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/raid1/www/Hosts/bankrupt/TCR_Public/060220.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 20, 2006, Vol. 10, No. 43 Headlines ALASKA COMMS: Largest Bondholder Tenders $12MM of 9-7/8% Sr. Notes ALLIANCE IMAGING: Medicare Changes Cue Moody's Rating Review ALLIED HOLDINGS: Wants More Time to Decide on Headquarters Lease ALMOST ANYTHING: Case Summary & 17 Largest Unsecured Creditors ALOHA AIRLINES: Emerges from Chapter 11 ANALYTICAL SURVEYS: Posts $43K Net Loss for 1st Qtr. of FY 2006 ANCHOR GLASS: Wants Court to Approve AIG Letter of Credit ANCHOR GLASS: Inks Premium Financing Agreement with Imperial ARTESYN TECHNOLOGIES: Posts $112.2MM Sales for 4th Quarter 2005 ASARCO LLC: 12 Debtors Will Meet Creditors on Mar. 6 ASARCO LLC: All Debtors Have Until June 5 to File Chapter 11 Plan ASARCO LLC: Court Denies First Union & BNY's Request to Amend DIP ASIA PREMIUM: Dec. 31 Balance Sheet Upside-Down by $4 Million ATARI INC: Announces 20% Worldwide Workforce Reduction AZTAR CORP: S&P Reviewing BB Corp. Credit Rating & May Downgrade BALL CORP: S&P Revises Outlook on BB+ Credit Rating to Stable BANCO BRADESCO: Good Performance Cues Moody's Positive Outlook BANCO RURAL: Moody's Withdraws All Ratings BERRY-HILL: Court Approves Motion Protecting Consigned Artwork BROOKLYN HOSPITAL: Wants Plan-Filing Period Extended to July 28 C. PAUL & SONS: Voluntary Chapter 11 Case Summary CACI INT'L: Inks Amended Agreement to Purchase Information Systems CALPINE CORP: Curtis Mallet-Prevost Approved as Conflicts Counsel CALPINE CORP: Gets Final Order to Maintain Existing Bank Accounts CAPITAL AUTO: Moody's Assigns Ba2 Rating to $31.5MM Class D Notes CAPITAL AUTO: Fitch Rates $31.5 Million Asset-Backed Notes at BB CATHOLIC CHURCH: Portland Responds to Estimation Objections CATHOLIC CHURCH: Portland Wants 7 Co-Defendants' Claims Estimated CELERO TECH: Court Extends Exclusive Plan-Filing Period to Feb. 20 CITGO: PDVSA Crude Shipments Increase Despite Diplomatic Spat COLLINS & AIKMAN: Taps Mary Ann Wright as Comm'l Management EVP COMMERCIAL MORTGAGE: Loan Payoffs Cue Fitch's Rating Upgrades COMPASS MINERALS: Earns $13.4 Mil. in Fourth Quarter Ended Dec. 31 COPEL: Inks Letter of Intent with El Paso for Power Plant Sale CYBERCARE INC: Wants Until March 13 to File Chapter 11 Plan DATA TRANSMISSION: S&P Revises Outlook on B+ Ratings to Negative DAVITA INC: Earns $56.4 Million of Net Income in Fourth Quarter DELPHI CORP: Expects to Divest Units & Exit Bankruptcy by Mid-2007 DELPHI CORP: Taps Sidney Johnson as VP - Global Supply Management DELPHI CORP: To Continue Talks with General Motors & Unions DELPHI FUNDING: Moody's Assigns Ba1 Rating to Preferred Stocks DENNY'S CORP: Balance Sheet Upside-Down by $265.4M at Dec. 28 DUNKIN' BRANDS: Moody's Assigns B2 Rating to $850 Mil. Term Loan DUQUESNE LIGHT: Posts $112.9MM of Net Income for 2005 Fiscal Year EASTGROUP PROPERTIES: Discloses Fourth Quarter Financial Results EL PASO: Inks Letter of Intent with COPEL for Power Plant Sale ELITE FLIGHT: Taps Emerge Capital to Develop Strategic Initiatives ELLIOTT-WILLIAMS: Case Summary & 20 Largest Unsecured Creditors EMERGE CAPITAL: Will Provide Elite Flight with Reform Services ENTERGY NEW ORLEANS: U.S. Trustee Amends Committee Membership ERA AVIATION: CapitalSource Wants to Foreclose on Collateral ERA AVIATION: Committee Hires Burr Pease as Counsel ERA AVIATION: Offshore Can Proceed With Rule 2004 Probe EXIDE TECHNOLOGIES: Appoints Francis Corby Jr. as CFO and EVP FOAMEX INT'L: Disclosure Statement Hearing Adjourned to March 14 FOAMEX INT'L: Wants Court to Deny Sealy & Continental's Request FORD MOTOR: Huizenga & Hergt Files Charges Against Ford Waivers FREDERICK MCNEARY: Bankruptcy Court Dismisses Chapter 11 Case FREEDOM FINANCIAL: Case Summary & Largest Unsecured Creditor FREESCALE SEMICONDUCTOR: S&P Upgrades BB+ Credit Rating to BBB- GAYLORD ENTERTAINMENT: Posts $13.0MM Loss in 4th Quarter of 2005 GENERAL GROWTH: Fitch Puts BB Rating on New $2.85 Bil. Term Loan GENERAL MOTORS: To Continue Talks with Delphi Corp & Unions GENESIS HEALTHCARE: Moody's Rates $125MM Credit Facility at Ba2 GLASS & POWDER: Case Summary & 20 Largest Unsecured Creditors GMAC COMMERCIAL: Moody's Affirms B3 Rating of Class O-2 Certs. GRANITE BROADCASTING: Moody's Junks Preferred Stock with C Rating GREENWOOD VILLAGE: Weak Balance Sheet Cues Fitch to Shave Rating H&E EQUIPMENT: S&P Raises Corporate Credit Rating to BB- from B+ HARRIS FURNITURE: Case Summary & 20 Largest Unsecured Creditors ICEWEB INC: Posts $351,658 Net Loss in Quarter Ended December 31 INDUSTRY MORTGAGE: Fitch Affirms Low-B Ratings on 3 Cert. Classes INGLES MARKETS: SEC Probe Prompts