/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060208.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, February 8, 2006, Vol. 10, No. 33 Headlines 1995 K3/K4: Voluntary Chapter 11 Case Summary ADELPHIA COMMS: Judge Says No to Examiner in Boies Schiller Probe ALISON GEM: Court Sets Discovery Dates on Alibayof & Kahan Dispute ANDROSCOGGIN ENERGY: Court Declines to Disband Creditors' Panel APPLICA INC: Moody's Withdraws Corporate Family & Debt Ratings ARMSTRONG WORLD: Taps Ryan & Co. as Property Tax Consultant ASARCO LLC: Wants to Assume Christensen Sampling Services Pact ASARCO LLC: Court Okays Assumption of PerkinElmer Life Contracts ASARCO LLC: Wants SRK Consulting to Make Production Analysis ASSET BACKED: Fitch Rates $20.1 Million Certificates at Low-Bs ATA AIRLINES: NatTel Appeals Chapter 11 Plan Confirmation Order ATA AIRLINES: Files Supplements to 1st Amended Reorganization Plan AUCTION MILLS: Lacks Sufficient Funding to Conduct Operations BLUE BEAR: Can Obtain $310,000 DIP Loan From Mr. & Mrs. Clayton BOWNE & CO: Moody's Affirms B2 Rating on Conv. Sub. Debentures CELERO TECH: U.S. Trustee Wants Ch. 11 Case Dismissed or Converted CENTRAL GARDEN: S&P Rates Proposed $650 Mil. Loan Facility at BB COMDIAL CORP: Court Okays Termination of Employee's Pension Plan DATICON INC: Committee Wants to Hire Reid and Riege as Counsel DELTA AIR: Gets Court Nod to Use Disability Fund in Reorganization DOCTORS HOSPITAL: Amends Chapter 11 Plan and Disclosure Statement DOCTORS HOSPITAL: DVI Complains Disclosure Statement is Inadequate ESSELTE GROUP: Sr. Notes Redeemed & Moody's Withdraws Ratings ERA AVIATION: Offshore Wants to Investigate CapitalSource EQUATOR CORP: Voluntary Chapter 11 Case Summary EXIDE TECHNOLOGIES: Has Until February 27 to Object to Claims FARMLAND IND: Trustee Wants to Sell United Stake to Bay State FLOWERS FOODS: Earns $11 Million in Fourth Quarter Ended Dec. 31 FLOWERS FOODS: Inks Merger Deal to Acquire Derst Baking GLOBO COMUNICACAO: Moody's Lifts Foreign Currency Rating to B1 GOODYEAR TIRE: Will Release Fourth Quarter Financials on Feb. 16 HANDMAKER JEWISH: Files Plan & Disclosure Statement in Arizona HASBRO INC: Earns $94.3 Million of Net Income in 2005 Fourth Qtr. HEATING OIL: Fund Receives Issuer Cease Trade Order from OSC INTERNATIONAL PAPER: Earns $1.1 Billion of Net Income on 2005 INTERSTATE BAKERIES: Selling Viejo Lot to Stallion 15 for $3.4M MIRANT CORP: 19 Creditors Demand $93 Million in Admin. Payments KAISER ALUMINUM: KACC Files Admin. Claim Against Debtors' Estates KMART CORP: Court Lifts Stay to Let 3 Claimants to Pursue Lawsuits KOPPERS INC: Moody's Raises Rating on 9.875% Parent Bonds to Caa1 KULLMAN INDUSTRIES: Court Approves Lowenstein as Panel's Counsel KULLMAN INDUSTRIES: Committee Hires BDO Siedman as Accountant LEGACY ESTATE: Carpy-Connoly Wants Decision on Grape Contract LORETTO-UTICA: Court Okays Continued Use of GECC's Cash Collateral LSI LOGIC: S&P Affirms BB- Corp. Credit Rating; Rating is Stable LUCENT TECH: Inks Agreement to Acquire Riverstone for $170 Million MAULDIN-DORFMEIER: Court Fixes March 1 as Claims Bar Date MESABA AIRLINES: Files Motion to Reject CBA with Three Unions METRICOM INC: Court Okays Release of $231,315 from Escrow Account MIRANT: Has to Issue Certificates to Refinance PEPCO's $148M Bonds MIRANT CORP: Court Approves Hanson-Sexton Settlement Agreement MOHEGAN TRIBAL: Posts $38.3 Million in First Quarter Ended Dec. 31 MUELLER GROUP: S&P Places B+ Corporate Credit Rating on Watch MUSICLAND HOLDING: Court Approves Interim Compensation Procedures MUSICLAND HOLDING: Wants to Dispose of 61 Media Play Store Leases NEWQUEST INC: S&P Places B Counterparty Credit Rating on Watch NORTHLAND CABLE: Redeems 10-1/4% Bonds & Moody's Withdraws Ratings OWENS CORNING: Court Approves AIG Insurance Settlement Agreement PERFORMANCE TRANSPORTATION: Gets Interim OK to Use Cash Collateral PERFORMANCE TRANSPORTATION: Organizational Meeting Set for Today PERFORMANCE TRANSPORTATION: Taps Kirkland & Ellis as Counsel PHOTOCIRCUITS CORP: Taps ERM-New England as Environmental Advisor PISTOL PETE: Case Summary & 6 Largest Unsecured Creditors PLIANT CORP: Asks Court to Approve Interim Compensation Procedures R.H. DONNELLEY: Completes $2.2 Bil. Issue of New Debt Securities R.H. DONNELLEY: Registers 2.5 Million Common Shares For Resale REFCO INC: Sale Hearing for Sale of Stake in PCIG Set for Feb. 28 REFCO INC: Court Okays Bid Procedures for Sale of Interest in PCIG REFCO INC: Wants Court to Approve New Cash Investment Guidelines RIVERSTONE NETWORKS: Inks $170MM Asset Purchase Deal With Lucent RIVERSTONE NETWORKS: Case Summary & 20 Largest Unsecured Creditors ROUGE INDUSTRIES: Wants Severstal's Mineral Lease Rights Clarified SATMEX: Inks Debt Restructuring Accord with Senior Noteholders SEPRACOR INC: Earns $37.2 Million for Fourth Quarter Ended Dec. 31 SPECTRUM BRANDS: S&P Lowers Corporate Credit Rating to B from B+ STARWOOD HOTELS: Earns $422 Million of Net Income in 2005 STEEDS CROSSING: Voluntary Chapter 11 Case Summary SUBURBAN PROPANE: Earns $38 Million in Quarter Ended Dec. 24, 2005 SUPERB SOUND: Wants to Sell Two Retail Stores' Assets to Phase One TELOGY INC: Files Joint Plan of Reorganization in N.D. of Calif. TONY WEBBER: Voluntary Chapter 11 Case Summary TRANSALTA CORP: S&P Upgrades Pref. Shares' Rating to BB+ from BB UAL CORP: Asks Court to Approve Bond Interest Rate Settlement UNITED SURGICAL: Moody's Reviews Low-B Ratings for Upgrade UNIVERSAL ACCESS: Court Confirms Second Amended Liquidating Plan URBAN HOTELS: Court Establishes March 1 as Claims Bar Date USG CORP: Plans to Raise $1.8 Million Through Rights Offering W.R. GRACE: Wants to Settle Drake, Casillas & Scott PI Claims WESTON NURSERIES: Wants Plan-Filing Period Extended to May 12 WESTPOINT STEVENS: Aretex Wants Panel's Lift Stay Motion Denied WINDSOR FINANCING: S&P Rates $49.6 Million Sub. Notes at (P)BB * Bankruptcy Team From Swidler Berlin Joins Orrick Herrington * Deloitte's Sheila Smith Gets TMA's Outstanding Individual Award * Upcoming Meetings, Conferences and Seminars ********* 1995 K3/K4: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: The 1995 K3/K4 Humble, Texas, L.P. c/o Midland Loan Services, Inc. 10851 Mastin Overland Park, Kansas 66210 Bankruptcy Case No.: 06-30508 Chapter 11 Petition Date: February 6, 2006 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Kristian William Gluck, Esq. Fulbright & Jaworski L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201-2784 Tel: (214) 855-8210 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have unsecured creditors who are not insiders. ADELPHIA COMMS: Judge Says No to Examiner in Boies Schiller Probe ----------------------------------------------------------------- The United States Trustee for Region II asked the Honorable Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York to appoint an examiner under 11 U.S.C. Sec. 1104 to investigate the law firm of Boies, Schiller & Flexner LLP, and whether the firm improperly steered millions of dollars of document handling work to affiliated firms. Judge Gerber declined the invitation. Boies Schiller was retained by Adelphia Communications Corporation as its special litigation counsel in the cable company's bankruptcy proceedings. As previously reported in the Troubled Company Reporter on Sept. 29, 2005, Boies, Schiller & Flexner, LLP, resigned as special counsel to Adelphia Communications Corporation and its debtor-affiliates after disclosing that relatives of its chairman, David Boies, Esq., indirectly own part of Amici LLC, which stores and manages Adelphia's bankruptcy documents. A friend of Mr. Boies, William Duker, who served prison time for overbilling the U.S. government for legal services, ran Amici. Boies Schiller was asked to resign after it was discovered that relatives of Mr. Boies indirectly own Amici. No Examiner At a hearing Monday, Judge Gerber ruled that the plain language of Sec. 1104 of the Bankruptcy Code makes it clear that examiners examine debtors, not debtors' law firms. Judge Gerber declined to put his stamp of approval on a Stipulation among the Debtors, the Committee and the U.S. Trustee calling for appointment of an examiner, opining that appropriate fact gathering can be done another way at a far lower cost. Judge Gerber declined to follow Judge Brozman's decision in In re Leslie Fay, 175 B.R. 525 (Bankr. S.D.N.Y. 1994) appointing an examiner to investigate conflicts involving the apparel company's bankruptcy counsel. Rule 2004 Probe Coming Robert A. Scher, Esq., at Foley & Lardner LLP, representing Adelphia, and David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, representing the Official Committee of Unsecured Creditors, say Judge Gerber's ruling won't stop them from getting the facts. The Debtors and the Committee have every intention of initiating an examination of the law firm under Rule 2004 of the Federal Rules of Bankruptcy Procedure. Boies Schiller Denies Any Wrongdoing Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, in addition to advocating Judge Gerber adopt a literal interpretation of Sec. 1104, outlined Boies Schiller's position about the purported conflict: (A) Boies Schiller says it didn't violate any obligation to its client or to the Bankruptcy Court in connection with Amici or Echelon. It was the U.S. Trustee, the Debtors and the Fee Committee, not the firm, that negotiated directly with Amici for document management services. The firm also submitted affidavits of prominent experts on bankruptcy disclosure rules and ethics, that cleared Boies Schiller of any wrongdoing. (B) The practices of experienced bankruptcy counsel reveal, consistent with the law, that bankruptcy firms do not even search their own records to determine whether they have any "connections" to administrative vendors like Amici and Echelon. Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. ALISON GEM: Court Sets Discovery Dates on Alibayof & Kahan Dispute ------------------------------------------------------------------ At the behest of Donald A. Palmieri, the chapter 11 trustee appointed in Alison Gem Corp.'s chapter 11 case, the U.S. Bankruptcy Court for the Southern District of New York established a discovery schedule for pursuit of monies owed by the Alibayof family, the Debtor's former owner, and Yitzchok "Isaac" Kahan, the Debtor's current owner, to each other and to the Debtor. For 25 years and until July 11, 2002, the Debtor's business was owned and operated by the Alibayof family, including brothers Danny, Joseph and Ronny Alibayof and their father, Naman Alibayof. On July 11, 2002, Yitzchok "Isaac" Kahan acquired all of the Debtor's issued and outstanding stock from the Alibayofs. At that time, the Debtor owed Kahan Jewelry Corp. (of which Kahan was a principal) substantial amounts for gold purchased by the Debtor for use in its jewelry manufacturing operations. The Dispute The Alibayofs say they're owed $1,435,225 by the Debtor under certain promissory notes allegedly executed in connection with Mr. Kahan's acquisition of the Debtor and under certain employment agreements. The Debtor's books and records reflect that it owes Mr. Kahan $10,003,147 for monies loaned by Mr. Kahan to the Debtor. The Debtor's books and records further reflect that it owes Kahan Jewelry $14,440,797 for gold purchases, rent and some other borrowed funds. On March 2, 2005, the Alibayofs asked the Court for discovery under Rule 2004 of the Federal Rules of Bankruptcy Procedure authorizing and directing the examinations of, and the production of documents by, Simon Bernfeld, the former Chief Financial Officer of the Debtor), Kahan Jewelry and Mr. Kahan. The Alibayofs also asked the Chapter 11 Trustee to produce, pursuant to Section 704(7) of the Bankruptcy Code, certain information concerning his administration of the estate. The Chapter 11 Trustee would have consented to the discovery request but Naman Alibayof objected to, among other things, the Trustee's request for discovery with regard to him. All discovery came to a halt as the parties exchanged barbs in Court over the matter. Discovery Schedule In an Order dated January 27, 2006, the Honorable James M. Peck directs the parties to produce and exchange the documents required of them on or before March 1, 2006. Depositions will be held on or after March 27, 2006. The Parties must conclude all discovery on or before May 25, 2006. Headquartered in New York City, New York, Alison Gem Corp., is a manufacturer and wholesaler of jewelry goods selling both diamond and colored stone jewelry to a variety of major retailers, small local retail chains, and single family owned retail stores. The Company filed for chapter 11 protection on January 25, 2005 (Bankr. S.D.N.Y. Case No. 05-10404). When the Debtor filed for protection from its creditors, it reported total assets of $20,600,000 and total debts of $43,000,000. On March 18, 2005, the Court granted the U.S. Trustee's application for the appointment of Donald A. Palmieri as Chapter 11 Trustee. Douglas J. Pick, Esq., in New York City, represents the Chapter 11 Trustee. Mr. Palmieri can be contacted at: Donald A. Palmieri 350 Fifth Ave., Suite 3000 New York, New York 10118 (212) 695-6000 ANDROSCOGGIN ENERGY: Court Declines to Disband Creditors' Panel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maine denied the request of Androscoggin Energy LLC to disband the Official Committee of Unsecured Creditors previously appointed by the U.S. Trustee. The Debtor argues that disbanding the committee is appropriate because: a) the Committee has no ability at this stage to serve any constructive or legitimate purpose; b) the Committee will slow down the confirmation process and waste the estate's assets; and c) the Committee does not represent a significant constituency of legitimate unsecured creditors. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, told the Court that some creditors have fulfilled the purposes and functions that would have otherwise been served by the Committee. Because of duplicative nature of any information that might happen, Mr. Keach said, the Committee's appointment is unjustified at this time and should therefore be disbanded. Creditors' Committee Talks Back The Committee opposed the Debtor's request. The Committee argued the Debtor's allegations that the Committee was formed at the insistence of AltaGas and its counsel is false. The Committee says that it organized because three of its members insisted that it be formed and expressed willingness to serve. Accordingly, the Committee asked the Court to deny the Debtor's request. Headquartered in Boston, Massachusetts, Androscoggin Energy LLC, owns, operates, and maintains an approximately 150-megawatt, natural gas-fired cogeneration facility in Jay, Maine. The Company filed for chapter 11 protection on November 26, 2004 (Bankr. D. Me. Case No. 04-12221). Michael A. Fagone, Esq., at Bernstein, Shur, Sawyer & Nelson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $207,000,000 and total debts of $157,000,000. APPLICA INC: Moody's Withdraws Corporate Family & Debt Ratings -------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Applica Incorporated for business reasons. The ratings withdrawn were: * Corporate family rating, B3; * Senior subordinated debt rating, Caa2. For further information, please refer to Moody's Withdrawal Policy on http://www.moodys.com/ ARMSTRONG WORLD: Taps Ryan & Co. as Property Tax Consultant ----------------------------------------------------------- Armstrong World Industries, Inc., seeks the U.S. Bankruptcy Court for the District of Delaware's permission to employ Ryan & Co., Inc., to provide property tax consulting services, effective January 16, 2006, in addition to the state and local tax consulting services it provides to the Debtors. As reported in the Troubled Company Reporter on Jan. 6, 2006, the Debtors sought the Court's authority to employ Ryan & Co. as its state and local tax consultant. Ryan & Co. will review AWI's multi-state sales and use tax payment records and identify refund or reduction opportunities -- the SALT Services -- more fully detailed in a retention agreement between the parties, dated December 20, 2005. AWI informs the Court that it has recently learned that its provider of property tax consulting services, a professional it employed in the ordinary course of business, has increased its rates and essentially priced itself out of the property tax consulting market. Kenneth L. Jacobs, AWI's deputy general counsel for Litigation, tells the Court that the services of Ryan & Co. as property tax consultants are necessary to enable AWI to execute its duties as debtor-in-possession and continue efforts to minimize its real and personal property tax assessments. Ryan & Co. will provide administrative and technical support to minimize the real and personal property tax assessments for AWI's sites, and create a centralized control system for all real and personal property taxes on the identified locations throughout the United States, resulting in 68 returns and 10 exemption filings. Ryan & Co.'s property tax consulting services will consist of three phases, and will cover tax year 2006 and will automatically renew each January 1 unless either party provides written notice at least 60 days prior to the renewal date. Either party may terminate the agreement by providing written notice at least 60 days prior to the termination. In the initial phase, Ryan & Co. will: -- perform administrative work, including monitoring the assessments as they are issued, and approving for payment all property tax bills sent to it by AWI; -- perform tax compliance services using the ePropertyTax's Property Tax Office software product; -- perform audit services, including responding to and managing all property tax audits; and -- will conduct an in-depth review and analysis of the proposed real property assessments and prior year personal property renditions and assessments for major facilities. In the second phase, when a property has been over-assessed due to a reason other than a basic assessor error that can be resolved via discussion with the assessor, Ryan & Co. will recommend filing an administrative appeal. In the third phase, if, after all administrative remedies have been exhausted, AWI decides to litigate, Ryan & Co. will continue to assist in the appeal and will counsel with the attorneys during this process. Samuel P. Birchfield will have overall responsibility for the engagement. Supporting Mr. Birchfield will be the entire team of Ryan & Co.'s property tax professionals. In exchange for Ryan & Co.'s property tax consulting services, the Debtors will pay: (1) a $36,500 annual fee; (2) $9,250 for the eProperty Tax software annually; (3) audit fees based on the hourly rates of Ryan & Co.'s professionals: Professional Hourly Fees ------------ ----------- Principal $350 Senior Manager $300 Manager $275 Senior $225 Staff $175 Administrative $75 (4) $2,500 for physical review per location; (5) reimbursement of all travel expenses incurred in connection with the engagement; and (6) 33.3% of all tax savings, plus interest in connection with the administrative appeal. If an attorney is necessary to file an administrative appeal, Ryan & Co. will be responsible for the attorney's fees. AWI will be responsible for the cost of expert witnesses or appraisal fees, if they are necessary for the appeal. Ryan & Co. will make all reasonable efforts to resolve appeals without the need to engage third-party appraisers. If AWI and Ryan & Co. mutually agree to pursue an appeal into the judicial system of the state where the property is located, all fees for legal expenses and expert witnesses will be the AWI's responsibility. AWI does not expect Ryan & Co.'s fees and expenses relating its property tax services to exceed $25,000 a month. U.S. Trustee Objects The U.S. Trustee complains on the first engagement letter and retention motion filed by AWI stating that: (i) Armstrong World Industries, Inc., propose to pay Ryan & Company, Inc., without the necessity for filing an application seeking approval of its fees and expenses; and (ii) the employment agreement signed by Ryan & Co. and AWI includes indemnification and limitation of liability provisions that are not warranted and may be inconsistent with prior decisions of the Court. AWI Responds AWI asserts that requiring Ryan & Co. to file a fee application for payment of its fees and expenses is unnecessary and would only increase the administrative expenses related to Ryan & Co.'s retention. AWI points out that Ryan & Co. will be paid on a contingent fee basis. The Firm will only be paid following a tax refund credit, reduction or minimization in real and personal property tax assessments. Given the nature of the services and the manner in which Ryan & Co. proposes to bill AWI on its assignments, AWI wants the Firm excused from filing interim fee applications. In addition, AWI has agreed with the U.S. Trustee to include in its quarterly ordinary course professional report any fees and expenses paid to Ryan & Co. Contrary to the U.S. Trustee's claims, the Employment Agreement does not provide that Ryan & Co. will have limited liability or be impermissibly indemnified with respect to its provision of state and local tax consulting services, Mr. Jacobs asserts. The limitation of liability provided under AWI's Intellectual Property Agreement with the Firm does not impermissibly limit Ryan & Co.'s liability inconsistent with its professional obligation as a fiduciary to AWI's estate, but merely recognizes certain limitations relating to AWI's use of intellectual property, Mr. Jacobs explains. Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASARCO LLC: Wants to Assume Christensen Sampling Services Pact -------------------------------------------------------------- Effective as of March 22, 2005, ASARCO LLC and Layne Christensen are parties to a Construction and Repairs Contract, where Christensen performs drilling and sampling services in exploration drill holes at agreed-upon rates. As of Aug. 9, 2005, $103,610 was due and owing to Christensen under the Contract. C. Luckey McDowell, Esq., at Baker Botts LLP, in Dallas, Texas, relates that Christensen's services will be used in connection with the exploration drilling at the Ray Mine. Accordingly, ASARCO seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to assume the Layne Christensen Contract. If the Contract is assumed, ASARCO estimates that an additional $355,242 will be paid to Christensen under the Contract as additional work is completed. In addition, Mr. McDowell points out that the drilling rates provided for in the Contract are less than what ASARCO could now obtain on the open market. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. (ASARCO Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Court Okays Assumption of PerkinElmer Life Contracts ---------------------------------------------------------------- PerkinElmer Life and Analytical Sciences provides comprehensive maintenance services and replacement repairs to equipment at Asarco LLC's: * Mission and Ray mine complexes in Arizona; * Specialty-chemicals plant in Denver, Colorado; * Copper refinery and precious-metals plant in Amarillo, Texas. The equipment manufactured, supplied and maintained by PerkinElmer constitutes very specialized laboratory equipment needed in the operation of ASARCO' business. At the Amarillo and Denver facilities, the instrumentation serviced by PerkinElmer allows ASARCO to maintain its quality management system under the standards set by the International Organization for Standardization. Therefore, the services provided by PerkinElmer are critical to ASARCO's ability to meet the quality standards required by its customers, James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas, contends. Due to specialized nature of the equipment, it is not feasible to have it serviced or repaired by other vendors, Mr. Prince says. Failure to maintain the equipment will substantially interfere with ASARCO's ability to conduct business and will impair its efforts to reorganize. Accordingly, ASARCO sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to: (a) assume its various contracts with PerkinElmer Life; and (b) pay $26,833 as cure for various outstanding prepetition obligations. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. (ASARCO Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants SRK Consulting to Make Production Analysis ------------------------------------------------------------ ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ SRK Consulting (U.S.), Inc. as its consultant to conduct an analysis of production and cost projections at the various mines, smelters and refineries. Pursuant to a Professional Services Agreement with ASARCO, SRK Consulting will conduct a thorough review of ASARCO's production and cost projections. The review will be divided in two phases: (a) Phase I will include technical audits of the ore reserves and mine plans for Mission, Ray and Silver Bell as well as production audits of these mines. (b) Phase II will include a review of the capital and operating cost assumptions associated with the production schedules from Phase I for the mines, the smelter facility at Hayden and the refinery at Amarillo. James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas, tells the Court that the technical audit is expected to identify opportunities for operational improvement. The analysis will allow ASARCO to better understand and evaluate its business model and strategies going forward, which will, in turn, constitute an essential part of the Debtors' successful reorganization. ASARCO will pay SRK Consulting $54,000 retainer, which will be paid before the commencement of any work. ASARCO will also pay SRK Consulting in its customary hourly rates ranging from $65 to $250 per hour, and reimburse actual costs and expenses SRK Consulting will incur in connection with the preparation of the Production and Cost Projections Analysis. To reduce administrative expenses, ASARCO seeks the Court's permission to pay the invoices in the ordinary course. The credit balance from the retainer will be applied to the final invoice, with any excess retainer to be returned to ASARCO. SRK Consulting estimates that Phase I services will cost $100,964 and Phase II services will cost $35,386. ASARCO is not liable for any fees or charges in excess of $136,350. Robert W. Klumpp, treasurer and principal of SRK Consulting, assures the Court that the firm does not represent any interest adverse to ASARCO and that it is a "disinterested person" as the term defined in Section 101(14) of the Bankruptcy Code. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors,it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. (ASARCO Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASSET BACKED: Fitch Rates $20.1 Million Certificates at Low-Bs -------------------------------------------------------------- Asset Backed Securities Corporation Home Equity Loan Trust's mortgage pass-through certificates, series AEG 2006-HE1, are rated by Fitch Ratings as: * $841,792,000 classes A-1 - A-4 'AAA' * $43,522,000 class M-1 'AA+' * $40,216,000 class M-2 'AA' * $28,096,000 class M-3 'AA-' * $19,282,000 class M-4 'A+' * $19,282,000 class M-5 'A' * $17,078,000 class M-6 'A-' * $18,180,000 class M-7 'BBB+' * $13,222,000 class M-8 'BBB' * $12,120,000 class M-9 'BBB-' * $12,120,000 class M-10 'BB+' * $8,264,000 class M-11 'BB' The 'AAA' rating on the senior certificates reflects the 23.60% total credit enhancement provided by the: * 3.95% class M-1; * 3.65% class M-2; * 2.55% class M-3; * 1.75% class M-4; * 1.75% class M-5; * 1.55% class M-6; * 1.65% class M-7; * 1.20% class M-8; * 1.10% class M-9; * 1.10% class M-10; * 0.75% class M-11; * 0.95% class M-12 (not rated by Fitch); and * 1.65% initial overcollateralization. All the certificates also benefit from monthly excess cash flow to absorb losses. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the integrity of the transaction's legal structure, as well as the primary servicing capabilities of Select Portfolio Servicing, Inc. U.S. Bank National Association will act as trustee. The collateral pool consists of first and second lien, fully amortizing and balloon, fixed-rate and adjustable-rate mortgage loans. As of the cut-off date (Jan. 1, 2006) the mortgage loans had an aggregate balance of $1.1 billion. First lien mortgage loans represent approximately 94.92% of the collateral pool with the remainder second lien. The mortgage loans had a weighted average loan rate of 7.814%, weighted average remaining term of 355 months, and an average outstanding principal balance of $146,851. The mortgage pool also had a weighted average Fair, Isaac & Co score of 616 and nearly 32.24% of the mortgage loans had a loan- to-value ratio at origination in excess of 80%. Single Family properties account for approximately 74.96% of the mortgage pool, planned unit developments 12.10%, and condos 5.01%. The loans are primarily located in: * California (13.92%); * Florida (11.90%); and * New York (11.09%). ATA AIRLINES: NatTel Appeals Chapter 11 Plan Confirmation Order --------------------------------------------------------------- NatTel, LLC, took an appeal from Judge Basil H. Lorch's order: (1) confirming the Plan of Reorganization filed by Reorganizing ATA Holdings Corp., ATA Airlines, Inc., ATA Leisure Corp., and ATA Cargo, Inc., and (2) denying NatTel's requests for: -- the appointment of an examiner; and -- a stay of the Confirmation Order pending appeal, to U.S. District Court for the Southern District of Indiana. NatTel wants the District Court to review the U.S. Bankruptcy Court for the Southern District of Indiana's decision. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Files Supplements to 1st Amended Reorganization Plan ------------------------------------------------------------------ ATA Airlines, Inc., and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of Indiana copies of: -- the Nonexclusive List of Retained Actions and Nonexclusive List of Avoidance Actions, which contains changes to the list to reflect: (1) the addition of Michelle Gulley, Stephen Harding, and Key Equipment Finance; and (2) the removal of Goodrich Wheel and Brake, Sprint, and Sprint PCS. A full-text copy of the Nonexclusive List of Retained Actions and Nonexclusive List of Avoidance Actions is available for free at: http://bankrupt.com/misc/ata_retained_avoidance_actions.pdf -- the Reorganizing Debtors' Rejected Contracts as of Jan. 27, 2006, a full-text copy of which is available for free at: http://bankrupt.com/misc/ata_rejected_contracts.pdf The Reorganizing Debtors provided notice of corrections to their Rejected Contracts, and requested that three Contracts should be stricken from the List: * Contract Numbers: I.2.133 (Bosfuel) * I.2.589 (City and County of Denver) * I.2.591 (City and County of Denver) -- the Reorganizing Debtors' Assumed Contracts as of Jan. 27, 2006, a full-text copy of the Assumed Contracts is available for free at: http://bankrupt.com/misc/ata_assumed_contracts.pdf Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) AUCTION MILLS: Lacks Sufficient Funding to Conduct Operations ------------------------------------------------------------- Auction Mills, Inc. (Pink Sheets:AUML) reported the company faces significant liquidity problems and does not have sufficient funds to continue conducting operations. Auction Mills currently has a working capital deficiency. In the event that Auction Mills does not obtain adequate financing to complete its Plan of Operations or if the Company does not adequately implement an alternative plan of operations that enables them to conduct operations without having received adequate financing, the Company may have to liquidate its business and undertake any or all of these actions: -- sell or dispose of its assets, if any; -- pay liabilities in order of priority, if there is available cash to pay such liabilities; -- if any cash remains after the Company satisfies amounts due to creditors, distribute any remaining cash to the Company's shareholders in an amount equal to the net market value of net assets; -- file a Certificate of Dissolution with the State of Texas to dissolve its corporation and close its business; -- make the appropriate filings with the Securities and Exchange Commission so that Auction Mills will no longer be required to file periodic and other required reports with the Securities and Exchange Commission, if, in fact, the Company is a reporting company at that time; and -- make the appropriate filings with the National Association of Security Dealers to effect a delisting of the Company's common stock, if, in fact, its common stock is trading on the Over-the-Counter Bulletin Board at that time. Based upon the Company's current assets, Auction Mills says it will not have the ability to distribute any cash to its shareholders. If the Company has any liabilities that it's unable to satisfy and the company qualifies for protection under the U.S. Bankruptcy Code, the Company may voluntarily file for reorganization under Chapter 11 or liquidation under Chapter 7. The Company's creditors may also file a Chapter 7 or Chapter 11 bankruptcy action against Auction Mills. If the Company's creditors or the Company file for Chapter 7 or Chapter 11 bankruptcy, the creditors will take priority over the shareholders. If the Company fails to file for bankruptcy under Chapter 7 or Chapter 11 and the Company have creditors, creditors may institute proceedings against Auction Mills seeking forfeiture of any assets. The Company says it does not know and cannot determine which, if any, of these actions it will be forced to take. If any of these foregoing events occur, investors could lose their entire investment in the Company's shares. Auction Mills asks that any customer with an outstanding refund request please send updated mailing information along with a current phone number to auctionmillstexas@yahoo.com, as Auction Mills no longer has access to its databases. To ensure proper delivery of such refunds, please include all proper and updated information as soon as possible. Headquartered in Dallas, Texas, Auction Mills, Inc. provides eBay auction services to consumers through locations across the U.S. The Company's auctioneers provide services such as photo taking, auction listing, payment processing, packing, and shipping. BLUE BEAR: Can Obtain $310,000 DIP Loan From Mr. & Mrs. Clayton --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Blue Bear Funding, LLC, to obtain a $310,000 postpetition loan from Robert D. Clayton and Joyce A. Clayton. As reported in the Troubled Company Reporter on Jan. 19, 2006, the Claytons agreed to lend the Debtor up to $310,000 on a secured basis. The loan carries an 8.5% annual interest rate and will mature one-year from the date the note evidencing the loan is executed. Use of the Clayton loan proceeds is restricted to the purchase of client account receivables that the Debtor factors. The Bankruptcy Court directs the Debtor to segregate the proceeds of the loans, as well as any client accounts purchased using the loan proceeds, in a separate bank. To secure repayment of the loan, the Claytons are granted a valid and perfected first priority lien on all client accounts acquired through the postpetition loan. The Debtor is also required to provide the Claytons with a weekly: -- collection report; -- funding requirement report; and -- comparative report on projected budget line items versus actual expenditures. Headquartered in Windsor, Colorado, Blue Bear Funding, LLC -- http://www.bluebearfunding.com/-- provides invoice factoring services. The Company filed for chapter 11 protection on Aug. 22, 2005 (Bankr. D. Colo. Case No. 05-31300). Alice A. White, Esq., and Douglas W. Jessop, Esq., at Jessop & Company, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated it had $1 million to $10 million in assets and liabilities of $10 million to $50 million. BOWNE & CO: Moody's Affirms B2 Rating on Conv. Sub. Debentures -------------------------------------------------------------- Moody's Investors Service has affirmed all ratings of Bowne & Co., Inc., and changed the outlook to positive from stable. Ratings affirmed: * $75 million Convertible Subordinated Debentures due 2033 -- B2 * Corporate Family rating -- Ba3 The rating outlook is changed to positive from stable. The change in the outlook reflects the continuing improvement of the company's liquidity and leverage profile, which have largely resulted from the sale of its outsourcing and globalization businesses, and a steady performance in Bowne's non-transactional print business. Bowne's rating reflects its relatively strong cash position, which Moody's estimates to be in excess of its total debt; the steady performance of Bowne's top line, which has been largely driven by its non-transactional financial print business; and the absence of any near-term debt maturities. However, the rating is constrained by the formidable competition, which Bowne faces in its financial print business from rivals including R.R. Donnelley, Merrill Corporation and others, and the vulnerability of this business to volatility within the capital markets sector. Since late 2004, Bowne has sold two major business units for approximately $325 million in direct and indirect cash proceeds. Bowne used approximately $70 million of these proceeds to redeem its senior unsecured notes, $30 million to acquire the Marketing and Business Communications division of Vestcom International, and approximately $72 million, as of Dec. 15, 2005, to fund its stock repurchase program. Bowne's board has subsequently approved an increase of $75 million to its previously announced share repurchase program. In addition, Bowne has used cash proceeds to fund free cash flow losses, which totaled approximately $25 million for the nine months ended Sept. 30, 2005. The sale of Bowne's Global Solutions and Business Solutions businesses has reduced the diversification of Bowne's product offerings and increased the company's exposure to the volatile transactional financial print segment. The financial print business, which has suffered from a recent softening of customer spending, also faces regulatory proposals designed to reduce the flow of printed documents to shareholders and investors. The company's unrated $150 million senior secured credit facility was undrawn at the end of Sept. 2005, with the result that Bowne's $75 million convertible notes effectively represent the company's only debt obligation, besides approximately $10 million in underfunded pension obligations. In Moody's opinion, Bowne's convertible notes, which are not callable until 2008, represent an attractive source of low cost funding. Moody's is concerned that the recent acquisition of MBC and the expansion in Bowne's share repurchase program could signal further event risk and potential cash depletion. Nevertheless, the positive outlook recognizes the ability of Bowne's relatively strong liquidity position to support a measure of further event risk. According to Moody's calculations, and assuming that Bowne repurchased additional shares up to the full amount of its expanded share repurchase program, its pro-forma liquidity position at the end of Sept. 2005 would have stood at approximately $245 million, including cash of approximately $95 million and undrawn availability under its senior unsecured credit facility of $150 million. Ratings could be upgraded if Bowne is able to revitalize its business to generate positive free cash flow or if management take measures to ensure no further depletion of its cash position. Ratings could be downgraded if management announces a further expansion of its share repurchase program, further acquisitions or other events which place unexpected calls on liquidity. Bowne & Co., Inc., a global provider of document management solutions, is headquartered in New York City. The company reported pro forma sales of $687 million for the LTM period ended Sept. 30, 2005. CELERO TECH: U.S. Trustee Wants Ch. 11 Case Dismissed or Converted ------------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3 asks the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to dismiss Celero Technologies, Inc.'s chapter 11 cases or convert it to a chapter 7 liquidation proceeding. Ms. Stapleton reminds the Court that the Debtor's case has been pending for over five months, and the Debtor has failed to file a disclosure statement and plan of reorganization. As reported in the Troubled Company Reporter on Jan. 11, 2006, the Company wants the Court to extend its exclusive right to file a chapter 11 plan until Feb. 20, 2006. The Debtor also wants its exclusive solicitation period extended until Apr. 20, 2006. The Debtor tells the Court that it has been active and diligent in resolving important issues affecting its reorganization. Ms. Stapleton complains that although the Debtor has generally remained current with the filing of its operating reports, many of those reports are incomplete and the Debtor has failed to amend the reports pursuant to repeated requests by the U. S. Trustee. The Debtor has also failed, Ms. Stapleton says, to remain current with its postpetition financial obligations including, but not necessarily limited to the fees due and owing pursuant to Section 1930(a)(6) of the Judiciary Procedures Code. To date, the Debtor has failed to remit $2,750 in fees for the fourth quarter of 2005. Ms. Stapleton argues that cause exists for the dismissal or conversion of the Debtor's case pursuant to Section 1112(b) of the Bankruptcy Code. Headquartered in Philadelphia, Pennsylvania, Celero Technologies, Inc., filed for chapter 11 protection on August 22, 2005 (Bankr. E.D. Pa. Case No. 05-31273). Amy E. Vulpio, Esq., and Robert A. Kargen, Esq., at White and Williams LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $500,000 to $1 million in assets and $10 million to $50 million in liabilities. CENTRAL GARDEN: S&P Rates Proposed $650 Mil. Loan Facility at BB ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan rating and '1' recovery rating to Central Garden & Pet Co.'s proposed $650 million bank facility, indicating the expectation of full (100%) recovery of principal in the event of a payment default. The ratings are based on preliminary terms and are subject to review upon final documentation. Net proceeds from the credit facility will be used to: * finance the acquisition of equine and pet health care product manufacturer and marketer, Farnam Companies Inc., and * refinance the company's existing $300 million credit facility. At the same time, Standard & Poor's lowered its ratings on the Walnut Creek, California-based lawn and garden and pet products supplier, including its corporate credit rating to 'BB-' from 'BB'. The ratings were removed from CreditWatch, where they were placed on Jan. 20, 2006, with negative implications, following Central Garden's announcement of its plans to acquire Farnam for about $287 million, plus $4 million for the purchase of related real property. Ratings on Central Garden's existing $300 million credit facility will be withdrawn upon completion of the refinancing. The outlook is stable. Pro forma for the new financing, Central Garden will have about $600 million of total debt outstanding. The downgrade reflects the company's significantly weaker credit profile following the debt-financed acquisition of Farnam. Subject to regulatory approval, the transaction is targeted to close in the second fiscal quarter ending March 2006. Standard & Poor's expects Central Garden to maintain credit measures on average above those for its rating, given the seasonality of its business, growth strategy, and low margins relative to its peers. "We remain concerned about the company's aggressive debt-financed acquisition strategy. Inability to reduce debt leverage and improve its financial profile could lead to a negative outlook," said Standard & Poor's credit analyst Allison Sullivan. COMDIAL CORP: Court Okays Termination of Employee's Pension Plan ---------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware approved Comdial Corporation, nka CMDL Corporation, and its debtor-affiliates' request to initiate a distress termination of the Comdial Corporation Employees Retirement Plan. Judge Walrath also approved a Stipulation between the Debtors and the Pension Benefit Guaranty Corporation regarding the termination of the pension plan. As reported in the Troubled Company Reporter on Jan. 11, 2006, the Debtors wanted to terminate the pension plan because they have ceased all business operations following the sale of substantially all of their assets to Vertical Communications. The Comdial pension plan covers employees hired prior to September 2000. The pension plan was frozen in September 2000 and the Debtor has not made any plan contributions since that time. In the first quarter of 2005, the Debtor's actuary at New England Financial reported that the pension plan had an underfunded, unrecognized actuarial loss of $9,625,000 at Dec. 31, 2004. As of June 30, 2005, the pension plan had $20,006,372 in assets and 1,150 participants. Headquartered in Sarasota, Florida, Comdial Corporation, nka CMDL Corporation -- http://www.comdial.com/-- and its affiliates develop and market sophisticated communications products and advanced phone systems for small and medium-sized enterprises. The Company and its debtor-affiliates filed for chapter 11 protection on May 26, 2005 (Bankr. D. Del. Case No. 05-11492). Jason M. Madron, Esq., and John Henry Knight, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $30,379,000 and total debts of $35,420,000. DATICON INC: Committee Wants to Hire Reid and Riege as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Daticon, Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the District of Connecticut in New Haven for permission to employ Reid and Riege, P.C., as its counsel. Reid and Riege will: 1) advise the Committee with respect to its powers and duties in the Debtor's chapter 11 case; 2) review and analyze all pleadings, documents and all aspects related to the proposed sale of the Debtor's assets to assist the Committee in determining the highest and best price for the Debtor's assets; 3) assist the Committee in investigating the acts, conduct, assets, liabilities and financial conditions of the Debtor, the operation of its business and any other matters related to the Debtor's chapter 11 case; 4) review and analyze all applications, motions, orders, statements of operations and schedules filed with the Court by the Debtor or third parties and advise the Committee about the propriety of those filings; 5) assist the Committee in the negotiation and formulation of a chapter 11 plan and a proposed asset sale of the Debtor and confer with the accountants and other professionals retained by the Committee in relation to that plan and asset sale; 6) assist the Committee in seeking the appointment of a chapter 11 trustee or examiner or conversion of the Debtor's chapter 11 case to a chapter 7 liquidation if those actions become necessary; and 7) render all other necessary legal services to the Committee in relation to the Debtor's chapter 11 case. Eric Henzy, Esq., a member of Reid and Riege, is one of the lead attorneys of the Firm performing services to the Committee. Mr. Henzy reports Reid and Riege's professionals bill: Designation Hourly Rate ----------- ----------- Partners $300 - $400 Senior Counsel $275 - $325 Associates $200 - $270 Legal Assistants $100 - $170 Reid and Riege assures the Court that it does not represent any interest materially adverse to the Committee, the Debtor or its estate. 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. As of Dec. 31, 2005, the Debtor listed $9,089,033 in assets and $18,997,028 in debts. DELTA AIR: Gets Court Nod to Use Disability Fund in Reorganization ------------------------------------------------------------------ According to a U.S. Bankruptcy judge's decree, as long as Delta Air Lines Inc. makes payments to retirees and other beneficiaries, the Company can continue to use funds allocated for a disability and survivors trust to meet other financial responsibilities as it reorganizes under Chapter 11. Michael Martinez, writing for the Associated Press, reports that the court-appointed committee representing retiree interests had sought to force Delta to seek the retirees' approval before using funds from the disability and survivors trust, stating that removing the funds, which Delta seeks to continue doing, posed an inherent risk to retirees' benefits. Dean M. Gloster, Esq., at Farella Braun + Martel LLP, in San Francisco, representing the retiree committee, said Delta had already used $83 million of the trust's money for severance and sick leave payments prior to filing for bankruptcy last fall, and said the embattled airline wanted to use more of the trust's money to meet its obligations going forward. Delta attorney Marshall S. Huebner, Esq., at Davis Polk & Wardwell in New York, however, said the committee could only intervene if payments to beneficiaries were affected. While there was some question as to the fund's long-term solvency, Delta said it would not cut its benefit payments. Bankruptcy Judge Adlai Hardin, in his first hearing since taking over Delta's case, agreed that the retirees' committee had no standing to control how Delta makes its payments, so long as retiree claims are paid normally. Should Delta alter its payments, then the retiree committee could return with a more suitable payments. The judge, however, noted that there was still a question of whether Delta appropriately used the trust's money prior to bankruptcy, but that legal action for any potential misuse was not in the current purview of the bankruptcy court. Judge Hardin also repeatedly noted that he had no stance on whether Delta had been using the disability and survivors money appropriately. Judge Hardin took over the case from Judge Prudence Carter Beatty, who took a medical leave last month. DOCTORS HOSPITAL: Amends Chapter 11 Plan and Disclosure Statement ----------------------------------------------------------------- Doctors Hospital 1997, L.P., delivered its first amended Chapter 11 Plan of Reorganization and an updated Disclosure Statement explaining the amended plan to the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. Treatment of Claims Pursuant to the Amended Plan, Allowed Claims under the BRS DIP Financing Facility will be paid in accordance with the subordinate rights of the Postpetition Junior Lender under the GE/BRS Intercreditor Agreement. The BRS DIP Financing Claim will accrue interest at the Prime Rate without amortization through the third anniversary of the Effective Date. The Debtor states that General Electric Capital Corporation has not agreed to this treatment of BRS claim. Allowed Priority Tax Claims will receive the claim amount with interest at a rate of 5% per annum, in equal annual Cash payments on each anniversary of the Effective Date, until the second anniversary of the Effective Date. Class Three Allowed Other Secured Claims will receive, at the Debtor's option, either: (i) the claim amount with interest at a rate of 5% per annum, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the Effective Date; or (ii) reconveyance of its Collateral as is. Allowed Other Secured Claims may be prepaid in whole or in part at any time without penalty. A full-text copy of the Debtor's first amended plan and disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060207202438 Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital located in Tidwell, Houston, and a 152-bed hospital located in West Parker Road, Houston. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291). James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $41,643,252 and total debts of $66,306,939. DOCTORS HOSPITAL: DVI Complains Disclosure Statement is Inadequate ------------------------------------------------------------------ DVI Financial Services, Inc., complains that the Disclosure Statement explaining the First Amended Plan filed by Doctors Hospital 1997 LP, contains only the barest mention of DVI and the DVI Collateral and is inadequate. There is no description of the DVI Collateral, no information about how the Debtor values the DVI Collateral, and no information as to what the Debtor considers to be the amount of DVI's secured claim, John Mayer, Esq., at Ross, Banks, May, Cron & Cavin, P.C., in Houston, Texas, observes. DVI asserts that it holds: a) a first priority perfected security interest in medical equipment and furniture; and b) a written subordination agreement from GE HFS Holdings, formerly known as Heller Financial Services, Inc., of its blanket security interest with respect to the DVI Collateral. According to Mr. Mayer, the Debtor employed Wellspring Valuation Ltd., to appraise its property and equipment. The Debtor ought to have a basis for evaluating secured claims for treatment in a plan and, Mr. Mayer says, that information should appear in the Disclosure Statement. Mr. Mayer contends that the Disclosure Statement describes a Plan that cannot be confirmed. "The Plan is not confirmable because it fails to give to DVI and the holders of other secured claims the indubitable equivalent of their collateral," Mr. Mayer explains. In its Amended Disclosure Statement, the Debtor confirmed that as of the Petition Date, it owed DVI $1,514,057. In addition, the Debtor estimated the current value of the DVI Collateral to be $135,000, however, the Debtor believes that DVI's interest in the DVI Blanket Collateral is of little or no value. Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital located in Tidwell, Houston, and a 152-bed hospital located in West Parker Road, Houston. The Company filed for chapter 11 protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291). James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $41,643,252 and total debts of $66,306,939. ESSELTE GROUP: Sr. Notes Redeemed & Moody's Withdraws Ratings ------------------------------------------------------------- Moody's Investors Service has withdrawn the debt ratings of Esselte Group Holdings AB following the announcement that the company has redeemed all of its senior notes with proceeds from the sale of its DYMO division to Newell Rubbermaid. This rating was withdrawn: * Corporate family rating of B2. Esselte, incorporated in Sweden, with executive offices in Stamford, Connecticut, is a leading manufacturer of office supplies and other creative products. The company's brands include Esselte, Leitz, Pendaflex, Oxford and Xyron. ERA AVIATION: Offshore Wants to Investigate CapitalSource --------------------------------------------------------- Offshore Aviation, Inc., SEACOR Holdings Inc., Era Helicopters LLC and ERA FBO LLC want to recover approximately $1.5 million in customer payments mistakenly sent to Era Aviation, Inc. To facilitate the recovery, Offshore and its affiliates ask permission from the U.S. Bankruptcy Court for the District of Alaska to examine CapitalSource Finance LLC pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. Lockbox Confusion Offshore purchased all of the outstanding shares of Era Aviation, Inc., from Rowan Companies, Inc., in December 2004. Era Aviation's business at the time of the sale included: -- a regional airline service; -- a helicopter service; and -- a fixed base operations business. In May 2005, Offshore sold the regional airline service to the Debtor and Era Aviation Investment Group. CapitalSource financed the Debtor's purchase of the airline service business through two terms loans and a revolving loan. Prior to the sale of the airline service business, Offshore notified its customers that payments related to its remaining helicopter service and fixed-base operations businesses must be sent to a new lockbox in Philadelphia, Pennsylvania. Despite the notice, some customers continued to inadvertently remit their payments to the old lockbox, which, after the sale, was controlled by the Debtor. On Nov. 1, 2005, after acknowledging Offshore's right to approximately $1.5 million in customer payments mistakenly sent to its lockbox, the Debtor informed Offshore that it could not return the monies because they had been "swept out" of the account by CapitalSource. Offshore subsequently filed a lawsuit against the Debtor in the Superior Court for the State of Washington for alleged conversion and breach of contract. The lawsuit was stayed when the Debtor filed for bankruptcy protection. Rule 2004 Probe Through a Rule 2004 examination, Offshore wants to quickly determine what happened to their the customer payments and what role, if any, CapitalSource played in its loss. Michael R. Mills, Esq., at Dorsey & Whitney LLP, tells the Bankruptcy Court that a finding that the Debtor or CapitalSource improperly converted Offshore's monies would affect the "liabilities and financial condition of the debtor" and would "affect the administration of the debtor's estate." Offshore wants to depose four CapitalSource officers: * Michael Ball -- the CapitalSource auditor who examined the Debtor's books and records and who became aware that the Debtor had received but not returned Offshore's customer receipts. * Steven Muscles -- the CapitalSource banker who had principal responsibility for the CapitalSource loan to the Debtor, and presumably the establishment of separate lock box mechanisms to ensure proper division of post-closing revenues. * Jim Peterson and Jennifer Rancilio -- CapitalSource representatives that were on the old Era Aviation board. Offshore also wants CapitalSource to produce documents relevant to its investigation by Feb. 20, 2006. Headquartered in Anchorage, Alaska, Era Aviation, Inc. -- http://www.flyera.com/-- provides air cargo and package express services. The Debtor filed for chapter 11 protection on Dec. 28, 2005. Cabot C. Christianson, Esq., at Christianson & Spraker, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. EQUATOR CORP: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Equator Corp. 2801 West Sam Houston Parkway North Houston, Texas 77043-1611 Bankruptcy Case No.: 06-30414 Type of Business: The Debtor manufactures household laundry equipment. See http://www.equatoronline.com/ Chapter 11 Petition Date: February 5, 2006 Court: Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Jesse Blanco, Jr., Esq. Law Office of Jesse Blanco, Jr. P.O. Box 680875 San Antonio, Texas 78268 Tel: (210) 509-6925 Fax: (210) 509-6903 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. EXIDE TECHNOLOGIES: Has Until February 27 to Object to Claims ------------------------------------------------------------- Reorganized Exide Technologies and its reorganized debtor- affiliates sought and obtained the U.S. Bankruptcy Court for the District of Delaware's approval to extend their claims objection deadline through and including February 27, 2006. James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, relates that the Reorganized Debtors have made substantial progress in resolving numerous claims filed in their Chapter 11 cases. Specifically, the Reorganized Debtors have: * filed 26 omnibus claim objections, two individual objections to claims, and consensually resolved numerous other claims; * reviewed, reconciled and resolved about 3,600 claims, reducing the total amount of outstanding claims by more than $1,800,000,000; and * completed seven quarterly distributions to creditors under the confirmed Plan of Reorganization, consisting of distributions on 2,000 claims totaling $1,500,000. However, the Reorganized Debtors need more time to review and resolve the 1,500 remaining claims, Mr. O'Neill tells Judge Carey. For this reason, the Reorganized Debtors ask the Court to further extend their Claims Objection Deadline through and including August 31, 2006, without prejudice to their rights to seek additional extensions. Mr. O'Neill explains that the extension will allow the Reorganized Debtors more time to continue evaluating the claims filed against the estate, prepare and file additional objections and, where possible, consensually resolve the claims. Court Defers Entry of Final Decree Since the Reorganized Debtors require additional time to complete the claims reconciliation process and resolve other outstanding post-confirmation issues, Judge Carey -- at the Reorganized Debtors' behest -- defers entry of a final decree closing the Chapter 11 case pursuant to Rule 5009-1 of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware. "The entry of a final decree closing this chapter 11 case shall be deferred until such time as the Court enters a final decree closing this case," Judge Carey says. Headquartered in Princeton, New Jersey, Exide Technologies -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'CCC' from 'CCC+' because of Exide's continued poor operating performance and rising debt leverage. The senior secured rating on Exide's recently enlarged first-lien credit facility was lowered to 'CCC' from 'B-', and the recovery rating was lowered to '2' from '1', because of the lower corporate credit rating and the weaker asset protection for the enlarged facility. The senior secured rating and the recovery rating reflect Standard & Poor's expectation that lenders will realize a substantial recovery of principal (80%-100%) in the event of default or bankruptcy. The senior secured rating on Exide's second-lien notes was lowered to 'CC' from 'CCC', reflecting the lower corporate credit rating and an increase in priority debt. FARMLAND IND: Trustee Wants to Sell United Stake to Bay State ------------------------------------------------------------- J.P. Morgan Trust Company, N.A., in its capacity as Liquidating Trustee of FI Liquidating Trust appointed in Farmland Industries, Inc., and its debtor-affiliates' chapter 11 cases, asks the U.S. Bankruptcy Court for the Western District of Missouri for permission to sell all of the Debtors' right, title and one-third interest in United Processors, LLC, to Bay State Milling Company, free and clear of liens, claims and interest. The Liquidating Trustee tells the Court that Bay State has offered to purchase the United Processors stake for $150,000. The Liquidating Trustee says that it previously marketed the United stake to potential buyers but no one was interested. The Liquidating Trustee believes that the purchase price for the United stake is fair and reasonable, and the proposed sale is in the best interests of the Debtors' estate, creditors and other parties in interest. The Liquidating Trustee relates that the proceeds of the sale will be distributed in accordance with the Plan. The Liquidating Trustee argues that the sale of the United stake free and clear of all liens, encumbrances, claims and interests is warranted because: (i) the purchase price will exceed all other liens, claims and interests that could be asserted against the assets; (ii) any other holders of liens, claims or interests in the assets could be compelled to accept a money judgment for their interest in the assets; and (iii) any alleged right of first refusal or similar anti- alienation right is an interest that is the subject of a bona fide dispute. About United Processors LLC United Processors LLC evaluates, builds, and acquires businesses and operations with an emphasis in the flour milling industry. United Processor is currently owned in equal third interests by Farmland Industries, Inc., Bay State Milling Company, and Cenex Harvest States Cooperatives. United Processor's only holding is a 66.42% interest in Rocky Mountain Milling LLC, which operates a flour mill in Colorado. About Bay State Milling Company Bay State Milling Company -- http://www.baystatemilling.com/-- operates flour mills in the Bay State and other states. The company provides U.S. wholesale and retail bakers, as well as bakery and food service distributors, will a variety of flour products. It mills about 7 million pounds of flour each day and specializes in rye, durum, and whole wheat flours. Subsidiary Rocky Mountain Milling produces organic wheat flours. The company is owned by the Rothwell family and was formed by Bernard Rothwell in 1899. Bay State Milling operates facilities in the eastern, midwestern, and southwestern US. About Farmland Industries, Inc. Farmland