated with Evans Analytical to EAG for $28.1 million, subject to customary working capital adjustments. Pending the final determination of the final closing date working capital, EAG consented to pay the purchase price in part by depositing $250,000 into escrow. The Trustee and EAG agreed that Deutsche Bank Trust Company Americas, as Escrow Agent, would hold the escrowed amount to secure the Debtors' obligations to pay any purchase price adjustments. The Settlement Pursuant to the settlement agreement, EAG and Mr. Gray agree that the EAG is entitled to 26.3% or $65,734 of the Holdback Escrow Amount while the Debtors are entitled to the remaining 73.7% or $184,266 of the escrowed amount. All interest earned on account of the escrowed amount and all fees and expenses due to Deutsche Bank will be allocated, pro rata, based on the escrowed amount received by EAG or the Debtors' estate. Headquartered in Wakefield, Massachusetts, High Voltage Engineering Corporation -- http://www.asirobicon.com/-- owns and operates a group of three industrial and technology based manufacturing and services businesses. HVE's businesses focus on designing and manufacturing high quality applications and engineered products, which are designed to address specific customer needs. The Debtor filed its first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No. 04-11586). Its Third Amended Joint Chapter 11 Plan of Reorganization was confirmed on July 21, 2004, allowing the Company to emerge on Aug. 10, 2004. High Voltage and its debtor-affiliates filed their second chapter 11 petition on Feb. 8, 2005 (Bankr. Mass. Case No. 05-10787). S. Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and Douglas B. Rosner, Esq., at Goulston & Storrs, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it listed $457,970,00 in total assets and $360,124,000 in total debts. Stephen S. Gray was appointed chapter 11 Trustee in February 2005. John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate, Hall & Stewart LLP represents the chapter 11 Trustee. HILB ROGAL: S&P Affirms BB Ratings & Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Hilb, Rogal & Hobbs (NYSE:HRH) to stable from negative and affirmed its 'BB' counterparty credit and bank loan ratings on the Connecticut- based company. The outlook revision reflects the reduced potential that ongoing regulatory investigations will trigger allegations that would materially affect the company's competitive or financial condition. Furthermore, Standard & Poor's concerns following the resignation of the company's former President and CEO have been allayed by the promotion of a company executive to President, in addition to the installation of a new CFO. In August 2005, the company entered into an agreement with the Connecticut State Attorney General's office to establish a $30 million national fund to reimburse clients affected by the company's contingent commission agreements. The settlement is primarily related to the alleged placement or steering of business to insurance carriers to qualify for larger bonuses and contingent commissions. In the third quarter of 2005, the company recorded a $42.3 million pretax charge to encompass the settlement and related costs. The settlement is expected to be paid in two installments: * $20 million by Feb. 1, 2006, and * the remaining $10 million by Aug. 1, 2007. Although no portion of the settlement includes a fine or a penalty, the company has further agreed to pay a $250,000 administrative fine to the Insurance Department of the State of Connecticut. "In stark contrast to settlements by other larger insurance brokers, HRH has not given up the collection of contingent commissions," observed Standard & Poor's credit analyst Donovan Fraser. "The brokerage-based commissions excluded from the company's new sales model amount to less than 10% of total contingent commissions of $42 million in 2004." As of Sept. 30, 2005, contingent commission income of $47.6 million eclipsed the $42.4 million collected in all of 2004. In addition, the company has historically collected the bulk of contingent commissions in the first quarter, further alleviating Standard & Poor's liquidity concerns. The company has historically operated well within existing restrictive bank covenants and has a $175 million revolving credit facility that remained untapped as of Sept. 30, 2005. Following the company's settlement with the Connecticut Attorney General, its near to intermediate term operating performance will be less susceptible to the loss of agency-based contingent commission income. Standard & Poor's expects the company to maintain an ROR in excess of 22% (adjusted for one-time charges) through 2006 and maintain adjusted fixed charge coverage (incorporating the imputed debt on noncancelable operating leases and excluding one-time charges) in excess of 6x. HOME INTERIORS: Lack of Info Cues Moody's to Withdraw Junk Ratings ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings for Home Interiors & Gifts, Inc. The ratings have been withdrawn because Moody's believes it lacks adequate information to maintain a rating. On Jan. 12, 2006, HIG announced plans for a comprehensive restructuring of its debt. On the same date, HIG filed with the SEC a Form 15 suspending its obligation to continue filing reports with the SEC. These ratings were withdrawn: * Corporate family rating, Caa3; * Senior secured revolving credit facility due 2009, Caa2; * Senior secured term loan facility due 2011, Caa2; and * Senior subordinated notes due 2008, Ca. Home Interiors & Gifts, Inc., based in Dallas, Texas is a fully- integrated manufacturer and distributor of home decorative accessories. The company sells its products primarily to independent sales representatives who resell the products at in- home presentations or shows. Sales for the twelve-month period ended Sept. 30, 2005 were approximately $531 million. IMPERIAL HOME: Trustee Can Hire Heiman Gouge as Conflicts Counsel ----------------------------------------------------------------- The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for the District of Delaware gave Montague S. Claybrook, the Chapter 7 Trustee overseeing the liquidation of Imperial Home Decor Group Holdings, Inc., and its debtor-affiliates, permission to employ Heiman, Gouge & Kaufman, LLP, as his special conflicts counsel. As previously reported in the Troubled Company Reporter on Nov. 24, 2005, the Court approved the retention of Ballard Spahr Andrews & Ingersoll, LLP, as Mr. Claybrook's counsel. During the course of its review of potential avoidance actions, Ballard Spahr identified approximately 13 potential defendants with whom it has conflict of interests, making it impossible to prosecute. In this light, Heiman Gouge will: a) assist the Trustee in investigating, analyzing and pursuing potentially avoidable transfers and other litigation on behalf of the estates not brought by Ballard Spahr; b) prepare all necessary motions, orders, applications, correspondence, complaints, answers, discovery materials, reports, memoranda and papers in connection with the prosecution of the conflicted avoidance action claims; and c) provide the full range of legal services in connection with prosecuting the conflicted avoidance claims, including the commencement and litigation of actions. Henry A. Heiman, Esq., reported that his firm will be paid on a contingency basis, without providing further details. Headquartered in Cleveland, Ohio, Imperial Home Decor Group, Inc. -- http://www.ihdg.com/-- manufactures and distributes home and commercial wall-coverings. The Company also provides online wall-covering information sales services. Products and services are sold to multiple industries. The Company and its debtor-affiliates filed for chapter 11 protection on Dec. 27, 2003 (Bankr. D. Del. Case No. 03-13899). The Debtors' cases were converted to chapter 7 on Sept. 1, 2004. Prior to the conversion date, substantially all of the Debtors' assets were liquidated. Currently, the estates are administratively insolvent. On Sept. 9, Montague S. Claybrook was appointed as chapter 7 Trustee. Duane David Werb, Esq., at Werb & Sullivan represents the Debtors. When the Debtor filed for protection from its creditors, it estimated $100 million in total assets and $100 million in debts. INDALEX HOLDING: Moody's Rates Proposed $280 Million Notes at B3 ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed $280 million of senior secured notes to be issued by Indalex Holding Corp. The notes will be guaranteed by the company's domestic subsidiaries and its parent, Indalex Holdings Finance, Inc, and will have a second-priority lien on property and assets of Indalex, to the extent such property and assets secure the bank revolving credit facility. The notes will also have a second- priority lien on all of Indalex's capital stock and that of its domestic subsidiaries and on 65% of the capital stock of foreign subsidiaries. In related rating actions, Moody's assigned a B3 corporate family rating and an SGL-2 speculative grade liquidity rating. The rating outlook is stable. This is the first time Moody's has rated Indalex, the aluminum extrusion businesses to be divested by Honeywell, Inc. following its acquisition of Novar Plc, the parent company of Indalex. The acquirer of Indalex, Sun Capital Partners, Inc. is expected to contribute approximately $111 million of the $425 million purchase price. The balance, including transaction costs, will be debt financed with proceeds from the bond offering and approximately $57 million of borrowings under a $200 million first-priority senior secured revolving bank facility. The ratings assume that the transaction will close in the amounts and along the terms as presented. Moody's corporate family rating for Indalex primarily reflects: 1) the high degree of financial leverage under which the company will be operating; 2) the sensitivity of earnings to volume levels; 3) the reliance on meaningful volume increases to improve EBITDA and operating cash flow generation; 4) increasing cost pressures; and 5) Moody's expectation that free cash flow will be negligible to negative in the early years following this transaction. The rating also considers the potential for increased supply of extruded products from offshore sources, as well as competition from other products. However, the rating acknowledges Indalex's good market position as a major supplier of extruded aluminum products in North America and, importantly, its "pass-through" aluminum price business model, which should provide a degree of stability to earnings over time. The notes are rated at the corporate family rating based upon the collateral available and the expectation that the revolver will be moderately used for seasonal working capital requirements. Moody's notes that should the first-priority liens securing the bank facility be released, the second-priority liens on the notes will also be released and all obligations become unsecured. Moody's further notes that the capital stock will be automatically released from the second-priority lien should the publication of financial statements for the issuers or relevant subsidiaries be required as a result of the pledge of the stock. These ratings were assigned: * B3 -- $280 million second-priority senior secured notes due 2014 * B3 -- corporate family rating * SGL-2 -- speculative grade liquidity rating. Indalex competes in the extruded aluminum market in North America where it ranks as the second largest supplier, behind Alcoa Inc., shipping approximately 15% of the estimated 4 billion pounds of extruded aluminum shipped in the US in 2004. From its 18 operating locations, including two cast houses to melt aluminum in-house, the company supplies a diverse customer base but core markets include the "made-to-order" transportation and the residential building and construction end markets, which together account for around 59% of shipments. Indalex, similar to other companies with a "margin on metal" business model, seeks to minimize aluminum price risk through formula pricing mechanism contracts as well as hedging and tolling activities while focusing on maximizing returns generated through conversion activities. The company indicates that the majority of its supply agreements are structured in one of these ways with the most common being the formula pricing mechanism, which accounts for around 66% of deliveries. Typically, an "all-in" price per pound charged to the customer under this formula is a function of three components: * the posted aluminum price on the London Metal Exchange; * the Midwest premium; and * a negotiated conversion margin, which is a key number Moody's considers in the rating. Moody's estimates Indalex's cash gross margin per pound shipped for the twelve months ended Oct. 2, 2005 to be approximately $0.22/pound. Moody's generally views this pricing model as providing more earnings stability and less exposure to the cyclical price swings inherent in the primary aluminum industry. However, Moody's views the ability to substantively increase margins as limited and therefore, increased volume is a critical component in growing earnings and cash generation. Indalex will also need to carefully manage its non-metal costs (labor, energy) in line with swings in volumes and reflective of increased cost pressures in energy and transportation. Moody's notes as well that competition from outside the US, China in particular, could have a negative effect on realized margins over time. Indalex currently sources approximately 4% of its extrusions from suppliers in China. Upon completion of the sale to Sun Capital, Indalex will be highly levered. At closing of this transaction, total financial debt of approximately $335 million represents approximately 5.6 times LTM October 2005 adjusted EBITDA (adjusted to include cash dividends from Indalex's approximate 25% holding in Asia Aluminum Group (AAG), a Chinese aluminum extrusion company, restructuring charges and costs that Moody's does not anticipate Indalex will incur under Sun Capital's ownership). The cash dividend received from AAG ($4.6 million in 2004) is an important source of cash flow generation. Adjusting debt for unfunded pension obligations and operating leases results in a leverage ratio of approximately 6.6 times. Given the fairly high level of capital expenditures anticipated relative to operating cash flow generation, Moody's expects 2006 free cash flow to be breakeven or modestly negative. The stable outlook reflects Moody's view that Indalex should demonstrate a reasonably stable level of operating and earnings performance over the next 12-15 months. Given the high leverage of the company and the need for substantive, sustained volume improvement in order to improve earnings and cash flow metrics, ratings upgrades are unlikely over the next 15 months. Negative impact to the outlook or rating could stem from: * significant shipment declines leading to margin and earnings contraction; * material dividend payments to equity holders; * acquisitions; or * other large non-operating cash uses, particularly given the already high use of leverage in the capital structure. The SGL-2 rating reflects Moody's expectation that Indalex will operate with minimal amounts of cash on its balance sheet. However, concurrent with the transaction, Indalex is expected to put in place a $200 million borrowing base controlled, first- priority lien, senior secured bank facility (not rated), which will fund approximately $57 million of the $425 million purchase price. The credit facility should leave a comfortable amount of borrowing capacity to meet seasonal working capital needs. The credit facility's only financial covenant is a fixed charge coverage ratio that goes into effect if excess availability falls below $25 million. The SGL-2 rating also considers the fact that a significant portion of the company's assets are pledged, thereby constricting alternative liquidity. Headquartered in Lincolnshire, Illinois, Indalex Holding Corp. is the parent of the "Indalex" group of operating companies engaged in the production of extruded aluminum products. Indalex, on a pro forma basis, reported revenues of $934 million for the fiscal year ended Dec. 31, 2004. JB OXFORD: Subsidiary Agrees to Pay $1 Mil. Civil Penalty to SEC ---------------------------------------------------------------- JB Oxford Holdings, Inc. (OTC: JBOHD) (JBOH) and its National Clearing Corp. subsidiary have agreed to settle a lawsuit commenced by the Securities and Exchange Commission alleging improper late trading and facilitation of market timing. Without admitting or denying wrongdoing, NCC has consented to the entry of an injunction enjoining NCC from future violations of certain provisions of the federal securities laws. NCC has also agreed to disgorge $1,035,324, which represents the gross revenue earned by NCC, plus interest, based on the conduct alleged in the SEC's Complaint, and to pay a civil penalty of $1 million. Three former employees have also agreed to separate settlements, for which neither NCC nor JBOH will be responsible. JBOH, without admitting or denying