Moody's to Affirm Low-B Ratings INT'L SPECIALTY: Chemco Unit Inks $1.2 Billion Senior Secured Loan J.C. PENNEY'S: Strong Liquidity Cues Moody's to Lift Ba1 Ratings JOURNAL REGISTER: S&P Revises Outlook on BB Rating to Negative KULICKE & SOFFA: S&P Reviewing Ratings for Possible Upgrade KULLMAN INDUSTRIES: Court Extends Deadline on Lease Until May 15 LEVI STRAUSS: Equity Deficit Tops $1.22 Billion at November 27 LIONEL LLC: Court Stretches Plan-Filing Period to July 31 LOVESAC CORP: Seeks Approval to Use Cash Collateral Until Mar. 26 MILL RUN: Case Summary & 20 Largest Unsecured Creditors MILLAR WESTERN: Moody's Affirms B2 Rating on $190 Mil. Sr. Notes MPI MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors MUSICLAND HOLDING: Creditor Panel Wants Facts About Benefit Plans MUSICLAND HOLDING: Gets Court Nod to Conduct Store Closing Sales NASH FINCH: S&P Reviewing B+ Credit Rating for Possible Downgrade NATCO INT'L: Dec. 31 Balance Sheet Upside-Down by $1.1 Million NETWORK INSTALLATION: Awarded $3.1MM Project From Station Casinos NORTHEAST MECHANICAL: Case Summary & 19 Largest Unsec. Creditors NOVA BIOGENETICS: Dec. 31 Balance Sheet Upside-Down by $1.2 Mil. O'SULLIVAN IND: Objects to Lamar's Motion for Adequate Protection OMNOVA SOLUTIONS: Fitch Holds Issuer Default Rating at B+ PARADISE MUSIC: Tinter Scheifley Raises Going Concern Doubt PERFORMANCE TRANSPORTATION: Outlines Executive Incentive Program QUICK MED: Posts $355,665 Net Loss in Quarter Ended December 31 QUIGLEY CO: Wants Until June 7 to Remove Civil Actions REFCO INC: Forex Capital Reacts to Cancelled RefcoFX Asset Sale RELIANT ENERGY: Fitch Pares Issuer Default Rating One Notch to B ROUGE INDUSTRIES: Can File Notices of Removal Until April 17 SATMEX: Investing US$270MM to Launch Satmex 6 Satellite on May 17 SEA CONTAINERS: S&P Slices Corp. Credit Rating from BB- to B+ SECURUS TECH: Commences Consent Solicitation on 11% Senior Notes SMK SPEEDY: Amends Repayment Terms of Senior Subordinated Notes SOUNDVIEW HOME: Fitch Shaves Rating on Class B Certs. to BB+ SOUTHHAVEN POWER: Court Extends Plan-Filing Period to July 17 STONE ENERGY: Receives Notice of Non-Compliance from Bondholders STONERIDGE INC: Posts Net Income of $900,000 for Fiscal Year 2005 SUPERCLICK INC: Bedinger & Company Raises Going Concern Doubt TITANIUM METALS: Declares Dividend Payable on March 15 US CAN: Argentinean Asset Sale Spurs S&P to Review B Credit Rating WACHOVIA BANK: S&P Assigns Low-B Ratings to Six Cert. Classes WALTER INDUSTRIES: Sets Price of Common Stock at $64.75 Per Share WESTERN GAS: To Buy Coal Bed Properties in Wyoming for $136.7 Mil. WESTERN IOWA: Can Employ Frankel Zacharia as Accountant WILLIAM CALO: Case Summary & 17 Largest Unsecured Creditors WINN-DIXIE: Court Allows Set-Off of Claims with Dannon Company WINN-DIXIE: Linpro Amends Demand for Rent Payment to $270,951 * BOND PRICING: For the week of Feb. 13 - Feb. 17, 2006 ********* ALASKA COMMS: Largest Bondholder Tenders $12MM of 9-7/8% Sr. Notes ------------------------------------------------------------------ Alaska Communications Systems Group, Inc.'s (NASDAQ:ALSK)(ACS) subsidiary, Alaska Communications Systems Holdings, Inc. (ACSH), entered into an agreement with the largest holder of ACSH's 9-7/8% Senior Notes due 2011 (CUSIP Nos. 011679AF4 and 011679AD9). Pursuant to the agreement, the holder agreed to tender its senior notes of approximately $12 million in principle amount, representing approximately 21% of the aggregate principal amount of the outstanding senior notes, and, subject to certain conditions, deliver its consent pursuant to the consent solicitation. The agreement is in relation to ACS' tender offer and consent solicitation for ACSH's 9-7/8% Senior Notes due 2011, as reported in the Troubled Company Reporter on Feb. 13, 2006. Based in Anchorage, Alaska, Alaska Communications Systems is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. * * * As reported in the Troubled Company Reporter on Dec. 16, 2005, Standard & Poor's Ratings Services revised its outlook on Anchorage, Alaska-based incumbent local exchange carrier Alaska Communications Systems, including Alaska Communications Systems Group Inc., to stable from negative, based on expectations for healthy growth in the wireless business, and improved operating trends in the wireline segment. These factors, coupled with declining capital expenditures as wireless upgrades wind down, are expected to lead to a turnaround to a positive discretionary cash flow position in mid-2006, somewhat earlier than anticipated," said Standard & Poor's credit analyst Allyn Arden. All ratings, including the company's 'B+' corporate credit rating, were affirmed. Total debt