Industries, Inc., was one of the largest agricultural cooperatives in North America with about 600,000 members. The firm operates in three principal business segments: fertilizer production; pork processing, packing and marketing; and beef processing, packing and marketing. The company, along with its affiliates, filed for chapter 11 protection (Bankr. W.D. Mo. Case No. 02-50557) on May 31, 2002 before the Honorable Jerry W. Venters. The Debtors' Counsel is Laurence M. Frazen, Esq. of Bryan Cave LLP. When the Debtors filed for chapter 11 protection, they listed total assets of $2.7 billion and total debts of $1.9 billion. Pursuant to the Second Amended Joint Plan of Reorganization filed by Farmland Industries, Inc. and its debtor- affiliates, the court declared May 1, 2004, as the Effective Date of the Plan. FLOWERS FOODS: Earns $11 Million in Fourth Quarter Ended Dec. 31 ---------------------------------------------------------------- Flowers Foods (NYSE: FLO) reported sales of $396.5 million for its 12-week fourth quarter ended on Dec. 31, 2005, a 9.7% increase over the $361.4 million reported for the fourth quarter last year. Sales for fiscal 2005 increased 10.6% to $1.716 billion. Net income for the fourth quarter was $11.7 million compared to $7.5 million for the fourth quarter of 2004, a 57% increase. Net income for fiscal 2005 was $61.2 million, a 21% increase over the prior year. "The operating strength of Flowers Foods is evident in our 2005 results," George E. Deese, chairman, chief executive officer and president, said. "Through challenges brought on by Hurricane Katrina and opportunities presented by changes in the industry, our team continued to perform well in the marketplace. It is particularly gratifying to report strong earnings growth in a year when the company suffered the temporary loss of a bakery, the disruption of our Gulf Coast markets, and the high costs that followed the hurricane. As we have previously discussed, new production capacity that we expect to be operational in the second quarter of 2006 will allow us to produce closer to our growth markets, and thereby require less product transportation, which we believe should enable us to achieve our 2006 guidance. Until the new capacity is online, we will incur incremental transportation costs to capture the sales opportunities in the marketplace." At Dec. 31, 2005, assets totaled $844 million and liabilities totaled $332 million, resulting in a stockholders' equity of $512 million. Headquartered in Thomasville, Georgia, Flowers Foods, Inc. -- http://www.flowersfoods.com/-- is one of the nation's leading producers and marketers of packaged bakery foods for retail and foodservice customers. Flowers operates 35 bakeries that produce a wide range of bakery products marketed throughout the Southeastern, Southwestern, and mid-Atlantic states via an extensive direct-store-delivery network and nationwide through other delivery systems. Among the company's top brands are Nature's Own, Cobblestone Mill, Sunbeam, BlueBird, and Mrs. Freshley's. * * * As reported in the Troubled Company Reporter on Jan. 24, 2006, Moody's Investors Service placed the Ba2 corporate family rating for Flowers Foods, Inc. under review for possible upgrade. Moody's says the review is prompted by: * Flowers' continuing solid operating performance; * its strong organic growth; and * its conservative capital structure. FLOWERS FOODS: Inks Merger Deal to Acquire Derst Baking ------------------------------------------------------- Flowers Foods, Inc. (NYSE: FLO) reached an agreement to acquire Derst Baking Company, headquartered in Savannah, Georgia. The transaction, expected to be complete within a few weeks, will be accomplished as a merger involving the exchange of Flowers Foods common stock for Derst Baking Company stock. Derst Baking Company, which operates profitably on annualized sales of approximately $50 million, is a family-owned business with one bakery in Savannah. The company employs 475 people and operates 165 direct-store-delivery routes that serve customers and consumers in South Carolina, eastern Georgia, and north Florida with fresh breads and rolls under the Captain John Derst's Old Fashioned Bread and Sunbeam brands. "The Derst family name has been a part of the U.S. bakery business for 139 years and we are fortunate to have this fine organization merge with Flowers Foods," George E. Deese, Flowers Foods' chairman of the board, chief executive officer and president said. "The merger will provide more efficient service as well as new products and brands throughout the territories served, which will benefit Flowers Foods and Derst Baking as well as our customers." Deese noted Derst Baking Company will operate under its current name as a part of Flowers Foods Bakeries Group. Headquartered in Thomasville, Georgia, Flowers Foods, Inc. -- http://www.flowersfoods.com/-- is one of the nation's leading producers and marketers of packaged bakery foods for retail and foodservice customers. Flowers operates 35 bakeries that produce a wide range of bakery products marketed throughout the Southeastern, Southwestern, and mid-Atlantic states via an extensive direct-store-delivery network and nationwide through other delivery systems. Among the company's top brands are Nature's Own, Cobblestone Mill, Sunbeam, BlueBird, and Mrs. Freshley's. * * * As reported in the Troubled Company Reporter on Jan. 24, 2006, Moody's Investors Service placed the Ba2 corporate family rating for Flowers Foods, Inc. under review for possible upgrade. Moody's says the review is prompted by: * Flowers' continuing solid operating performance; * its strong organic growth; and * its conservative capital structure. GLOBO COMUNICACAO: Moody's Lifts Foreign Currency Rating to B1 -------------------------------------------------------------- Moody's Investors Service upgraded the foreign currency corporate family rating of Globo Comunicacao e Participacoes S.A., to B1 from Caa3. The rating action primarily reflects the successful completion of Globo's debt restructuring program, leading to a significantly more manageable debt amortization schedule. Moreover, the upgrade to B1 reflects Globo's improved corporate structure, as a result of the merger of TV Globo Ltda., and divestiture of some weaker performing businesses. The action also reflects much improved credit metrics over the past two years as Globo benefits from the more favorable economic and advertising environment in Brazil. The outlook is stable. Among other factors, Globo's B1 rating reflects a highly cyclical business that is susceptible to the volatile Brazilian economic environment; the fact that the majority of its restructured debt and a small part of its programming costs remain denominated in foreign currency; the company's high fixed cost base stemming from its high quality programming strategy; as well as its limited historic performance post-restructuring. More positively, the B1 rating mainly reflects Globo's position as the dominant broadcast company in Brazil with over 55% of total audience share, a position supported by its high quality programming. The rating also reflects the company's improved liquidity and ability to meet its debt obligations following the debt restructuring, and Globo's steps over the past few years to improve its cost structure. Upgrades: Issuer: Globo Comunicacao Participacoes S.A. *Corporate Family Rating, Upgraded to B1 from Caa3 Withdrawals: Issuer: Globo Comunicacao Participacoes S.A. *Issuer Rating, Withdrawn, previously rated Ca About Globo Comunicacao Headquartered in Rio de Janeiro, Globo is Brazil's largest media group, owned by the Marinho family and formed from the merger of TV Globo Ltda., with and into Globo Comunicacoes e Participacoes S.A. in 2005. TV Globo is Brazil's leading broadcast TV network, including an internet operation and sound business, and accounts for over 85% of Globo's revenues and EBITDA. Globo has other business activities including: magazine publishing and printing, pay-TV production and programming, and interests in Brazil's leading satellite direct-to-home and cable operator. GOODYEAR TIRE: Will Release Fourth Quarter Financials on Feb. 16 ---------------------------------------------------------------- The Goodyear Tire & Rubber Company will report fourth quarter 2005 financial results before the market opens on Thursday, Feb. 16, 2006, to be followed by an investor conference call at 10 a.m. EST. The company anticipates record sales of almost $20 billion for the full year and more than $4.9 billion for the fourth quarter. It expects 2005 segment operating income to be up between 20% and 25% from 2004. Excluding the impact of hurricanes in the U.S. Gulf Coast region, fourth quarter segment operating income is expected to approximate the $238 million achieved in the prior year period. Goodyear said raw material costs increased approximately 13% for the fourth quarter, more than it had anticipated. Consistent with its plans to focus on its cash and working capital requirements, Goodyear reduced global tire inventories through production adjustments during the quarter, particularly in Europe and Latin America. "Our strong 2005 results show the impact of Goodyear's innovative new products around the world and improved marketing and give us a solid foundation for the next stage of our turnaround," said Robert J. Keegan, chairman and chief executive officer. "During the quarter, global product demand, including that for new Goodyear tires such as Assurance in North America and Ultra Grip 7 in Europe, remained strong and continued to drive a richer product mix," Mr. Keegan said. "We are working worldwide to reduce our costs and working capital needs, as well as to further improve our product and brand mix," Keegan added. "Nevertheless, the escalating cost of raw materials and currency fluctuations continue to challenge our businesses." The executives who will participate in the conference call are: -- Robert J. Keegan, chairman and chief executive officer; -- Richard J. Kramer, executive vice president and chief financial officer; and -- Darren R. Wells, senior vice president, business development and treasurer. They will review Goodyear's fourth quarter and full-year results. Prior to the commencement of the call, Goodyear will post the financial and other statistical information that will be presented on its Web site at http://investor.goodyear.com/ Shareholders, members of the media and other interested persons may access the conference call on the Web site or via telephone by calling (706) 634-5954 before 9:55 a.m. on February 16. A taped replay of the conference call will be available at 2:00 p.m. that day by calling (706) 634-4556. The call replay will also remain available on the Web site. Headquartered in Akron, Ohio The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * Goodyear's 9% Senior Notes due 2015 carry Moody's Investor Service's B3 rating, Standard & Poor's B- rating, and Fitch Ratings' CCC+ rating. HANDMAKER JEWISH: Files Plan & Disclosure Statement in Arizona -------------------------------------------------------------- Handmaker Jewish Services for the Aging unveiled to the U.S. Bankruptcy Court for the District of Arizona a Disclosure Statement explaining its Plan of Reorganization. Overview of the Plan The Plan proposes to pay all allowed administrative priority claims in full while secured creditors will be paid according to agreements reached by the Debtor and creditors. Once it emerges, the Reorganized Debtor will repay its unsecured creditors by making distributions from a portion of adjusted net revenues earned in the future. The Debtor will assume all necessary executory contracts for the continued operation of the multiple residence-retirement community complex. Plan Funding The Debtor tells the Court that the Plan will be funded using the net operating income generated by the Debtor's facility and contributions from benefactors. The existing management for the Debtor will be provided by HME, Inc., pursuant to the terms of the existing Management Service Contract, until Aug. 31, 2006. After that, the management will be as selected by the Debtor's Board of Directors. Treatment of Claims Under the plan, all administrative claims will be paid in full. The Priority Claim of the Internal Revenue Service will be paid $1,000 per month with 6% interest post confirmation until satisfied. Employee Priority Claims will be paid or honored according to the Debtor's human resource policies and in the ordinary course of business. Resident Refund Claims will be paid at the time a resident leaves the Debtor's facility. Claims of bondholders are comprised of holders of tax exempt bonds issued by the Industrial Development Authority of the County of Pima, with Wells Fargo Bank, National Association, as the successor Bond Trustee under the Bond Indenture. The bondholders' claim of $21,469,699 is secured by the Debtor's improved real property, and the equipment and machinery in the property together with monies held by the Bond Trustee for the bondholders. The plan proposes to bifurcate the Bondholders' claim under Section 506(b) of the Bankruptcy Code. The secured portion of the claim will be allowed in the amount of the value of the collateral less the: * amount of any monies paid to the Bond Trustee from Sept. 30, 2005 until the effective date; and * the amount of the reserve funds held by the Bond Trustee as of Sept. 30, 2005. The secured portion of the bondholders' claims will continue to be secured by a continuing lien on all collateral and will be paid according to the terms of the indenture together with 5.5% annual interest. The unsecured portion of the bondholders' claims will share pari passu and pro rata with other general unsecured creditors. Unsecured creditors will receive, three times a year, for three years, 100% of the net cash flow from the Debtor's operations, less reserves as the Debtor's management and its Board of Directors deem reasonably prudent. If the Bond Trustee decides to make a Section 1111(b) election, then the bondholders' claim will: (a) be secured by a continuing lien on all collateral; and (b) be paid in 360 monthly installments equal to: -- $45,000 per month for the first 120 months, -- $60,000 per month for the second 120 months, and -- $75,000 per month for the final 120 months; The payment terms for Cardinal Health's secured claim of $50,540, less any amount paid before the effective date, will be extended for six months with a corresponding reduction in the monthly payments. Citicorp Vendor Finance, Inc.'s claim of: * $21,125, which is secured by copiers and * $10,065, which is secured by printers, will be amortized over 75 months, instead of 60 months, with a corresponding reduction in the monthly payment and paid in equal monthly installments. Dell Financial Services secured claim of $6,628 will be amortized over 48 months, instead of 36 months, with a corresponding reduction in the monthly payment and paid in equal monthly installments. The $19,310 secured claim of Holmes Tuttle Ford, Inc., will be amortized over 78 months with interest at the contract rate and a corresponding reduction in the monthly principal and interest payment based upon the longer amortization period. The payment term of Medline Industries' secured claim will be extended for six months with a corresponding reduction in the monthly payment and paid in equal monthly installments. The secured claim of Pitney Bowes for postage equipment totals $6,900. The Debtor says that its contract with Pitney will be extended for six months with all other contract terms remaining the same. To compensate the secured claim of VGM Financial Services, the contract will be extended from 36 months to 48 months with all other contract terms remaining the same. The Priority Claims of Arizona Department of Economic Security will be paid in six monthly installments with interest of 6% post confirmation. Convenience Class Claims are defined as claim against the Debtor for less than $1,000, or where a creditor elects to reduce a claim to $1,000, will be paid in full in two installments: * 25% on the Effective Date, and * 75% in six months. Headquartered in Tucson, Arizona, Handmaker Jewish Services for the Aging owns and operates a multiple residence-retirement community complex facility. The Company filed for chapter 11 protection on Sept. 30, 2005 (Bankr. D. Ariz. Case No. 05-05924). Michael W. McGrath, Esq., at Mesch Clark & Rothschild, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10,384,351 in assets and $21,625,125 in debts. HASBRO INC: Earns $94.3 Million of Net Income in 2005 Fourth Qtr. ----------------------------------------------------------------- Hasbro, Inc. (NYSE: HAS) reported its 2005 full year and fourth quarter results. For the year, the Company reported net earnings of $212.1 million, compared to $196 million in 2004. For the fourth quarter, the Company reported net earnings of $94.3 million, compared to $81.9 million last year. For the year, worldwide net revenues were $3.1 billion, compared to $3 billion a year ago. For the fourth quarter, the Company reported worldwide net revenues of $1.1 billion, an increase of $12.7 million, compared to the prior year. "Hasbro performed well in 2005. In a challenging environment we delivered solid revenue growth, strong earnings growth and operating cash flow was up significantly," Alfred J. Verrecchia, President and Chief Executive Officer, said. "While I am pleased with our overall performance, in particular our STAR WARS product line, the Games segment performance was below our expectations and clearly there is opportunity for improvement this year." At Dec. 25, 2005, assets totaled $3.3 billion and liabilities totaled $1.5 billion, resulting in $1.7 billion stockholders' equity. Headquartered in Pawtucket, Rhode Island, Hasbro, Inc. -- http://www.hasbro.com/-- is a worldwide leader in children's and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its Playskool, Tonka, Milton Bradley, Parker Brothers, Tiger, And Wizards Of The Coast brands and products provide the highest quality and most recognizable play experiences in the world. * * * As reported in the Troubled Company Reporter on Dec. 15, 2005, Moody's Investors Service affirmed the Baa3 long-term debt rating of Hasbro, Inc. and changed the ratings outlook to positive from stable to reflect the expectation for continued-strong operating performance and cash flows, leading to further debt reduction and credit metric improvement over the near-to-intermediate-term. These ratings were affirmed with a positive outlook: * Baa3 senior unsecured debt rating * (P)Ba1 rating for subordinated debt HEATING OIL: Fund Receives Issuer Cease Trade Order from OSC ------------------------------------------------------------ Heating Oil Partners Income Fund (TSX:HIF.UN) has been advised by staff of the Ontario Securities Commission that, in accordance with OSC Policy 57-603, CSA Staff Notice 57-301 and the disclosure contained in the Fund's Dec. 28, 2005 press release and related material change report, the OSC will issue an issuer cease trade order upon the Fund's failure to file its Dec. 31, 2005 interim financial statements, which are due on March 1, 2006. Under an issuer cease trade order, all trading in the Fund's securities is ceased permanently, or for such other period as is specified in the order. The possibility of such an action by the OSC was noted by the Fund. The Fund expects that other Canadian securities regulatory authorities will issue comparable orders. On Sept. 26, 2005, the Petition Date, the Fund's principal operating subsidiary, Heating Oil Partners, L.P., and certain other affiliates of the Fund filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code and obtained recognition of those proceedings in Canada under the Companies' Creditors Arrangement Act. In the press release on Dec. 28, 2005, the Fund disclosed that, given the level of the Company's pre-Petition Date secured debt, which ranks ahead of the Fund's indirect investment in the Company, it is the Fund's expectation that unitholders will not receive any consideration in respect of the Fund's investment in the Company upon completion of the restructuring process. The investment in the Company is the Fund's only material asset. Consequently, subsequent to the release of the Sept. 30, 2005 financial results, the Fund no longer intends to file annual and interim financial statements and the related management's discussion and analysis or annual information forms in accordance with applicable Canadian securities legislation, in view of the expense and diversion of management resources associated with the continuation of such filings. The Fund will continue to file news releases and material change reports in accordance with the timely disclosure requirements of applicable Canadian securities laws, and intends to file other material information concerning its affairs as provided in Ontario Securities Commission Policy 57-603 during the periods in which it is otherwise in default of applicable financial statement filing requirements. About Heating Oil Partners Income Fund Heating Oil Partners Income Fund -- http://www.hif-un.com/-- is an open-ended limited purpose trust established under the laws of the Province of Ontario by a declaration of trust dated Mar. 20, 2002, as amended and restated as of May 9, 2002. The Fund has been established to hold the securities of a Canadian holding company, HOP Holdings Inc., including its common shares and notes. HOP Holdings Inc., in turn, owns shares of common stock of the general partner and limited partnership interests of Heating Oil Partners, L.P., a limited partnership formed under the laws of Delaware on October 27, 1995. About Heating Oil Partners L.P. Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. INTERNATIONAL PAPER: Earns $1.1 Billion of Net Income on 2005 ------------------------------------------------------------- International Paper reported full-year 2005 net earnings of $1.1 billion compared with a loss of $35 million in 2004. The company posted a net loss of $77 million for the three-months ended Dec. 31, 2005, compared with earnings of $169 million in the fourth quarter of 2004 and $1 billion in the third quarter of 2005. Net sales increased in both the 2005 fourth quarter and full year. Fourth-quarter net sales rose to $6.1 billion from $6 billion in both the fourth quarter of 2004 and the third quarter 2005. Full- year 2005 net sales were $24.1 billion compared with $23.4 billion in 2004. Operating profits of $397 million for the 2005 fourth quarter were lower than third-quarter 2005 operating profits of $489 million, mainly because of high input costs. Full-year 2005 operating profits were $1.9 billion versus $2.0 billion in 2004. "Input costs skyrocketed in the fourth quarter, especially in October and November," said John Faraci, the Company's chairman and chief executive officer. "They were above the already high year-to-date levels -- this put a big dent in our margins. Volumes, however, were better than we expected in the fourth quarter, especially in containerboard and printing papers." Commenting on the first quarter of 2006, Mr. Faraci said, "We expect first quarter results to be flat with fourth quarter, with somewhat lower earnings from land sales. While natural gas prices are trending down, costs for chemicals and fuel oil are trending up from already high levels in fourth quarter, so we expect overall input costs to be about flat. Given this continued cost pressure, operational improvement remains a priority. We expect volumes to be seasonally slow early in the quarter, with some pick-up in March. However, I feel good about the dynamics of what's happening in our business right now, as we gained some price momentum late in the fourth quarter that we expect will carry into the first quarter, particularly in our printing papers and packaging business." International Paper's balance sheet showed $28.5 billion in total assets at Dec. 31, 2005, and liabilities of $20.2 billion. About International Paper International Paper Inc. -- http://www.internationalpaper.com/-- is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative (R) (SFI) program, a system that ensures the continual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. * * * As reported in the Troubled Company Reporter on July 22, 2005, Moody's Investors Service placed International Paper Company's ratings on review for possible downgrade. International Paper Company: * Senior Unsecured Baa2 * Subordinate Shelf (P)Baa3 * Preferred Shelf (P)Ba1 * Commercial Paper P-2 International Paper Capital Trust II: * Bkd Preferred Stock Baa3 * International Paper Capital Trust III: * Bkd Preferred Shelf Baa3 International Paper Capital Trust IV: * Bkd Preferred Shelf (P) Ba1 * International Paper Capital Trust VI: * Bkd Preferred Shelf (P) Ba1 Champion International Corporation: * Senior Unsecured Baa2 * Federal Paper Board Co., Inc. * Senior Unsecured Baa2 Union Camp Corporation: * Senior Unsecured Baa2 INTERSTATE BAKERIES: Selling Viejo Lot to Stallion 15 for $3.4M --------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Western District of Missouri's permission to sell their property located at 23981 Alicia Parkway, in Mission Viejo, California, to Stallion 15 LLC, for $3,400,000, free and clear of all liens, claims and encumbrances. The Mission Viejo Property includes approximately 1.19 acres of land with an approximately 8,640-square foot building. A portion of the Building is currently leased to Action Automotive Electric, now known as Action Dealer Electric and Air. Since September 2005, the Debtors, with the assistance of Hilco Industrial, LLC and Hilco Real Estate LLC conducted marketing efforts for the Mission Viejo Property. Pursuant to a Jan. 11, 2006 auction, they have determined that the $3,400,000 offered by Stallion 15 represents the highest and best offer for the Mission Viejo Property. As the stalking horse bidder, Stallion 15 agreed to purchase the Mission Viejo Property for $2,326,000 before the Auction, Paul M. Hoffman, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, relates. Stallion 15 has deposited $232,600, which is being held in escrow until all closing conditions are met. The Mission Viejo Property is being sold as-is, where-is, with no representations or warranties, reasonable wear and tear and casualty and condemnation excepted. Notwithstanding anything to the contrary, the Court authorizes the Debtors to pay outstanding real and personal property taxes for the tax year 2004-2005 with respect to the Property totaling $10,206 to the Orange County Tax Collector at Closing. The Court disallows penalties on 2004-2005 Property Taxes. Judge Venters further authorizes the Debtors to assume and assign the Action Automotive Lease to Stallion 15. The cure claim for the Action Automotive Lease is $0. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: 19 Creditors Demand $93 Million in Admin. Payments --------------------------------------------------------------- Nineteen creditors estimate that certain of the reorganized debtor-affiliates' of Mirant Corporation or the unreorganized debtors owe them in aggregate more than $93,000,000 in administrative expenses: Creditor Claim Amount ----------- ------------ AON Consulting, Inc. $76,102 CSX Transportation, Inc. 3,651,172 Chemithon Corporation 4,520,425 Farrell Construction Services 46,480 General Electric Capital Corporation unliquidated Illinois Department of Revenue 161,386 Niagara Mohawk Power Corporation 60,000 Potomac Electric Power Company 78,000,000 Vogt-NEM, Inc. 997,960 State of New York, et al. 4,120,000 Stone & Webster, et al. 1,849,679 William Croissant, et al. unliquidated Jo E. Hartwick, Esq., at Stutzman Bromberg Esserman & Plifka, P.C., in Dallas, Texas, tells the Court that PEPCO's administrative claim is in excess of: * $70,000,000 results from Mirant Corporation's postpetition shutdown of the Potomac River Facility and its obligations under that certain Local Area Support Agreement; and * $8,000,000 results from Mirant's failure to execute certain certificates for pollution control bonds. Ms. Hartwick says that the stated Administrative Claim amounts remain subject to final determination and calculation. The State of New York and the New York State Department of Environmental Conservation assert payment of administrative expense against the unreorganized New York Debtors -- Mirant New York, Inc., Mirant Lovett LLC, Mirant Bowline LLC, Hudson Valley Gas Corporation, and Mirant New York Gen LLC. Maureen F. Leary, the State's assistant attorney general, says that the New York Claim is based on environmental compliance obligations and postpetition penalties and regulatory fees incurred and to be incurred by the New York Debtors during the pendency of their Chapter 11 cases. Chemithon's Claim arises from Mirant's 2005 contractual obligations relating to two projects -- "Temporary Flue Gas Conditioning System" and "SafeDeNox (Urea to Ammonia)" system -- at the generation stations in Morgantown and Chalk Point. CSX Transportation and Mirant Americas Energy Marketing, LP, are parties to two railroad transportation contracts, Contract Nos. CSXT-C-68229 and CSXT-C-68229, pursuant to which CSX agreed to transport coal from various originating mines to MAEM's power generating stations at certain specified rates. Joseph A. Friedman, Esq., at Kane, Russel, Coleman & Logan, P.C., in Dallas, Texas, says that CSX Transportation's Claim represents MAEM's unpaid freight bills for both Contracts and other rail contracts. William Croissant, Patricia Croissant, Swinging Bridge, Inc., Old Mongaup Corporation and GE Capital notify the Court of their administrative expense claim out of an abundance of caution, as their Claims cannot yet be determined. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 92 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. KAISER ALUMINUM: KACC Files Admin. Claim Against Debtors' Estates ----------------------------------------------------------------- On February 15, 2005, the U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement among Kaiser Aluminum Corporation, its debtor-affiliates and the Official Committee of Unsecured Creditors regarding the resolution of prepetition and postpetition intercompany claims. Pursuant to the Intercompany Claims Settlement, the Liquidating Debtors -- Alpart Jamaica, Inc., Kaiser Jamaica Corporation, Kaiser Alumina Australia Corporation and Kaiser Finance Corporation -- have obligations to pay certain amounts to Kaiser Aluminum & Chemical Corporation. Although most of the amounts have been paid, the Liquidating Debtors' estates still have obligations to KACC under the Intercompany Claims Settlement that may require additional payments. On December 20, 2005, the Court confirmed the Liquidating Debtors' Joint Plans of Liquidation. The Plans became effective two days later. Each of the Liquidating Plans classifies Intercompany Claims in Class 4 and provides that Intercompany Claims are entitled to receive the treatment in the Intercompany Claims Settlement. In light of the Confirmation Order and out of an abundance of caution, KACC asserts, to the extent necessary, a protective administrative claim against the Liquidating Debtors' estates to preserve its right to payment of amounts due under the Intercompany Settlement Agreement. A copy of the protective administrative claim has been served on the Distribution Trustee for the Liquidating Debtors and counsel for the Official Committee of Unsecured Creditors. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 89; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: Court Lifts Stay to Let 3 Claimants to Pursue Lawsuits ------------------------------------------------------------------ Three personal injury claimants ask the U.S. Bankruptcy Court for the Northern District of Illinois to lift the automatic stay to enable them to proceed with their litigation against Kmart Corporation: (1) Gloria McClay, (2) Shirley Weinstein, and (3) Sarah Blair Ms. McClay filed a complaint against Kmart in 1999 to recover damages resulting from a personal injury -- and related complications -- sustained at a Kmart store in April 1997. Ms. McClay's complaint was filed in the Eighteenth Judicial Circuit, Brevard County, Florida. Ms. Weinstein holds a $375,000 administrative expense claim against Kmart for personal injuries sustained on February 24, 2002, at K-Mart Store No. 7556 located in Deerfield Beach, Broward County, Florida. Ms. Blair, on the other hand, suffered personal injuries when a metal pole fell on her while she was at Kmart Store No. 4836. Ms. Blair has requested for a mediation but Kmart refused. The Claimants have exhausted efforts to settle their claims against Kmart pursuant to the Claims Resolution Procedures. Still, they were not able resolve their claims. * * * The Court lifts the automatic stay and the Plan Injunction to permit the Claimants' litigation to proceed and continue to a final judgment or settlement. Judge Susan Pierson Sonderby clarifies that the Agreed Orders will remain in effect with respect to any and all actions by the Claimants to execute on any final judgment or settlement against Kmart and its estate. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000) KOPPERS INC: Moody's Raises Rating on 9.875% Parent Bonds to Caa1 ----------------------------------------------------------------- Moody's Investors Service raised its ratings for Koppers Inc., and Koppers Holdings Inc., following the recently completed initial public offering of KHI and the use of IPO net proceeds to redeem approximately $109 million of Koppers' senior secured notes. The IPO adds a credit-friendly layer of junior capital and a potential source of external financing, and the debt reduction restores KHI's consolidated credit metrics to levels that the company had prior to the issuance of its discount notes, in Nov. 2004. Koppers' businesses are performing well and benefiting from strong aluminum, steel and railroad demand. The ratings are constrained by the cyclicality underlying many of Koppers' businesses and by uncertainty related to legal proceedings, antitrust investigations, and disclosed deficiencies in the design and operation of internal controls related to the company's information systems. In addition, KHI continues to have a modest equity base, even after the IPO, and has indicated that it will pay a relatively large common share dividend, approximately 4% yield. This completes the review of Koppers and KHI, which began in Sept. 2005. The rating outlook for both companies is stable. These ratings were affected by the action: For Koppers Holdings Inc.: * 9.875% senior discount notes due 2014 -- raised to Caa1 from Caa2 * corporate family rating -- raised to B1 from B2 For Koppers Inc.: * 9.875% senior secured notes due 2013 -- raised to B1 from B2 On Feb. 2, 2005, KHI's IPO raised approximately $112 million in net proceeds. KHI used all of the net proceeds to purchase stock of Koppers Inc., which used such proceeds to redeem, at a premium, $101.7 million aggregate principal amount of its 9.875% senior secured notes due 2013. This leaves approximately $218 million of Koppers' senior secured notes outstanding. There will be no change to KHI's senior discount notes, which had an accreted value of $136.5 million as of Sept. 30, 2005. The discount notes are scheduled to accrete until going cash pay on Nov. 15, 2009, when the accreted value will equal $203 million. KHI has indicated that its initial common stock dividend will be $0.68 per share on an annual basis, which equates to a 4% dividend yield and $14.1 million per year based on 20.7 million shares. KHI's ratings are supported by its improved credit metrics following the IPO, its global and diverse end markets, its leading market position in many of its businesses, the stability provided by its reliance on multi-year sales contracts, the essential nature of its products, and its diversified raw material supply base. These strengths have made Koppers' financial performance very stable and profitable, with EBITDA to sales in a narrow band between 10-11.5%, except for a decline in performance in 2003. Koppers' sales and margins expanded in 2005, and these improvements should be sustained in the near term. Factors contributing to the improvement include higher prices for chemical products, furnace coke, and railroad ties, improved spreads between phthalic anhydride prices and naphthalene costs, and cost savings achieved by restructuring and plant closures. KHI's ratings also reflect the commodity nature of its products, the maturity and cyclicality of the industries it serves, and the high level of environmental risk associated with the carbon-based chemical materials that it produces. The ratings also embody concern over a melange of issues that could lead to increased cash outflows: antitrust investigations, product liability lawsuits, legal costs, plant closure costs, underfunded defined benefit pension plans; and disclosed deficiencies in the design and operation of internal controls related to the company's information systems. While these may be deminimis on an individual basis, in the aggregate they constrain the company's ratings and will continue to do so until more of these issues have been shown to be under control. Koppers' senior secured notes are secured by a second priority lien on all of the assets owned by Koppers and its subsidiaries that secure its obligations under its senior secured (first lien) credit facilities. However, the book value of the tangible assets securing the notes is only moderately greater than the secured debt and, therefore, Koppers' senior secured notes are rated at the corporate family rating of B1. The Caa1 rating for KHI's senior discount notes reflect the notes' structural subordination to all indebtedness and other liabilities of KHI's subsidiaries, their effective subordination to Koppers' secured indebtedness, and the modest book value of the company's tangible assets, $533 million, compared to KHI's total debt of $544 million, which includes underfunded pension and operating lease obligations per Moody's methodologies. Per the indenture for KHI's senior discount notes, KHI can pay dividends in an amount equal to the capital contribution received by Koppers Inc. from the IPO, plus 50% of Koppers' cumulative net income, which permits considerable dividends to be paid prior to the first semiannual cash interest payment due May 2010. KHI's stable outlook reflects the company's solid performance across several product lines, the stability provided by its multi- year sales contracts, and its diversified raw materials supply base. KHI's ratings could be raised if debt, using Moody's adjustments for pension and operating leases, to EBITDA drops below 4.5x. This ratio was 5.2x pro forma for the IPO. Alternatively, KHI's ratings could be raised if it consistently records free cash flow to adjusted debt above 7%. In addition to these holding company targets, Koppers' senior secured notes could be notched higher than the corporate family rating if credit facility and term loan balances were reduced to zero. The ratings could be lowered if there are adverse developments regarding any of the legal, environmental, internal control, and accounting issues noted above, if leverage rises above 6 times, or free cash flow to debt falls below 3% over an extended period. Koppers Inc., headquartered in Pittsburgh, is a worldwide producer of carbon compounds and treated wood products for use in a variety of markets including the railroad, aluminum, chemical and steel industries. Koppers Inc. is the sole subsidiary of Koppers Holdings Inc. KULLMAN INDUSTRIES: Court Approves Lowenstein as Panel's Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Kullman Industries, Inc.'s chapter 11 proceeding, sought and obtained authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Lowenstein Sandler PC as its counsel. The Firm will: (a) advise in respect of the Committee's duties and powers; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, potential claims, and any other matters relevant to the case or to the sale of assets or confirmation of a Plan of Reorganization; (c) participate in the formulation of a Plan; (d) assist the Committee in requesting the appointment of a Trustee or Examiner, should such action be necessary; and (e) perform other legal services as may be required and be in the interest of the Committee and creditors. Bruce Buechler, Esq., a member at Lowenstein Sandler, discloses his Firm's professionals bill: Designation Hourly Rate ----------- ----------- Members $320 - $595 Senior Counsel $295 - $425 Counsel $265 - $375 Associates $165 - $300 Legal Assistants $75 - $150 Mr. Buechler assures the Court that his Firm does not hold any interest adverse to the Committee. Headquartered in Lebanon, New Jersey, Kullman Industries, Inc. -- http://www.kullman.com/-- is a modular construction builder. The company filed for chapter 11 protection on Oct. 17, 2005 (Bankr. D. N.J. Case No. 05-60002). James N. Lawlor, Esq., at Wollmuth, Maher & Duetsch, LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million to $50 million. KULLMAN INDUSTRIES: Committee Hires BDO Siedman as Accountant ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Kullman Industries, Inc.'s chapter 11 proceeding sought and obtained permission from the U.S. Bankruptcy Court for the District of New Jersey to employ BDO Seidman, LLP, as its accountants and financial advisors, nunc pro tunc to Nov. 7, 2005. BDO Seidman will: (a) analyze the Debtor's pre- and postpetition financial operations as necessary; (b) perform forensic investigating services as requested by the Committee and counsel regarding the Debtor's prepetition activities in order to identify potential causes of action; (c) perform claims analysis for the Committee, as necessary; (d) verify the physical inventory of supplies, equipment and other material assets and liabilities, as necessary; (e) assist the Committee in its review of monthly statements of operations to be submitted by the Debtor; (f) analyze the Debtor's budgets, cash flow projections, restructuring programs, selling and general administrative structure and other reports or analyses prepared by the Debtor or its professionals in order to advise the Committee on the status of the Debtor's operations; (g) scrutinize cash disbursements on an on-going basis for the period subsequent to the petition date; (h) analyze transactions with insiders, related and/or affiliated companies; (i) prepare and submit reports to the Committee as necessary; (j) assist the Committee in its review of the financial aspects of a plan of reorganization to be submitted by the Debtor; (k) attend meetings of creditors and conferences with representatives of the creditor groups and their counsel; (l) prepare hypothetical orderly liquidation analyses; (m) monitor the sale and/or liquidation of any of the Debtor's assets; (n) analyze the financial ramifications of any proposed transactions for which the Debtor seeks Bankruptcy Court approval including, but not limited to, postpetition financing, sale of all or a portion of the Debtor's assets, management compensation and/or retention and severance plans; (o) render expert testimony on behalf of the Committee, as agreed by BDO Seidman; (p) provide assistance and analysis in support of potential litigation (including avoidance power actions) that may be investigated and/or prosecuted by the Committee; (q) analyze transactions with the Debtor's financing institution; and (r) perform other necessary services as the Committee or counsel to the Committee may request from time to time with respect to the financial, business and economic issues that may arise. William K. Lenhart, a member of BDO Seidman, discloses his Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $335 - $675 Senior Managers & Directors $230 - $510 Managers $210 - $345 Seniors $150 - $255 Staff $95 - $195 Mr. Lenhart assures the Court that his Firm does not represent any interest adverse to the Debtor's estate. Headquartered in Lebanon, New Jersey, Kullman Industries, Inc. -- http://www.kullman.com/-- is a modular construction builder. The company filed for chapter 11 protection on Oct. 17, 2005 (Bankr. D. N.J. Case No. 05-60002). James N. Lawlor, Esq., at Wollmuth, Maher & Duetsch, LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million to $50 million. LEGACY ESTATE: Carpy-Connoly Wants Decision on Grape Contract ------------------------------------------------------------- Carpy Connoly LLC asks the U.S. Bankruptcy Court for the Northern District of California to compel The Legacy Estate Group, LLC, d/b/a Freemark Abbey Winery, Byron Vineyard & Winery, and Arrowood Vineyards & Winery, to assume or reject a Grape Purchase Contract. Prior to the filing of the petition on Aug. 10, 2000, the Debtor and Carpy-Connoly LLC were parties to a Grape Purchase Contract, under which Carpy-Connoly agreed to deliver Chardonnay, Viognier, and Merlot grapes to the Debtor until the 2006 harvest. The Debtor defaulted on the Purchase Contract in the 2005 harvest year and owes Carpy-Connoly $322,485. Carpy-Connoly tells the Bankruptcy Court that it has performed, and continues to perform, each and every act required by the terms of the Purchase Contract. Carpy-Connoly says four factors militate in favor of fixing a quick deadline for the Debtor to assume or reject the Grape Purchase Contract: 1) the damage that the other party to the contracts would suffer, beyond compensation available under the Bankruptcy Code; 2) the importance of the contracts to the Debtor's business and reorganization; 3) whether the Debtor has had sufficient time to appraise its financial situation and potential value of its assets in formulating a plan; and 4) whether the exclusivity period has terminated. Assumption of the Purchase Contract would mean that the Debtor would be required to promptly: 1) cure the $322,485 default; 2) compensate Carpy-Connoly for any loss resulting from the default, including attorney's fees totaling $13,856; and 3) provide adequate assurance of future performance under the Contract. If the Debtor rejects the Purchase Contract, Carpy-Connoly will need to begin marketing the grapes to a new buyer to mitigate its damages. The Court will consider Carpy-Connoly's request at a hearing at 10:00 a.m., on Feb. 10, 2006, at the U.S. Courthouse in Santa Rosa, California. Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and Connaught Capital Partners, LLC, filed for chapter 11 protection on Nov. 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $108,287,046 in assets and $84,585,230 in debts. LORETTO-UTICA: Court Okays Continued Use of GECC's Cash Collateral ------------------------------------------------------------------ The Honorable Stephen D. Gerling of the U.S. Bankruptcy Court for the Northern District of New York authorized Loretto-Utica Properties Corporation, to continue using cash collateral securing repayment of its prepetition obligation to General Electric Capital Corporation. The Debtor can use GECC's cash collateral until Feb. 28, 2006, in accordance with a February 2006 budget. A copy of that budget is available for free at http://ResearchArchives.com/t/s?50e Prepetition Debt The debt stems from the Debtor's default on its obligations to its previous lenders. Those lenders eventually assigned the loans to the Department of Housing and Urban Development. HUD paid for the bonds and thereafter sold it to GECC and at the same time assigned the Loan Documents to GECC. The Debtor relates that pursuant to the terms of the Mortgage and Supplemental Mortgage sold to GECC, GECC holds an interest in the leases between the Debtor and: * Loreto-Utica Residential Health Care Facility, * Loreto-Utica Adult Residence, Inc., and * St. Elizabeth Hospital. GECC also asserts an interest in the rental and other payments due and to become due under the terms of the leases. Adequate Protection To provide GECC 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 provide GECC with a roll over security interest having the same extent, validity and priority as the prepetition liens. In addition, the Debtor will pay GECC $25,000 in February 2006 with the same interest reflected at the contract rate on the value of GECC's interest. The Debtor tells the Court that it will use the cash collateral in the ordinary course of its business, and stresses the company's need for prompt access to the cash collateral to pay day-to-day operating expenses. Headquartered in Syracuse, New York, Loretto-Utica Properties Corporation filed for chapter 11 protection on Dec. 15, 2005 (Bankr. N.D.N.Y. Case No. 05-73473). Jeffrey A. Dove, Esq., at Menter, Rudin & Trivelpiece, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $1 million to $10 million in assets and estimated $10 million to $50 million in debts. LSI LOGIC: S&P Affirms BB- Corp. Credit Rating; Rating is Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Milpitas, California-based LSI Logic Corp. and revised the ratings outlook to stable from negative. "The action reflects improving operating profitability and improving free cash flow stability, as the company moves toward an outsourced manufacturing model," said Standard & Poor's credit analyst Bruce Hyman. LSI is a major manufacturer of: * custom-designed application-specific semiconductors, * multicustomer application-specific standard products, and * storage systems. Key served markets include: * digital entertainment devices, * storage components and storage systems, and * communications equipment suppliers. The company had $795 million of debt and capitalized operating leases at Dec. 31, 2005. LSI reported sales of $506 million in the December quarter, up 5% sequentially and up 20% from year-earlier levels, part of an overall strengthening trend. Still, the business has displayed a substantial degree of volatility, including seasonal strength in the December quarter of most years. EBITDA was about $88 million in the quarter, and $240 million for the full year. "Our outlook reflects the permanent change in the business model that no longer calls for potentially large capital expenditures. A material improvement in operating performance could lead to stronger credit metrics and a positive outlook over the longer term. However, if there were significant business erosion, or if credit measures were to decline materially, the outlook could again be revised to negative," Mr. Hyman said. LUCENT TECH: Inks Agreement to Acquire Riverstone for $170 Million ------------------------------------------------------------------ Lucent Technologies (NYSE: LU) signed a definitive purchase agreement to acquire certain net assets related to the business operations of Riverstone Networks (RSTN.PK), a maker of carrier- grade Ethernet routers for the telecommunications industry, for $170 million in cash. This acquisition will complement Lucent's broadband, data and optical networking solutions. Lucent currently resells Riverstone's systems to service providers worldwide to support consumer and business multimedia network services. "Riverstone is a valued partner in a space that we believe will continue to grow," said Ken Wirth, president, Multimedia Network Solutions, Lucent Technologies. "This acquisition will enhance our ability to deliver large-scale Ethernet solutions and will allow us to accelerate the development of next-generation, carrier-grade Ethernet solutions that enable our customers to deliver broadband services to businesses and residential subscribers. This is good news for our mutual customers and a symbol of our commitment to provide carrier-grade Ethernet solutions to the market." The transaction is subject to completion of a bankruptcy court administered process under Riverstone's impending reorganization proceeding and other closing conditions. Riverstone filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware on Feb. 7, 2006. The acquisition of Riverstone's assets is expected to occur at the conclusion of an auction process under Section 363 of the Code. If approved by the bankruptcy court, the transaction will be subject to the receipt of regulatory approvals and the satisfaction of other conditions, including the resolution of Riverstone's matters with the Securities and Exchange Commission. Lucent expects that all required approvals could be obtained and conditions to closing could be satisfied by the middle of the calendar year. The total consideration for the assets may increase or decrease based on any subsequent change in the value of the net assets as provided in the agreement. The net assets to be purchased primarily include Riverstone products, intellectual property, certain contracts and receivables, tangible long-lived assets, accounts payable and certain other accrued liabilities. The net assets primarily exclude cash, investments and debt. Substantially all of Riverstone's 400 employees are expected to join Lucent. About Riverstone Networks Headquartered in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. About Lucent Technologies Headquartered in Murray Hill, New Jersey, Lucent Technologies -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. * * * As reported in the Troubled Company Reporter on Oct. 28, 2005, Fitch Ratings has upgraded Lucent Technologies: -- Issuer default rating to 'BB-' from 'B'; -- Senior unsecured debt to 'BB-' from 'B'; -- Subordinated convertible debentures to 'B' from 'CCC+' -- Convertible trust preferred securities to 'B' from 'CCC+'. MAULDIN-DORFMEIER: Court Fixes March 1 as Claims Bar Date --------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of California set March 1, 2006, at 4:30 p.m., as the deadline for all creditors owed money by Mauldin-Dorfmeier Construction, Inc., on account of claims arising prior to July 5, 2005, to file their proofs of claim. Creditors must file written proofs of claim on or before the March 1 Claims Bar Date and those forms must be delivered to: The Clerk of the U.S. Bankruptcy Court Fresno Division Office 1130 O Street, Room 2656 Fresno, California 93721 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 AIRLINES: Files Motion to Reject CBA with Three Unions ------------------------------------------------------------- Mesaba Airlines is asking the U.S. Bankruptcy Court for authority to reject the collective bargaining agreements with the Air Line Pilots Association, International, the Association of Flight Attendants and the Aircraft Mechanics Fraternal Association. In response, the Mesaba Airlines Labor Coalition said that the unions have made every effort possible to respond to management's request for cost savings but are at odds over the depth of management's proposed cuts, especially in light of the "enormous" sums of money that Mesaba has transferred to its parent, MAIR Holdings. The unions reportedly also see Mesaba's parent, MAIR Holdings, as a critical factor in the bankruptcy. Almost all of MAIR's revenue is produced by Mesaba and MAIR held $120 million in cash and equivalents at the time Mesaba filed for bankruptcy. Big Sky Airlines, another MAIR subsidiary, has accrued over $13 million in losses since the carrier was purchased in December 2002. Big Sky has not filed for bankruptcy protection, the unions noted. Mesaba Aviation, Inc., d/b/a 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. METRICOM INC: Court Okays Release of $231,315 from Escrow Account ----------------------------------------------------------------- The Honorable Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California ordered Wells Fargo Bank West, National Association, as escrow agent, to release to Metricom, Inc. and its debtor-affiliates, $231,315 from an escrow account. The Debtors related that as part of the sale of their assets to Ricochet Networks, Inc., they were required to deposit funds into an escrow account as adequate protection to the holders of personal property and ad valorem taxing claimants that asserted liens securing allowed claims for personal property taxes. Pursuant to the Escrow Agreement dated Nov. 7, 2001, the Debtors deposited $220,407 while Ricochet deposited $130,528. The Debtors contend that because they have managed to resolve all tax claims, the purpose of the escrow account has already been carried out. The Debtors want their share of the funds in the escrow account plus a pro rata share of the accrued interest. The Debtors told that Court that they are entitled to a total of approximately $231,315. The Debtors said that they would use the funds to pay creditors holding allowed claims, pursuant to their confirmed Plan. The Debtors also disclosed that Terabeam Inc., a company that purchased Ricochet's stock in June 2004, might also request the escrow agent to release Ricochet's pro rata portion of the funds. Metricom, Inc. is a high-speed wireless data Company. With its high-speed Ricochet mobile access, Metricom is making "information anytime" possible-at home, at the office, on the road, and on many devices. The company filed for chapter 11 protection July 1, 2001 (Bankr. N.D. Calif. Case No. 01-53291). Joshua M. Fried, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub PC, represents the Debtor. When the Company filed for protection from its creditors, it listed $1,047,859,000 in assets and $967,561,000 in debts. The Debtor's chapter 11 Plan became effective on Sept. 14, 2002. MIRANT: Has to Issue Certificates to Refinance PEPCO's $148M Bonds ------------------------------------------------------------------ The Honorable Michael D. Lynn grants Potomac Electric Power Company' request to have Mirant Corporation and its debtor- affiliates issue certificates to refinance $148 million bonds PEPCO is party to the long-term bonds, which were originally issued in connection with generating assets currently owned by the Debtors. PEPCO can now refinance the bonds at lower rates. To do so, however, Mirant must first provide certificates concerning the operation of the assets. The Asset Purchase and Sale Agreement for Generating Plants and Related Assets requires Mirant to provide these certificates upon request. The certificates are ministerial in nature. Mirant, however, refused to issue the certificates. But while Mirant is withholding issuance of the certificates, it has incurred a claim of over $8 million, which increases by approximately $5,000 to $6,000 a day, every day, PEPCO related. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 90 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. MIRANT CORP: Court Approves Hanson-Sexton Settlement Agreement -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the settlement agreement inked between Mirant Corporation and its debtor-affiliates and Russlyn Hanson-Sexton reducing Ms. Hanson-Sexton's allowed unsecured claim from $4 million to $60,000 in resolution of all their pending disputes. As reported in the Troubled Company Reporter on Jan. 10, 2006, Ms. Hanson-Sexton was employed under a contract at Mirant Mid-tlantic, LLC's electric generation facility located in Prince George's County in Maryland, commonly known as "Chalk Point." She was employed from July 2000 to November 2002. At all times, Ms. Hanson-Sexton was an employee of Richard Lawson Excavating. On March 19, 2004, Ms. Hanson-Sexton commenced a lawsuit in the United States District Court for the District of Maryland, Southern Division, against MIRMA seeking monetary damages for alleged injuries and damages arising during the period of her employment at Chalk Point. She alleged discrimination based on sex, hostile work environment, and retaliation, and seeks $500,000 in damages for lost future wages and $1,000,000 in compensatory damages and certain legal costs. The Maryland District Court stayed the Lawsuit pending a decision by the Bankruptcy Court regarding whether the Lawsuit should proceed before the Maryland District Court. MIRMA denies any liability with respect to the Lawsuit. On August 10, 2004, Ms. Hanson-Sexton filed two proofs of claim based on the Complaint: -- Claim No. 7796 for $2,000,000 against Mirant Corp.; and -- Claim No. 7797 for $2,000,000 against MIRMA. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 92 Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to power generator and developer Mirant Corp. The outlook is stable. The rating reflects the credit profile of Mirant, based on the structure the company expects to have on emergence from bankruptcy at or around year-end 2005. MOHEGAN TRIBAL: Posts $38.3 Million in First Quarter Ended Dec. 31 ------------------------------------------------------------------ The Mohegan Tribal Gaming Authority, the operator of a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a harness racetrack located in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs, or Pocono Downs, reported its operating results for the quarter ended Dec. 31, 2005. Quarterly highlights include: Results and significant events for the quarter ended December 31, 2005 were as follows: -- record first quarter gaming revenues of $315.5 million, a 9.5% increase over the corresponding period in the prior year; -- gross slot revenues of $216.2 million, a 3.8% increase over the corresponding period in the prior year; -- table games revenues of $95.3 million, a 13.4% increase over the corresponding period in the prior year; -- non-gaming revenues of $71.3 million, a 16.8% increase over the corresponding period in the prior year; -- income from operations of $68.4 million, a 13.1% increase over the corresponding period in the prior year; -- net income of $38.3 million, a 11.9% increase over the corresponding period in the prior year; -- record first quarter adjusted EBITDA, a non-GAAP measure, of $91 million, a 11.2% increase over the corresponding period in the prior year; -- submitted applications for a conditional and permanent slot machine license with the Pennsylvania Gaming Control Board in December 2005. Net income for the quarter ended Dec. 31, 2005, increased by $4.1 million, or 11.9%, to $38.3 million from net income of $34.2 million for the same period in the prior year. The increase in net income is primarily due to the increase in income from operations offset by the increase in interest expense. Interest expense increased by $3.6 million to $22.8 million for the quarter ended Dec. 31, 2005, as compared to $19.2 million for the same period in the prior year due to an increase in weighted average outstanding debt. The weighted average outstanding debt was $1.25 billion for the quarter ended Dec. 31, 2005, and $ 1.05 billion for the quarter ended Dec. 31, 2004. The increase in weighted average outstanding debt was due to the acquisition of Pocono Downs and five off track wagering facilities -- OTW -- in January 2005. The weighted average interest rate was 7.4% for the quarter ended Dec. 31, 2005, compared to 7.3% for the same period in the prior year. "The Board was delighted with the results of the quarter. Each of our gaming and non-gaming product offerings showed outstanding growth as compared to last year," Chairman Bruce Bozsum said. "the Management Board believes that the results are directly related to the superior performance by our dedicated work force at Mohegan Sun and Mohegan Sun at Pocono Downs," he further commented. Mohegan Sun Net revenues for the quarter ended Dec. 31, 2005, increased by $26.4 million, or 8.3%, to $345.7 million from $319.3 million for the same period in the prior year. This increase is the result of a 7.1% growth in gaming revenues and a 15.5% growth in non-gaming revenues at Mohegan Sun. "We are delighted by the outstanding performance or our team here at Mohegan Sun. This is evidenced by the growth in Adjusted EBITDA, operating margin and market share over the prior year," said Mitchell Etess, Mohegan Sun President and CEO. "We will continue our focus on improving operating efficiency and customer service throughout 2006." Mohegan Sun at Pocono Downs Results for Pocono Downs and the five OTWs for the quarter ended Dec. 31, 2005, consisted of racing revenues of $6.8 million, net revenues of $7.6 million, loss from operations of $2.0 million and Adjusted EBITDA of negative $231,000. The loss from operations at Pocono Downs for the quarter ended Dec. 31, 2005, includes $1.1 million in pre-opening costs and expenses comprised of personnel, consulting and other costs associated with the development plans. The Authority plans for the development of Mohegan Sun at Pocono Downs, a proposed 400,000 square foot gaming and entertainment facility to be constructed on the existing grounds of the Pocono Downs racetrack on Route 315 in Plains Township, Pennsylvania. The current plans provide for approximately 2,000 slot machines, 3 full-service restaurants, a 300 seat buffet, a 15,000 square foot food court, several bars and lounges, an 18,000 square foot nightclub, a "Kid's Quest" center, 20,000 square feet of retail space, new parking facilities and an enhanced employee services area. The scope and timing for development continue to be refined through the Authority's rigorous planning process. Construction of the new facility will begin following the issuance of a conditional or permanent slot license by the Pennsylvania Gaming Control Board -- PGCB -- anticipated in the summer of 2006. Estimated cost of construction for the facility is between $140 million and $160 million. Downs Racing, L.P., a subsidiary of the Authority and the owner and operator of Mohegan Sun at Pocono Downs, submitted an application for a conditional slot license with the PGCB on Dec. 8, 2005, and for a permanent slot license on Dec. 28, 2005. Upon receipt of a conditional or permanent license, the Authority will also pay a one-time $50 million fee to the Commonwealth of Pennsylvania. As required in the licensing regulations, the Authority established a letter of credit commitment of $50 million in December 2005 to support the future payment of the license fee. "We were very pleased to have submitted our licensing application in December," said Robert J. Soper, President and Chief Executive Officer of Mohegan Sun at Pocono Downs. "We continue to be excited about our opportunity for gaming at Pocono Downs. As was the case prior to and during the Authority's prior expansions of Mohegan Sun, we will keep you informed as to any material changes in our expansion plans for Pocono Downs." The Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut a federally recognized Indian tribe with an approximately 405-acre reservation situated in southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive power to conduct and regulate gaming activities on the existing reservation of the Tribe, and the non-exclusive authority to conduct such activities elsewhere, including the operation of Mohegan Sun, a gaming and entertainment complex that is situated on a 240-acre site on the Tribe's reservation. The Tribe's gaming operation is one of only two legally authorized gaming operations in New England offering traditional slot machines and table games. * * * The Mohegan Tribal Gaming Authority's $250,000,000 issue of 8% Senior Subordinated Notes due April 1, 2012 carry Moody's Investor Service's Ba3 rating and Standard & Poor's B+ rating. The Tribe's $500,000,000 five-year revolving credit agreement, under which Bank of America, N.A., serves as the administrative agent for a consortium of lenders, matures on March 31, 2008. That loan package (which includes a provision that could increase the lenders' commitments to $600,000,000) is rated BB by S&P and Ba1 by Moody's. MUELLER GROUP: S&P Places B+ Corporate Credit Rating on Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit ratings on Mueller Group Inc. and on its parent Mueller Water Products Inc., as well as the companies' other ratings, on CreditWatch with positive implications. The '2' recovery rating on Mueller Group Inc.'s bank credit facility was affirmed. At Dec. 31, 2005, Decatur, Illinois-based Mueller, which is owned by Tampa, Florida-based Walter Industries Inc. (B+/Stable/--), had approximately $1.5 billion in total debt outstanding. The CreditWatch listing follows the company's S-1 filing with the SEC for an IPO of up to $400 million. The net proceeds will be used for debt reduction and general corporate purposes. "Our business risk assessment of Mueller and our analysis of the proposed transaction indicate that the company can support slightly higher ratings if its pro forma capitalization and financial policies are somewhat less aggressive than they were in the past," said Standard & Poor's credit analyst Joel Levington. At the current ratings, Standard & Poor's expects total debt (including our operating lease and pension adjustments) to average between 4.5x and 5.0x. Standard & Poor's will meet with management to discuss the timing of the transaction and Mueller's financial policies, including: * its leverage targets, * dividend payout expectations, and * acquisition plans. Standard & Poor's plan is to resolve the CreditWatch shortly after the transaction is completed. MUSICLAND HOLDING: Court Approves Interim Compensation Procedures ----------------------------------------------------------------- Pursuant to Sections 105(a) and 331 of the Bankruptcy Code, Musicland Holding Corp. and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's permission to establish orderly and regular procedures for the compensation and reimbursement of various court-approved professionals on a monthly basis, on terms comparable to the procedures established in other large Chapter 11 cases. The Debtors specifically propose that: (a) Each Professional seeking compensation will serve a monthly statement, on or before the 30th day of each month after the month the compensation is sought, to: * Musicland Holding Corp., * Kirkland & Ellis LLP, * the attorneys for any Committee appointed by the Office of the United States Trustee; and * the Office of the United States Trustee. (b) The monthly statement does not need to be filed with the Court and a copy does not have to be delivered to the presiding bankruptcy judge's chambers; (c) For Professionals who bill based on time, each monthly fee statement must contain a list of the individuals who provided services during the statement period, their billing rates, the aggregate hours spent, a reasonably detailed breakdown of the disbursements incurred and contemporaneously maintained time entries; (d) The Notice Parties will have 15 days to review a statement. If a Party objects to the compensation or reimbursement, it must, by no later than 35 days after the end of the month for which compensation is sought, serve a written notice of objection containing the nature of the objection, upon: * the Professional whose statement is objected to; and * the Notice Parties. (e) At the expiration of the 35 day period, and in the absence of objection, the Debtors will promptly pay 80% of the undisputed fees and 100% of the undisputed expenses in each monthly statement; (f) If the Debtors receive an objection to a fee statement, they will withhold payment on that objected portion of the fee statement and promptly pay the remainder of the fees and disbursements; (g) If the parties to an objection are able to resolve their dispute, then the Debtors will promptly pay that portion of the fees statement which is no longer subject to an objection; (h) All unresolved objections will be preserved and presented to the Court at the next interim or final fee application hearing; (i) An objection will not prejudice the objecting party's right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any ground; (j) In accordance with General Order M-242, every 120 days, but no more than every 150 days, each of the Professionals will serve and file an application for interim or final Court approval and allowance of the compensation and reimbursement of expenses requested; (k) Any Professional who fails to file an application seeking approval of compensation and expenses previously paid when due will: * be ineligible to receive further monthly payments of fees until further Court order; and * may be required to disgorge any fees paid since the retention or the last fee application, whichever is later. (l) The pendency of an application or a Court order that payment of compensation or reimbursement of expenses was improper as to a particular statement will not disqualify a Professional from the future payment of compensation or reimbursement of expenses; (m) Neither the payment of, nor the failure to pay, monthly compensation and reimbursement will have any effect on the Court's interim or final allowance of compensation and reimbursement of any Professional; and (n) If a Committee is appointed, the attorneys for the Committee may collect and submit statements of expenses, with supporting evidence of payment, from members of the Committee the person represents. However, the Committee attorneys must ensure that the reimbursement requests comply with the Court's Administrative Orders dated June 24, 1991, and April 21, 1995. Mr. Sprayregen points out that the proposed procedures will enable the Debtors to closely monitor the costs of administration, maintain a level cash flow availability and implement efficient cash management procedures. Moreover, those procedures will allow the Court and key parties- in-interest to ensure the reasonableness and necessity of the compensation and reimbursement sought. * * * Judge Stuart M. Bernstein grants the Debtors' request. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Wants to Dispose of 61 Media Play Store Leases ----------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates proposed to notify each lessor of a proposed assumption and assignment of the 61 Media Play leases. The Debtors will also provide a schedule of all their outstanding obligations under the Leases through the Petition Date. On January 19, 2006, the Debtors presented to the Court a notice of cure schedules. The Notice contained: (a) a list of unexpired real property Leases at each of the Media Play stores which the Debtors sought to assume; and (b) the proposed cure amounts due and owing for the unexpired real property leases which are based on the Debtors' books and records A full-text copy of the 61 Media Play Leases and the proposed Cure Amounts is available for free at: http://bankrupt.com/misc/Musicland_61mediaplayleases.pdf Landlords Object to Proposed Cure Some of the landlords of the Media Play Leases object to the Debtors' Cure Schedules. According to the Landlords, the Cure Amounts in the Debtors' Notice do not reflect all charges owing to Landlords under the Leases. Certain of the Landlords presented their calculated cure amounts: Debtors' Landlords' Cure Amount Cure Amount ----------- ----------- 100 Oaks LP $47,484 $87,376 Barrett Pavilion 59,498 187,191 Cincinnati Mills 46,714 93,195 Citadel Crossing Shopping Center 14,962 111,470 Family Center at Fort Union 17,925 46,258 Family Center at Midvalley 18,185 46,739 Family Center at Orem 16,872 51,135 Family Center at Riverdale 14,635 37,122 Greenwood Point 58,793 77,508 Harrisburg 27,151 54,486 Houston Lakes 15,775 35,165 Keystone Plaza 51,921 71,937 Lafayette Place 87,862 102,969 Largo Plaza 29,683 7,871 Meyer Park Center 170,028 201,772 Great Mall of the Bay 25,178 77,628 North Point Market Center 18,814 53,013 Ridgemont Plaza 68,241 98,171 Rivergate Mall 89,690 260,001 Robinson Court 0 107,158 Southlake Pavilion 53,681 85,858 Southtown Plaza Associates, LLC 11,502 153,877 Spring Meadows Place Shopping Mall 62,005 93,384 Stateline Plaza 82,367 101,790 The Market at Chapel Hills West 130,882 152,122 Walden Place 15,995 34,167 Western Hills 54,519 63,286 Westgate Shopping Center 35,456 46,508 Woodlawn Market 50,854 50,151 The Landlords allege that the amounts in the Debtors' Cure Schedule do not reflect the unbilled year-end adjustments to real estate taxes, insurance, common area maintenance, legal costs and attorneys fees. Further, the Debtors' administrative rent and rent-related charges continue to accrue daily. The Proposed Cure Schedule also did not provide a break down of the Cure. Thus, the Debtors cannot be assured that the cure was accurately calculated. In addition, some of the Debtors maintain that they received an extremely limited and late notice of the Cure Amounts and the auction of the Media Play Leases. Consequently those Debtors have not yet had an opportunity to complete their review of the Cure Schedule and an analyze their own records relative to the Cure Schedules. More Objections (1) Kmart Corp. According to Richard M. Meth, Esq., at Pitney Hardin LLP, in Florham Park, New Jersey, many of the documents pertinent to the Media Play Leases are not made immediately available to Kmart Corp. Mr. Meth says that Kmart has already arranged for the various records to be retrieved, and is currently seeking to verify independently the Debtors' Cure Amounts. However, as of the present, all those relevant information and documents have not yet been received by Kmart. Thus, Kmart has not have sufficient time to complete its review of the documents related to the Media Play Leases. Kmart believes that it may have rights and claims relative to six of the Media Play Leases. Kmart objects to the Cure Schedule and the Cure Amounts due to the limited notice provided to it relative to the Assumed Contracts, the Cure Amounts and the Auction. (2) National Amusements Richard L. Levine, Esq., attorney for National Amusements, Inc., in Boston, Massachusetts, tells the Court that the relevant date for determining the cure amount is not the date of filing, as was stated in the Cure Notice, but the date the lease is assumed and assigned. On behalf of National Amusements, Mr. Levine objects to the Cure Amount proposed by the Debtors unless the Debtors affirm that the Cure Amount only represents the amounts due as of the Petition Date, and do not represent the total amount due on the Lease's assumption. (3) Merchant's Walk Robert L. LeHane, Esq., at Kelley Drye & Warren LLP, in New York City, asserts that the Merchant's Walk (E&A) LLC lease was terminated prior to the filing of the Debtors' bankruptcy cases and the Debtors have no interest in the Lease to sell. Thus, the Debtors have no legal right to cure any defaults under the Lease. Mr. LeHane notes that Merchant's Walk is not waiving its position. Further, Mr. LeHane says that the proposed Cure Amount with respect to the Lease is incorrect. According to Mr. LeHane, as of January 20, 2006, $132,799 plus attorney's fees was due to Merchant's Walk under the Lease. (4) New Market Acquisitions New Market Acquisitions Ltd., contends that it has not received and cannot locate a Cure Schedule as of January 20, 2006. Accordingly, New Market states that its cure amount is $68,094. New Market Acquisitions leases to Media Play a real property known as 7690 New Market Center Way, in Columbus, Ohio, under a lease dated June 22, 1993. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) NEWQUEST INC: S&P Places B Counterparty Credit Rating on Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' counterparty credit rating on NewQuest Inc. on CreditWatch with positive implications. "The rating is being placed on CreditWatch positive in connection with the recently completed public offering of common equity shares by NewQuest's parent, HealthSpring Inc. (NYSE:HS)," explained Standard & Poor's credit analyst Joseph Marinucci. HealthSpring raised $366.6 million overall and most of the proceeds were used to strengthen the company's balance sheet by eliminating debt outstanding ($190 million), which Standard & Poor's considers beneficial to the company's financial profile. "In addition, we expect health plan operations to meet our membership and adjusted earnings targets (6%-7% ROR) for full-year 2005," added Mr. Marinucci. Standard & Poor's also expects an over-allotment option to be exercised, which could raise the deal value to $421.6 million, but there would be no rating implications since these proceeds would benefit existing shareowners only (supplemental secondary offering). Standard & Poor's intend to meet with HealthSpring management within 30 days to review 2005 financial results and further discuss its prospective capital and strategic plans. Following the review, the rating could be raised to 'B+' or 'BB-'. NORTHLAND CABLE: Redeems 10-1/4% Bonds & Moody's Withdraws Ratings ------------------------------------------------------------------ Moody's Investors Service withdrew all ratings on Northland Cable Television, Inc., following the company's redemption in full of its 10-1/4% Senior Subordinated Notes due 2007 on Jan. 27. Ratings withdrawn include: Northland Cable Television, Inc. -- Corporate Family Rating, Withdrawn, previously rated Caa1 -- Outlook, Withdrawn, previously Stable OWENS CORNING: Court Approves AIG Insurance Settlement Agreement ---------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved the settlement agreement inked between Owens Corning and its debtor-affiliates and the AIG Companies -- Birmingham Fire Insurance Company, Granite State Insurance Company, Landmark Insurance Company, Lexington Insurance Company, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania -- regarding the coverage for the Debtors' non-products claims. The principal terms of the Agreement are: 1. The AIG Companies will pay a settlement amount, and depending on the progress of the Debtors' Chapter 11 cases at the time the payments are made, payments will be made either into an escrow account or as directed by a confirmed plan of reorganization; 2. Owens Corning and the AIG Companies will mutually release one another from all claims relating to the excess liability policies and their settlement in 1991; and 3. The Settlement Agreement's terms are contingent on the entry of a final order confirming a plan of reorganization that includes an injunction, pursuant to Section 524(g) of the Bankruptcy Court, protecting the AIG Companies; 4. In addition to the Section 524(g) Injunction, Owens Corning will do its best to obtain other injunctive protections for the AIG Companies as part of the Debtors' Plan under Section 105 of the Bankruptcy Code; and 5. If the Agreement becomes null and void, the AIG Companies will not be obligated to make any further payments of the Settlement Amount and will be entitled to the prompt release and return of any payments previously made to the Escrow Account, and the Parties will have restored all rights, defenses, and obligations relating to the excess liability policies issued by the AIG Companies to Owens Corning and the 1991 Settlement. The full-text copy of the Settlement Agreement was filed under seal to keep certain key terms and information confidential. Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtors in their restructuring efforts. (Owens Corning Bankruptcy News, Issue No. 124; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Gets Interim OK to Use Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of New York authorized Performance Transportation Services, Inc., and its debtor-affiliates to use cash collateral securing its prepetition debts to a consortium of lenders represented by Credit Suisse, Cayman Islands Branch, as administrative and collateral agent. The Prepetition Agents and Secured Lenders are granted Adequate Protection Liens and Section 507(b) Claims. They are also entitled to payment of interest, fees and expenses. The Debtors' right to use Cash Collateral will terminate if a trustee under Chapter 7 or 11 of the Bankruptcy Code or an examiner with enlarged powers relating to business operations is appointed. As of the Petition Date, the Debtors owe money under two credit agreements: Credit Agreement Outstanding Amount Owed ---------------- ----------------------- First Lien Credit Agreement, $121,600,000 dated January 31, 2005, with Credit Suisse, Cayman Islands Branch, as sole administrative and collateral agent Second Lien Credit Agreement, $35,000,000 dated January 31, 2005, with Credit Suisse, Cayman Islands Branch, as sole administrative and collateral agent (Wells Fargo Bank, National Association, succeeded Credit Suisse as agent) PTS' obligations under the Credit Agreements are secured by liens and security interests on: * the capital stock of PTS and all of its domestic related subsidiaries; * the present and future property and assets (subject to customary exceptions) of PLG, PTS and all of its domestic related subsidiaries; and * the proceeds and products of those property and assets. Pursuant to Section 363(c)(2) of the Bankruptcy Code, a debtor- in-possession may not use cash collateral without the consent of the secured party or court approval. Section 363(e) of the Bankruptcy Code provides that upon request of an entity that has an interest in property to be used by a debtor, the court will prohibit or condition that use to provide adequate protection of that interest. The Debtors tell the Court that they need immediate access to the Cash Collateral to, among other things, pay present operating expenses, including payroll and pay vendors on a going-forward basis to ensure a continued supply of materials essential to their continued operations. To protect the Prepetition Secured Lenders from diminution of the value of their interest in their collateral, the Debtors propose that the Agents will be granted replacement and additional security interests in and lien on the collateral subject and subordinate only to the security interests and liens granted to postpetition lenders. The Debtors also propose that the Prepetition Agents and Secured Lenders will be granted a superpriority claim as provided in Section 507(b) of the Bankruptcy Code, immediately junior to the claims of postpetition lenders. The Debtors further propose to pay interest, fees and certain expenses of the Prepetition Agents and Secured Lenders. The Final Cash Collateral Hearing is scheduled for February 15, 2006, at 1:00 p.m. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Organizational Meeting Set for Today ---------------------------------------------------------------- Deirdre A. Martini, the United States Trustee for Region 2, will convene an organizational meeting in Performance Transportation Services, Inc., and its debtor-affiliates' Chapter 11 cases at 11:00 a.m. today, Feb. 8, 2006. The meeting will be held at the New York Hilton Hotel, located at 1335 Avenue of the Americas in New York. The sole purpose of the meeting will be to form a committee of unsecured creditors in the Debtors' Chapter 11 cases. This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtors will attend and provide background information regarding their cases. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Taps Kirkland & Ellis as Counsel ------------------------------------------------------------ Performance Transportation Services, Inc., and its 13 debtor- Affiliates ask permission from the U.S. Bankruptcy Court for the Western District of New York to employ Kirkland & Ellis LLP as their bankruptcy counsel. Since 1999, Kirkland & Ellis has represented the Debtors on a variety of transactional matters. While preparing for the Chapter 11 cases, the firm has also become familiar with the Debtors' businesses and affairs, and many of the potential legal issues that may arise in the context of the Chapter 11 cases. Accordingly, the Debtors believe that the firm is both well qualified and uniquely able to represent them in their Chapter 11 cases in an efficient and timely manner. As the Debtors' bankruptcy counsel, the firm will: a. advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest; c. take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including objections to claims filed against the estates; d. prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates and their bankruptcy case; e. take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; f. represent the Debtors in connection with obtaining postpetition financing; g. advise the Debtors in connection with any potential sale of assets; h. appear before the Bankruptcy Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those Courts and the United States Trustee; i. consult with the Debtors regarding tax matters; and j. perform all other necessary legal services to the Debtors in connection with their Chapter 11 cases, including: -- the analysis of leases and executory contracts and the agreements' assumption, rejection or assignment; -- the analysis of the validity of liens against the Debtors; and -- advice on corporate, litigation and other matters. The Debtors will pay Kirkland & Ellis at these hourly rates: Position Rate -------- ------------ Partners $520 to $950 Of Counsel $280 to $685 Associates $245 to $520 Paraprofessionals $90 to $240 The professionals expected to have primary responsibility for providing services to the Debtors and their hourly rates are: Professional Billing Rate ------------ ------------ James A. Stempel, Esq. $745 James W. Kapp III, Esq. $675 Jocelyn A. Hirsch, Esq. $575 Sven T. Nylen, Esq. $445 Michelle Mulkern, Esq. $395 Paul Wierbicki, Esq. $295 Kathryn L. Koenig, Esq. $295 Mr. Stempel, a partner at Kirkland & Ellis, attests that the firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Stempel discloses that in the 90 days prior to the Petition Date, the Debtors advanced to the firm around $1,312,000 in a series of payments, most of which constitute classic retainer payments: Date of Payment Amount --------------- ------ November 9, 2005 $7,264 November 16, 2005 63,471 December 12, 2005 350,000 December 21, 2005 100,000 December 27, 2005 150,000 January 3, 2006 100,000 January 9, 2006 100,000 January 13, 2006 191,655 January 18, 2006 200,000 January 24, 2006 50,000 Kirkland & Ellis is a 1,100-attorney law firm representing global clients in complex corporate, restructuring, tax, litigation, dispute resolution and arbitration, and intellectual property and technology matters. The Firm has offices in Washington, D.C., Chicago, London, Los Angeles, Munich, New York and San Francisco. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) PHOTOCIRCUITS CORP: Taps ERM-New England as Environmental Advisor ----------------------------------------------------------------- Photocircuits Corporation asks the U.S. Bankruptcy Court for the Eastern District of New York for permission to retain ERM-New England, Inc., as its environmental consultant. ERM-New England will assist the Debtor in selling its real estate assets by conducting Phase I Environmental Site Assessments on each of the parcels owned or leased by the Debtor located in Glen Cove, New York, and Peachtree City, Georgia. ERM-New England is expected to: a) visit each site; b) analyze documents including, but not limited to, operating permits, registrations and license, monitoring data and reports, regulatory agency visits, inspections and correspondence, and solid and hazardous waste manifests; c) review readily available environmental databases for the geographical area in question; d) evaluate the historical uses of each parcel; and e) generate a Phase I report for each parcel of real property. Ernest Rossano, a member of ERM-New England, discloses that his Firm will be paid a total flat fee of $14,500, inclusive of expenses. Mr. Rossano assures the Court that ERM-New England represents no interest adverse to the Debtor or its estate. Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PISTOL PETE: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Pistol Pete, LLC dba Felicia's Restaurant 1148-1150 South 11th Street Philadelphia, Pennsylvania 19147 Bankruptcy Case No.: 06-10470 Type of Business: The Debtor owns and operates a restaurant located in Philadelphia, Pennsylvania. Chapter 11 Petition Date: February 6, 2006 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Edward J. DiDonato, Esq. DiDonato & Winterhalter, P.C. 1818 Market Street, Suite 3520 Philadelphia, Pennsylvania 19103 Tel: (215) 564-4606 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 Debtor's 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Michael Weiner, M.D., P.A. $347,000 Profit Sharing Plan 9000 Southwest 87th Court Miami, FL 33176 Rewards Network $48,353 11900 Biscayne Boulevard, Suite 460 North Miami, FL 33181 Delaware Valley High School $12,000 1311 Chancellor Street Philadelphia, PA 19107 Advance Me, Inc. $7,036 c/o Martin J. Kilstein, Esq. 1311 Spruce Street Philadelphia, PA 19107 Dennis George, Esq. $5,000 Suite 1000, The Bourse 111 South Independence Mall East Philadelphia, PA 19106 Clever Ideas, Inc. $2,500 2 Prudential Plaza, Suite 5300 Chicago, IL 60601 PLIANT CORP: Asks Court to Approve Interim Compensation Procedures ------------------------------------------------------------------ Pliant Corporation and its debtor-affiliates have filed, and may further file, applications seeking authority to employ bankruptcy professionals. The Debtors also anticipate that the Official Committee of Unsecured Creditors will retain counsel and other professionals to represent it. Stephen T. Auburn, Pliant Corp.'s vice president and general counsel, relates that the Debtors have devised procedures for the allowance of interim compensation for services rendered and reimbursement of expenses incurred by the Professionals. Mr. Auburn tells the Court that the Compensation Procedures will streamline the professional compensation process and enable the Court and all parties-in-interest to more effectively monitor the fees incurred by the Professionals. The Compensation Procedures will also avoid forcing the Professionals to finance the Debtors' Chapter 11 cases while awaiting final approval of their fees and expenses. Pursuant to Sections 105(a) and 331 of the Bankruptcy Code, the Debtors ask the Court to approve these Compensation Procedures: (a) No earlier than the 25th day of each month following the month for which compensation is sought, each Professional may file an application for interim allowance of compensation for services rendered and reimbursement of expenses incurred during the preceding month and serve a copy of the Monthly Fee Application by first class mail on: (1) the Office of the United States Trustee; (2) the Debtors and their counsel; (3) counsel to the Official Committee of Unsecured Creditors and any other committees appointed in the Debtors' Chapter 11 cases; and (4) counsel to General Electric Capital Corporation; (b) Each Notice Party will have 20 days after service of a Monthly Fee Application to object. If no timely objections are filed, the Professional will file a certificate of no objection with the Court, after which the Debtors will be authorized to pay the Professional 80% of the fees and 100% of the requested expenses. If a timely objection is filed, the Debtors will be authorized to pay the Professional 80% of the fees and 100% of the expenses not subject to the objection; (c) If any Notice Party objects to a Professional's Monthly Fee Application, it must file with the Court and serve on the Professional and each Notice Party an objection, identifying with specificity the objectionable fees or expenses, and the basis for the Objection. If the objecting party and the affected Professional are unable to reach a resolution within 20 days after service of the Objection, the affected Professional may either: (i) file a response to the Objection with the Court, together with a request for payment of the difference, if any, between the Maximum Interim Payment and the Actual Interim Payment made to the Professional; or (ii) forego payment of the Incremental Amount until the next quarterly fee application request hearing or final fee application hearing, at which time the Court will consider and rule on the Objection if requested by the parties; (d) Beginning with the approximate three-month period from the Petition Date and ending on March 31, 2006, and at the end of each three-month period thereafter, each Professional must file with the Court and serve on the Notice Parties a request, pursuant to Section 331, for interim Court approval and allowance of compensation for services rendered and reimbursement of expenses sought in the Monthly Fee Applications filed during the period; (e) The Quarterly Fee Application Request will include a summary of the Monthly Fee Applications that are the subject of the request and any other information requested by the Court or required by the local rules. Each Quarterly Fee Application Request will be filed with the Court and served on the Notice Parties by no later than 45 days after the end of the applicable Interim Fee Period. Any Professional who fails to file a Quarterly Fee Application Request when due will be ineligible to receive further interim payments of fees or expenses until the time as the Quarterly Fee Application Request is submitted; (f) The Debtors will request that the Court schedule a hearing on Quarterly Fee Application Requests at least once every six months or at other intervals as the Court deems appropriate; (g) The pendency of an Objection to payment of compensation or reimbursement of expenses will not disqualify a Professional from the future payment of compensation or reimbursement of expenses; and (h) Neither (i) the payment of or the failure to pay, in whole or in part, monthly interim compensation and reimbursement of expenses, nor (ii) the filing of or the failure to file an Objection to any Fee Application or Quarterly Fee Application Request will bind any party-in-interest or the Court with respect to the allowance of interim or final applications for compensation for services rendered and reimbursement of expenses. All fees and expenses paid to Professionals are subject to disgorgement until final allowance by the Court. The Debtors also request that each Committee Member be permitted to submit statements of expenses and supporting vouchers to counsel to the applicable Committee, who will collect and submit the requests for reimbursement in accordance with the Compensation Procedures as if the Committee Member were a Professional. The first Monthly Fee Application to be submitted by each Professional will cover the period from the Petition Date through and including January 31, 2006. The first Interim Fee Application Deadline will be May 15, 2006, and the first Quarterly Fee Application Request will cover the Interim Fee Period from the Petition Date through and including March 31, 2006. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) R.H. DONNELLEY: Completes $2.2 Bil. Issue of New Debt Securities ---------------------------------------------------------------- R.H. Donnelley Corporation (NYSE: RHD - News) issued $365 million aggregate principal amount at maturity -- approximately $332 million gross proceeds -- of 6.875% series A-1 senior discount notes due in 2013. In addition, R.H. Donnelley Finance Corporation III, a newly formed subsidiary of the Company, issued: * $660 million aggregate principal amount at maturity -- approximately $600 million gross proceeds -- of 6.875% series A-2 senior discount notes due in 2013, and * $1,210 million of aggregate principal amount of 8.875% series A-3 notes due 2016. The proceeds of the series A-1 senior discount notes were used to fund a portion of the repurchase of all of the Company's outstanding shares of convertible preferred stock on Jan. 27, 2006. The proceeds from the series A-2 senior discount notes and the series A-3 senior notes will be used to pay Dex Media, Inc.'s stockholders in connection with the completed acquisition of Dex Media, Inc., and for other general corporate purposes including the payment of fees and expenses. All of the senior notes were sold in a private offering for resale to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 and in offshore transactions pursuant to Regulation S under the Securities Act. R.H. Donnelley -- http://www.rhd.com/-- is a leading Yellow Pages publisher and local online search company. RHD publishes directories with total distribution of approximately 28 million serving approximately 260,000 local and national advertisers in 19 states. RHD publishes directories under the Sprint Yellow Pages(R) brand in 18 states with total distribution of approximately 18 million serving approximately 160,000 local and national advertisers, with major markets including Las Vegas, Nevada, and Orlando and Fort Myers, Florida. In addition, RHD publishes directories under the SBC Yellow Pages brand in Illinois and Northwest Indiana with total distribution of approximately 10 million serving approximately 100,000 local and national advertisers. RHD also offers online city guides and search websites in its major Sprint Yellow Pages markets under the Best Red Yellow Pages(R) brand at http://www.bestredyp.com/and in the Chicago area at http://www.chicagolandyp.com/ * * * As previously reported in the Troubled Company Reporter on Feb. 2, 2006, Standard & Poor's Ratings Services lowered its ratings on R.H. Donnelley Corp. and its operating subsidiary Donnelley, Inc., including its corporate credit rating to 'BB-' from 'BB', as expected, following the company's announcement that the company has completed its acquisition of Dex Media Inc. In addition, all ratings on RHD and RHD Inc. were removed from CreditWatch with negative implications. Furthermore, Standard & Poor's affirmed bank loan rating on RHD Inc. and all ratings on the Dex family of companies, including the corporate credit rating of 'BB-'. The outlook is stable. As previously reported in the Troubled Company Reporter on Jan. 13, 2006, Fitch Ratings has initiated rating coverage on R.H. Donnelley Corp. by assigning a 'B+' Issuer Default Rating and a 'CCC+' rating to RHD's senior unsecured notes. Fitch has also assigned specific issue ratings to R.H. Donnelley Inc. and has revised ratings on Dex Media Inc. and its wholly owned subsidiaries, Dex Media West and Dex Media East. All Dex ratings are removed from Rating Watch Negative where they were placed Oct. 3, 2005. The 'B+' IDR applies to each of the five issuing entities. The rating action affects approximately $8.5 billion of debt outstanding at Sept. 30, 2005. The Rating Outlook is stable. R.H. DONNELLEY: Registers 2.5 Million Common Shares For Resale -------------------------------------------------------------- R.H. Donnelley Corp. filed a Registration Statement with the Securities and Exchange Commission to allow for resale of 2,527,251 shares of Common Stock for a maximum offering of $159,216,813. The shares are to be issued under the Dex Media, Inc. 2004 Incentive Award Plan and the Stock Option Plan. The holder will also have the right to purchase 1/100 of a share of R.H. Donnelley's Series B Participating Cumulative Preferred Stock. This right will also be issued with respect to each share of Common Stock. The Bank of New York is the successor to First Chicago Trust Company of New York as Rights Agent. R.H. Donnelley's stock is traded in the New York Stock Exchange. Last month, R.H. Donnelley's common stock was traded at a low price of $60.01 and high end of $65.62. This month, the common stock is traded in the $64 level. A full-text copy of R.H. Donnelley Corp.'s Registration Statement is available at no charge at http://ResearchArchives.com/t/s?50d R.H. Donnelley -- http://www.rhd.com/-- is a leading Yellow Pages publisher and local online search company. RHD publishes directories with total distribution of approximately 28 million serving approximately 260,000 local and national advertisers in 19 states. RHD publishes directories under the Sprint Yellow Pages(R) brand in 18 states with total distribution of approximately 18 million serving approximately 160,000 local and national advertisers, with major markets including Las Vegas, Nevada, and Orlando and Fort Myers, Florida. In addition, RHD publishes directories under the SBC Yellow Pages brand in Illinois and Northwest Indiana with total distribution of approximately 10 million serving approximately 100,000 local and national advertisers. RHD also offers online city guides and search websites in its major Sprint Yellow Pages markets under the Best Red Yellow Pages(R) brand at http://www.bestredyp.com/and in the Chicago area at http://www.chicagolandyp.com/ * * * As previously reported in the Troubled Company Reporter on Feb. 2, 2006, Standard & Poor's Ratings Services lowered its ratings on R.H. Donnelley Corp. and its operating subsidiary Donnelley, Inc., including its corporate credit rating to 'BB-' from 'BB', as expected, following the company's announcement that the company has completed its acquisition of Dex Media Inc. In addition, all ratings on RHD and RHD Inc. were removed from CreditWatch with negative implications. Furthermore, Standard & Poor's affirmed bank loan rating on RHD Inc. and all ratings on the Dex family of companies, including the corporate credit rating of 'BB-'. The outlook is stable. As previously reported in the Troubled Company Reporter on Jan. 13, 2006, Fitch Ratings has initiated rating coverage on R.H. Donnelley Corp. by assigning a 'B+' Issuer Default Rating and a 'CCC+' rating to RHD's senior unsecured notes. Fitch has also assigned specific issue ratings to R.H. Donnelley Inc. and has revised ratings on Dex Media Inc. and its wholly owned subsidiaries, Dex Media West and Dex Media East. All Dex ratings are removed from Rating Watch Negative where they were placed Oct. 3, 2005. The 'B+' IDR applies to each of the five issuing entities. The rating action affects approximately $8.5 billion of debt outstanding at Sept. 30, 2005. The Rating Outlook is stable. REFCO INC: Sale Hearing for Sale of Stake in PCIG Set for Feb. 28 ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 9, 2006, Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to authorize Refco Group Ltd., LLC, to sell "Purchase Shares," consisting of 14.29% minority stake in Partners Capital Investment Group, L.L.C., under the terms of a proposed repurchase agreement. Partners Capital is a non-regulated international investment advisory firm primarily involved in providing investment advisory and financial consulting services to institutions and high net worth individuals, as well as acting as general partner to six investment funds sponsored by Refco Group, with approximately $880,000,000 of assets under management. Shortly after the Petition date, Partners Capital approached the Debtors to propose a repurchase of the Purchase Shares. The Debtors and the Purchaser then engaged in intense negotiations over several weeks, culminating in the agreement memorialized in the Purchase Agreement. Pursuant to the Purchase Agreement, Refco Group will transfer, subject to Court approval and an auction process, its 14.29% interest in Partners Capital to Partners Capital in exchange for $1,540,000 in cash, without deduction or setoff of any kind. Based on the results of their analysis of the Debtors' ongoing and future business prospects, the Debtors' management and financial advisors have concluded that the best way to maximize value for the Debtors' estates is to sell the Purchase Shares to Partners Capital and thereby avoid a liquidation sale or sale at a depressed price. * * * The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court authorizes the Debtors to sign the Purchase Agreement for the transfer of Refco Group Ltd., LLC's 14.29% minority stake in Partners Capital Investment Group, L.L.C. The Court further allows the Debtors to perform obligations under the Purchase Agreement, which arise before the Sale Hearing. The hearing to consider approval of the sale of the Purchase Shares to the successful bidder will be held on Feb. 28, 2006, 10:00 a.m. Eastern Time. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Court Okays Bid Procedures for Sale of Interest in PCIG ------------------------------------------------------------------ As reported in the Troubled Company Reporter on Jan. 10, 2006, Refco Inc., and its debtor-affiliates propose to implement uniform bid procedures for the sale of Refco Group Ltd., LLC's 14.29% minority stake in Partners Capital Investment Group, L.L.C. A full-text copy of the Bid Procedures is available for free at: http://bankrupt.com/misc/refcogroupbidprocedures.pdf The Bid Procedures contemplate an auction process similar to that conducted for the sale of the assets of Refco, LLC: * qualification of bidders, * access to information, and * a minimum initial overbid requirement. The Bid Procedures also contemplate certain protections for Partners Capital, as the opening bidder, who has committed to a floor price for the Auction. The Bid Procedures specifically provide that: (a) The Minimum Bid must be equal or exceed the sum of: * the $1,540,000 purchase price; plus * the $50,000 Minimum Overbid Increment; plus * the Break-Up Fee; plus * the Expense Reimbursement. (b) The initial overbid requirement of any qualified bid is an amount not less than $50,000, with further bidding in $10,000 increments; (c) If the Debtors receive a Qualified Bid other than the Acquisition Transaction, an auction will be held on _______ __, 2006, at __:00 _.m. Eastern Time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036 or at any other location as the Debtors may designate. (d) Refco Group is permitted to assemble a Disclosure Package, containing: * Partners Capital 2003 & 2004 Financials, * Partners Capital September 30, 2005 Financials, * Last 4 Quarters Income Statement and Balance Sheet, and * Fourth Amended and Restated Limited Liability Company Agreement dated July 31, 2005; (e) If there are qualified competing bids, the Debtors will allow Partners Capital and qualified bidders to submit improved bids. Based on the terms of the bids received and other information as the Debtors deem relevant, the Debtors, in their sole discretion, after consultation with representatives of the Official Committee of Unsecured Creditors, may adopt rules for the submission of improved bids and conduct the auction in all respects in a manner they determine, in their reasonable business judgment, will better promote the goals of obtaining the highest, best or otherwise financially superior proposal that is not consistent with any of the provisions of the Bidding Procedures Order or the Bankruptcy Code; (f) At the close of the Auction, the Debtors will identify which Qualified Bidder had the highest or otherwise best bid, which will be determined by considering: * the total consideration to be received by the Debtors; * the likelihood of each Qualified Bidder's ability to timely close a transaction and make any deferred payments, if applicable; and * the net benefit to the estate, taking into account the Breakup-Fee and Expense Reimbursement. * * * The Honorable Robert D. Drain of the Southern District of New York Bankruptcy Court directs the Debtors to comply with bid procedures pursuant to the Purchase Agreement in all respects. If the Debtors receive competing bids, an auction will be held on February 24, 2006, at 10:00 a.m. Eastern Time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, or any location as the Debtors may designate. The Debtors will provide to Partners Capital Investment Group, L.L.C., and each Qualified Bidder, a written notice of the Auction on or before February 21, 2006. Judge Drain further directs the Debtors and PCIG to consult with representatives of the Official Committee of Unsecured Creditors and the Administrative Agent for the Debtors' prepetition bank lenders prior to making any determinations or announcements and exercising their discretion as contemplated by the Bid Procedures. The hearing to consider approval of the sale of the Purchase Shares to the successful bidder will be held on Feb. 28, 2006, 10:00 a.m. Eastern Time. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) REFCO INC: Wants Court to Approve New Cash Investment Guidelines ---------------------------------------------------------------- Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that Refco Inc., and its debtor- affiliates have bank accounts located in various states and several foreign countries through which the Debtors manage cash transactions for their entire corporate enterprise. The assets in the Bank Accounts consist of cash, cash equivalents, short-term investments, and deposit accounts. Before the Petition Date, the Debtors invested their cash in accordance with general investment guidelines pursuant to Section 345 of the Bankruptcy Code. Ms. Henry notes that several of the Debtors' largest accounts are held in banks that are on the United States Trustee's approved depository list, including HSBC Bank USA, Bank of America, N.A., JPMorgan Chase and Wachovia Bank, N.A. All deposits held in the Approved Depositories will be invested in certain types of obligations. The Debtors believe that the institutions at which their investments are held are financially stable, and all deposits are designed to yield the maximum reasonable net return on the funds invested. To effectively manage the cash held in the Bank Accounts, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to invest in these types of accounts located at the Approved Depositories according to a new set of Investment Guidelines: (a) U.S. Treasuries/Government Agencies Obligations like Treasury Bills, notes and repurchase agreements issued or guaranteed by the U.S. Government or its agencies. There are no dollar limitations or portfolio percentage holding limits on those instruments. (b) Corporate Obligations Obligations like commercial paper issued by a company with rating no lower than A1/P1 for commercial paper and A3/A- for long term debt. Total corporate obligations are limited to $25 million per issuer and may not exceed 50% of the portfolio. (c) Bank Obligations Obligations, including bank deposits and certificates of deposit, of banks having a credit rating no lower than A3/A-. These obligations are limited to $25 million per issuer and 75% of the portfolio at the settlement date. (d) MoneyMarket Mutual Funds The funds must have a credit rating no lower than AAA or Aaa by Standard & Poor's, Moody's, or Fitch. These Investments are limited to $25 million with any one institution and must not exceed 25% of total assets under management in any one fund. No synthetically created instruments are permitted. The goals of the new Investment Guidelines are to preserve principal, provide liquidity and maintain yield. Investments made under the Investment Guidelines are considered short-term investments. Investment for speculative purposes is not permitted. Ms. Henry says that investment maturities will not exceed 30 days, and compliance with the Investment Guidelines will be guaranteed by a rigorous and daily process of internal review. The Debtors also propose to deposit amounts in other non- approved, U.S.-based banks, including Harris Bank. The Investment Guidelines limit that deposit to investments in obligations issued or guaranteed by the U.S. government or its agencies. There are no dollar limitations or portfolio percentage holding limits on those instruments. The Investment Guidelines, Ms. Henry clarifies, do not apply to securities held by Refco Capital Markets, Ltd. Moreover, the Debtors will continue to be bound by the terms and conditions provided in the stipulation and consent order limiting activities of RCM and Refco Securities LLC. Ms. Henry tells Judge Drain that the Investment Guidelines will enable the Debtors to maintain the security of their investments, while at the same time, providing them with the flexibility required to maximize the yield on investment and deposit of cash. In view of the magnitude of cash that is or will be held by the Debtors, Ms. Henry says investment in strict compliance with the requirements of Section 345(b) of the Bankruptcy Code is inconsistent with Section 345(a), which authorizes deposits or investments of a bankruptcy estate's assets in a manner that will "yield the maximum reasonable net return on money, taking into account the safety of deposit or investment." Section 345(b) provides that, for deposits or investments that are not "insured or guaranteed by the United States or by a department, agency or instrumentality of the United States or backed by the full faith and credit of the United States," the estate must require from the entity with which the money is deposited or invested a bond in favor of the United States secured by the undertaking of an adequate corporate surety. In the alternative, the estate may require the entity to deposit securities specified in 31 U.S.C. Section 9303. Ms. Henry says the requirement of obtaining a bond secured by the undertaking of a corporate surety from each of the numerous financial institutions with which the Debtors deposit or invest funds would be prohibitively expensive and administratively burdensome, and could offset much of the financial gain derived from investing in private as well as federal or federally guaranteed securities. Headquartered in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. (Refco Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) RIVERSTONE NETWORKS: Inks $170MM Asset Purchase Deal With Lucent ---------------------------------------------------------------- Riverstone Networks (Pink Sheets:RSTN) signed a definitive asset purchase agreement with Lucent Technologies (NYSE:LU) under which Lucent will acquire substantially all of Riverstone's business operations, not including its cash and convertible subordinated notes, for $170 million in cash. Completion of the transaction is subject to certain closing conditions. Over the last year, Lucent and Riverstone have worked together in a strategic alliance, delivering high-quality carrier Ethernet routers to service provider customers. This transaction provides Lucent with direct access to one of the fastest growing areas of carrier investment: next-generation Ethernet infrastructure. Both Lucent and Riverstone are committed to a seamless transition for Riverstone's customers, resellers and suppliers. For Riverstone, this transaction culminates the company's achievements over the past two years including: * establishing a strong presence in one of the fastest growing segments of the service provider market; * introducing technology advancements and new products; * the creation of India-based research and development; and * expanded deployments to Tier-1 carriers in North America, Europe and Asia. "We are extremely pleased and energized to join forces with an industry leader that we have admired and with which we have closely collaborated over the past year," Oscar Rodriguez, President and CEO of Riverstone, said. "We view this combination as a major win for our stockholders, customers, resellers and employees around the world. In addition to maximizing value for our stakeholders, this transaction will enable Riverstone to successfully build on its heritage of innovation. With Lucent, we will now be better able to address our customers' needs and to extend Riverstone's technology leadership into new markets while also keeping our development cycles on a fast track. In addition, Riverstone's employees will be part of a larger organization that is ideally positioned to compete in today's rapidly evolving global marketplace." Following the close of the transaction, Riverstone will become part of Lucent's Multimedia Network Solutions business. Substantially all of Riverstone's employees are expected to join Lucent. Terms As a condition of the asset purchase agreement, Riverstone has agreed to conduct the sale of its business under the provisions of Chapter 11, section 363 of the U.S. Bankruptcy Code. Following this sale, Riverstone intends to: * satisfy its remaining non-operating liabilities including payment of its convertible subordinated notes in the amount of $65,875,000; * provide for any contingent liabilities and costs of liquidation; and * distribute its remaining cash to Riverstone's shareholders as part of a plan of liquidation. Riverstone tells its shareholders that they should consult with respective their tax advisors as to the income tax ramifications of the liquidating cash distributions. While Riverstone presently has sufficient cash to fund its continuing operations, U.S. bankruptcy law permits use of Section 363 of Chapter 11 for solvent companies that wish to sell their assets in a supervised auction. Riverstone believes that the use of Section 363 in this fashion ensures an orderly strategic sale of the business and follow-on liquidation and dissolution of its public entity. Riverstone filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware on Feb. 7, 2006. Because Riverstone is conducting the sale under Section 363, the completion of Riverstone's financial audit will not be necessary, and accordingly, work with the auditors has been suspended. Riverstone's transaction with Lucent is expected to close by the middle of the calendar year 2006. The transaction is also subject to customary regulatory approvals, the resolution of the Securities and Exchange Commission's pending investigation of accounting issues that arose under Riverstone's prior management, and bankruptcy court approval of the final sale terms. No shareholder consent is required. Advisors As directed by its Board of Directors, Riverstone conducted a thorough process of exploring strategic and financial alternatives during 2005 with the advice of Sonenshine Partners LLP as Riverstone's investment banking firm and Morgan, Lewis & Bockius LLP as outside legal counsel. About Lucent Technologies Headquartered in Murray Hill, New Jersey, Lucent Technologies -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. About Riverstone Networks Headquartered in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. RIVERSTONE NETWORKS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Riverstone Networks, Inc. 5200 Great America Parkway Santa Clara, California 95054 Tel: (408) 878-6500 Fax: (408) 878-6501 Bankruptcy Case No.: 06-10110 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Blue Coast Software 06-10111 The OASys Group, Inc. 06-10112 Riverstone Networks SPC, Inc. 06-10113 Pipal Systems, Inc. 06-10114 Type of Business: The Debtor is a provider of networking technologies and telecommunication services for businesses. See http://www.riverstonenet.com/ Chapter 11 Petition Date: February 7, 2006 Court: District of Delaware (Delaware) Judge: Peter J. Walsh Debtors' Counsel: Edmon L. Morton, Esq. Robert S. Brady, Esq. Young, Conaway, Stargatt & Taylor LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 Financial Condition as of December 24, 2005: Total Assets: $98,341,134 Total Debts: $130,071,947 Consolidated List of Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Association Bonds $65,875,000 Corporate Trust Services Nevada Financial Center, 2300 West Sahara, 3rd Floor Las Vegas, NV 89102 IXIA Trade $135,654 26601 West Agoura Road Calabasas, CA 91302 Hewlett-Packard Espanola, S.L. Trade $53,442 Carretera N-V1, KM Madrid, Spain Exhibit Central Trade $15,275 Molex Connector Trade $13,621 Avnet Trade $12,516 Miracle Engineers Trade $8,000 Grant Thornton LLP Trade $4,949 Dennemeyer & Co. Ltd. Trade $3,341 Light Reading Inc. Trade $3,200 CDW Computer Trade $2,560 Spherion Trade $1,680 Office Depot Business Trade $912 Calgreg Electronics Trade $582 CPR Networks Trade $541 Meritronics Inc. Trade $440 Elliott Laboratories Inc. Trade $400 Axess Limousine, Inc. Trade $324 Netpower Technologies Trade $221 Leboulanger Trade $152 ROUGE INDUSTRIES: Wants Severstal's Mineral Lease Rights Clarified ------------------------------------------------------------------ Rouge Industries, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to confirm the validity of the transfer of certain mineral leases to Severstal North America, Inc., under the terms of the asset purchase agreement governing the sale of substantially all of the Debtors' assets to OAO Severstal. Severstal North America is the U.S.-based affiliate of OAO Severstal, Russia's second largest steel producer. In December 2003, the Bankruptcy Court approved the sale of substantially all of the Debtors' assets to OAO for $285.5 million. Among the assets sold were agreements covering certain of the Debtors' oil and gas interests in Kentucky. Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, tells the Bankruptcy Court that the Debtors' right to collect royalties under these agreements was effectively conveyed to Severstal pursuant to the asset purchase agreement and subsequent court order approving the sale. However, several parties to the mineral leases have questioned Severstal's right over the royalties and have asserted that the leases were not conveyed to Severstal. To allow Severstal to enforce the terms of the leases, the Debtors' also ask the Bankruptcy Court to approve a Lease Assignment Agreement that would formally convey the leases to Severstal. The Debtors say that the Bankruptcy Court's December 2003 order approving the sale gives them sufficient authority to enter into the Lease Assignment Agreement. The Debtors inked the Lease Assignment Agreement out of an abundance of caution. They maintain that the mineral leases have already been transferred to Severstal based on the original asset purchase agreement. The Debtors point out that the mineral leases are considered as property interests under Kentucky law and are not executory contracts that the Debtors have to convey to Severstal. Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272). Donna L. Harris, Esq., Robert J. Dehney, Esq., Eric D. Schwartz, Esq., Gregory W. Werkheiser, Esq., and Alicia B. Davis, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $558,131,000 in total assets and $558,131,000 in total debts. On Dec. 19, 2003, the Court approved the sale of substantially all of the Debtors' assets to Severstal N.A. for $285.5 million. The Asset Sale closed on Jan. 30, 2005. SATMEX: Inks Debt Restructuring Accord with Senior Noteholders -------------------------------------------------------------- Satelites Mexicanos, S.A. de C.V., Mexico's leading satellite service provider, announced that the principal terms of a restructuring of its indebtedness, supported by the Conciliador appointed in its Concurso Mercantil proceeding, were reached among the ad-hoc committees of holders of the Senior Secured Floating Rate Notes due 2004 and the 10-1/8% Senior Notes due 2004, the Company and its shareholders. "After more than two years of trying to reconcile many highly complex issues, I am pleased that Satmex will emerge from this process with a better financial outlook and a more competitive company, able to continue delivering premier satellite services to its most important constituents, its customers," said Sergio Autrey, Chairman and CEO of Satmex. "The upcoming launch of Satmex 6 in May of this year will fortify the company even further." Richard Mastoloni, vice president and treasurer of Loral and representing Loral's interests in Satmex said, "This agreement is the culmination of the last few years of hard work that Loral has contributed to the restructuring of Satmex's business. Without the need for external financing, Satmex will now be able to launch the Space Systems/Loral-built Satmex 6 satellite, one of the region's largest and most powerful satellites that will provide high-demand C- and Ku-band coverage of the entire Western hemisphere." Thomas Heather, the Conciliador in the Concurso Mercantil proceeding of Satmex, appointed at the request of Mexico's Ministry of Communications and Transportation, said, "The challenge was to preserve the substantial value inherent in Satmex and to quickly bring all parties into agreement in order to eradicate the uncertainty that has existed thus far in the process. The country's invaluable assets, its orbital positions and its satellite coverage, will continue to receive the key communication support of Satmex. This continuity will create the confidence necessary for new investment in this area. All applicable governmental approvals necessary to implement the restructuring plan, including those of the Ministry of Communications and Transportation, are expected to be issued in due course and in a timely manner." "The ad hoc committee of the 10 1/8 percent senior noteholders is pleased that we have finally reached a fundamentally fair agreement-in-principle that creates the sound financial footing required for Satmex to succeed," said Robert L. Rauch, partner and director of research of Gramercy Advisors LLC, who heads the committee. "We would like to thank the conciliador Thomas Heather and the Mexican government for providing the leadership necessary to reach this consensual restructuring." "This has been a complicated and challenging deal," said Mitchell Harwood of Mitchell A. Harwood Partners, financial advisor to the Ad Hoc Committee of Floating Rate Noteholders. The Floating Rate Noteholders, including GoldenTree Asset Management and Murray Capital Management, are pleased that they have arrived at an agreement in principle and look forward to a speedy resolution of the deal. The Company expects that, with the support of its Creditors and shareholders, negotiations of the comprehensive terms and conditions will move forward quickly and resolution of the many outstanding issues will be achieved in a timely manner, although there is no assurance that final agreement will be reached. The restructuring agreement is subject to receipt of necessary Mexican government regulatory approvals. Specifically, the agreement provides that holders of the existing U.S.