the SEC's allegations, has consented to the entry of an administrative cease and desist order prohibiting it from future violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5. In addition, JBOH has agreed not to have a controlling interest in a clearing brokerage firm for a period of five years. JBOH will not be required to pay any money in settlement of this action. SEC Mutual Fund Lawsuit In Aug. 2004, the SEC's Los Angeles office commenced a civil lawsuit against the Company, National Clearing Corp and three of its former officers and employees, alleging violations of section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5, and Section 22(c) of the Investment Company Act of 1940 and Rule 22c-1. The suit contends that the Company wrongfully allowed customers to place mutual fund trades after 4:00 p.m. EST, and wrongfully assisted clients in "market timing" of mutual funds. While the Company admits no wrongdoing and intends to vigorously defend itself. The Company has not accrued any specific amount related to this matter, as no amount of loss in the Company's estimated range of loss of zero to $20 million is more likely than another. In Jan. 2005, the Court, with prejudice, dismissed all claims under Section 17(a) of the Securities Act of 1933. The remaining claims are pending. The suit seeks unspecified monetary damages and penalties, as well as other remedies against the individual defendants. Stock Dividend Announced The Board of Directors of JB Oxford Holdings has resolved to pay a stock dividend to shareholders of record as of the close of business on Jan. 5, 2006. The stock dividend will consist of 9 shares of $.01 par value previously authorized, but unissued JBOH common stock for each whole share of record as of the close of business on Jan. 5, 2006. It is anticipated that the Company's transfer agent will pay the dividend within the next ten days. Headquartered in Los Angeles, California, JB Oxford Holdings, Inc. offers market making and institutional trading services through its National Clearing Corp subsidiary. The Company also purchases and sells real estate for investment and/or development through its FiCorp, Inc., subsidiary. Through its wholly owned subsidiaries, the Company was previously engaged in the business of providing brokerage and related financial services to retail customers and broker-dealers nationwide. With the completion of the transactions with Ameritrade, Inc. and North American Clearing, its brokerage operations are now limited to providing market making and institutional trading services only. * * * Going Concern Doubt JB Oxford's recurring operating losses and significant pending litigation raise doubt as to the Company's ability to raise enough revenues in order to continue operating as a viable going concern. Due to these factors, BDO Seidman, LLP, the Company's independent registered certified public accounting firm, expressed substantial doubt about the Company's ability to continuing as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004. Bankruptcy Warning JB Oxford Holdings warns that if the judgment against the Company from the pending Securities and Exchange Commission lawsuit related to the ongoing mutual fund investigations is significant, the demand for payment coupled with the Company's deteriorating financial results, will likely affect the its ability to meet its obligations as they become due in the normal course of business. Should JB Oxford Holdings be unable to meet its obligations as they become due, the Company has indicated it would be forced to immediately file for protection under chapter 11 of the United States Bankruptcy Code. KERR-MCGEE CORP: Cancelled Debt Cues Moody's to Withdraw Rating --------------------------------------------------------------- Moody's Investors Service withdrew its Ba3 senior secured rating for Kerr-McGee Corporation's $1.25 billion bank revolving credit facility due May 1, 2010, as the credit facility has been cancelled. Moody's does not plan to assign a rating to Kerr-McGee Corporation's new $1.25 billion senior unsecured five-year bank revolving credit facility. Kerr-McGee Corporation, headquartered in Oklahoma City, Oklahoma, is an independent exploration and production company with primary operations in the US. LIFECARE HOLDINGS: Moody's Maintains B2 Rating With Stable Outlook ------------------------------------------------------------------ Moody's assigned a negative outlook to the long-term acute care hospital (LTACH) sector following the release of a proposed rule for fiscal 2007 Medicare reimbursement. The proposed rule was published on Jan. 19, 2005 and is subject to a 60-day public comment period with a final rule expected in late Spring 2006. A final rule would be effective for patient discharges occurring on or after July 1, 2006 through June 30, 2007. The Centers for Medicare and Medicaid Services (CMS) stated that the proposed rule as drafted would result in an average reduction of the LTACH Medicare reimbursement rate of approximately 11%. Moody's maintains ratings on three long-term acute care hospital providers. * Select Medical, B1 Negative * LifeCare Holdings, B2 Stable * Triumph Healthcare, B2 Stable Moody's estimates that the effect of the proposed reimbursement change would be significant to all three issuers. Therefore, a final rule passed in a form that is substantially similar to the proposal could result in negative rating actions in all three cases. Moody's notes that the 60-day comment period could result in changes to the rule that mitigate some of the negative effects and, therefore, will not take rating actions based on the proposal to avoid unnecessary volatility in the long-term ratings of the individual companies. Moody's expects to issue a more detailed report on the proposed rule change and the effects on rated LTACH issuers shortly. Moody's, however, has assigned a negative outlook to the sector. Moody's had not formally maintained an outlook for the sector prior to this. Moody's believes that even if the final rule does not initially result in as drastic a reduction to the fiscal 2007 reimbursement, CMS will continue to revise LTACH reimbursement. For example, CMS is likely to continue to refine its definition of an LTACH facility and the type of patients that should be treated in the LTACH setting in order to drive patients to the most efficient form of care. Moody's believes that the evolution of these criteria over the next twelve to eighteen months will create enough uncertainty in the sector to warrant the negative outlook. LIFECARE HOLDINGS: S&P Places B Corporate Credit Rating on Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for: * LifeCare Holdings Inc. (including the 'B' corporate credit rating); * Select Medical Corp. ('B+'); and * Triumph HealthCare Holdings Inc. ('B') on CreditWatch with negative implications. This follows the announcement of the proposal by The Centers for Medicare & Medicaid Services to reduce Medicare reimbursement to long-term acute care hospitals in fiscal 2007. "If enacted as proposed, Medicare reimbursement to proprietary long-term acute care hospitals could fall an average of about 10.4%," noted Standard & Poor's credit analyst David Peknay. Resolution of the CreditWatch listings will require a more comprehensive analysis of the rate cut implications, as well as each company's strategy to lessen the impact should the cut be enacted. The proposal is subject to a comment period that will last until late March. The final ruling should be published in May. LOCKHEED MARTIN: Moody's Puts Sub. Shelf's (P)Ba1 Rating on Review ------------------------------------------------------------------ Moody's Investors Service placed all of Lockheed Martin Corporation's and COMSAT Corporation's long term debt ratings (Senior Unsecured rating Baa2) under review for possible upgrade. Lockheed's short term rating, Prime-2 was affirmed. The short term rating was not placed under review as an upgrade of the long term rating sufficient to warrant and upgrade of the Prime-2 short term rating is unlikely. Lockheed's liquidity profile remains very strong. Moody's last rating action was on Nov. 12, 2004 changing the outlook for both companies to Positive. The review of Lockheed debt ratings will focus on the outlook for continued strengthening of the company's cash flow and debt coverage metrics. Lockheeds' earnings and cash flow have improved and debt has been reduced over the past several years. The review will assess the company's prospects in light of expected continued budgetary pressures on defense department spending. This will include the company's balance of revenues between the development and manufacturing of major mission platforms where growth in revenues and cash flow are expected to be limited, and the company's activities in systems, communications, intelligence etc. where the potential for growth is expected to be greater. In addition, the review will assess the company's financial flexibility should an unexpectedly major change in defense spending occur. Among many factors that could impact this assessment is the balance between fixed and cost plus contracts. Lockheed's basic financial profile is strong with a: * large reported backlog; * declining debt levels; * stable to improving cash flow; and * a business base that, while focused on defense, includes major contracts with the Department of Homeland Security and other large government agencies. In addition to this diversification, the company's ability to apply a wide range of skill sets to create complete solutions to its customers' needs and its technological expertise, including classified capabilities, are all, in Moody's opinion, supportive of the rating. Lockheed Martin Corporation, headquartered in Bethesda, Maryland, is the world's largest defense company. On Review for Possible Upgrade: Issuer: COMSAT Corporation * Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Issuer: Lockheed Corporation * Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Issuer: Lockheed Martin Corporation * Issuer Rating, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Conv/Exch Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 * Senior Unsecured Shelf, Placed on Review for Possible Upgrade, currently (P)Baa2 * Subordinated Shelf, Placed on Review for Possible Upgrade, currently (P)Ba1 Issuer: Martin Marietta Technologies, Inc. * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Outlook Actions: Issuer: COMSAT Corporation * Outlook, Changed To Rating Under Review From Positive Issuer: Lockheed Corporation * Outlook, Changed To Rating Under Review From Positive Issuer: Lockheed Martin Corporation * Outlook, Changed To Rating Under Review From Positive Issuer: Martin Marietta Technologies, Inc * Outlook, Changed To Rating Under Review From Positive MARSHALL CREEK: Voluntary Chapter 9 Case Summary ------------------------------------------------ Debtor: Town of Marshall Creek, Texas c/o Town Secretary 132 Ash Road Roanoke, Texas 75262 Bankruptcy Case No.: 06-40072 Chapter 9 Petition Date: January 23, 2006 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Gerrit M. Pronske, Esq. Pronske & Patel, P.C. 1717 Main Street, Suite 3400 Dallas, Texas 75201 Tel: (214) 893-7135 Estimated Assets: $100,000 to $500,000 Estimated Debts: $100,000 to $500,000 The Debtor did not file a list of its 20 largest unsecured creditors. MAULDIN-DORFMEIER: Amended Plan Confirmation Hearing Set on Feb. 1 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of California continued until Feb. 1, 2006, at 1:30 p.m., the confirmation hearing for the Second Amended Plan of Reorganization filed by Mauldin-Dorfmeier Construction Inc. The Court approved the adequacy of the Debtor's Second Amended Disclosure Statement on Dec. 9, 2005. Summary of Second Amended Plan Under the Plan, the Debtor will liquidate and reduced to cash all of its remaining assets in a manner consistent with the realization of fair value for those assets. The assets not liquidated and reduced to cash will be abandoned after the Debtor determines that those assets have no reasonably expected material value in excess of the expenses required to liquidate those assets. Any planned abandonment of assets will not take place until after notice by the Debtor to creditors and other parties-in-interest and an opportunity for those parties to object to the abandonment pursuant to the relevant provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. A post-confirmation Committee of Unsecured Creditors will be formed on the effective date of the Plan to supervise the Debtor's progress in the liquidation of assets. If in the view of the Committee the Debtor is not acting in the estates' best interest, the Committee has the right and power to seek appointment of a liquidating agent or conversion of the case to chapter 7. Payment to Creditors Under the Plan, an initial distribution of $500,000 will be made after the Plan's confirmation for all allowed administrative and priority claims and to administrative convenience class of unsecured creditors. All allowed unsecured claims will receive a pro rata share of the remaining available cash within 90 days of the effective date. Subsequent distributions of available cash will be made every six months provided the Debtor will not be obligated to make a subsequent distribution until the available cash exceeds $200,000. A full-text copy of the Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060124203006 Headquartered in Fresno, Calif., Mauldin-Dorfmeier Construction, Inc., provides construction services. The Company is owned 50% each by Patrick Mauldin and Alan Dorfmeier, who are president and vice president, respectively. The Company filed for chapter 11 protection on Feb. 29, 2005 (Bankr. E.D. Calif. Case No. 05-11402). Riley C. Walter, Esq., at Walter Law Group, represents the Debtors in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated between $10 million to $50 million in assets and debts. MESABA AVIATION: Wants Exclusive Period Stretched to August 10 -------------------------------------------------------------- Mesaba Aviation, Inc., doing business as Mesaba Airlines, asks the U.S. Bankruptcy Court for the District of Minnesota to extend the time period within which it has the exclusive right to: a. file a plan until August 10, 2006, and b. solicit acceptances of that plan until October 9, 2006. Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman, in Minneapolis, Minnesota, relates that the Debtor has made significant progress since the Petition Date by, among other things: -- obtaining authority to use cash management systems; -- retaining professionals necessary or required to a reorganization; -- continuing essential programs and contracts; -- maintaining uninterrupted utility services; -- rejecting undesirable executory contracts and leases; -- selling unnecessary or burdensome assets; -- enforcing the automatic stay; -- resolving disputes with most maintenance providers; -- obtaining a postpetition financing commitment and arranging for a procedure to solicit offers for more favorable financing; -- negotiating and enforcing Debtor's rights vis-a-vis Northwest Airlines, Inc.; and -- proposing modifications to its collective bargaining agreements. Although progress has been made in the Debtor's case, Mr. Tansey asserts that significant work remains before the Debtor can develop a final business plan, including: -- negotiating a long-term air services arrangement with Northwest or other major carrier; -- restructuring aircraft leases; -- adjusting the size of Debtor's aircraft fleet; -- reducing labor and maintenance costs; and -- arranging potential short or long term financing. John Spanjers, Mesaba's president and chief operating officer, believes that the resolution of the matters is necessary before the Debtor will be able to develop and seek confirmation of a plan of reorganization that will be in the best interests of Debtor's estate. Furthermore, Mr. Tansey asserts that "cause" to extend the exclusivity periods exists because: 1. the Debtor is a large entity with many operational components that requires more time to formulate a plan than a typical Chapter 11 debtor; 2. the Debtor has provided substantial information and will continue to provide information to the creditors committee; 3. the Debtor's plan of reorganization is contingent on the progress and development of a long-term agreement with Northwest, to which agreement is being delayed by the progress of Northwest's bankruptcy case; 4. the Debtor has been properly and competently managed as manifested in its ability: -- to continue to pay its bills as they become due; -- to avoid a breakdown in the negotiation with any constituency of its estate; and -- to resolve any fundamental matters which could reasonably be expected to be resolved at this stage of the bankruptcy. Mr. Tansey assures the Court that the extension sought by the Debtor will not give it any undue bargaining leverage in the pending negotiations but will allow both sides of the negotiations the time necessary to allow for the possibility of mutually acceptable