outstanding as of Sept. 30, 2005, was $457 million. ALLIANCE IMAGING: Medicare Changes Cue Moody's Rating Review ------------------------------------------------------------ Moody's Investors Service placed the speculative grade ratings of the diagnostic imaging companies under review for possible downgrade in response to recent legislation that will negatively impact these companies' financial results upon implementation. The legislation calls for significant changes in Medicare reimbursement rates with respect to the technical component of diagnostic imaging services provided by this sector commencing in January 2007. The review for possible downgrade for each company in the rated sector will focus on quantification of the revenue and EBIT impact of reimbursement rate changes by Medicare and the resulting effects on other payor rates. The potential adverse effect of these changes exacerbates concern about cash flow, liquidity, financial leverage, and general business risk which are already prevalent in the existing B2 and B1 corporate family ratings for companies in the sector. On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005, which provides that reimbursement for the technical component of imaging services in non-hospital based freestanding facilities will be capped at the lesser of the Medicare Part 'B' Physician Fee Schedule or the Hospital Outpatient Prospective Payment System. Current reimbursement generally allows for higher reimbursement than is available under the HOPPS. Services impacted by this portion of the legislation will exclude diagnostic and screening mammography. The new rules as promulgated by the DRA will go into effect on Jan. 1, 2007. Changes in Medicare reimbursement for imaging services under the DRA will also result in the reduction in reimbursement for multiple images on contiguous body parts as previously announced by the Centers for Medicare and Medicaid Services in November, 2005. Currently, Medicare reimburses at a level of 100% of the technical component of each procedure. Under the new rules, Medicare will pay 100% of the technical component of the higher priced imaging procedure with payments for additional scans performed on contiguous body parts to be reduced by 25% for 2006 and 50% for 2007 and beyond. During an assessment of the relative impact of the aforementioned Medicare reimbursement changes on each individual issuer, Moody's will consider the following business factors: (1) payor mix, including the follow-on impact that the Medicare reimbursement changes are likely to have on the reimbursement patterns of 3rd party payors; (2) scan mix; (3) body parts covered by a given scan; (4) the relative composition of mobile vs. fixed service settings; (5) historical and prospective expansion modes utilized (i.e., de novo vs. acquisition); (6) the nature of hospital vs. physician practice relationships; and (7) the relative size and market share position occupied by the issuer in the markets in which it provides diagnostic imaging services. Moody's will also examine the financial wherewithal of each individual issuer, including: (1) historical and prospective profitability and cash flow generation capabilities; (2) leverage, taking into consideration the impact of operating leases and associated rents; (3) liquidity; (4) historical and prospective capital expenditure patterns as well as whether the issuer has adequate financial resources to facilitate the replacement of equipment or the expansion of sites; and (5) the age and technological advancement of diagnostic equipment utilized in the business and whether the equipment is being replaced on a timely basis. Ratings placed under review for possible downgrade are: Alliance Imaging, Inc. * Corporate family rating, rated B1 * $70 million guaranteed senior secured revolving credit facility due 2010, rated B1 * $410 million guaranteed senior secured term loan 'B due 2011, rated B1 * $150 million, 7.25% guaranteed senior subordinated global notes due 2012, rated B3 Center for Diagnostic Imaging, Inc. * Corporate family rating, rated B2 * $20.0 million senior secured revolving credit facility due 2009, rated B2 * $75.0 million senior secured term loan due 2010, rated B2 Diagnostic Imaging Group, LLC * Corporate family rating, rated B2 * $25 million guaranteed senior secured revolving credit facility due 2010, rated B2 * $110 million guaranteed senior secured term loan 'B' due 2012, rated B2 InSight Health Services Corp. * Corporate family rating, rated B2 * $300 million guaranteed senior secured floating rate notes due 2011, rated B2 * $250 million 9.875% guaranteed senior subordinated global notes due 2011, rated Caa1 MQ Associates, Inc. (parent