$203.4 million of FRNs will receive new first priority senior secured notes with a face value equal to the sum of current principal and accrued interest through the effective date of the restructuring in satisfaction of the obligations due under the FRNs. The terms proposed for the First Priority Senior Secured Notes are as: -- Five year maturity with a quarterly coupon of LIBOR + 875 basis points; -- Callable at a price of 103 in year 1, 102 in year 2, 101 in year 3 and at par (plus accrued interest); -- First priority security interest in Satmex's assets; and -- Cash sweep prepayments on any cash balances over US$5 million. The agreement also includes the issuance of new second lien senior notes in the principal amount of US$140,000,000 and certain shares of reorganized Satmex to the holders of the existing U.S.$320 million of HYBs in satisfaction of the obligations due under the HYBs including all accrued interest. The proposal provides for these terms for the Second Priority Senior Secured Notes: -- Seven year maturity with a quarterly coupon of 10-1/8% all-in, with 0 percent cash payment in year 1, 2% cash payment until the First Priority Senior Secured Notes are paid in full, after which time the coupon will be paid wholly in cash; -- Second lien on Satmex's assets junior in priority, operation and effect to the security interests of the First Priority Senior Secured Notes; -- After the full payment of the First Priority Senior Secured Notes, cash sweep prepayment on any cash balances over US$5 million; -- In exchange for capitalization of the balance of their claim of US$274 million in principal and unpaid interest, the holders of the HYBs will receive approximately 80% of the economic interest in the equity of Satmex including approximately 47% of the voting capital; and the shareholders agreement will include certain minority governance rights. Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V. -- http://www.satmex.com/-- is the leading provider of fixed satellite services in Mexico and is expanding its services to become a leading provider of fixed satellite services throughout Latin America. Satmex provides transponder capacity to customers for distribution of network and cable television programming and on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications, as well as satellite internet services. The Debtor is an affiliate of Loral Space & Communications Ltd., which filed for chapter 11 protection on July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710). Some holders of prepetition debt securities filed an involuntary chapter 11 petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y. Case No. 05-13862). The Debtor, through Sergio Autrey Maza, the Foreign Representative, Chief Executive Officer and Chairman of the Board of Directors of Satmex filed an ancillary proceeding on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103). Matthew Scott Barr, Esq., Luc A. Despins, Esq., Paul D. Malek, Esq., and Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represent the Debtor. When the Debtor filed an ancillary proceeding, it listed $900,000,000 in assets and $688,000,000 in debts. SEPRACOR INC: Earns $37.2 Million for Fourth Quarter Ended Dec. 31 ------------------------------------------------------------------ Sepracor Inc. (Nasdaq: SEPR) reported its consolidated financial results for the fourth quarter and full year ended Dec. 31, 2005. For the three months ended Dec. 31, 2005, Sepracor's consolidated revenues were approximately $311.1 million, of which revenues from Sepracor's pharmaceutical product sales were approximately $302.9 million: -- XOPENEX(R) brand levalbuterol HCl Inhalation Solution revenues were $146 million, -- XOPENEX HFA(TM) brand levalbuterol tartrate Inhalation Aerosol revenues were $12 million, and -- LUNESTA(TM) brand eszopiclone revenues were $144.9 million. Net income for the fourth quarter of 2005 was approximately $37.2 million. These consolidated results compare with consolidated revenues of $131.4 million, of which revenues from Sepracor's pharmaceutical product sales (XOPENEX Inhalation Solution) were approximately $117.2 million, and a net loss of $33.7 million, for the three months ended Dec. 31, 2004. For the year ended Dec. 31, 2005, Sepracor's consolidated revenues were approximately $820.9 million, of which revenues from Sepracor's pharmaceutical product sales were approximately $769.7 million: -- XOPENEX Inhalation Solution revenues were $428.5 million, -- XOPENEX HFA revenues were $12.0 million, and -- LUNESTA revenues were $329.2 million. Net income for the year ended Dec. 31, 2005, was approximately $5 million. These consolidated results compare with consolidated revenues of $380.9 million, of which revenues from Sepracor's pharmaceutical product sales (XOPENEX Inhalation Solution) were approximately $319.8 million, and a net loss of $295.7 million, for the year ended Dec. 31, 2004. Included in the net loss for the year ended December 31, 2004, was a charge of approximately $69.8 million, or approximately $0.76 per share, representing inducement costs incurred in connection with the conversion of convertible subordinated notes into shares of Sepracor common stock. "The year 2005 was a year of significant growth for Sepracor and its stakeholders. It marks our first profitable year, aided by the successful launch in April of LUNESTA brand eszopiclone for the treatment of insomnia. In December, we expanded our XOPENEX franchise with the launch of XOPENEX HFA, a metered-dose inhaler (MDI) for the treatment or prevention of bronchospasm," Timothy J. Barberich, Chairman and Chief Executive Officer of Sepracor said. "We also submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration for arformoterol, a nebulized long-acting beta-agonist for the treatment of chronic obstructive pulmonary disease (COPD), advanced our early-stage pipeline of pharmaceutical products, and presented and published data related to our LUNESTA and XOPENEX product franchises. We are proud of our successes during the past year. With these accomplishments, we believe we have positioned Sepracor for continued growth and profitability for 2006." Sepracor continues to earn royalties on sales of out-licensed antihistamine products. These include: * ALLEGRA(R) brand fexofenadine HCl -- marketed by sanofi- aventis, Sepracor earns royalties in countries outside the U.S. where Sepracor holds patents relating to fexofenadine, including Japan, Europe, Canada and Australia; * CLARINEX(R) brand desloratadine HCl -- marketed by Schering- Plough Corporation, Sepracor earns royalties on sales of all formulations of CLARINEX in the U.S. and other countries where Sepracor holds patents relating to desloratadine; and * XYZAL(R)/XUSAL(TM) brand levocetirizine -- marketed by UCB, Sepracor earns royalties on sales of levocetirizine in European countries in which the product is sold. In 2005, royalty revenue for these products was approximately $51.2 million. Sepracor Inc. is a research-based pharmaceutical company dedicated to treating and preventing human disease through the discovery, development and commercialization of innovative pharmaceutical products that are directed toward serving unmet medical needs. Sepracor's drug development program has yielded an extensive portfolio of pharmaceutical compound candidates with a focus on respiratory and central nervous system disorders. Sepracor's corporate headquarters are located in Marlborough, Massachusetts. As of September 30, 2005, Sepracor's equity deficit narrowed to $212,788,000 from a $331,115,000 deficit at Dec.31, 2004. * * * Sepracor Inc.'s corporate credit rating carries Standard & Poor's CCC+ rating. SPECTRUM BRANDS: S&P Lowers Corporate Credit Rating to B from B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on The Atlanta, Georgia-based Spectrum Brands Inc., including its corporate credit rating to 'B' from 'B+'. The ratings were also removed from CreditWatch with negative implications where they were placed on Nov. 10, 2005. The outlook is stable. About $2.3 billion of debt is affected by this action. The downgrade is based on the company's weak operating performance since the fourth quarter of fiscal 2005 due primarily to negative trends in its North American and European battery segments and increasing commodity costs which have pressured margins. "While Spectrum Brands has taken steps to address these issues and expects cost savings related to synergies from the United Industries and Tetra Holdings GmbH acquisitions, the competitive operating environment and continued commodity cost pressure are expected to challenge the company to improve its financial performance in the near term," said Standard & Poor's credit analyst Patrick Jeffrey. STARWOOD HOTELS: Earns $422 Million of Net Income in 2005 --------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., earned $423 million of income from continuing operations for the year ended Dec. 31, 2005, as compared to $369 million of income from continuing operation a year earlier. Net income, after discontinued operations, was $422 million, versus $395 million of net income in 2004. Income from continuing operations was $159 million in the fourth quarter of 2005 compared to $111 million for the same period in 2004. Starwood Hotels' management reported that for the thirteenth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as for system-wide hotels. According to Smith Travel Research, system-wide market share in North America increased approximately 100 basis points for the full year 2005 when compared to 2004. The Company's results continued to be negatively impacted by lost business in New Orleans, Cancun and Miami as a result of damage at its owned hotels from Hurricanes Katrina and Wilma. Although the Company has recorded expenses for its insurance deductibles associated with these storms, in accordance with accounting rules, it has not recorded any of its expected recoveries under its existing business interruption insurance policies. Steven J. Heyer, CEO, said "I am very pleased with our results this quarter. We beat our top and bottom line expectations and for thirteen quarters in a row our market share has increased. We are moving full speed ahead with all of our strategic initiatives and with the brand building initiatives rolling out across our system, we expect our momentum to continue. "During the quarter we made significant progress toward reducing our investment in owned real estate, while maintaining long-term, attractive management agreements with an outstanding partner. I couldn't be more pleased with the results of this transaction and the future opportunities it creates for us. And, as we said when we announced the deal, it re-opened our window for share repurchases. Since our window opened, we have repurchased $373 million in stock, and we plan to be buyers of our stock throughout 2006. "We closed on the purchase of the Le Meridien brand, adding another upper upscale brand and 122 hotels to our system. The brand is very strong, and we are pleased with the quality of the hotel management teams in place. After these two transactions, our earnings become more balanced between hotel ownership and fee income. We expect to aggressively drive both businesses." At Dec. 31, 2005, the Company's balance sheet showed $12.4 billion in total assets and total debt, including debt classified as held for sale, of $4.145 billion. At Dec. 31, 2005, debt was approximately 69% fixed rate and 31% floating rate and its weighted average maturity was 4.4 years with a weighted average interest rate of 6.27%. Asset Sale In 2005, in addition to the sale of three hotels in joint ventures that Starwood Hotels held a minority interest in, the Company sold ten wholly owned hotels for cash proceeds of approximately $510 million. Additionally, in January 2006 the Company completed the sale of four hotels for proceeds of $234 million in cash. The Company had previously announced that it entered into a definitive agreement with Host Marriott Corporation to sell 38 hotels for cash as well as assumption of debt and stock. As part of the agreement, the Company will manage the hotels for up to 40 years. About Starwood Hotels With headquarters in White Plains, N.Y., Starwood Hotels & Resorts Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the leading hotel and leisure companies in the world with approximately 750 properties in more than 80 countries and 120,000 employees at its owned and managed properties. With internationally renowned brands, Starwood(R) corporation is a fully integrated owner, operator and franchiser of hotels and resorts including: St. Regis(R), The Luxury Collection (R), Sheraton(R), Westin(R), Four Points(R) by Sheraton, and W(R), Hotels and Resorts as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. * * * Standard & Poor's Ratings Services revised its outlook on hotel and leisure company Starwood Hotels & Resorts Worldwide Inc. to positive from stable. At the same time, the ratings were affirmed on the Company, including the 'BB+' corporate credit rating. In addition, Standard & Poor's placed its 'BB+' ratings on Starwood subsidiary ITT Corp.'s $450 million senior notes and $150 million senior notes on CreditWatch with negative implications, reflecting the expectation that these obligations will be assumed by Host Marriott Corporation (BB-/Stable/--), a lower rated entity, subject to bondholder consent. The ratings on the notes would be lowered to the level of Host's senior unsecured rating, which is currently 'BB-', if they are assumed on a pari-passu basis upon the close of the transaction expected by the first quarter of 2006. STEEDS CROSSING: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Steeds Crossing Partners Joint Venture 150 Barsana Road Austin, Texas 78737 Bankruptcy Case No.: 06-10144 Chapter 11 Petition Date: February 6, 2006 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Eric R. Borsheim, Esq. Law Office of Eric R. Borsheim 1601 Rio Grande, Suite 360 Austin, Texas 78701 Tel: (512) 479-7068 Fax: (512) 477-0741 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have unsecured creditors who are not insiders. SUBURBAN PROPANE: Earns $38 Million in Quarter Ended Dec. 24, 2005 ------------------------------------------------------------------ Suburban Propane Partners, L.P. (NYSE: SPH) reported significantly improved earnings for the three months ended Dec. 24, 2005. Net income for the quarter ended Dec. 24, 2005 was $38.2 million, an increase of $13.3 million, or 53.4%, compared to the prior year quarter of $24.9 million. Revenues for the quarter ended Dec. 24, 2005, were $487.4 million, compared to the prior year quarter of $424 million. "We are extremely pleased with the first quarter earnings growth. The benefits of our field realignment and the elimination of our fuel oil ceiling program have already started to result in improvements to our operating results," Chief Executive Officer Mark A. Alexander said. "We are still dealing with an extremely high commodity environment and increased customer conservation, but we now have a stronger, more efficient operating infrastructure and are better able to take advantage of margin opportunities, particularly in the fuel oil segment, while our core propane segment continues to perform strongly. We are well positioned for significant earnings growth in fiscal 2006." At Dec. 24, 2005, assets totaled $1 billion and liabilities totaled $952 million, resulting in a stockholders' equity of $97.5 million. Headquartered in Whippany, New Jersey, Suburban Propane Partners, L.P. -- http://www.suburbanpropane.com/-- is a publicly traded Master Limited Partnership listed on the New York Stock Exchange. Suburban has been in the customer service business since 1928. The Partnership serves the energy needs of approximately 1,000,000 residential, commercial, industrial and agricultural customers through more than 370 customer service centers in 30 states. * * * As reported in the Troubled Company Reporter on Oct. 26, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on retail propane and fuel oil distributor Suburban Propane Partners L.P. to 'B+' from 'BB-' and removed the company's ratings from CreditWatch with negative implications, where they were placed on Sept. 19, 2005. The outlook is stable. Standard & Poor's also lowered its senior unsecured rating on Suburban to 'B-' from 'B'. Whippany, New Jersey-based Suburban had $563.7 million of debt as of June 25, 2005. The rating action reflects Suburban's weak operating and financial performance in fiscal 2005 at the partnership's fuel oil segment, primarily due to spikes in commodity prices and an ineffective hedging strategy for the partnership's fuel oil customer ceiling program. SUPERB SOUND: Wants to Sell Two Retail Stores' Assets to Phase One ------------------------------------------------------------------ Superb Sound, Inc., asks the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis for permission to sell substantially all of its assets free and clear of any and all liens, claims, interest, encumbrances, and charges. The Debtor negotiated an agreement to sell the assets of its retail stores located at 1005 Lewis and Clark Highway, in Clarksville, Indiana, and 4600 Shelbyville Road, in Louisville, Kentucky to Phase One Orace, LLC. The essential terms of the purchase agreement include: i) a sum equal to $300,000 paid in cash at Closing for the Debtor's inventory located at the Louisville and Clarksville Store, selected by the Buyer at the end of the business day on the day before closing. The inventory will be determined by physical count and valued at cost; ii) a sum equal to $125,000 paid in the form of an installment note payable to the Debtor from the buyer for a mutually agreeable non compete contract for the term of two years; iii) a sum equal to $40,000 paid in cash at Closing for the Debtor's assets selected by the Buyer at the end of the business day on the day before Closing. The assets will be determined by physical count and valued at cost or another mutually agreeable amount; and iv) a sum equal to $35,000 paid in cash at Closing for the Debtor's goodwill from the Louisville and Clarksville Stores. Under the agreement, the Debtor will assume and assign the contracts to the buyer with the transfer of the other assets. Reason For the Sale The Debtor tells the Court that the company suffered financial difficulty for a period of time prior to its chapter 11 filing. After it filed for bankruptcy, sales at the stores have not met its expectations. The Debtor asserts that it doesn't need all 7 of its remaining retail stores to reorganize. One retail store in Lexington location has already been sold. The Debtor believes that by selling its assets is beneficial to the estate because it liquidates the stores. The real property lease on the stores has been rejected and the Debtor would have closed the stores altogether. Due to lagging sales, the Clarksville location has already been closed. Security Interest The sale proceeds, which are not greater than $500,000, will be paid to Old National Bank's secured debt. Old National Bank holds a validly and properly perfected first-priority security interest to the Debtor's assets. Old National has at least $4.5 million interest value. Secured vendors also hold perfected security interest in and to the goods they have sold to the Debtor, however, the secured vendors have all subordinated their secured position to Old National by subordination agreements prior to the Debtor's chapter 11 filing, and are therefore wholly-unsecured based on an analysis of the value of the assets relative to the amount of the Old National outstanding debts. Headquartered in Indianapolis, Indiana, Superb Sound, Inc., dba Ovation, Ovation Audio/Video and Ovation Home -- http://www.ovation-av.com/-- is an audio, video and mobile electronics specialist. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137). William J. Tucker, Esq., at William J. Tucker & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,416,642 in assets and $14,546,796 in debts. TELOGY INC: Files Joint Plan of Reorganization in N.D. of Calif. ---------------------------------------------------------------- Telogy, Inc., and its debtor-affiliate, e-Cycle, LLC, filed a Joint Plan of Reorganization with the U.S. Bankruptcy Court for the Northern District of California on January 23, 2005. The Debtors sought the Court's authority to file the Plan without a disclosure statement. Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C., informs the Court that the Debtors would like the flexibility to file the Plan earlier than the Disclosure Statement to show its vendors and customers that it is making quick progress in its chapter 11 proceeding. Reorganized Companies On or before the Plan's effective date, Reorganized Telogy will be formed as a Delaware limited liability company. Reorganized Telogy will be treated as a partnership for federal income tax purposes. On or before the Effective Date, Reorganized e-Cycle will be formed as a Delaware limited liability company. Reorganized Telogy will be the sole member and manager of Reorganized e-Cycle, and Reorganized e-Cycle shall be disregarded as an entity separate from Reorganized Telogy for federal income tax purposes. On the Effective Date, Reorganized Telogy will acquire substantially all of the assets of Telogy, and Reorganized e-Cycle will acquire substantially all of the assets of e-Cycle, pursuant to the applicable Asset Purchase Agreement. Telogy's equipment has a going concern value of not more than $121.84 million. In addition, contemporaneously with the acquisition, Reorganized Debtors will assume the obligations set forth in the Plan, including, with respect to Reorganized Telogy, the obligations under the New Securities. Reorganized Telogy will transfer its new securities and cash to the holders of allowed claims in accordance with the Plan. On the Effective Date, Anthony Schiavo, Telogy's Chairman of the Board of Directors and Chief Executive Officer, will contribute, for nominal value, or cause to be contributed to Reorganized Telogy all of the outstanding equity securities of Telogy International, which will become a wholly owned subsidiary of Reorganized Telogy. Exit Facility On the Effective Date, Reorganized Telogy and will enter into the exit financing agreements with financial entities yet to be disclosed by the Debtors. The Exit Facility will provide for, among other things: (1) a revolving credit facility of at least $20 million, partially drawn as of the Effective Date; (2) a term of five years; (3) interest will be payable quarterly in arrears; (4) the indebtedness of Reorganized Telogy and its subsidiaries evidenced by the Exit Facility will rank senior in right of payment to any and all subordinated indebtedness and pari passu in right of payment with all other existing and future unsubordinated indebtedness; (5) secured with a first priority security interest; (6) financial covenants customary for loans of this type, and will be mutually agreed to by the Ad Hoc Committee -- comprised of B IV Capital Partners, L.P., DK Acquisition Partners, and Sunrise Partners Limited Partnership -- and the Debtors, including, without limitation, in respect of maximum capital expenditures and leverage and minimum cash balances; (7) other covenants customary for debt of this type, and as will be mutually agreed to by the Ad Hoc Committee and Debtors; and (8) all documentation relating to the Exit Facility will be governed by the law of the State of New York. Treatment of Claims and Interests Holders of claims under the Fourth Amended and Restated Credit Agreement dated August 12, 2003, and holders of the Debtors': -- 7.48% Senior Secured Notes, Series A, due March 15, 2003, under the Note Agreement dated March 15, 1998; -- 7.69% Senior Secured Notes, Series B, due March 15, 2005; and -- 8.82% Senior Secured Notes, Series 1999-A, due July 15, 2006, under that certain Note Agreement dated as of July 15, 1999; will receive: (1) a pro rate share from the special trust account maintained by Bank of America, N.A., as collateral agent under the Consolidated Security Agreement dated December 31, 1998, under the Amended and Restated Intercreditor Agreement dated December 31, 1998, into which certain preferential payments have been deposited. (2) a pro rata share of 793,083 Series A New Shares, comprising of: (a) four classes of membership interest in Reorganized Telogy issued on the Effective Date; and (b) warrants to be issued to holders of subordinated claims; and (3) cash payment for costs and expenses incurred in connection with the Debtor's reorganization including, without limitation: (a) any fees and costs of legal and financial advisors retained by the Ad Hoc Committee; and (b) the fees and costs of legal and financial advisors retained by the Ad Hoc Noteholder Committee -- presently consisting of Minnesota Life Insurance Company, The Canada Life Assurance Company of New York, Canada Life Insurance Company of America, The Prudential Insurance Company of America, United of Omaha Life Insurance Company, and Guggenheim Partners and the Collateral Agent. Holders of general unsecured claims will receive their pro rata share of a $100,000 pot. Agilent, Tektronix, and Rhode & Schwarz will receive 100% of their allowed claims. If holders of obligations under: -- the 14.00% Series A Senior Subordinated Notes due 2010 and 14.01% Series B Senior Subordinated Notes due 2011 issued by Telogy under that certain Note Purchase and Private Shelf Agreement, dated as of December 14, 1999; -- 16% Senior Subordinated Notes due 2011 issued by Telogy under that certain Note Purchase Agreement, dated as of August 12, 2003; -- 14% Series A Senior Subordinated Notes due 2007 and the 14% Series B Senior Subordinated Notes due 2009 issued by Telogy under that certain Note Purchase Agreement, dated as of December 23, 1993; -- the Amended and Restated Subordinated Noted dated January 1, 2000; vote to accept the Plan, they will receive, in full satisfaction of their claims, a pro rata share of: (1) 3,826 Series A New Shares; and (2) two series of Subordinated Claim Warrants, Series X and Series Y, to acquire 88,498 Series A New Shares, with each such series entitling their Holders to purchase, in the aggregate, 44,249 Series A New Shares. If they vote to reject the Plan, they will be treated as general unsecured claim holders Holders of general unsecured claims amounting to $5,000 or less or general unsecured claims in excess of $5,000 where holders have irrevocably elected on their ballots cast as votes to accept the Plan to reduce their claims to $5,000 will recover 100% of their claim in cash. Holders of: -- intercompany claims; -- outstanding obligations under the Junior Subordinated Note Agreements with Massachusetts Mutual Life Insurance Company issued in 1995 and 1998; and -- equity interests; will receive nothing. A full-text copy of the Joint Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060207021529 Headquartered in Union City, California, Telogy, Inc. -- http://www.tecentral.com/-- rents, sells, leases electronic test equipment including oscilloscopes, spectrum, network, logic analyzers, power meters, OTDRs, and optical, from manufacturers like Tektronix, Rohde & Schwarz. Telogy, Inc., and its debtor-affiliate, e-Cycle, LLC, filed for chapter 11 protection on Nov. 29, 2005 (Bankr. N.D. Calif. Case No. 05-49371). Ramon M. Naguiat, Esq., at Pachulski, Stang, Ziehl, Young Jones & Weintraub P.C. represents the Debtor in its restructurng efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. TONY WEBBER: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Tony L. Webber 14442 Floret Estates Lane Cypress, Texas 77429 Bankruptcy Case No.: 06-30434 Chapter 11 Petition Date: February 6, 2006 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Aaron Keiter, Esq. The Keiter Law Firm, P.C. 4545 Mt. Vernon Houston, Texas 77006-5815 Tel: (713) 706-3636 Fax: (713) 706-3622 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 The Debtor did not file a list of its 20 largest unsecured creditors. TRANSALTA CORP: S&P Upgrades Pref. Shares' Rating to BB+ from BB ---------------------------------------------------------------- Standard & Poor's Ratings Services raised the long-term corporate credit rating on Calgary, Altanta-based, electricity generator TransAlta Corp. and its wholly owned subsidiary TransAlta Utilities Corp., to 'BBB' from 'BBB-'. Standard & Poor's also raised: * the rating on TransAlta's senior unsecured debt to 'BBB' from 'BBB-'; * the rating on TransAlta's preferred shares to 'BB+' from 'BB'; and * the rating on TransAlta Utilities' senior secured debt to 'BBB+' from 'BBB'. The outlook is stable. The ratings actions reflect a stronger financial profile and less aggressive financial policy and growth strategy, with no meaningful change expected for the company's business risk profile in the next several years. The upgrade also reflects Standard & Poor's expectation that TransAlta's financial profile will strengthen further, although marginally, in 2006 and that management will remain focused on managing volatility of key credit metrics. "TransAlta has successfully rebounded from the negative consequences of its historically aggressive growth and financial policy which have plagued the company's creditworthiness in the past few years," said Standard & Poor's credit analyst Nicole Martin. The company's greenfield construction projects initiated in previous years are complete and TransAlta is now benefiting from reduced capital outlays and a financial return on these investments. Furthermore, the commitment to a less aggressive balance sheet realized through modest debt reduction and a more moderate growth strategy also serves to support the company's creditworthiness. "Although TransAlta's sustainable financial profile is expected to support the 'BBB' rating, the company will continue to be hampered by its reliance on higher risk merchant cash flows for future growth initiatives or debt reduction," added Ms. Martin. The stable outlook reflects Standard & Poor's expectation that TransAlta will continue to demonstrate a commitment to credit quality by managing the volatility in its key credit metrics. The company's challenge will be to fund growth without weakening its strengthened balance sheet. A material debt-financed acquisition or greenfield generation project, an increase in the risk appetite of the trading organization, or a sustained deterioration in operating performance of the Alberta power purchase arrangement plants could result in an outlook revision to negative. Given the company's business risk profile and financial policy, a positive outlook or uplift to the rating is highly unlikely. UAL CORP: Asks Court to Approve Bond Interest Rate Settlement ------------------------------------------------------------- Pursuant to a Court-approved Chicago Municipal Bond Settlement Agreement, Reorganized UAL Corp is required to issue $149,646,114 par value (structured to trade at par) convertible notes due 2021 -- New UAL ORD Settlement Bonds -- so that they will trade, at the time of issuance, at a value not less than par, on terms that are "reasonably acceptable" to Stark Investments, L.P., and Shepherd Investments International, Ltd. On December 12, 2005, Stark and Shepherd filed a limited objection to the Plan of Reorganization contending that the indenture documents related to the Chicago Municipal Settlement Agreement were not yet in a form acceptable to them. The Debtors and Stark have subsequently reached an agreement on all issues but one -- the appropriate interest rate on the New UAL ORD Settlement Bonds. Erik W. Chalut, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, tells the Court that the Debtors are prepared to show, at an evidentiary hearing, that the interest rate they proposed will allow the New UAL ORD Settlement Bonds to be traded at par upon issuance as required by the Chicago Municipal Bond Settlement Agreement. Accordingly, the Debtors ask the Court to approve their proposed interest rate. The Debtors did not indicate the proposed interest rate in their pleading. 