resolutions. Mesaba Aviation, Inc., doing business as Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000). MESABA AVIATION: Judge Kishel Approves LECG LLC as Consultant ------------------------------------------------------------- Mesaba Aviation, Inc., doing business as Mesaba Airlines, sought and obtained authority from the U.S. Bankruptcy Court for the District of Minnesota's to employ LECG, LLC, as its consultant, nunc pro tunc to December 1, 2005. Mesaba and LECG signed an engagement letter dated December 12, 2005. The Director of LECG, Daniel Kaplan, tells the Court that LECG's services will include independent financial analysis and potential expert testimony in connection with the Debtor's collective bargaining and labor related matters. The Debtor believes that LECG's services are necessary to enable it to maximize the value of its estate and to reorganize successfully. Bill Pal-Freeman, Mesaba's vice president of human resources, assures the Court that LECG's services will not be duplicative of those provided by other advisors retained in the Debtor's case. LECG charges the Debtor on an hourly basis with rates ranging from $165 per hour to $550 per hour. Dr. Kaplan, as the LECG expert leading the engagement, bills at $400 per hour. In addition, the Debtor has agreed to pay reasonable out-of- pocket expenses, including counsel fees, incurred by LECG in connection with any matters related to its retention or the Services to the Debtor. Mr. Pal-Freeman explains that the Services unexpectedly became necessary to the Debtor in connection with its labor negotiations with its unions in early December 2005. Due to this necessity, the Debtor asked LECG to perform the Services immediately, before obtaining Court approval and before executing the Engagement Letter. In light of the urgency of the Services, other pressing matters in the Debtor's Bankruptcy Case and the holiday season, the application was inadvertently delayed. The Debtor believes that retroactive approval of LECG's engagement effective Dec. 1, 2005, is justified under the circumstances and applicable law. Dr. Kaplan believes that LECG does not have any connection with potential parties-in-interest in matters related to the Debtor or its Case. However, he attests, LECG has been engaged by counsel on behalf of Northwest Airlines Corporation in connection with Northwest's bankruptcy proceeding. In that proceeding, an LECG expert, Daniel M. Kasper, has been retained to file an expert declaration and provide oral testimony in conjunction with Northwest's Section 1113(c) motion. Mr. Kasper's testimony will provide an independent analysis of the current economic environment facing Northwest and other legacy network carriers as well as Northwest's competitive position in the industry with a particular focus on their labor costs relative to other carriers. * * * In a separate order, Judge Kishel rules that regardless of anything contained in the Engagement Letter or the Debtor's Application: 1. LECG will not be entitled to late fees attributable to either: a. the required 20% holdback pursuant to Instruction 8(c) of the Court's published Instructions for Filing a Chapter 11 Case; or b. the fees earned by LECG prior to January 18, 2006; 2. the Debtor will not pay a retainer to LECG without obtaining further Court approval; 3. any attorney's fees incurred by LECG will not be paid by the Debtor until the attorney's engagement and fees are approved by further Court order; and 4. LECG will disclose to the Court and the United States Trustee any future representation of a person or party who holds an interest that is adverse to the estate or results in LECG ceasing to be a disinterested person, as defined by the Bankruptcy Code. Mesaba Aviation, Inc., doing business as Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000). MESABA AVIATION: Wells Fargo Backs L/Cs for Customs Fees & Duties ----------------------------------------------------------------- Mesaba Aviation, Inc., doing business as Mesaba Airlines, seeks the U.S. Bankruptcy Court for the District of Minnesota's authority to obtain a postpetition letter of credit secured by a cash deposit in accordance with a General Pledge Agreement with Wells Fargo Bank, National Association, pursuant to Sections 363(b) and 364(c) of the Bankruptcy Code. Specifically, the Debtor seeks to provide two letters of credit aggregating $150,000 to Western Surety Company to secure two carrier bonds issued by the Surety, which are required by the United States Customs Service agency in connection with Debtor's airline service between the United States and Canada. Wells Fargo has agreed to provide the Letters of Credit provided that the Debtor enters into the Pledge Agreement and deposits $150,000 into a non-interest bearing bank account with Wells Fargo. The Collateral secures Wells Fargo's potential liability under the Letter of Credit. Thomas M. Schmidt, the Debtor's vice president of finance, explains that without the Carrier Bonds, the Debtor will not be permitted to fly international routes and its operations will be seriously interrupted causing significant cost and irreparable harm to its estate. Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman, in Minneapolis, Minnesota, attests that the Pledge Agreement was negotiated at arm's length and in good faith. A full-text copy of the Pledge Agreement is available for free at: http://ResearchArchives.com/t/s?48b Moreover, the Debtor believes that: -- it could not obtain significantly better terms than those contemplated in the Pledge Agreement; and -- it will suffer immediate and irreparable harm if it is unable to obtain the Letter of Credit from Wells Fargo. The Surety requires that the first Letter of Credit be delivered on or before January 31, 2006. Accordingly, the Debtor asks Judge Kishel for an expedited hearing to assure that no unforeseen delays will jeopardize its operations. Mesaba Aviation, Inc., doing business as Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000). MORTON'S RESTAURANT: Prices 7.5% Senior Secured Notes Offering -------------------------------------------------------------- Morton's Restaurant Group, Inc. reported the pricing for its previously announced offer to purchase up to $68,250,000 aggregate principal amount at maturity of its outstanding 7.5% Senior Secured Notes due 2010 and the related consent solicitation, which commenced Jan. 3, 2006. The total consideration for each $1,000 aggregate principal amount at maturity of notes tendered, and for the related consents, if such notes are tendered on or prior to the consent payment deadline of 5:00 p.m., New York City time, Jan. 18, 2006, and if such notes are accepted for payment by the Company, will be $1,011.10, which includes a consent payment of $15.00 for each $1,000 aggregate principal amount at maturity of notes. The total consideration was determined by reference to a fixed spread of 27 basis points over the yield to maturity (based on the bid-side price as of Jan. 18, 2006, at 10:00 a.m., New York City time) for the 3.625% U.S. Treasury Note due June 30, 2007. Holders who tender notes after the consent payment deadline but on or prior to 5:00 p.m., New York City time on Feb. 1, 2006, unless extended, will receive the tender offer consideration of $996.10 per $1,000 principal amount at maturity of notes tendered, and for the related consents, but will not receive the consent payment. Holders who tender notes that are accepted for payment and purchased by the Company also will be paid accrued and unpaid interest up to, but not including, the payment date, which is expected to be on or about Feb. 2, 2006, unless extended. In addition, the Company has obtained consents to the proposed amendments to the indenture governing the notes, described in more detail in the offer to purchase and consent solicitation statement, from the holders of a majority in aggregate principal amount at maturity of outstanding notes. Tendered notes may not be withdrawn and delivered consents may not be revoked after the withdrawal deadline of 5:00 p.m., New York City time, Jan. 18, 2006. Promptly following the withdrawal deadline, the supplemental indenture will be executed and will, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture governing the notes. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on Feb. 1, 2006, unless extended. If notes representing more than the maximum tender amount of $68,250,000 aggregate principal amount at maturity are validly tendered and not validly withdrawn, the Company will accept for payment and purchase only the maximum tender amount and will pay tendering holders thereof either the total consideration, or the total consideration less the consent payment, as appropriate, on a pro rata basis based on the proration factor. As a result, holders who validly tender and do not validly withdraw notes pursuant to the tender offer may have a portion of their notes accepted for payment pursuant to the tender offer and a portion returned to them. The proration factor will determine the percentage principal amount at maturity of notes accepted for payment pursuant to the tender offer and will depend on the level of participation in the tender offer. The obligation of the Company to accept for payment and purchase the notes in the tender offer, and pay for the related consents, remains conditioned on, among other things, the consummation of the Company's proposed initial public offering and the closing of the Company's proposed new senior revolving credit facility. The Company has retained Jefferies & Company, Inc. to serve as the dealer manager and solicitation agent for the tender offer and the consent solicitation. Questions regarding the tender offer and the consent solicitation may be directed to: Jefferies & Company, Inc. Telephone (973) 912-2888 Requests for documents in connection with the tender offer and the consent solicitation may be directed to the information agent for the tender offer and the consent solicitation: CapitalBridge Telephone (201) 499-3500 Toll Free (877) 746-3583 Headquartered in New York City, Morton's Restaurant Group -- http://www.mortons.com/-- is the leader in the fine dining segment of the restaurant industry. The company is also the largest company-owned steakhouse group in the United States. * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed its ratings, including its 'B-' corporate credit rating, on Hyde Park, New York-based Morton's Restaurant Group Inc. on CreditWatch with positive implications. The rating action follows the company's announcement that it plans a $150 million initial public offering. MUSICLAND HOLDING: Can Maintain Existing Bank Accounts ------------------------------------------------------ The Office of the United States Trustee has established certain operating guidelines for debtors-in-possession in order to supervise the administration of Chapter 11 cases. Those guidelines require Chapter 11 debtors to, among other things: (a) close all existing bank accounts and open new debtor-in- possession bank accounts; (b) establish one debtor-in-possession account for all estate funds required for the payment of taxes, including payroll taxes; and (c) maintain a separate debtor-in-possession account for cash collateral. Prior to the Petition Date, Musicland Holding Corp. and its debtor-affiliates maintained numerous bank accounts. Some of those Bank Accounts are located at financial institutions other than those designated by the United States Trustee as authorized depositories. A 56-page list of the Bank Accounts is available for free at: http://bankrupt.com/misc/Musicland_bankaccounts.pdf The Debtors routinely deposit, withdraw and otherwise transfer funds to, from and among the Bank Accounts by various methods, including check, wire transfer, automated clearing house transfer, internal bank transfer and electronic funds transfer. The Debtors complete thousands of transactions per month through the Bank Accounts. The Debtors seek a waiver of the U.S. Trustee's requirement that the Bank Accounts be closed and that new postpetition bank accounts be opened. If the U.S. Trustee's requirement is enforced, it would cause enormous disruption in the Debtors' businesses and would severely impair the Debtors' ability to successfully reorganize during their Chapter 11 Cases, James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, contends. In addition, Mr. Sprayregen says, if the Debtors were required to open separate accounts as debtors in possession, it would necessitate opening numerous new accounts for collections, cash concentration and disbursements. The delays that would result from opening new accounts and instructing customers to redirect payments would negatively impact the Debtors' ability to operate their businesses while pursuing those arrangements, Mr. Sprayregen notes. Therefore, to avoid delays in paying debts incurred postpetition, and to ensure as smooth a transition into chapter 11 as possible, Mr. Sprayregen asserts, the Debtors should be permitted to continue to maintain the existing Bank Accounts and, if necessary, to open new accounts and close existing accounts in the normal course of business operations. The Debtors assure Judge Bernstein that they will implement appropriate mechanisms to ensure that no payments will be made on any prepetition debts, other than those authorized by the U.S. Bankruptcy Court for the Southern District of New York. Procedures that have been implemented include: (a) notification of banks of the check numbers of all prepetition checks that should not be honored; (b) segregation of the Debtors' accounts payables into prepetition and postpetition; (c) training of the Debtors' accounting staff on identifying and segregating prepetition obligations; and (d) specific authorization procedures to issue a check for any prepetition liabilities to assure that it is authorized by a specific Court Order. * * * The Court authorizes the Debtors designate, maintain and continue to use, with the same account numbers, all of the bank accounts in existence on the Petition Date. The Debtors are allowed to open new bank accounts or close any existing bank accounts, as they may deem necessary. The Court also allows the Debtors to treat the Bank Accounts for all purposes as accounts of the Debtors as debtors in possession. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, 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. (Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Can Continue Using Existing Business Forms ------------------------------------------------------------- Pursuant to the operating guidelines established by the Office of the United States Trustee for debtors-in-possession in order to supervise the administration of Chapter 11 cases, the Debtors are required to obtain checks that bear the designation "debtor in possession" and reference the bankruptcy case number and the type of account on those checks. Musicland Holding Corp. and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's authority to continue using existing checks and business forms, including letterheads, purchase orders and invoices, without reference to the Debtors' status as debtors-in-possession. Furthermore, the Debtors seek the Court's permission to use their existing check stock. However, as soon as practicable, the Debtors will imprint the legend "Debtor-In-Possession" on those checks. According to James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, with the nature and scope of the Debtors' business operations and the large number of suppliers with whom the Debtors deal on a regular basis, it is important that the Debtors be permitted to continue to use their existing checks and other business forms without alteration. Mr. Sprayregen points out that changing business forms is unnecessary and unduly burdensome, since parties doing business with the Debtors undoubtedly will be aware of the Debtors' status as debtors-in-possession as a result of the size and notoriety of the Chapter 11 cases, the press releases issued by the Debtors and general press coverage. * * * Judge Bernstein grants the Debtors' requests. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, 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. (Musicland Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) NOBLE DREW: M.R. Beal Retention Draws Fire from Creditors Panel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Noble Drew Ali Plaza Housing Corp. asks the U.S. Bankruptcy Court for the Southern District of New York to deny the Debtor's request to employ M.R. Beal & Company as its financial and private placement advisor. The Committee's objections focused on M.R. Beal's allegedly inappropriate and superfluous role as financial and private placement advisor as well as the vague provisions in the Firm's engagement letter. Scope of Work Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, pointed out that it is inappropriate for M.R. Beal to serve as a private placement advisor, and facilitate private offerings, since the Debtor is a non-profit corporation. The Debtor cannot issue stock pursuant to the New York Not-for-Profit Corporation Law. Mr. Bunin further stated that the Debtor should not be allowed to pay financial advisory fees for a bank loan that it can get on its own. In addition, the Committee's counsel explained that any significant financing secured by the Debtor's real property, to be arranged by M.R. Beal, is precluded by approximately $5.3 million in real estate taxes owed to JER Revenue Services, LLC, and approximately $4.4 million in property taxes owed to the City of New York. Engagement Letter Provisions The Committee's complaints regarding the content of M.R. Beal's engagement letter pertain to the inclusion of provisions for: -- a $45,000 advisory fee supposedly payable upon the simple execution of a reorganization plan, without a clear qualification of what M.R. Beal is expected to contribute towards plan formulation; -- a placement fee equal to 3.5% of any consideration raised from an investor, in view of the Debtor's status as a non- profit corporation; and -- exclusivity that prohibit the Debtor from accepting financing not obtained through M.R. Beal. Headquartered in Brooklyn, New York, Noble Drew Ali Plaza Housing Corp., filed for chapter 11 protection on March 25, 2005 (Bankr. S.D.N.Y. Case No. 05-11915). Gerard R. Luckman, Esq., at Silverman Perlstein & Acampora, LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $43,500,000 and total debts of $18,639,981. NOBLE DREW: Panel Wants Mahoney Cohen as Financial Advisors ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Noble Drew Ali Plaza Housing Corp. asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Mahoney Cohen & Company, CPA, PC, as its accountants and financial advisors. Mahoney Cohen is expected to: a) assist the Committee in the investigation of the pre- petition acts, conducts, liabilities and financial condition of the Debtor and its management and business operations; b) assist the Committee in the review of the Debtor's monthly operating statements and in the evaluation of the Debtor's cash flow projections; c) monitor the Debtor's activities regarding cash expenditures and general business operations and analyze the Debtor's transactions with vendors, insiders and affiliated companies; d) assist the Committee in the review of financial aspects of any proposed chapter 11 plan and assist in any litigation proceedings against insiders and other potential adversaries; e) attend meetings with representatives of the Committee and its counsel and prepare presentations to the Committee that provide analyses and updates on diligence performed; and f) perform all other accounting and financial advisory services that are requested by the Committee and its counsel. Charles M. Berk, C.P.A., a Director at Mahoney Cohen, reports the Firm professionals bill: Designation Hourly Rate ----------- ----------- Shareholders & Directors $350 - $500 Managers & Senior Managers $265 - $350 Senior Accountants & Staff $95 - $265 Mahoney Cohen assures the Court that it does not represent any interest materially adverse to the Committee, the Debtor or its estate. Headquartered in Brooklyn, New York, Noble Drew Ali Plaza Housing Corp., filed for chapter 11 protection on March 25, 2005 (Bankr. S.D.N.Y. Case No. 05-11915). Gerard R. Luckman, Esq., at Silverman Perlstein & Acampora, LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $43,500,000 and total debts of $18,639,981 NOMURA ASSET: Moody's Rates Two Sub. Certificate Classes at Low-B ----------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S4, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization has multiple originators, with IndyMac Bank F.S.B. (26.25%), and First National Bank of Nevada (11.28%), originating the largest percentage of loans. The loans are backed by second lien fixed-rate collateral. The ratings are based primarily on: * the credit quality of the loans backing the certificates; and * on the protection from: -- subordination, -- overcollateralization, -- excess spread, and -- an interest rate cap agreement. Expected loss for this pool of loans is expected to range between 6.90% and 7.40%. GMAC Mortgage Corporation will service the mortgage loans. GMACM, a capable servicer of residential mortgage loans, is located in Horsham, Pennsylvania. The complete rating actions are: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S4 * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class A-IO, 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 B-1, Assigned Baa1 * Class B-2, Assigned Baa2 * Class B-3, Assigned Baa3 * Class B-4, Assigned Ba1 * Class B-5, Assigned Ba2 NORD RESOURCES: Mayer Hoffman Raises Going Concern Doubt -------------------------------------------------------- Mayer Hoffman McCann PC expressed substantial doubt about Nord Resources Corporation's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004, 2003 and 2002. The auditing firm pointed to the Company's significant operating losses in 2004, 2003 and 2002. The Company's auditors can be reached at: Mayer Hoffman McCann PC 5060 California Ave. Ste 800 Bakersfield, California 93309 Fax: 661-325-7949 http://www.mhm-pc.com/ Delinquent Financial Statements As a first step to regaining compliance with its regulatory filing obligations, Nord Resources filed an annual report on Form 10-KSB with the Securities and Exchange Commission on Jan. 17, 2006. The Company's latest 10-KSB is intended to provide meaningful disclosure for the years ended Dec. 31, 2000 through 2004, during which the company was delinquent in its filings. The annual report includes audited financial statements for the years ended Dec. 31, 2004, 2003 and 2002, and unaudited statements for the years ended Dec. 31, 2001 and 2000. The Company had been unable to file the required reports since 1999 due to financial difficulties. Nord Resources plans to file its outstanding quarterly reports on Form 10-QSB for the first three quarters of 2005 no later than the end of January. 2004 Financial Results Nord Resources incurred a $864,357 net loss for the year ended Dec. 31, 2004, as compared to a $451,596 net loss a year earlier. The Company experienced an increase in the net loss between 2003 and 2004 despite a reduction in net operating losses between the two financial years, due to: -- a decrease in net sales of $408,333 in 2003 to $0 in 2004 as a result of placing our operations on care and maintenance status in 2003; -- a significant increase in interest expense during 2004 over 2003; and -- $768,000 in miscellaneous income recorded in 2003 as a result of reversing accrued unpaid salary for Mr. John Champagne, the Company's former Chief Executive Officer. At Dec. 31, 2004, the Company's balance sheet showed $4,516,739 in total assets and liabilities of $4,846,579, resulting in a stockholders' deficit of $329,840. The Company had a $3,767,262 working capital deficit at Dec. 31, 2004, versus a $2,992,478 working capital deficit in the prior year. Johnson Camp Mine Nord Resources continuation as a going concern is dependent, among other things, to the resumption of copper mining and processing operations at the Johnson Camp Mine in Arizona. The mine includes two existing open pits, the Burro and the Copper Chief. The Company's near term objective is to resume mining and leaching operations at the Johnson Camp Mine, with the goal of producing approximately 25 million pounds of cathode copper per year. Management estimates that the Company will need more than $22 million to fund start-up costs at the Johnson Camp property. The capital costs to be incurred in the following two years are expected to be approximately an additional $9 million. New Secured Loans In October 2005, Nord Resources obtained a $2,850,000 secured loan from Auramet Trading, LLC. Ronald Hirsch, the Company's Chairman and Chief Executive Officer, funded approximately $1,850,000 of the loan. From the loan proceeds, $2,763,561 was used to pay off all remaining amounts outstanding under a pre-existing secured loan on the Johnson Camp property. Nord Resources also obtained a $3,900,000 secured loan from Nedbank Limited in November 2005. The Company used $1,860,175 of the loan proceeds to pay Mr. Hirsch. To secure repayment of the loan, Nord granted Nedbank a first priority lien encumbering all of the real and personal property associated with the Johnson Camp property. The loan matures in May. About Nord Resources Headquartered in Dragoon, Arizona, Nord Resources Corporation -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The Company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the Company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. NORTHWEST AIR: Retiree Committee Wants Segal Co. as Consultants --------------------------------------------------------------- The Official Committee of Retired Employees seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to retain The Segal Company as its actuarial consultants effective as of January 1, 2006. The Retiree Committee requires Segal for all matters relating to the Retiree Committee's review and evaluation of the Northwest Airlines Corp. and its debtor-affiliates' proposals to modify Retirees' benefits. Segal's services provided to the Retiree Committee will be: (a) at the Retiree Committee's request; (b) appropriately directed by the Retiree Committee so as to avoid duplicative efforts among the professionals retained in the Debtors' Chapter 11 cases; and (c) performed in accordance with applicable standards of the actuarial profession. The Retiree Committee anticipates that Segal's work will focus on determining the value of any proposed changes to the Debtors' retiree medical benefits. These services are expected to include: -- analyzing the actuarial assumptions and mathematical accuracy of the Debtors' calculations of the costs of the proposals, whether the proposals are fair based on benchmarking benefits and actuarial assumptions of similar organizations; and -- given the circumstances of the retirees of the Debtors, helping to create any counterproposals or alternative plan changes. Segal may also, to the extent necessary, provide expert testimony. The hourly rates for Segal professionals who may be assigned to the engagement in effect as of January 1, 2006, are: Professional Hourly Rate ------------ ----------- Thomas D. Levy $555 Stuart Wohl $415 Howard Atkinson $415 Harold Burch $190 Others Consistent with the rates All hourly rates are subject to the addition of a 5% technology charge in lieu of a direct charge for computer use. The firm will also be reimbursed for reasonable, out-of-pocket expenses. Segal has extensive experience with the treatment of benefit plans in bankruptcy, having acted as actuarial consultants to the Pilots' Section 1114 Committee in the United Air Lines Chapter 11 case, as well as 1114 Committee for Allis Chalmers, Eastern Airlines, Pan American World Airways, Bonwit Teller, Lone Star Industries, H.K. Porter, and Solutia. Thomas D. Levy, senior vice president and chief actuary of Segal, ascertains that none of the members or employees of Segal is related to the Debtors, their creditors, other parties-in- interest, or the United States Trustee or anyone employed in the Office of the U.S. Trustee, holds or represents adverse to any party. Mr. Levy discloses that Segal currently provides services to these unions in matters unrelated to the Debtors' Chapter 11 cases: (a) International Association of Machinists and Aerospace Workers; (b) Air Line Pilots Association, International; and (c) Transport Workers Union of America Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIR: Gets Court Nod to Amend Aircraft Financing --------------------------------------------------------- Northwest Airlines, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to enter into and perform obligations under amended financing agreements with Special Value Opportunities Fund, LLC, and Special Value Expansion Fund, LLC, relating to four Boeing 747 aircraft. Motion granted. The Hon. Allan L. Gropper ruled that by virtue of the cross- default and cross-collateralization provisions contained in the Amended Loan Documents, any agreement under Section 1110(a) of the Bankruptcy Code with respect to the 1110 Aircraft will require the (i) cure, (ii) full and complete performance, and (iii) no modification whatsoever by Northwest Airlines, Inc., of all obligations in the Amended Loan Documents with respect to all of the Aircraft that are the subject of the Amended Loan Documents. This provision will survive and remain in full effect notwithstanding the full or partial prepayment or repayment of the obligations owed in respect of the Amended Loan Documents and the Aircraft, or the sale or other disposition of the Aircraft. Northwest Airlines or any other representatives of the estate may not modify in any manner or reject the Amended Loan Documents nor abandon or sell the Aircraft without payment in full to Special Value Opportunities Fund, LLC and Special Value Expansion Fund, LLC under the Amended Loan Documents, unless Northwest Airlines' Chapter 11 case is converted to a case under Chapter 7 of the Bankruptcy Code. If a rejection, modification, abandonment, or sale occurs in a Chapter 7 Case, the terms of the Existing Loan Documents will be reinstated for purposes of determining Special Value and U.S. Bank National Association's rights and claims. In this case, any payments received by Special Value and U.S. Bank will be applied as postpetition interest at the contractual rate and will not otherwise be subject to avoidance or repayment on any grounds. Judge Gropper holds that the security interests and liens in the Aircraft granted to Special Value and U.S. Bank prior to the Petition Date will have the same validity, perfection, force and effect with respect to the Amended Loan Documents as with respect to the Existing Loan Documents without the necessity of Northwest Airlines' execution of mortgages, deeds of trust, security agreements, pledge agreements, financing statements or otherwise. The Prepetition Security Interests are not subject to Section 552(a) and include any engines or other appliances and related parts and equipment that are replaced on the Aircraft. Moreover, Northwest Airlines or any other representative of the estate may not assert any rights under Section 506(c) against the Aircraft, Special Bank and U.S. Bank. Judge Gropper rules that the Order will survive entry of any order: (a) confirming any plan of reorganization in Northwest Airlines' Chapter 11 case; (b) converting Northwest Airlines' pending Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code; or (c) dismissing Northwest Airlines' Chapter 11 case. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTHWEST AIR: Has Until May 13 to Decide on Four Airport Leases ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extends the time within which Northwest Airlines Corp. and its debtor-affiliates may assume or reject the Unexpired Leases to and including May 13, 2006, with respect to: (a) Austin-Bergstrom International Airport; (b) Wayne County Airport Authority; (c) Columbus Regional Airport Authority; and (d) City of Baton Rouge The extension is without prejudice to the right of these Airport Operators to seek a reduction of the time, upon prior notice to the Debtors, the Official Committee of Unsecured Creditors, and the United States Trustee. If the Debtors propose a disclosure statement explaining a plan of reorganization prior to May 13, 2006, the four Airport Operators' objections will be deemed preserved, and will be heard at that hearing. The extension is without prejudice to the Debtors' right to seek further extensions. Judge Gropper clarifies that the Order will not be deemed an approval of the assumption or rejection of any executory contract or unexpired lease. The Court adjourns until January 31, 2006, the hearing on the Debtors' request and the objection by: (a) The Metropolitan Airports Commission; (b) Metropolitan Washington Airports Authority; (c) Lehigh Valley-Northampton Airport Authority; (f) Clark County (Las Vegas) Nevada; (g) Tucson International Airport; (h) Metropolitan Airport Authority of Rock Island County, Illinois; (i) The Denver International Airport; and (j) The City and County of San Francisco, California The time within which the Debtors may assume or reject the Adjourned Parties' Unexpired Leases pursuant to Section 365 of the Bankruptcy Code is further extended to and including the hearing, provided however, that: (a) the Adjourned Parties may request a hearing in advance of the January 31, 2006 hearing date for cause shown; and (b) the Debtors and the Adjourned Parties may enter into agreements resolving the objections in advance of the January 31, 2006 hearing date. Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) NRG ENERGY: Discloses Details on Texas Genco Acquisition Financing ------------------------------------------------------------------ NRG Energy, Inc. (NYSE:NRG) filed a Form 8-K with the Securities and Exchange Commission. The filing is in connection with its previously announced public offerings of common stock, mandatory convertible preferred stock and unsecured notes to finance the acquisition of Texas Genco LLC and anticipated to close the week of Jan. 30, 2006. The Form 8-K provides additional disclosure and updates the description of the sources and uses of funds as well as the description of the capitalization of NRG on an "as adjusted" basis, contained in the Preliminary Prospectus Supplements relating to each of these offerings filed on Jan. 5, 2006 with the SEC. NRG expects to issue three tranches of notes in the unsecured notes offering, consisting of: * $300 million in aggregate principal amount of floating rate senior notes due 2014, * $1,100 million in aggregate principal amount of fixed rate senior notes due 2014, and * $2,200 million in aggregate principal amount of fixed rate senior notes due 2016. In addition, NRG expects to increase the amount of cash paid to the sellers in the Texas Genco transaction to an aggregate of approximately $4,400 million in cash in lieu of issuing to such sellers shares of cumulative redeemable preferred stock. NRG continues to expect to issue $1,000 million of its common stock and $500 million of its mandatory convertible preferred stock in these offerings. In addition, NRG expects to increase the amount of the term loan portion of the new senior secured credit facility it plans to enter into in connection with its Texas Genco acquisition from $3,200 million to $3,575 million. NRG has also filed a Form 8-K/A to update its previously filed pro forma financial statements in connection with these offerings and the Texas Genco acquisition. The information contained in the Form 8-K and the pro forma information contained in the Form 8-K/A supersede the sources and uses data and the pro forma financial information contained or incorporated by reference in the Preliminary Prospectus Supplements related to these offerings. The additional disclosure modifies or supplements the disclosure already contained in the Preliminary Prospectus Supplements. A full-text copy of the Company's Form 8-K is available at no charge at: http://ResearchArchives.com/t/s?493 About Texas Genco Texas Genco LLC is one of the largest wholesale electric power generating companies in the United States, providing safe, reliable and competitively priced electricity. The company seeks to lead the nation in operational excellence for independent power producers. Texas Genco owns approximately 11,000 MW of net operating generation capacity and sells power and related services in Texas' largest power market, ERCOT. About NRG Energy NRG Energy, Inc. currently owns and operates a diverse portfolio of power-generating facilities, primarily in the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Fitch Ratings has initiated rating coverage of NRG Energy, Inc. by assigning a 'BB' rating to NRG's proposed $5.2 billion secured credit facility, consisting of: * a $3.2 billion secured term loan B and $2 billion of revolving credit/synthetic letter of credit facilities, * a 'B' rating to NRG's proposed $3.6 billion issuance of senior unsecured notes, and * a 'CCC+' rating to NRG's proposed issuance of $500 million mandatory convertible preferred stock. In addition, Fitch has assigned NRG a 'B' issuer default rating, as well as recovery ratings for the proposed debt instruments. The Rating Outlook is Stable. The ratings have been initiated by Fitch as a service to investors. Recovery ratings by Fitch are: NRG Energy, Inc. -- $3.2 billion secured term loan 'RR1'; -- $1 billion secured revolving credit line 'RR1'; -- $1 billion secured synthetic letter of credit 'RR1'; -- $3.2 billion senior unsecured notes 'RR4'; -- $500 million mandatory convertible preferred stock 'RR6' O'SULLIVAN IND: Lamar Wants Immediate Payment for Utility Services ------------------------------------------------------------------ The City of Lamar in Missouri provides utility services to O'Sullivan Industries Holdings, Inc., and its debtor-affiliates including electrical, water and sewer services. Lamar asserts that the Debtors are not current with their utility bills. The Debtors' default makes the City inadequately protected, Louis G. McBryan, Esq., at Macey, Wilensky, Cohen, Wittner & Kessler, LLP, in Atlanta, Georgia, tells Judge Mullins. Mr. McBryan contends that the default demonstrates the Debtors' lack of good faith. In this regard, the City seeks the U.S. Bankruptcy Court for the Northern District of Georgia's authority to: a) cease the utility services to the Debtors; and b) offset held funds to its postpetition claim aggregating $208,206. In the alternative, the City asks the Court to compel the Debtors to provide adequate assurance of payment for postpetition services not less than $374,000 and allow the City to offset the funds held if any invoice remains outstanding more than 10 days past issuance. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) OAKWOOD HOMES: S&P Junks 27 Housing Transaction Classes' Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 40 classes of Oakwood Homes Corp.-related manufactured housing transactions. At the same time, 33 of the lowered ratings are removed from CreditWatch with negative implications, where they were placed May 19, 2005. Concurrently, ratings are affirmed on 19 other Oakwood-related classes and removed from CreditWatch with negative implications, where they were also placed May 19, 2005. The lowered ratings reflect: * the continued adverse performance trends exhibited by the underlying pools of manufactured housing installment sales contracts and mortgage loans; and * the resulting deterioration of credit enhancement since Standard & Poor's last rating actions. The projected lifetime cumulative net losses for most of the transactions have significantly exceeded original expectations, and the current rating actions reflect the declining levels of credit enhancement available to cover future expected losses. The higher losses exhibited by these transactions continue to be driven by higher-than-expected defaults and loss severities, as most of the underlying collateral pools have deteriorated over the past few years. Clayton Homes Inc., a subsidiary of Berkshire Hathaway Inc., completed its acquisition of Oakwood Mortgage Corp. in April 2004. There has been a stabilization of collateral performance since Clayton assumed the servicing responsibilities for the Oakwood portfolio, but the performance has not improved enough to offset the rapid decline in credit support. Most of the transactions have experienced principal write-downs on their subordinate classes and, in many cases, on their mezzanine classes as well. The ratings on the M-1 classes from Oakwood Mortgage Investors Inc. 1999-C and OMI Trust 2000-A, as well as the rating on class M-2 from OMI Trust 2002-A, are all being lowered to 'D' to reflect the unlikelihood that investors will receive timely interest and the ultimate repayment of their original principal investment. Each class has reported outstanding liquidation loss interest shortfalls and Standard & Poor's believes that interest shortfalls will continue to be prevalent in the future, given the adverse performance trends displayed by the underlying contract pools and the location of subordinate class write-down interest at the bottom of the transaction's payment priorities (after distributions of senior principal). Ratings lowered and removed from creditwatch negative: Oakwood Mortgage Investors Inc. Series 1995-A: Rating Class To From ----- -- ---- B-1 BBB+ A+/Watch Neg Oakwood Mortgage Investors Inc. Series 1995-B: Rating Class To From ----- -- ---- B-1 BB BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-A: Rating Class To From ----- -- ---- B-1 CCC- B-/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-A: Rating Class To From ----- -- ---- M-1 B+ BB-/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-B: Rating Class To From ----- -- ---- M-1 B BB/Watch Neg OMI Trust 1999-C: Rating Class To From ----- -- ---- A-2 B- B/Watch Neg OMI Trust 1999-D: Rating Class To From ----- -- ---- M-1 CCC- CCC/Watch Neg OMI Trust 1999-E: Rating Class To From ----- -- ---- M-1 CCC- CCC/Watch Neg OMI Trust 2000-C: Rating Class To From ----- -- ---- A-1 CCC+ B+/Watch Neg OMI Trust 2000-D: Rating Class To From ----- -- ---- A-2 CCC- B-/Watch Neg A-3 CCC- B-/Watch Neg A-4 CCC- B-/Watch Neg OMI Trust 2001-D: Rating Class To From ----- -- ---- A-1 CCC- B-/Watch Neg A-2 CCC- B-/Watch Neg A-3 CCC- B-/Watch Neg A-4 CCC- B-/Watch Neg OMI Trust 2001-E: Rating Class To From ----- -- ---- A-1 CCC- B-/Watch Neg A-2 CCC- B-/Watch Neg A-3 CCC- B-/Watch Neg A-4 CCC- B-/Watch Neg OMI Trust 2002-A: Rating Class To From ----- -- ---- M-1 CCC- CCC/Watch Neg OMI Trust 2002-B: Rating Class To From ----- -- ---- A-1 BB- BB/Watch Neg A-2 BB- BB/Watch Neg A-3 BB- BB/Watch Neg A-4 BB- BB/Watch Neg M-1 CCC B-/Watch Neg M-2 CCC- CCC/Watch Neg OMI Trust 2002-C: Rating Class To From ----- -- ---- M-1 CCC CCC+/Watch Neg M-2 CCC- CCC/Watch Neg ABSC Manufactured Housing Contract Resecuritization Trust 2004- OAK1: Rating Class To From ----- -- ---- A-1 BBB+ A-/Watch Neg A-2 BBB+ A-/Watch Neg A-3 BBB+ A-/Watch Neg A-4 BB+ BBB-/Watch Neg Ratings lowered: OMI Trust 1999-C: Rating Class To From ----- -- ---- M-1 D CCC- OMI Trust 2000-A: Rating Class To From ----- -- ---- M-1 D CCC- OMI Trust 2001-C: Rating Class To From ----- -- ---- A-1 CCC- CCC A-2 CCC- CCC A-3 CCC- CCC A-4 CCC- CCC OMI Trust 2002-A: Rating Class To From ----- -- ---- M-2 D CCC- Ratings affirmed and removed from creditwatch negative: Oakwood Mortgage Investors Inc. Series 1996-B: Rating Class To From ----- -- ---- A-6 AAA AAA/Watch Neg Oakwood Mortgage Investors Inc. Series 1996-C: Rating Class To From ----- -- ---- A-6 AAA AAA/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-A: Rating Class To From ----- -- ---- A-6 AAA AAA/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-B: Rating Class To From ----- -- ---- M-1 AA AA/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-C: Rating Class To From ----- -- ---- M-1 A A/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-A: Rating Class To From ----- -- ---- A-4 AA- AA-/Watch Neg A-5 AA- AA-/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-B: Rating Class To From ----- -- ---- A-3 AA AA/Watch Neg A-4 AA AA/Watch Neg A-5 AA AA/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-D: Rating Class To From ----- -- ---- A BBB+ BBB+/Watch Neg A-1 ARM BBB+ BBB+/Watch Neg OMI Trust 1999-D: Rating Class To From ----- -- ---- A-1 BB- BB-/Watch Neg OMI Trust 1999-E: Rating Class To From ----- -- ---- A-1 B B/Watch Neg OMI Trust 2002-A: Rating Class To From ----- -- ---- A-1 BB- BB-/Watch Neg A-2 BB- BB-/Watch Neg A-3 BB- BB-/Watch Neg A-4 BB- BB-/Watch Neg OMI Trust 2002-C: Rating Class To From ----- -- ---- A-1 B B/Watch Neg PLAZA PROPERTIES: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Lead Debtor: Plaza Properties, LLC 251 Regency Park Drive O'Fallon, Illinois 62269 Bankruptcy Case No.: 06-30078 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Property Consultants, LLC 06-30079 Chapter 11 Petition Date: January 23, 2006 Court: Southern District of Illinois (East St Louis) Debtors' Counsel: Spencer P. Desai, Esq. Capes Sokol Goodman Sarachan PC 7701 Forsyth Boulevard, 4th Floor Clayton, Missouri 63105 Tel: (314) 721-7701 Fax: (314) 721-0554 Estimated Assets Estimated Debts ---------------- --------------- Plaza Properties, LLC $1 Million to $1 Million to $10 Million $10 Million Property Consultants, LLC $1 Million to $1 Million to $10 Million $10 Million Debtors' Largest Unsecured Creditor: Entity Claim Amount ------ ------------ First Bank Unknown 200 South Lincoln O'Fallon, IL 62269 PONDERLODGE INC: Court Approves First Amended Disclosure Statement ------------------------------------------------------------------ The Hon. Gloria M. Burns of the U.S. Bankruptcy Court for the District of New Jersey approved the adequacy of the disclosure statement explaining Ponderlodge, Inc.'s First Amended Liquidating Chapter 11 Plan. Judges Burns determined that the Disclosure Statement contains adequate information -- the right amount of the right kind for creditors to make informed decisions when the Debtor asks them to vote to accept the Plan. Plan Funding Arthur Abramowitz, the chapter 11 Trustee appointed in the Debtor's case, will fund the Plan using: (a) the proceeds from the sale of the Debtor's real and personal property located in New Jersey, and, (b) the net proceeds, if pursued, of Avoidance Actions and other litigation. New Jersey Sale The Trustee says that the New Jersey Sale was a product of arms- length negotiations with the State of New Jersey, Department of Open Spaces. Under the New Jersey Sale, substantially all of Debtor's real and personal property will be sold in as-is condition for $8,450,000. Although the Trustee's appraisal indicated that the property is worth approximately $11,500,000, the $8.45 million amount is based upon the highest and best use for the property. The Trustee relates that the property is currently not zoned for its highest and best use and obtaining such zoning approvals would take at least one year and would be quite costly. In light of Steamboat Capital III, LLC's order granting them relief from the automatic stay to proceed with a Sheriff's Sale effective Mar. 3, 2006, the Trustee believes that pursuing another sale is unreasonable and that the New Jersey Sale is the highest and best offer for the property. Distribution of Claims At the closing of the New Jersey Sale, the Trustee will distribute the funds to creditors in the priority pursuant to the statutory provisions in the Bankruptcy Code. A full-text copy of Ponderlodge, Inc.'s Disclosure Statement is available for free at http://ResearchArchives.com/t/s?48f The Court will convene a hearing on Jan. 31, 2006, at 10:00 a.m., to consider confirmation of the Debtor's Plan. Headquartered in Villas, New Jersey, Ponderlodge, Inc. -- http://www.ponderlodge.com/-- operates a golf course. The Company filed for chapter 11 protection on July 13, 2005 (Bankr. D. N.J. Case No. 05-32731). D. Alexander Barnes, Esq., at Obermayer, Rebmann, Maxwell & Hippel LLP represents the Debtor in its chapter 11 case. When the Debtor filed for protection from its creditors, it estimated assets of $10 million to $50 million and debts of $1 million to $10 million. PRESIDENT CASINOS: Earns $1.7MM of Net Income in 3rd Quarter ------------------------------------------------------------ President Casinos Inc. delivered its financial results for the quarter ended Nov. 30, 2005, to the Securities and Exchange Commission on Jan. 17, 2005. For the three months ended Nov. 30, 2005, President Casinos generated $1,716,000 of net income, compared to a $768,000 of net loss for the quarter ended Nov. 30, 2004. The Company's balance sheet showed $66,292,000 in total assets and $75,531,000 of liabilities at Nov. 30, 2005, resulting in a stockholders' deficit of approximately $9,239,000. President Casinos and its operating subsidiaries, except for President Broadwater Hotel, LLC, and President Riverboat Casino- New York, Inc., are operating their businesses as debtors-in- possession under Chapter 11 of the Bankruptcy Code. The company expects to continue to incur significant professional fees and other restructuring costs in connection with the reorganization on top of the cash requirements necessary to fund ongoing operations. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 28, 2005, Deloitte & Touch LLP expressed substantial doubt about President Casinos' ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Feb. 28, 2005 and Feb. 29, 2004. The auditing firm pointed to the Company's recurring losses from operations, negative cash flow from operations and stockholders' deficit. Headquartered in St. Louis, Missouri, President Casinos Inc. -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. The Company's balance sheet at Aug. 31, 2005 showed assets totaling $64,009,000 and debts totaling $74,964,000. REAL MEX: Moody's Affirms Ratings at B2 with Developing Outlook --------------------------------------------------------------- Moody's Investors Service affirmed Real Mex Restaurants, Inc.'s B2 corporate family rating and changed the outlook to developing following the company's public announcement that it plans to begin exploring strategic alternatives. The developing outlook incorporates uncertainty as to the timing and nature of any actions taken by the company. Nonetheless, the revised outlook encompasses Moody's anticipation of a near-to-intermediate term resolution. In addition, it is the rating agency's view that although Real Mex's fundamentals and expectations for financial performance in fiscal 2006 are positive, the final outcome and potential impact on creditors may or may not adversely affect the current ratings. Moody's will continue to monitor any developments and take further rating action once the outcome is announced. Ratings affirmed with a developing outlook: Real Mex Restaurant, Inc.: * B2 corporate family rating, * B2 on the $105 million senior secured notes due 2010, and * SGL-3 for the speculative grade liquidity rating. Real Mex Restaurants Inc., headquartered in Cypress, California, operates Mexican casual dining restaurants principally under the trade names: * "El Torito", * "Acapulco", and * "Chevys Fresh Mex". The company acquired 69 Chevys Fresh Mex restaurants and 5 Fuzio Universal Pasta restaurants in January 2005. RICHARD RUTTER: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtors: Richard G. Rutter and Carol A. Rutter 1928 Mesa Drive Freeport, Illinois 61032 Bankruptcy Case No.: 06-70078 Type of Business: The Debtors own a 12% interest in Aero Internet Services, Inc., and a 50% interest in Interclay, Inc. The Debtors previously filed for chapter 11 protection on Sept. 6, 2006 (Bankr. N.D. Ill. Case No. 05-74588). Chapter 11 Petition Date: January 24, 2006 Court: Northern District of Illinois (Rockford) Judge: Manuel Barbosa Debtors' Counsel: James E Stevens, Esq. Barrick, Switzer, Long, Balsley & Van Evera 6833 Stalter Drive Rockford, Illinois 61108 Tel: (815) 962-6611 Fax: (815) 962-1758 Total Assets: $1,046,599 Total Debts: $1,077,200 Debtors' 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank 309-311 Butternut $250,000 P.O. Box 5830 Drive, Lena, Portland, OR 97228 Illinois Citizens State Bank Loan $181,000 c/o Attorney Craig Willette 1318 East State Street Rockford, IL 61104 Durand State Bank Personal Loan $150,000 c/o Thomas Luchetti, Esq. 6838 E. State Street, Suite 307 Rockford, IL 61108 MBNA America Credit Card debt $26,000 P.O. Box 15027 Wilmington, DE 19850 Chase Bank Card Credit Card debt $25,000 P.O. Box 52188 Phoenix, AZ 85072 Discover Card Credit Card debt $20,100 P.O. Box 3008 New Albany, OH 43054 COMED Electricity for $3,000 Bill Payment Center 21-29 West Main Chicago, IL 60668-0001 Street, Freeport, Illinois Capital One Credit Card debt $2,500 P.O. Box 85015 Richmond, VA 23285 NICOR Gas charges for Unknown P.O. Box 310 21-29 West Main Aurora, IL 60507 Street, Freeport, Illinois RURAL CELLULAR: Undeclared Dividends Cue S&P's Rating Downgrade --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Rural Cellular Corp.'s 11.38% senior exchangeable preferred stock issue to 'D' from 'C'. This follows the company's January 20 press release that its Board of Directors has determined not to declare the quarterly dividends on the senior exchangeable preferred stock payable in cash on Nov. 15, 2005, and Feb. 15, 2006, to holders of record on Nov. 1, 2005, and Feb. 1, 2006, respectively. At the same time, we affirmed other ratings on the Alexandria, Minnesota-based regional wireless carrier, including its 'B-' corporate credit rating. The outlook is negative. Pro forma for a refinancing in November 2005 and related preferred stock dividend payments made at the time, the company has about $1.4 billion of total debt outstanding and about $600 million of preferred stock. SAINT VINCENTS: Inks Agreement Limiting Recovery of Five Claimants ------------------------------------------------------------------ Five claimants have filed complaints, alleging medical malpractice against Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates: (1) Angela Robb; (2) Christopher Apprendi, as administrator of the estate of Amy Apprendi; (3) Karen Henderson, as administrator of the estate of James Henderson, deceased; (4) Lynn Marziale; and (5) Thomas Simon. The Claimants have previously asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow them to proceed with their Actions. In separate stipulations, the Debtors and the Claimants except Ms. Robb, agree that: (1) The automatic stay is modified solely to permit the Claimant to proceed with their malpractice action to judgment or settlement and collection from the Debtors' Primary Insurance without further action of the Court, provided, however, that: (a) the Claimants limit their claim against the Debtors or against practitioners who are covered by the Debtors' Primary Insurance to the available proceeds from the Debtors' Primary Insurance, if any; (b) the Claimants waive their right, if any, to collect any amount with respect to their malpractice claim against the Debtors' estates and any practitioner covered by the Debtors' Primary Insurance; (c) the Claimants will not file a further proof of claim in the Debtors' Chapter 11 cases, or otherwise seek to recover from the Debtors' estates in any manner with respect to any claim arising from, or related to, the malpractice claim or malpractice action and that to the extent that a proof of claim has already been filed, that claim will be disallowed; and (d) Primary Insurance is paying defense costs and other related fees and expenses in connection with the Claimants' malpractice actions; and (2) The Claimants' Lift Stay Motions are withdrawn, with prejudice; and (3) The Stipulations may be modified pursuant to the terms of a confirmed plan of reorganization in the Debtors' Chapter 11 cases. However, if the Stipulations modify or limit the Claimants' ability to collect from Primary Insurance, the Claimants will be free to assert a claim against SVCMC in an amount in excess of the Primary Insurance. That claim will be allowed or disallowed, and subject to objection, in accordance with Section 502 of the Bankruptcy Code. The Debtors and Ms. Robb agree to the modification of the automatic stay solely to permit Ms. Robb to proceed to litigate her malpractice action up to the entry of judgment, provided, however, that: (1) subject to a Court Order, Ms. Robb may not seek to enforce or otherwise collect on any judgment rendered in her malpractice action against the Debtors, any practitioners who are covered by the Debtors' Primary Insurance, Self- Insurance, or Excess Insurance, or the Debtors' Primary Insurance, Excess Insurance, or any insurance trust; (2) Primary Insurance is paying defense costs and other related fees and expenses in connection with Ms. Robb's malpractice action; and (3) Ms. Robb's Lift Stay Motion is withdrawn, without prejudice. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) SELECT MEDICAL: Moody's Maintains B1 Rating With Negative Outlook ----------------------------------------------------------------- Moody's assigned a negative outlook to the long-term acute care hospital (LTACH) sector following the release of a proposed rule for fiscal 2007 Medicare reimbursement. The proposed rule was published on Jan. 19, 2005 and is subject to a 60-day public comment period with a final rule expected in late Spring 2006. A final rule would be effective for patient discharges occurring on or after July 1, 2006 through June 30, 2007. The Centers for Medicare and Medicaid Services (CMS) stated that the proposed rule as drafted would result in an average reduction of the LTACH Medicare reimbursement rate of approximately 11%. Moody's maintains ratings on three long-term acute care hospital providers. * Select Medical, B1 Negative * LifeCare Holdings, B2 Stable * Triumph Healthcare, B2 Stable Moody's estimates that the effect of the proposed reimbursement change would be significant to all three issuers. Therefore, a final rule passed in a form that is substantially similar to the proposal could result in negative rating actions in all three cases. Moody's notes that the 60-day comment period could result in changes to the rule that mitigate some of the negative effects and, therefore, will not take rating actions based on the proposal to avoid unnecessary volatility in the long-term ratings of the individual companies. Moody's expects to issue a more detailed report on the proposed rule change and the effects on rated LTACH issuers shortly. Moody's, however, has assigned a negative outlook to the sector. Moody's had not formally maintained an outlook for the sector prior to this. Moody's believes that even if the final rule does not initially result in as drastic a reduction to the fiscal 2007 reimbursement, CMS will continue to revise LTACH reimbursement. For example, CMS is likely to continue to refine its definition of an LTACH facility and the type of patients that should be treated in the LTACH setting in order to drive patients to the most efficient form of care. Moody's believes that the evolution of these criteria over the next twelve to eighteen months will create enough uncertainty in the sector to warrant the negative outlook. STELCO INC: Ontario Superior Court Approves Restructuring Plan -------------------------------------------------------------- Stelco Inc. (TSX:STE) reported that its restructuring plan was sanctioned and approved by the Superior Court of Justice (Ontario) on Jan. 20, 2006. The Court indicated its view that Stelco has been in compliance with all statutory requirements, has adhered to previous orders of the Court, and that nothing has been done or purported to be done that is not authorized by the Companies' Creditors Arrangement Act. The Court also found that the restructuring plan was fair, reasonable and equitable. "This is wonderful news for Stelco, for our employees and retirees, for our other stakeholders, and for the communities in which we operate," Courtney Pratt, Stelco President and Chief Executive Officer, said. "The conclusion of our restructuring is now in sight. The new Stelco that emerges from this process will be much better positioned to become a viable and competitive steel producer for the long term. Stelco will do everything possible to reward the confidence that has been shown in the restructuring plan and in the future of this great company." The Court had indicated earlier this week that it wanted to be certain that the restructuring plan presented for approval could actually be implemented. To that end, the Company had advised the Court that it expected to be in a position to deliver term sheets in the matter of the $600 million asset based loan and the $375 million bridge loan to the Monitor by 5:00 p.m. on Jan. 20, 2006. Letters and term sheets in a form acceptable to the Court were delivered, as referenced in the 48th Report of the Monitor issued late yesterday afternoon. Having reviewed these materials and the Monitor's Report, the Court indicated that it was satisfied the restructuring plan was implementable. The Court also determined that the restructuring plan was fair to existing shareholders on the grounds that there was insufficient value with which to provide them any recovery. In addition, the Court noted its belief that the marketplace had been exhaustively and well canvassed for prospective purchasers of the Company during the restructuring process. The Court also noted that no real or realistic interest had been shown even though certain existing shareholders had made efforts in this regard in recent months. The Sanction Order also extended the stay period from Jan. 31, 2006 until March 3, 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. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until Mar. 3, 2006. STELCO INC: Comments on Allegations Made by Two Former Directors ---------------------------------------------------------------- Stelco Inc. (TSX:STE) commented on the resignation letter of two former directors which was made public under an Order of the Superior Court of Justice (Ontario). The Company noted that allegations contained in the letter had been addressed previously by the board of directors and by a Special Officer of the Court. A Special Committee of the board was established to review the allegations following receipt of the resignation letter last August 2005. In addition, the Company sought and obtained the appointment of the Honorable Coulter Osborne as a Special Officer of the Court. Mr. Osborne's mandate was to assist and oversee the Special Committee's review of the allegations, and to report to the Court. Mr. Osborne's report was filed and made public on Sept. 21, 2005. The report confirmed the appropriateness of the process and findings of the Special Committee in the matters under review. The report expressed the view: * that there was no conflict of interest on the part of the president and chief executive officer or other members of senior management, * that there had been no stakeholder complaint about the forecasting model that was used, and * that the board had acted responsibly in considering all aspects of the forecasts with which it was presented. The Company noted in particular a number of allegations in the former directors' letter concerning the Chief Restructuring Officer, Mr. Hap Stephen. The Company noted the Osborne report's finding that "there was nothing which emerged in the course of the Special Committee process which in any way compromised the role of the CRO." "The allegations, and particularly those concerning the motives and conduct of specific individuals, are not accepted by Stelco's current directors who consider those allegations to be inappropriate and unjustified," Richard Drouin, chairman of Stelco's board of directors, said. "The activities of the board, management, advisors and the CRO have been overseen by the Court-appointed Monitor. For its part, the board has had complete confidence in every member of the Company's restructuring team throughout this process." 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. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until Mar. 3, 2006. STRUCTURED ASSET: Moody's Rates Class B1 Mezzanine Certs. at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Structured Asset Investment Loan Trust 2005-11 and ratings ranging from Aa2 to Ba1 to the mezzanine certificates in the deal. The securitization is backed by adjustable-rate (78.44 %) and fixed-rate (21.56%) sub-prime residential mortgage loans originated largely by BNC Mortgage, Inc. (76.31%). The ratings are based primarily on: * the credit quality of loans, * subordination, * overcollateralization, * excess spread, * an interest rate swap agreement, * a cap agreements, and * primary mortgage insurance. After taking into account the benefit from the mortgage insurance Moody's expects collateral losses to range from 3.25% to 3.75%. Wells Fargo Bank, N.A., JPMorgan Chase Bank, N.A., HomEq Servicing Corporation will act as the servicers and Aurora Loan Services LLC will act as master servicer in this transaction. The complete rating actions: Issuer: Structured Asset Investment Loan Trust 2005-11 Securities: Mortgage Pass-Through Certificates, Series 2005-11 * Class A1, rated Aaa * Class A2, rated Aaa * Class A3, rated Aaa * Class A4, rated Aaa * Class A5, rated Aaa * Class A6, rated Aaa * Class A7, rated Aaa * Class M1, rated Aa2 * Class M2, rated Aa3 * Class M3, rated A1 * Class M4, rated A2 * Class M5, rated A3 * Class M6, rated Baa1 * Class M7, rated Baa2 * Class M8, rated Baa3 * Class B1, rated Ba1 SUNCOM WIRELESS: S&P Puts CCC+ Corporate Credit Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Berwyn, Pennsylvania-based SunCom Wireless Holdings Inc., including the 'CCC+' corporate credit rating, on CreditWatch with negative implications. The 'B-' bank loan rating of Suncom Wireless Inc. was also placed on CreditWatch with negative implications, but the bank loan recovery rating of '1' was affirmed and not placed on CreditWatch, indicating high expectations for full recovery of principal in the event of bankruptcy or default. These actions, which affect approximately $1.7 billion of debt, follow the release of a Form 8-K by the company on Jan. 19, 2006, announcing the engagement of Lazard FrSres & Co. LLC as a financial adviser to assist in evaluating options to improve the company's financial position and Weil, Gotshal & Manges LLP as a legal adviser. Additionally, the company announced that fourth- quarter EBITDA would be $20 million-$25 million lower than previous guidance, resulting in full-year 2005 EBITDA of approximately $31 million. Suncom is a rural wireless services provider serving portions of: * North Carolina, * South Carolina, * Tennessee, * Georgia, * Kentucky, * Puerto Rico, and * the U.S. Virgin Islands. "Given Suncom's weak financial position, characterized by very aggressive leverage and significant operating challenges as it as it makes the transition to becoming an independent wireless provider, we believe it is possible that options to improve the company's financial position may focus on altering the company's capital structure, possibly through a debt exchange," said Standard & Poor's credit analyst Susan Madison. "Such an exchange would likely be viewed by Standard & Poor's as a distressed exchange." Upon completion of a distressed exchange, the corporate credit rating would be lowered to 'SD', indicating a selective default, and the exchanged debt would be lowered to 'D'. Subsequently, Standard & Poor's would assign a new corporate credit rating and ratings to any outstanding debt issues based on the new capital structure. The recovery rating of '1' assigned to Suncom Wireless Inc.'s $250 million secured credit facility is affirmed, since even in the event of a selective default, the value of the company's assets relative to the size of the secured credit facility will continue to be substantial. SunCom currently owns licenses representing 465 million megahertz population equivalents (MHz/POPs) and has a growing subscriber base in excess of 920,000 subscribers. Even using conservative