company of MedQuest, Inc.) * Corporate family rating, rated B2 * $136 million aggregate principal amount, at maturity, 12.25% senior discount notes due 2012, rated Caa3 MedQuest, Inc. * $80 million guaranteed senior secured revolving credit facility due 2007, rated B2 * $60 million guaranteed senior secured term loan due 2009, rated B2 * $180 million 11.875% guaranteed senior subordinated notes, due 2012, rated Caa1 Radiologix, Inc. * Corporate family rating, rated B1 * $160 million 10.50% guaranteed subordinated notes due 2008, rated B2 ALLIED HOLDINGS: Wants More Time to Decide on Headquarters Lease ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 24, 2006, LEPERQ Corporate Income Fund, LP, asked the U.S. Bankruptcy Court for the Northern District of Georgia to compel Allied Holdings, Inc., and its debtor-affiliates to assume or reject a nonresidential real property lease for the Debtors' corporate headquarters at Decatur, Georgia, before Feb. 28, 2006. The Debtors ask the Court to extend the time to decide whether to assume, assume and assign, or reject the Georgia Headquarters Lease until May 31, 2006. According to Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, adequate grounds exist for the Court to grant an extension because: (a) the Debtors will continue to pay all postpetition lease obligations; (b) LEPERQ will not be harmed with an extension of time because all obligations under the Lease will continue to be paid, and the rent that LEPERQ is receiving from the Debtors is well above market; (c) LEPERQ will be adequately protected by its continued receipt of above-market rent and by the Debtors' consent for Lexington to market the unused portions of the Premises despite the Debtors' payment of rent obligations for those portions of the Premises; and (d) the Debtors have determined that, logistically, the earliest they could possibly vacate the Premises without jeopardizing their reorganization efforts would be in June or July 2006. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALMOST ANYTHING: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Almost Anything For A Buck dba AAFB, Inc. aka Beyond Image 6185 Blain Place La Mesa, California 91942 Tel: (619) 471-5586 Bankruptcy Case No.: 06-00241 Chapter 11 Petition Date: February 17, 2006 Court: Southern District of California (San Diego) Judge: Peter W. Bowie Debtor's Counsel: William M. Rathbone, Esq. Gordon & Rees LLP 101 West Broadway, Suite 1600 San Diego, California 92101 Tel: (619) 696-6700 Fax: (619) 696-7124 Debtor's current financial condition: Total Assets: $1,220,398 Total Debts: $1,389,615 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank Loan $225,233 California Business Banking MAC U185-014 P.O. Box 7487 Boise, ID 83707 Westday Associates Premises Lease $163,320 J.A. Lewis Mgmt., Inc. 1716 Briercrest Drive, $300 Bryan, TX 77802 GGP-Willowbrook, L.P. Premises Lease $134,868 General Growth Chicago, IL 60606 Woodlands Mall Associates Premises Lease $125,124 General Growth Chicago, IL 60606 CIT Trade Loan $107,283 16633 Ventura Boulevard Encino, CA 91436 Nixon Watches Vendor/Supplier $63,030 Reef Brazil Vendor/Supplier $43,459 Quicksilver Vendor/Supplier $42,368 Sole Technology Vendor/Supplier $41,970 DC Shoes Vendor/Supplier $41,351 Globe Shoes Vendor/Supplier $29,965 Hurley International Vendor/Supplier $29,137 Arizona Dept. of Revenue Taxes $26,065 Burton Snowboards Vendor Supplier $19,227 Woodlands Mall Associates Premises Lease $12,453 Comptroller of Public Acct. Sales Tax $9,078 Girl Star Vendor/Supplier $540 ALOHA AIRLINES: Emerges from Chapter 11 --------------------------------------- Aloha Airlines formally exited bankruptcy on Feb.17, 2006, with new investors joining longtime stakeholders to create a financially solid company that positions the privately held Hawaii-based carrier for future growth. Aloha's emergence from Chapter 11 completes a wide-ranging reorganization begun in December 2004. "Today, the 60-year-old tradition of Aloha Airlines has been reborn with a renewed commitment to serve the inter-island and transpacific markets with the finest and friendliest service in the sky," David A. Banmiller, Aloha's president and chief executive officer, said. "Aloha Airlines is now a 60-year-old start-up company with a low-cost structure," Mr. Banmiller continued. The lead investor behind Aloha's successful reorganization is The Yucaipa Cos., a private equity investment firm headed by Ronald W. Burkle. Participating with Yucaipa are Aloha Aviation Investment Group and Aloha Hawaii Investors LLC. "Aloha Airlines has been able to restructure with the wholehearted support of our employees and our business partners and the