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' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITED SURGICAL: Moody's Reviews Low-B Ratings for Upgrade ---------------------------------------------------------- Moody's Investors Service placed under review for possible upgrade the B1 corporate family rating and the B3 senior subordinated note rating of United Surgical Partners Holdings, Inc., which is a wholly owned subsidiary of United Surgical Partners International, Inc. The review for possible upgrade follows the company's announcement that it has signed an agreement to acquire Surgis, Inc., a privately held surgery center company based in Nashville, Tennessee. Surgis operates 24 surgery centers and is in the process of developing seven additional units. Twenty of the 31 total facilities are located in markets presently served by United Surgical or one of its healthcare system partners. Surgis also manages the endoscopy service in 42 acute care hospitals and reported revenues under management of $118 million for 2005. The rating review for possible upgrade acknowledges the improved financial profile of the company on a standalone basis and Moody's expectation that incremental debt likely to be incurred with respect to the Surgis acquisition should have only a moderate impact on the company's financial leverage. Ratings placed under review for possible upgrade: * Corporate family rating, rated B1 * $150 million guaranteed senior subordinated global notes due 2011, rated B3 United Surgical (NASDAQ: USPI), which is headquartered in Dallas, Texas, currently maintains ownership interests or operates 104 surgical facilities. Of the company's 101 U.S.-based surgery centers, 68 are jointly owned with not-for-profit healthcare systems. United Surgical also operates three facilities in the United Kingdom. UNIVERSAL ACCESS: Court Confirms Second Amended Liquidating Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois confirmed the Second Amended Plan of Liquidation and approved the adequacy of the Second Amended Disclosure Statement jointly filed by Universal Access Global Holdings, Inc., and its debtor- affiliates and the Official Committee of Unsecured Creditors. The Court entered its order on Jan. 27, 2006. The Court also approved the appointment of Clear Thinking Group LLC as the Plan Administrator under the confirmed Plan. Summary of Second Amended Joint Plan The Amended Plan provides for the substantive consolidation of the estates, with all of the assets and liabilities of each of the Debtors to be consolidated into a single estate. On the effective date of the Plan: 1) all assets of the estates will be transferred to UAI, Inc. as a single pool of assets free and clear of all encumbrances, claims, and other interests, except as otherwise provided in the Plan or the Bankruptcy Court's confirmation order; and 2) all claims between the Debtors will be eliminated and claims against individual Debtors will be treated as one single claim for distribution purposes. On the effective date, all assets of the Debtors will be vested in UAI, Inc., which will continue to exist for the purpose of implementing the Plan. UAI, Inc. will be managed and governed by the Plan Administrator. The Plan Administrator will be empowered to effect all actions necessary to perform and enforce the duties, obligations and rights of UAI, Inc. under the Plan. Treatment of Claims and Interests 1) Prepetition priority non-tax claims will be paid in full after the effective date of the Plan. 2) Prepetition general unsecured claims, totaling approximately $44,034,000 will receive: a) pro-rata distributions of available funds, if any, remaining after payment or reserve for payment of allowed Prepetition priority non-tax claims, allowed administrative claims, allowed priority tax claims, allowed general unsecured convenience claims and costs of administration of the Plan; and b) the percentage of UAGH stock that is issued to UAI, Inc., pursuant to any Shell Sale transaction that may occur under Section 5.8 of the Plan. 3) Convenience Claims, totaling approximately $28,851 will receive after the effective date, either 80% of the amount of the allowed claim if the allowed claim is equal to or less than $1,000 or $800 if the amount of the allowed claim is greater than $1,000. 4) Untimely filed claims will receive pro-rata distributions of any remaining cash, if any, from the Cash Pool, after full payment of all allowed prepetition general unsecured claims. 5) Penalty and forfeiture claims will receive pro-rata distributions of any remaining cash, if any, from the Cash Pool, after full payment of all untimely filed claims. 6) Interest holders, totaling approximately $14,462,000 will receive pro-rata distributions of any remaining cash, if any, from the Cash Pool, after full payment of all penalty and forfeiture claims. 7) Secured claims, totaling approximately $309,000 will receive, at the option of the Plan Administrator either: a) assets securing the claim that has been abandoned to the holder of that claim and the holder will be allowed to pursue rights and remedies against those assets, including set-off, or b) a cash distribution equal to value of the assets securing the claim and the encumbrance against those assets will be terminated. A full-text copy of the Amended Disclosure Statement explaining the Amended Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060207021150 Headquartered in Chicago, Illinois, Universal Access Global Holdings, Inc. -- http://www.universalaccess.com/-- provides network infrastructure services and facilitates the buying and selling of capacity on communications networks. The Company and its debtor-affiliates filed for a chapter 11 protection on August 4, 2004 (Bankr. N.D. Ill. Case No. 04-28747). John Collen, Esq., and Rosanne Ciambrone, Esq., at Duane Morris LLC, represent the Company. David W. Wirt, Esq., and David Neier, Esq., at Winston & Strawn, represent an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $22,047,000 in total assets and $24,054,000 in total debts. URBAN HOTELS: Court Establishes March 1 as Claims Bar Date ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California set March 1, 2006, as the deadline for all creditors owed money by Urban Hotels, Inc., d/b/a LA Plaza Hotel, on account of claims arising prior to Nov. 28, 2005, to file their proofs of claim. Creditors must file written proofs of claim on or before the March 1 Claims Bar Date and deliver those forms to: Clerk of the U.S. Bankruptcy Court Edward R. Roybal Federal Building and Courthouse 255 East Temple Street Los Angeles, CA 90012 Copies must be sent to: M. Jonathan Hayes Law Offices of M. Jonathan Hayes 21800 Oxnard Street, Suite 840 Woodland Hills, CA 91367 Headquartered in Culver City, California, Urban Hotels Inc., operates Lax Plaza Hotel. The Company filed for chapter 11 protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No. 05-50140), to stop a foreclosure sale by AN Capital, Inc. M. Jonathan Hayes, Esq., of Woodland Hills, California, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $23,000,000 in assets and $20,000,000 in debts. USG CORP: Plans to Raise $1.8 Million Through Rights Offering ------------------------------------------------------------- To finance a portion of settlement payments to the asbestos personal injury trust, as well as avoid disputes as to the proper valuation of the shares, USG Corporation and its debtor- affiliates expect to raise $1,800,000,000 through a rights offering in connection with a plan of reorganization, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, disclosed in papers filed with the Court. The Debtors anticipate filing a plan and accompanying disclosure statement in February 2006. Mr. DeFranceschi says existing shareholders will be given the ability to purchase one additional share of USG Corp. stock for each share that they own. In addition, the Debtors intend that rights will be tradeable. As a result, should a shareholder not desire to purchase additional USG stock, it will be able to sell its right to do so in the open market. Under the rights offering, existing shareholders will merely be given the option to purchase additional shares of USG stock. As a result, the Debtors require that they have a firm commitment from a third party to purchase each share of USG stock that is not purchased by existing shareholders in the rights offering. "That commitment," Mr. DeFranceschi explains, "will help ensure that the Debtors receive the $1.8 billion necessary to make all payments to the PI Trust. Having that commitment will ensure that the Debtors can demonstrate at confirmation that the Plan is feasible for purposes of Section 1129(a)(11) of the Bankruptcy Code." On January 29, 2006, USG's Board of Directors amended a Rights Agreement, dated as of March 27, 1998, between USG and Harris N.A., as rights agent. Among other things, the amendment permits USG's proposed equity rights offering to proceed without triggering the original Rights Agreement and accelerates the expiration of rights to 11 days after the Plan's effectivity. A full-text copy of the Amended Rights Agreement is available for free at http://ResearchArchives.com/t/s?50c Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at Jones Day represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Wants to Settle Drake, Casillas & Scott PI Claims ------------------------------------------------------------- Marcus Drake, Ramon Casillas, and Brenda Casillas initiated a lawsuit against W.R. Grace & Co.-Conn. and its concrete admixtures dispenser technician, Jeremy Jay Kline, before the Superior Court of California, County of Sacramento, for injuries and damages sustained in a February 2003 automobile accident. Pursuant to the lawsuit, Mr. Drake asserted: -- $4,838 in past wage loss; -- $48,823 in past medical expenses; and -- $130,000 in projected future medical expenses. Mr. Casillas asserted: -- $28,695 in wage loss; -- $750,000 in future wage loss; -- $190,000 in claimed past medical expenses; and -- $180,000 in future medical expenses. Ms. Casillas alleged damages for loss of consortium. The three claimants also seek $103,000 for loss of Mr. Casillas' household services. Fabrice Scott initiated a separate suit against Grace and Mr. Kline for a currently undetermined amount, for injuries and damages. Grace has or will engage in settlement discussions regarding the Claims of each of the PI Claimants. Accordingly, the Debtors seek the Court's authority to settle the Claims and pay as an administrative claim against Grace's Chapter 11 estates an amount not to exceed the $500,000 insurance deductible that is applicable to all claims arising from the accident. Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) WESTON NURSERIES: Wants Plan-Filing Period Extended to May 12 ------------------------------------------------------------- Weston Nurseries, Inc. asks the U.S. Bankruptcy Court for the District of Massachusetts to extend, until May 12, 2006, the period within which it has the exclusive right to file a plan. The Debtor also wants to retain, until July 11, 2006, the exclusive right to solicit acceptances of that plan from creditors if a plan is filed by May 12, 2006. The Debtor is awaiting the Bankruptcy Court's decision on the long-standing dispute between its two shareholders, brothers Roger N. Mezitt and R. Wayne Mezitt, concerning the disposition of the leased portion of the land on which the Debtor operates and the abutting acreage. The proposed Shareholders' Settlement, if executed and approved will allow the Debtor to move forward with the planned sale process that should permit, after payment of secured and priority claims, full payment on all allowed general unsecured claims. The Debtor anticipates filing a plan and disclosure statement concurrent with or upon completion of the sale process to distribute the proceeds of the intended sale and proposed settlement. Headquartered in Hopkinton, Massachusetts, Weston Nurseries, Inc., -- http://www.westonnurseries.com/-- is central New England's premier resource in designing, creating, and enjoying outdoor living areas. Weston Nurseries grows and sells quality plants, trees, shrubs, and perennials. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. D. Mass. Case No. 05-49884). Alan L. Braunstein, Esq., at Riemer & Braunstein, LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. WESTPOINT STEVENS: Aretex Wants Panel's Lift Stay Motion Denied --------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Jan. 10, 2006, the Steering Committee asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to permit it and the First Lien Collateral Trustee to exercise any and all rights and remedies that may exist with respect to any and all of the Collateral that secures the outstanding First Lien Indebtedness owed by WestPoint Stevens, Inc., and its debtor-affiliates. Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman, LLP, in Los Angeles, California, asserts that relief from stay is mandatory under Section 362(d)(2) of the Bankruptcy Code given that the Debtors have no equity in the Securities and cannot demonstrate that the Securities are necessary for an effective reorganization. Even if relief from stay were not mandatory, Mr. Levinson contends that the Court should grant relief from stay for cause under Section 362(d)(1). Under the Sale Order, the Court held the value of the Securities was $575,800,000, which is at least $78,000,000 below the total principal amount of the First Lien Indebtedness and the Second Lien Indebtedness as of July 8, 2005, not even taking into account unpaid accrued interest, fees, expenses since August 1, 2005, of more than $13,000,000. Mr. Levinson adds that the Debtors also cannot carry their burden to prove that the Securities are necessary for an effective reorganization. Mr. Levinson notes that the Debtors have abandoned all prospects for a plan of reorganization, as evidenced by their motion to dismiss their cases filed August 2005. The Debtors remain administratively insolvent, unable to reorganize the business, which has been sold, or fund a liquidating plan of reorganization, Mr. Levinson points out. The Debtors now face accrual of interest on the outstanding First Lien Indebtedness of more than $3,000,000 per month. Given the Debtors' admission that reorganization is impossible and that there is no reasonable likelihood of rehabilitation, Mr. Levinson asserts, immediate relief from the automatic stay is warranted. In the alternative, Mr. Levinson maintains that cause exists by reason of the Debtors' inability to provide the Objecting First Lien Lenders and the Steering Committee with adequate protection of their secured claims. Aretex and Purchasers Object Aretex, LLC, WestPoint International, Inc. and WestPoint Home, Inc., ask the Court to deny the Steering Committee's request to lift the automatic stay. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, in New York, argues that the Steering Committee's request to lift the stay is supported by two false presumptions that: -- some of the equity securities are the property of the Debtors' Estates and remain subject to the stay; and -- the automatic stay is the only thing that prevents it from setting its own course towards liquidating the Securities distributed at the Closing. Mr. Wolfson states that the Securities distributed to the First Lien Lenders became and remain the property of the recipient First Lien Lenders. The Securities initially for the Second Lien Lenders were distributed to an escrow account with WestPoint International as escrow agent for the benefit of the First Lien Lenders, the Second Lien Lenders and Aretex, pro rata. Mr. Wolfson makes it clear that none of the Securities were distributed to the Estates, none are the Estates' property, none are subject to the automatic stay, and the distributions are irreversible by virtue of the Closing. Mr. Wolfson points out that the Court's obligation to control the liquidating process prevents the Objecting First Lien Lenders from acting upon the Securities and not the automatic stay. Moreover, Mr. Wolfson says, the Steering Committee is not entitled to relief because it has twice requested and has been twice denied control of the Securities, therefore, barred by the law of the case. Mr. Wolfson further disclosed that the terms of the District Court Order are still in flux so that the Court must defer ruling on the Steering Committee's request until the District Court has completed its proceedings. In addition, the Steering Committee claims that it is entitled relief from stay for cause as the Debtors have failed to make adequate protection payments, the Securities do not provide it with adequate protection, and it alleges improper conduct by International's Board of Directors. Mr. Wolfson asserts that each argument lacks merit on the grounds that: (1) the Securities are not property of the Estates; (2) the First Lien Lenders and the Second Lien Lenders are no longer entitled to adequate protection under the Adequate Protection Order; (3) the collateral, the Parent Shares and Subscription Rights distributed to the members of the Steering Committee at the Closing, is currently held by them, valued in an amount equal to their claim, and protected against any diminution by the continued lien against the escrowed Subscription Rights and Excluded Assets; and (4) the decision to recommend the adoption of the amendments is insulated from judicial review by Delaware's business judgment rule. Headquartered in West Point, Georgia, WestPoint Stevens, Inc. -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) WINDSOR FINANCING: S&P Rates $49.6 Million Sub. Notes at (P)BB -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB-' rating and '3' recovery rating to Windsor Financing LLC's $266 million senior secured bonds due 2017. Standard & Poor's also assigned its preliminary 'BB' rating and '5' recovery rating to the company's $49.6 million subordinated secured notes due January 2016. The outlook is stable. Windsor is a single purpose entity created to refinance two Cogentrix Energy Inc. (BB-/Stable/--) power plants, with three facilities, located in: * Richmond, Virginia; and * Rocky Mount, North Carolina. The '3' recovery rating on Windsor's $266 million secured bonds indicates the expectation for meaningful recovery (50%-80%) of principal in the event of payment default. The '5' recovery rating on the company's $49.6 million subordinated notes indicates the expectation of negligible recovery (0%-25%) of principal in the event of payment default. "The stable outlook is based on the contractual revenues and costs and predominantly investment-grade counterparties," said Standard & Poor's credit analyst Daniel Welt. Standard & Poor's rating on Windsor is constrained by the rating of the 100% owner, Cogentrix. * Bankruptcy Team From Swidler Berlin Joins Orrick Herrington ------------------------------------------------------------- The bankruptcy team from Swidler Berlin, led by Roger Frankel, Esq., is joining Orrick, Herrington & Sutcliffe LLP, effective Feb. 6, 2006. Mr. Frankel, called "a dean of the bankruptcy practice" by Chambers, is a former managing partner at Swidler Berlin from 1998-2000. He brings to Orrick the entire bankruptcy team from his former firm -- Richard Wyron, Esq., Jonathan Guy, Esq., Monique Almy, Esq., Mary Wallace, Esq., and five associates. The 10-member team, with its roster of national clients, will be based in Orrick's Washington, D.C. office. The team has built a reputation as a leader in both the energy sector and in asbestos- related cases, and its lawyers are practitioners on complex issues in these industries. The lawyers have represented the National Grid companies in the NRG and USGen Chapter 11 cases. They advise court-appointed future claims representatives in the high-profile cases of Combustion Engineering, W.R. Grace and Congoleum. This week, Mr. Frankel and Mr. Guy are scheduled to argue before the United States Court of Appeals for the Fifth Circuit representing Potomac Electric Power Company, a major creditor in the Mirant bankruptcy case. "The addition of this highly respected team strengthens Orrick's bankruptcy practice and achieves several strategic objectives for the group, including raising our visibility on high-stakes matters of national importance," said Lorraine McGowen, a New York partner who is the co-chair of the Bankruptcy and Debt Restructuring Group. At Ms. McGowen's suggestion, Mr. Frankel will join her as co-chair of the group. "We got to know Orrick and its lawyers very well during discussions between the two firms in 2004," Mr. Frankel said. "We were very impressed with the firm, but conflicts prevented a merger. At the end 2005 we learned that conflicts would prevent our bankruptcy team from joining other Swidler lawyers who will be going to Bingham McCutchen, we immediately contacted Orrick. There was nowhere else we wanted to go." "Orrick is second to none in terms of the quality of its practices and its culture. Taking into consideration Orrick's global network of offices, we are clearly in a better position than ever before to help our clients achieve their goals, on the complex matters they face today," Mr. Frankel continued. About the New Orrick Lawyers Roger Frankel, Esq., led Swidler's bankruptcy and creditors' rights group and was a member of the firm's board of directors. A practitioner in the areas of business reorganization and creditors' rights since 1972, Frankel represents a wide range of companies and fiduciaries in debt restructuring and reorganization matters ranging from multi-bank out-of-court workouts to proceedings under state insolvency statutes and the Federal Bankruptcy Code. Recently, he has counseled clients with asbestos matters, including representing a debtor in a successful pre-packaged Chapter 11 case as well as representing other significant parties in pending asbestos cases. Mr. Frankel was named one of Washington's top bankruptcy lawyers in Washingtonian in December 2004. Chambers calls Frankel a "dean of the bankruptcy practice." He has been named in every edition of the "Best Lawyers in America," and has appeared on the PBS news program, "Nightly Business Report." Richard Wyron, Esq., represents debtors, creditors, lenders, equity holders, asset purchasers and other parties-in-interest in proceedings under Chapter 11 of the Bankruptcy Code as well as in non-judicial workouts and restructurings. He has been lead counsel in a wide variety of Chapter 11 cases. Among other clients, Mr. Wyron has represented a multi-state retailer in its successful reorganization proceedings, a national manufacturer in designing, implementing and confirming its pre- packaged Chapter 11 plan, and the principal creditor in the restructuring proceedings of an independent energy producer. His practice includes significant asbestos matters. Mr. Wyron represented an asbestos defendant in developing and confirming its Chapter 11 pre-packaged plan, and he currently advises the legal representative for future claimants in several pending asbestos bankruptcies. Chambers has described Mr. Wyron as "an imaginative strategist" with "good judgment and a balanced approach," and as a "smart lawyer who gets the best deal for his client." Jonathan Guy, Esq., has extensive experience as lead counsel in complex commercial and bankruptcy litigation matters in state and federal trial and appellate courts throughout the U.S. His clients include major companies in the utility, energy trading, asphalt, oil, asbestos, retail, and telecommunications industries. Mr. Guy's litigation experience includes bankruptcy, antitrust, environmental, security, and employment law, as well as common law issues such as fraud and breach of contract. Mr. Guy also represents debtors-in-possession, secured and unsecured creditors, and committees in all litigation matters that arise in large and complex Chapter 11 cases. He also has been active in pro bono matters, including immigration appeal matters and a class-action race discrimination suit. He is an advisor to the bipartisan Presidential Commission for the National Museum for African American History. Prior to becoming a lawyer, Mr. Guy worked in investment banking. Monique Almy, Esq., has 18 years of experience in bankruptcy and creditors' rights matters. Ms. Almy has represented commercial banks and other financial institutions in bankruptcy-related litigation, SBA and state-guaranteed transactions, and contested mortgage foreclosure and distressed loan workouts. Other clients include DIP Lenders, official creditors' committees, health care providers and long distance providers. Mary Wallace, Esq., has extensive experience in sophisticated corporate and finance transactions, including mergers and acquisitions, divestitures, restructurings, private debt and equity financings, joint ventures, and strategic licensing arrangements. Her clients include venture funds and other financial institutions in connection with their investments as well as telecommunications, media and technology, manufacturing and biotechnology companies. Joining the firm as associates are Matthew Cheney, Esq., Kathleen Orr, Esq., Debra Lessin Felder, Esq., Kimberly Neureiter, Esq., and Katherine Thomas, Esq. The addition of the ten-lawyer bankruptcy team brings the total number of lawyers in Orrick's D.C. office to 77. It adds considerable depth to the firm's bankruptcy practice, which, in addition to Washington, has a presence in New York, San Francisco, Los Angeles, Sacramento, London, Paris and Moscow. About Orrick's Bankruptcy and Debt Restructuring Group Orrick is renowned for its successful representation of secured and unsecured lenders, major institutional investors, debtors, official and ad hoc creditor committees in the United States, Europe, Asia and Latin America. The firm's experience enables it to handle every complex issue that arises in bankruptcy cases, out-of-court restructurings and recapitalization transactions. Its bankruptcy and debt restructuring lawyers represent many of the largest institutional investors in distressed debt and are recognized leaders in preserving and creating value for creditors, bondholders and shareholders in both out-of-court and judicial restructurings of large national and multinational companies. The firm's ability to handle transnational matters is enhanced through the firm's offices in Hong Kong, London, Milan, Moscow, Paris, Rome, Taipei and Tokyo. While providing a full range of restructuring-related legal services, the firm's bankruptcy and debt restructuring lawyers draw upon, when necessary, the resources of lawyers in other Orrick practice groups, including those in corporate finance, securities, litigation, tax, pension and real estate. About Orrick Orrick, Herrington & Sutcliffe LLP is an international law firm with more than 850 lawyers in North America, Europe, and Asia. The firm focuses on litigation, complex and novel finance, and innovative corporate transactions. Orrick's clients include Fortune 100 companies, major industrial and financial corporations, commercial and investment banks, high-growth companies, governmental entities, start-ups, and individuals. The firm's 16 offices are located in New York, Washington, D.C., San Francisco, Silicon Valley, Sacramento, Los Angeles, Orange County, Pacific Northwest, Hong Kong, London, Milan, Moscow, Paris, Rome, Taipei and Tokyo. * Deloitte's Sheila Smith Gets TMA's Outstanding Individual Award ----------------------------------------------------------------- Sheila T. Smith, national service line leader of the Reorganization Services Group of Deloitte Financial Advisory Services LLP, a subsidiary of Deloitte & Touche USA LLP, will receive the Outstanding Individual Contribution award from the Turnaround Management Association. Ms. Smith was recognized for her dedication and commitment to the corporate renewal industry and the TMA. While pursuing a highly competitive career helping financial institutions, equity investors and other stakeholders maximize recovery from distressed and bankrupt companies, Ms. Smith, who has led the RSG practice at Deloitte FAS for nearly a year, also helped elevate the status of TMA, locally and internationally. Ms. Smith has served as the TMA international vice president of education, and as a member of the TMA Executive Committee, the Cornerstone Council, a board-designated endowment fund, and the Butler Cooley Excellence in Education Award Committee, which honors teachers who have helped turn around children's lives. "Deloitte FAS is delighted that TMA has recognized Sheila for her contributions to the sector," said Frank Piantidosi, chairman and chief executive officer, Deloitte FAS. "Sheila's experience in leading the only reorganization services advisory group among the Big 4 has been exemplary in helping clients, creditors and shareholders to develop and implement solutions that render companies stronger. Her dedication illustrates Deloitte FAS' commitment to excellence and client service, and her contributions to TMA reflect her high ethical standards and professionalism." A frequent speaker at industry conferences, Ms. Smith chaired the 2004 TMA International Convention in New York, which broke all previous attendance records. In previous years, she chaired the TMA Awards Committee, where she is credited with elevating the awards. "For ten years, Sheila has been a 'cheerleader' for the industry and TMA," said Pamela Linton, president of the Northeast TMA Chapter based in Boston. Ms. Smith was the first woman president of the chapter in 1998 when it earned the Outstanding Chapter of the Year award. She also expanded chapter membership by initiating the concept of satellite chapters, now in place in Rhode Island, Maine and in Worcester and Springfield, Massachusetts. "Sheila embodies the core principles that form the mission of TMA," said Kathleen Z. Lepak, a fellow member of the 2005 TMA Executive Committee. "She has driven growth and a positive reputation for her organization, which benefits TMA by association." Ms. Smith will receive the award at the TMA's 2006 Spring Conference March 22-25 at the JW Marriott Desert Ridge in Phoenix, Arizona. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms and their respective subsidiaries and affiliates. As a Swiss Verein, neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte", "Deloitte & Touche", "Deloitte Touche Tohmatsu" or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein. Deloitte & Touche USA LLP is the US member firm of Deloitte Touche Tohmatsu. In the US, services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP. About the TMA Headquartered in Chicago, TMA's members comprise a professional community of turnaround practitioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive recruiters and consultants. Members adhere to a Code of Ethics specifying high standards of professionalism, integrity and competence. Its Certified Turnaround Professional program recognizes professional excellence and provides an objective measure of expertise and experience related to workouts, restructurings and corporate renewal. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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. Marie Therese V. Profetana, Shimero Jainga, Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, 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 ***