valuations for the spectrum and subscriber base, Standard & Poor's believes there is sufficient asset value to provide full recovery for secured lenders in the event of a default or reorganization. SWIFT & COMPANY: Poor Performance Cues Moody's to Lower Ratings --------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of Swift & Company following material earnings declines and a significant increase in leverage over the past year, as well as the likelihood that profits and cash flow will remain under pressure as the company seeks to turnaround its operating performance and combat unfavorable industry trends. The ratings outlook is stable. This rating action concludes the review commenced on Oct. 19, 2005. These ratings were downgraded: 1) $268 million 10.125% senior unsecured notes due 2009, downgraded to B3 from B2; 2) $150 million 12.5% Senior Subordinated Notes due 2010, downgraded to Caa1 from B3; and 3) Corporate family rating, downgraded to B2 from B1. Moody's does not rate Swift's $550 million secured revolving bank facility. The ratings downgrade reflects Swift's significant sales and earning declines, which were most pronounced in the company's US beef and Australian beef segments. Over the past twelve months, Swift's operating performance has suffered from prolonged closure of certain key export markets, such as Japan and Korea, to US beef following the December 2003 discovery of BSE in the US. The company also suffered from high raw material costs which it could not fully pass on to its customers. In the US, processing operations have run below normal capacity due to a lack of adequate cattle supply reflecting cyclical low level in the US cattle herd, and a reduced level of imports from Canada. The US beef operations have also suffered from inefficient operations and generally weak operating performance, irrespective of industry conditions. In Australia, cattle supply has been limited for its grass-fed processing operations as unusually good pasture conditions have induced producers to keep cattle grazing longer than normal before sending them to slaughter. While Swift's pork processing business had helped offset some weakness and witnessed robust profitability in the past, the pork margin has started to plateau to its historical norm. Swift's LTM Nov. 29, 2005 EBITDA fell by 51% to $79 million from $163 million in FYE 2005, resulting in a substantial EBITDA margin deterioration from 1.7% to 0.8%. Many of the contributing factors to Swift's recovery hinge upon the industry dynamics which are out of the company's control -- such as how soon US beef exports to Asian countries are fully restored to pre-BSE levels. And while Moody's expects these unfavorable industry conditions to moderate over time, it is unlikely that they will improve quickly enough to help Swift restore its profitability and financial metrics to levels appropriate for its former rating. The ratings also take into consideration Swift's high enterprise debt. The company's owners (Hicks, Muse, Tate & Furst and Booth Creek Management Corporation) have become more financially aggressive over the past year and induced the company to pay a sizable debt-financed dividend despite a very challenging industry environment. During March 2005, Swift's direct holding company and guarantor of its debt (S&C Holdco 3) issued $105 million in senior unsecured notes and Swift's indirect ultimate parent holding company (Swift Foods Company) issued $75 million in senior convertible notes. Both issues are unrated. These are currently PIK. This debt was issued in order to fund a special dividend to the owners. Moody's consolidates this debt as well as $150 million seller notes due 2010 to ConAgra Foods issued by Swift's indirect holding company (S&C Holdco 2) with that of Swift & Company for analytic purposes. It is Swift's operations which must generate the cash to service this debt and ultimately repay or refinance it as Swift's various holding companies have no meaningful operations of their own. The combination of weaker operating performance and higher enterprise debt has caused a material increase in Swift's leverage and further erosion in debt protection metrics. Enterprise debt/EBTIDA (using Moody's standard analytic adjustments) for 12 months ending Nov. 27, 2005 increased to over 10x, as compared to 6.0x for FYE May 29, 2005. EBITDA-Capex/Interest fell to 0.4x for the 12 months ending Nov. 27, 2005 from 1.4x at FYE May 29, 2005. The ratings also consider that Swift's liquidity continues to remain solid. The company maintains a $550 million asset-based revolving credit facility. Swift is not required to meet any financial covenant under the facility so long as unused availability exceeds $75 million. Borrowing availability was approximately $290 million at the end of November 2005. The ratings gain additional support from Swift's scale and position as the third largest processor of fresh beef and pork in the U.S. and as the largest beef processor in Australia. The ratings also reflect: * Swift's diverse customer base and somewhat diversified geographic presence of its operations; * extensive reach through all major channels; and * well-established business platform. The rating on the senior unsecured notes is notched down from the corporate family rating to reflect its effective subordination to the senior secured revolver. The notes are guaranteed by Swift's direct holding company and its US subsidiaries. The notes benefit from the $150 million of subordinated debt, but the unsecured note indenture would permit Swift to refinance the subordinated debt in the future with senior unsecured notes. The rating on the senior subordinated notes reflects its effective and contractual subordination to the senior secured credit facilities and senior unsecured notes. The senior subordinated notes are guaranteed on a subordinated basis by Swift's direct holding company and its US subsidiaries. Moody's notes that Swift's current debt protection measures remain weak even for its new ratings, but the rating agency expects some improvement in the year ahead. An inability to execute its plan to improve operating performance and debt protection measures, or additional dividends to its parent company, will further pressure the rating. There is limited upward rating pressure at this time. Positive rating pressure can develop if Swift can improve its performance and reduce leverage, generating sustainable average free cash to debt of approximately 6% as well as maintain average Debt/EBITDA at below 4x. Swift & Company, headquartered in Greeley, Colorado, is a major processor of beef and pork, with operations in the US and Australia. TENET HEALTHCARE: Moody's Affirms B3 Rating With Negative Outlook ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Tenet Healthcare Corporation following recent announcements by the company, including the restatement of previously reported financial statements. The outlook for the ratings remains negative. Moody's also affirmed the speculative grade liquidity rating at SGL-4. The affirmation of the ratings reflects Moody's belief that the announced restatement of prior period financial results does not materially affect factors considered by Moody's in determining the rating as considered in Moody's Global For-Profit Hospital Industry Rating Methodology. More specifically, Moody's expects the company to maintain metrics, which when aggregated and weighted in accordance with the methodology, will remain consistent with its B3 rating. Tenet has indicated that the restatement relates predominantly to the timing of revenue recognized in prior periods, which will not affect the factors most heavily weighted in Moody's analysis of the company, including: * cash flow coverage metrics, * volume trends, and * exposure to ongoing litigation. Moody's also does not expect the restatement to result in the inability of the company to file its Form 10-K for the year ended Dec. 31, 2005 in a timely manner. Additionally, the company's Jan. 12, 2006 announcement that it had reached an agreement to settle securities class-action lawsuits and derivative litigation was in line with Moody's expectations. While this settlement is a positive for Tenet in clearing the way toward reducing its exposure to contingent liabilities, the company remains the focus of a number of ongoing investigations. In addition to the continued exposure to litigation and investigations, Moody's remains concerned about the ongoing operations of the company's core assets as reflected in the negative outlook. This is especially true as industry peers have begun to report sluggish results for the fourth quarter of 2005 as a result of weak volume and sustained increases in bad debt expense. Positive factors reflected in the rating include diversity and scale and the recent rationalization of the portfolio. Additionally, a favorable rate environment with regard to Medicare reimbursement should help to stabilize the operations in the near term. Further, the company does not have any debt maturities over the rating horizon and maintained a cash balance of approximately $1.5 billion at Sept. 30, 2005. Tenet Healthcare Corporation, headquartered in Dallas, Texas operates 69 short-term acute care hospitals. The company generated $9.7 billion in net revenue for the twelve months ended Sept. 30, 2005. TIGER TELEMATICS: Gizmondo Unit Files for Administration in UK -------------------------------------------------------------- On Jan. 20, 2006, Tiger Telematics, Inc.'s wholly owned subsidiary, Gizmondo (Europe) Limited filed a High Court application for administration in the United Kingdom. The filing provides Gizmondo Europe with a moratorium in order to effect a financial restructuring of the business. Gizmondo Europe will have a court hearing on Jan. 31, 2006, to ask for the administration order. During the interim period, Gizmondo Europe will immediately be subject to protection of the UK Court and all enforcement actions of creditors are automatically stayed. Tiger intends to use funds from its recently announced $5 million bridge loan to reinvest in the business in the UK and to restructure the overall debt of the European business. Gizmondo Europe made a reduction in payroll of approximately 50% of monthly staff costs during the week prior to the court application to reduce overall operating expenses of the business and significantly improve its prospects for a successful turnaround. Gizmondo Europe continues to trade normally during this interim period. The Company anticipates a similar action in Sweden for the game subsidiary of Gizmondo Europe and for the Company's Gizmondo Studios, Sweden AB subsidiary within the next few days. Tiger Telematics, Inc., is the parent company of several subsidiaries, including Gizmondo Europe Ltd., the developer of the multi-entertainment wireless handheld gaming device called the Gizmondo. The Company historically has been in the retail flooring business and a designer, developer and marketer of mobile telematics systems and services that combine global positioning and voice recognition technology to locate and track vehicles and people down to the street level in countries throughout the world. As of Sept. 30, 2005, the company has a $66,418,283 stockholders' equity deficit compared to a $16,214,762 stockholders' equity deficit at Dec. 31, 2004. * * * Going Concern Doubt Goldstein Golub Kessler LLP in Manhattan raised substantial doubt about Tiger Telematics, Inc., and its subsidiaries's ability to continue as a going concern after Goldstein Golub audited their financial statements for the years ended Dec. 31, 2004, and 2003. GOLDSTEIN GOLUB pointed to the companies recurring losses from operations and net working capital deficiency. TOWER AUTOMOTIVE: Wants Plan Filing Period Stretched to April 28 ---------------------------------------------------------------- Tower Automotive Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend, without prejudice, their exclusive periods to: (1) file a plan of reorganization through April 28, 2006; and (2) solicit and obtain acceptances of that plan through June 27, 2006. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, informs the Court that despite the Debtors' most diligent efforts, they will not be able to file a plan before the Plan Proposal Period ends on January 27, 2006. Mr. Sathy discloses that the Debtors and their professionals have worked in a direct and deliberate manner to ensure that the Reorganization Cases proceed as quickly as possible to effectuate the Debtors' rehabilitation and to develop a consensual plan of reorganization. The Debtors have engaged and are continually engaging in extensive due diligence efforts with the Creditors Committee and their professionals on a variety of issues related to the Debtors' restructuring plan. Mr. Sathy relates that the Debtors have substantially completed the business plan that they expect will serve as the foundation for their chapter 11 plan. The Debtors' business plan is predicated on cost savings from a number of constituents to which the Debtors have commenced the process under collective bargaining agreements and retiree benefit plans. The Debtors have met in good faith with their various unions and with the Retiree Committee, and have created and maintained a comprehensive on-line data room to facilitate the sharing of information, Mr. Sathy says. Mr. Sathy reminds the Court that the Debtors filed a motion on January 4, 2006, seeking to reject their collective bargaining agreements and to modify their retiree benefits. The Court has scheduled trial dates for February 2006 and will render a ruling by March. Mr. Sathy points out that while the Debtors have made substantial progress on their business plan, their reorganization prospects hinge on the outcome of the CBA Rejection Motion. In addition, Mr. Sathy notes that the Debtors have had sufficient resources to meet and have generally met all required postpetition payment obligations and the Debtors do not expect any change in their ability to meet their postpetition payment obligations as their reorganization cases move forward. Mr. Sathy assures Judge Gropper that the Debtors are not seeking the extension to delay administration of their reorganization cases or to pressure Creditors to accept unsatisfactory plans. On the contrary, Mr. Sathy says, the requested extension is intended to facilitate an orderly, efficient and cost-effective plan process for the benefit of all Creditors. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) TOWER AUTOMOTIVE: R.J. Tower Wants to Assume QAD Licensing Pacts ---------------------------------------------------------------- R.J. Tower Corporation, a debtor-affiliate of Tower Automotive Inc., seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to assume certain software licensing agreements with QAD, Inc., which are executory contracts pursuant to Section 365 of the Bankruptcy Code. Anup Sathy, Esq., at Kirkland & Ellis, LLP, in Chicago, Illinois, relates that the Debtors are examining and analyzing their prepetition contracts to determine which contracts are to be assumed, including the Multinational Software Product Licensing Agreement between QAD and R.J. Tower. Under the terms of the Agreement, Mr. Sathy discloses that R.J. Tower is authorized to use the QAD software in connection with its business operations subject to limitations and restrictions. The QAD software is utilized for managing the majority of the Debtors' businesses as it is used to maintain customers, vendors, item masters, bills-of-material, routings, work centers, engineering changes, production schedules, demand schedules, shipping schedules, material requirements shipping, receiving, non-MRO purchasing, invoicing, vouchering, accounts payable, accounts receivable, and general lender. Mr. Sathy adds that pursuant to the Agreement, QAD provides the Debtors with critical maintenance services related to the QAD software applications and its associated Progress database. These services include access to QAD's helpdesk support services for reporting and resolving functional software as well as technical database issues, critical software patches, software service packs, and future releases of software. The Agreement further allows the Debtors access to on-line support, on-line knowledge base, and educational services via the Internet. The total estimated cost to R.J. Tower for continued maintenance service under the QAD Agreement is $800,000 per year. According to Mr. Sathy, the Debtors' continued use of the QAD software is integral to their ongoing business operations as the day-to-day business is dependent on the software. Without the continued dedicated and prompt availability of technical support and service from QAD, the Debtors will be unable to properly utilize the QAD software, and further risks incurring significant administrative costs in an effort to replace and install alternate software. In consideration of R.J. Tower's proposed assumption of the contract, QAD has continued to provide maintenance services to the Debtors during the postpetition period, Mr. Sathy relates. In addition, Mr. Sathy says, QAD has agreed to waive outstanding prepetition amounts owed to it by R.J. Tower, which total $3,600 and arise from unpaid prepetition amounts owed to QAD pursuant to the QAD Agreement, and related maintenance and advisory services. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000). UAL CORP: Twelve Directors Named for Reorganized Board ------------------------------------------------------ UAL Corporation (OTC Bulletin Board: UALAQ) names the members of the company's new Board of Directors, who are to begin service on the effective date of the company's Plan of Reorganization. Those named by the company are current directors: -- W. James Farrell (Chairman, Illinois Tools Works, Inc. - Director since 2001) -- Robert S. Miller, Jr. (Chairman and CEO, Delphi Corporation - Director since 2003) -- James J. O'Connor (Retired Chairman and CEO, Unicom Corporation - Director since 1984) -- Glenn F. Tilton (Chairman, President and CEO, UAL Corporation - Director since 2002) -- John H. Walker (President and CEO, The Boler Company - Director since 2002) Those named by the Official Committee of Unsecured Creditors are: -- Richard J. Almeida (Retired Chairman and CEO, Heller Financial, Inc.) -- Walter Isaacson (President and CEO, The Aspen Institute) -- Janet Langford Kelly (Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP) -- Robert D. Krebs (Retired Chairman, Burlington Northern Santa Fe Corporation) -- David Vitale (Chief Administrative Officer, Chicago Public Schools) Union representatives on the Board will continue to be: -- Mark A. Bathurst (United Airlines Pilots Master Executive Council Chairman, Airline Pilots Association International - Director since 2004) -- Stephen R. Canale (President and General Chairman, District Lodge 141, IAMAW - Director since 2002) "We are encouraged by this slate of directors, which brings a level of knowledge and experience that this company needs as it emerges from Chapter 11 as a sustainable enterprise," said Glenn Tilton, United's Chairman, President and CEO. "I look forward to working with the entire Board as we continue improving United, and as we move ahead in competing successfully with the world's strongest carriers." Upon the effective date of the company's Plan of Reorganization, these members will depart the Board: -- W. Douglas Ford (Retired Executive Director and Chief Executive, Refining and Marketing, BP p.l.c. - Director since 2002) -- Dipak C. Jain (Dean, Kellogg School of Management, Northwestern University - Director since 2003) -- Paul E. Tierney, Jr. (General Partner, Darwin Capital Partners and Managing Member, Development Capital, LLC - Director since 1990) -- George B. Weiksner, Jr. (Vice Chairman, Credit Suisse First Boston - Director since 2003) "We want to express our appreciation to all of the company's current board members -- especially those who are leaving the board -- for their tremendous contributions and commitment of time during what has been an extraordinarily complex and demanding restructuring," said James J. O'Connor, UAL's lead director. "That United moves ahead today as a fundamentally stronger institution is in part a testament to their hard work and focus." Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Amended Plan of Reorganization on Jan. 20, 2006. VALCOM INC: Losses Trigger Auditor's Going-Concern Doubt -------------------------------------------------------- Armando C. Ibarra, CPAs, expressed substantial doubt about ValCom, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations. Fiscal Year 2005 Results ValCom incurred a $1,820,021 net loss for the fiscal year ended Sept. 30, 2005, in contrast to a $5,929,714 net loss reported a year earlier. Revenues in fiscal year 2005 decreased to $930,108 from $1,953,480 of revenue generated for the fiscal year ended Sept. 30, 2004. The decrease in revenue was principally due to decreased production revenues associated with the Woody Fraser Productions joint venture and decreased rental revenues. At Sept. 30, 2005, the Company's balance sheet showed $1,617,672 in total assets and liabilities of $1,383,284. About ValCom Headquartered in Las Vegas, Nevada, ValCom, Inc. -- http://www.valcom.tv/-- is a diversified and vertically integrated, independent entertainment company. ValCom, Inc. through its operating divisions and subsidiaries creates and operates full service facilities that accommodate film, television and commercial productions with its four divisions that are comprised of: studio, film and television, camera/equipment rentals, and broadcast television. As of Sept. 30, 2005, ValCom had four subsidiaries: Valencia Entertainment International, LLC; Half Day Video, Inc.; ValCom Studios, Inc. and ValCom Broadcasting, LLC. VENTURE HOLDINGS: Creditors Must File Proofs of Claim by May 17 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan, set May 17, 2006, as the deadline for all creditors owed money by Venture Holdings Company, LLC, and its debtor-affiliates, on account of claims arising prior to May 24, 2004, to file formal written proofs of claim. Creditors must deliver their claim forms to: Sheila M. Tighe Clerk of the Bankruptcy Court Eastern District of Michigan 211 West Fort Street Detroit, Michigan 48226 Headquartered in Fraser, Michigan, Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Simon, Esq., at Foley & Lardner LLP represent the Debtors. John A. Karaczynski, Esq., and Robert M. Aronson, Esq., at Akin Gump Strauss Hauer & Feld LLP, and Joel D. Applebaum, Esq., at Clark Hill PLC represent the Creditors' Committee. WOODWORKERS WAREHOUSE: Buckley Group Wants Chapter 11 Case Closed ----------------------------------------------------------------- The Buckley Group, the Liquidation Manager appointed pursuant to the confirmed Second Amended Plan of Liquidation of Woodworkers Warehouse, Inc., nka WW Warehouse, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to authorize the final distribution to creditors and enter a final decree closing the Debtor's chapter 11 case. The Court confirmed the Debtor's Plan of Liquidation on July 30, 2004, and the Plan took effect on Aug. 10, 2004. Reasons for Final Distribution to Creditors and Entry of Final Decree The Liquidation Manager is currently holding approximately $746,000 in funds, which is enough to pay all expected final costs, expenses and fees in the Debtor's case and for distributing an additional $662,000 to creditors. All significant issues in the Debtor's chapter 11 case have been resolved and only the de minimis administrative matters remain, which the Liquidation Manager believes will not affect the final distribution to creditors. The only administrative matters remaining to be completed in the Debtor's case are the Court's approval of Buckley Group's application for compensation, which is pending before the Court and the closing of the case. Additionally, substantial consummation the Debtor's chapter 11 case as required under Section 1101(2) of the Bankruptcy Code has occurred. There are no more deposit requirements under the Plan, all properties required to be transferred are already done and all adversary proceedings have been settled or resolved. The Court will convene a hearing at 2:30 p.m., on Feb. 10, 2006, to consider the Liquidation Manager's request. Headquartered in Lynn, Massachusetts, Woodworkers Warehouse, Inc., nka WW Warehouse, Inc., was a retailer of woodworking equipment and accessories. The Company filed for chapter 11 protection on December 2, 2003 (Bankr. Del. Case No. 03-13655). Christopher A. Ward, Esq., at The Bayard Firm represents the Debtor. The Court confirmed the Debtor's chapter 11 Plan on July 30, 2004, and the Plan took effect on Aug. 10, 2004. The Buckley Group is the Liquidation Manager under the Plan. Donald J. Detweiler, Esq., at Saul Ewing LLP represents the Liquidation Manager. When the Company filed for chapter 11 protection, it listed $28,366,000 in total assets and $34,669,000 in total debts. WORLDCOM INC: Has Until March 2 to Object to Tax Claims ------------------------------------------------------- WorldCom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend the Remaining Tax Claim Objection Deadline to March 2, 2006. A list of the 46 remaining tax claims is available for free at http://bankrupt.com/misc/WorldCom_46RemainingTaxClaims.pdf Marc E. Albert, Esq., at Stinson Morrison Hecker, LLP, in Washington, D.C., asserts that extending the Remaining Tax Claim Objection Deadline is necessary to: -- determine whether the Remaining Tax Claims were timely filed; -- identify whether the Remaining Tax Claims duplicate or amend other claims; -- determine how the Remaining Tax Claims were calculated; and -- identify the defenses, if any, of the Debtors to those claims. The extension is not sought for purposes of delay and should not result in any prejudice while the Debtors complete settlement discussions and their analysis of the Remaining Tax Claims, Mr. Albert emphasizes. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM INC: Court OKs Portion of Mississippi Power's Cure Claim ----------------------------------------------------------------- As reported in the Troubled Company Reporter on February 21, 2005, Mississippi Power Company and Southern Company Services, Inc., as agent for Mississippi Power and each of the other Southern Company operating companies, asked the United States Bankruptcy Court for the Southern District of New York to compel MCI Telecommunications, Inc., to satisfy its cure obligations pursuant to Section 365(b) of the Bankruptcy Code. MCI's predecessor-in-interest and Southern Company entered into an agreement for the provision of fiber optic facilities and services on August 12, 1991. Pursuant to a stipulation resolving Mississippi Power's limited objection to WorldCom, Inc. and its debtor-affiliates' Plan of Reorganization, MCI assumed the Agreement on April 20, 2004. The stipulation provides that: "[T]he Debtors shall cure any and all undisputed defaults under the Agreement in accordance with Section 8.05 of the Plan. The Debtors and MPC . . . shall negotiate in good faith to determine the nature and amount of any and all disputed defaults under the Agreement. Should the parties not be able to reach agreement on any disputed default, the parties shall promptly submit such dispute to the Bankruptcy Court for adjudication. . . ." * * * Judge Gonzalez grants the uncontested portion of the cure amounts in Mississippi Power's request: (a) $303,315 for costs of Southern Company Services, Inc., and Georgia Power Co., associated with maintenance of the fiber optic cable; and (b) $419,560 for costs associated with title research and acquisition of rights-of-way. The Court denies Mississippi Power's request, in all other respects. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000) XYBERNAUT CORP: Equity Panel Taps Henry O'Donnell as Legal Counsel ------------------------------------------------------------------ The Official Committee of Equity Security Holders of Xybernaut Corporation and its debtor-affiliate asks the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to employ Henry, O'Donnell, Dahnke & Walther, P.C., and to have the Firm substitute for Connolly, Bove, Lodge & Hutz, as its legal counsel. On January 5, 2006, Connolly Bove obtained the Court's approval to withdraw as the Committee's counsel. The Committee wants Henry O'Donnell's services to assist in the effective undertaking of the Committee's responsibilities, powers and duties. Kevin M. O'Donnell, Esq., a principal at Henry O'Donnell, disclosed that the Firm will be paid $275 to $350 per hour. Mr. O'Donnell assures the Court that Henry O'Donnell is disinterested as that term is defined in section 101(14) of the Bankruptcy Code. Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. XYBERNAUT CORP: Wants to Move Office to Chantilly, Virginia ----------------------------------------------------------- Xybernaut Corporation and Xybernaut Solutions, Inc. ask the U.S. Bankruptcy Court for the Eastern District of Virginia for authority to enter into an Office Lease Agreement. The Debtors tell the Court that they currently operate their business in office space located at 1270 Fair Lakes Circle, Fairfax, Virginia. The space is leased from Hyatt Plaza, LP, and the lease will expire on Jan. 31, 2006. The Debtors say that they have already found a new site for their office space at 5175 Parkstone Drive, Chantilly, Virginia. The Debtors relate that they have already negotiated a lease with the landlord, Justice Federal Credit, Union and plan to use the space immediately after the Hyatt lease expires. The Debtors argue that they need the new office space to conduct their business and have a space to store their records. Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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 26, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Looking Back at the First 90 Days Cornell Club, New York, New York Contact: http://www.airacira.org/ 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/ January 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Retail Roundtable Discussion Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ February 2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.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 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 23, 2006 WIDENER LAW JOURNAL The Changing Landscape of Bankruptcy in America: A Symposium Addressing the Impact of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Widener University School of Law, Harrisburg, Pennsylvania Contact: amygoodashman@aol.com or 717-541-3987 February 27-28, 2006 PRACTISING LAW INSTITUTE 8th Annual Real Estate Tax Forum New York, New York Contact: http://www.pli.edu/ February 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ 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 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management for SMEs Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.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 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ March 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ March 15-17, 2006 STRATEGIC RESEARCH INSTITUTE Mid-Market March Madness: Capitalizing on M&A, Buyouts & Turnaround Opportunities Omni Hotel at CNN Center, Atlanta, GA Contact: 925-825-8738 or http://www.srinstitute.com/ March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/ March 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or 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, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ 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 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION The Great Debate ANZ Bank, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ 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/ April 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, FL Contact: 561-882-1331 or http://www.turnaround.org/ 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 5, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Alexander Hamilton Custom House, New York, New York Contact: 1-703-739-0800; http://www.abiworld.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 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, FL Contact: 561-882-1331 or http://www.turnaround.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/ May 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 1-2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Southeast Regional Conference Amelia Island, Florida Contact: 410-347-7391 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 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Signature Luncheon, Charity Event Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.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 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ 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 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.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 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.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/ August 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 3-5, 2006 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ August 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.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 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ 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 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.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/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.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 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.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/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.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 A. Soriano-Baaclo, Marjorie C. Sabijon, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. 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 $725 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 ***