loyalty of our customers," said Mr. Banmiller, who will remain at the helm of Aloha as president and chief executive officer. "We can now move ahead with a new company built on the foundation of the old, and with financial backing from a slate of new investors who have teamed up with our longtime shareholders from the Ching and Ing families of Honolulu." Mr. Banmiller said: "We are especially grateful to Hawaii Gov. Linda Lingle and her administration, U.S. Transportation Secretary Norman Mineta, Pension Benefit Guaranty Corp. Executive Director Bradley D. Belt, Hawaii's congressional delegation and other elected officials across the state and the country who have assisted us. We also owe a debt of gratitude to a fabulous team of professionals and consultants who have worked closely with our own dedicated employees to get the job done under challenging conditions. Thanks to everyone who has worked so hard, the future certainly looks bright for Aloha Airlines." Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. -- http://www.alohaairlines.com/-- provides air carrier service connecting the five major airports in the State of Hawaii. Aloha Airgroup and its subsidiary Aloha Airlines, Inc., filed for chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky represent the Debtors in their restructuring efforts. As of Dec. 30, 2004, Aloha Airgroup reported $333,901 in assets and $24,124,069 in liabilities, while Aloha Airlines reported $9,134,873.23 in assets, and $543,709,698.75 in liabilities. ANALYTICAL SURVEYS: Posts $43K Net Loss for 1st Qtr. of FY 2006 --------------------------------------------------------------- Analytical Surveys, Inc. (Nasdaq: ANLT) reported its financial results for the first fiscal quarter ended Dec. 31, 2005. Analytical Surveys' first quarter revenue for fiscal year 2006 was $1.3 million compared to first quarter revenue of $2 million for fiscal year 2005. The Company's net loss available to common shareholders for the first quarter of fiscal year 2006 was $43,000 compared to a net loss of $491,000 for the same period in 2005. The Company attributed the reduced net loss principally due to lower revenues, salaries, wages, benefits and subcontractor costs and the absence of severance costs in fiscal 2006. The Company's management attributed the decline in first quarter revenue to a lower number of active contracts versus last year's first quarter, and a lower level of new contract signings in recent fiscal years. The long-term decline in contract activity has been the result of lower demand for data conversion services specifically within the GIS industry. The Company ended the first quarter with an order backlog of $2.9 million versus $4 million at the end of fiscal year 2005. Completed Financial Transaction On Feb. 10, 2006, Analytical Surveys completed the placement of a new Series A Convertible Preferred Stock with gross aggregate proceeds of approximately $760,000. That preferred stock bears interest at 7% annually and is convertible into 598,425 shares of our common stock on or before Feb. 10, 2008. Pursuant to the transaction, the Company also issued warrants that entitle the holders to purchase up to 795,276 shares of common stock at 101% and 112% of the closing bid price on the date of closing. The warrants will be exercisable after six months from the date of closing until their expiration three years from the date of closing. Proceeds of the warrants will be used to fund the Company's expansion into the energy market, including the purchase of interests in oil and gas prospects. The Company redeemed its previously issued Series A Redeemable Preferred Stock, which had been classified as debt, in exchange for common stock, so it can convert its debt to equity. For the fiscal year ended Dec. 31, 2005, Analytical Surveys reported total assets of $3,479,000 and total liabilities of $1,893,000. As of Dec. 31, 2005, the Company's accumulated deficit widened to $33,726,000 compared to an accumulated deficit of $33,683,000 at Sept. 30, 2005. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 9, 2006, Pannell Kerr Forster Of Texas, P.C., expressed substantial doubt about Analytical Surveys' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Sept. 30, 2005. The Company has suffered significant operating losses in 2005 and prior years and does not currently have external financing in place to fund working capital requirements. Headquartered in San Antonio, Texas, Analytical Surveys Inc. -- http://www.anlt.com/-- provides technology-enabled solutions and expert services for geospatial data management, including data capture and conversion, planning, implementation, distribution strategies and maintenance services. Through its affiliates, ASI has played a leading role in the geospatial industry for more than 40 years. The Company is dedicated to providing utilities and government with responsive, proactive solutions that maximize the value of information and technology assets. ASI maintains operations in Waukesha, Wisconsin. ANCHOR GLASS: Wants Court to Approve AIG Letter of Credit --------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to approve the Letter of Credit Agreement with American International Group, Inc. The Debtor has an insurance agreement with affiliates of AIG. Under the AIG Insurance Programs, Anchor Glass is obligated to post a $1,000,000 letter of credit to assure the performance of its obligations. The L/C Agreement requires Anchor Glass to secure its obligation to Wachovia Bank, by either pledging a demand deposit account, or obtaining a separate letter of credit in favor of Wachovia Bank for not less than 102% of the outstanding amount under the Letter of Credit. Robert A. Quinn, Esq., at Carlton Fields PA, in Tampa, Florida, tells the Court that the L/C Agreement is satisfactory to Anchor Glass. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Inks Premium Financing Agreement with Imperial ------------------------------------------------------------ Anchor Glass Container Corporation's insurance programs with certain affiliates of American International Group, Inc., require the Debtor to provide a $1,000,000 letter of credit to secure its obligations to AIG. Accordingly, the Debtor sought and obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to enter into a financial agreement with Imperial Premium Finance, Inc., dated Jan. 24, 2006. Under the Premium Finance Agreement, Imperial will advance the initial premiums due to each of the insurers for the Insurance Programs. For seven months, Anchor Glass will pay $655,424 to Imperial. The Premium Finance Agreement requires a $1,592,097 cash down payment, and the unpaid balance will be secured by substantial unearned premium previously paid to the insurers. If Anchor Glass fails to pay Imperial, Imperial has the right to cancel the insurance policies and receive and retain the unearned premium amounts back from the insurers to satisfy the amounts owed by Anchor Glass. Furthermore, the Debtor is required by law to keep in place certain of the insurance coverages by the Premium Finance Agreement. The remaining coverages are to be maintained under Anchor Glass' agreements with various secured lenders, or as a matter of sound business practice. Judge Paskay authorizes the Debtor to grant Imperial a first priority security interest. In the event that returned or unearned premiums are insufficient to pay the total amount owed by the Debtor to Imperial, any remaining amount will be allowed as an administrative expense. Judge Paskay makes it clear that any monies not satisfied through returned or unearned premiums or through payment of an allowed administrative claim will not be subject to discharge. Judge Paskay adds that the Lien granted to Imperial in connection with the Policies will be senior to any security interests and liens granted to any other secured creditors. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARTESYN TECHNOLOGIES: Posts $112.2MM Sales for 4th Quarter 2005 --------------------------------------------------------------- Artesyn Technologies, Inc., generated $112.2 million in sales for the fourth quarter of 2005, compared to $120.4 million for the same quarter in 2004. The Company earned $3.9 millionof net income for the fourth quarter of 2005, compared to $5.3 million of net income for the fourth quarter of 2004. For the year ended Dec. 30, 2005, Artesyn reported $424.7 million in sales compared to $429.4 million for fiscal year 2004. Net income for fiscal year 2005 is $9.9 million compared to net income of $13.9 million for fiscal year 2004. Included in net income for fiscal year 2005 are restructuring charges of $3.7 million. Total orders received during the fourth quarter were $115.2 million, yielding a book-to-bill ratio of 1.03. Backlog at the end of the quarter was $84.8 million, with approximately 93% shippable during the first quarter of 2006. In the fourth quarter of 2005, Artesyn had 27 major design wins that the Company estimates will realize approximately $206 million in lifetime project revenues. For the year, the Company was awarded 107 design wins that are estimated to generate $965 million of lifetime revenues. During the quarter, the Company determined that certain costs previously classified within cost of sales, are more appropriately classified as research and development costs, included within operating expenses. Accordingly, in the fourth quarter of 2005, $2.7 million was reclassified as research and development costs that related to the first three quarters of 2005. To conform to the 2005 presentation, a reclassification was made for approximately $0.9 million and $3.2 million for the respective quarterly and annual periods in 2004. Power Conversion Segment Results Fourth quarter sales for the Company's Power Conversion segment is $87.8 million compared to $96.6 million for the fourth quarter of 2004. According to the Company, the decline in sales is primarily from older programs in the server division going end of life during 2005. Lower sales in the segment, related to the closure of the manufacturing facility in Hungary, resulted in an operating loss of $0.4 million compared to operating income of $4.1 million for the same period last year, the Company says. Embedded Systems Segment Results The Company's fourth quarter sales for the Embedded Systems segment is $24.5 million compared to $23.8 million for the fourth quarter of 2004. The improvement in sales according to the Company is primarily from the realization of revenue from large wireless infrastructure customers supplying 3G deployments and carrier upgrades in North America. As a result of higher sales, the operating income is $8.6 million for the fourth quarter compared to $7.7 million for the same period last year. Headquartered in Boca Raton, Florida, Artesyn Technologies, Inc. -- http://www.artesyn.com/-- is a world leader in the design, manufacture and sale of power conversion and embedded board solutions for infrastructure applications in server and storage, networking, wireless and telecommunications systems. The Company's products are used in middle to high-end servers, data storage devices, routers, hubs, high-speed modems, RF amplification systems, base station controllers and transceivers. The Company has a global sales reach with design and manufacturing facilities in Asia, Europe and North America. Artesyn is a public company whose common stock is traded on the Nasdaq stock market under the symbol ATSN. * * * Moody's Investors Service assigned a B3 subordinated debt rating to Artesyn Technologies on June 16, 1987. Artesyn issued $90,000,000 of 5.50% Convertible Senior Subordinated Notes due August 15, 2010, in 2003. ARTESYN TECHNOLOGIES, INC., ARTESYN NORTH AMERICA, INC., and ARTESYN COMMUNICATION PRODUCTS, INC., are Borrowers under a five-year $35,000,000 LOAN AND SECURITY AGREEMENT dated March 28, 2003, with FLEET CAPITAL CORPORATION. ASARCO LLC: 12 Debtors Will Meet Creditors on Mar. 6 ---------------------------------------------------- Romina L. Mulloy, Esq., at Baker Botts LLP, in Dallas, Texas, informs the Court that the meeting for the creditors of Asarco Master, Inc., and 11 other Debtors pursuant to Section 341 of The Bankruptcy Code has been rescheduled to March 6, 2006, at 1:30 p.m. The meeting will be held at 606 North Carancahua, Suite 1107, in Corpus Christi, Texas. These are Asarco affiliates that filed for bankruptcy in October 2005: * ALC, Inc., * American Smelting and Refining Company. * AR Mexican Explorations, Inc., * AR Sacaton, LLC, * Asarco Consulting, Inc., * ASARCO Master, Inc., * Asarco Oil and Gas Company, Inc., * Bridgeview Management Company, Inc., * Covington Land Company, * Encycle, Inc., * Government Gulch Mining Company, Limited, and * Salero Ranch, Unit III, Community Association, Inc. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. gives the Debtor financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP gives legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. 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. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: All Debtors Have Until June 5 to File Chapter 11 Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi extended ASARCO LLC and its debtor-affiliates' exclusive and solicitation period to the same date for all Debtors: (a) June 5, 2006, for filing a plan of reorganization; and (b) Aug. 4, 2006, for solicitation of acceptances of the plan. As previously reported in the Troubled Company Reporter on Feb. 7, 2006, Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas, asserts that setting the expiration of the Exclusive Periods on the same dates for all the Debtors will assist in the efficient management of the Debtors' cases. Because the debtor subsidiaries of ASARCO LLC did not file for bankruptcy on the same date, the Court has set the deadlines for the exclusive period for filing a plan and for obtaining acceptances for the plan for the different groups of Debtors at different dates. The Court has set the deadline for the Exclusive Period for ASARCO, Encycle, Inc., and ASARCO Consulting, Inc. -- the Asbestos Subsidiaries -- on March 7, 2006, and their Solicitation Period on May 6, 2006. The remaining group of Debtors' -- the October Filing Subsidiaries -- Exclusive Period will expire on Feb. 10, 2006, and their Solicitation Period will expire on April 11, 2006. The October Filing Subsidiaries are: * ALC, Inc., * American Smelting and Refining Company, * AR Mexican Explorations, Inc., * AR Sacaton LLC, * Asarco Master, Inc., * Asarco Oil and Gas Company, Inc., * Bridgeview Management Company, Inc., * Covington Land Company, * Government Gulch Mining Company, Ltd., and * Salero Ranch, Unit III, Community Association, Inc. 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. Lehman Brothers Inc. gives the Debtor financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP gives legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. 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. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Court Denies First Union & BNY's Request to Amend DIP ----------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Dec. 22, 2005, Judge Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas authorized ASARCO LLC, on a final basis, to obtain up to $75,000,000 financing pursuant to a senior secured revolving line of credit facility with The CIT Group/Business Credit, Inc. The financing includes a $50,000,000 letter of credit subfacility. The loan amount may be increased to up to $150,000,000, at ASARCO's option, in accordance with the terms of the DIP Financing Agreement and subject to the DIP Agent receiving satisfactory collateral audits, appraisals, and title and lien reports with respect to a supplemental asset component. To secure the prompt payment and performance of any and all obligations, liabilities, and indebtedness of ASARCO under the DIP Facility, Judge Schmidt grants valid and automatically perfected security interests and liens to CIT Group in all of ASARCO's right, title, and interest in all of the real and personal properties and assets of ASARCO's estate. As previously reported in the Troubled Company Reporter on Feb. 6, 2006, First Union Corporation and Bank of New York Capital ask the Court to reconsider and modify the Final DIP Order to allow continued priority of perfection by allowing updated financing statements filings to be recognized as Permitted Encumbrances and Prior Liens within the context of the Final DIP Order. First Union and BNY Capital objected to the possible application of the Final DIP Order to updated financing statements needed because of ASARCO's change of state of organization and name. No Justification for Reconsideration, Debtors Assert The Debtors ask the Court to deny First Union Corporation and the Bank of New York Capital's request for reconsideration of the Final DIP Order to the extent that the request represents efforts to obtain postpetition enhancement of First Union and BNY's prepetition liens. Eric A. Soderlund, Esq., at Baker Botts LLP, in Dallas, Texas, asserts that First Union and BNY's Reconsideration Motion is unnecessary. "[First Union and BNY] have offered no justification for their request." Mr. Soderlund notes that First Union and BNY want the Final DIP Order modified "to allow continued priority of perfection by allowing updated financing statement filings to be recognized as Permitted Encumbrances and Prior Liens within the context of the Final DIP Order." First Union and BNY are simply mistaken in their assertion that the Final DIP Order does not recognize their right to update their financing statement, Mr. Soderlund says. The Final DIP Order and the DIP Financing Agreement already provide for the protection First Union and BNY are seeking. First Union stated that the financing statement filed in November 2005 was only intended as a continuation, and not a new filing. With this declaration, Mr. Soderlund concludes that a modification of the automatic stay is not required. ASARCO does not object to First Union and BNY's intent to file updated financing statements, provided that it retains the right to challenge whether First Union and BNY held validly perfected non-avoidable prepetition liens. The Reconsideration Motion should be denied for procedural reasons, Mr. Soderlund avers. "Neither the Federal Rules of Civil Procedure nor the Bankruptcy Rules provide for reconsideration motions. However, such a motion can be recharacterized as a Rule 59 or Rule 60 motion. The movants fail to identify the procedural rule that provides the basis for the relief they seek and have not satisfied any of the conditions under which relief may be granted under Rule 59 or Rule 60." * * * The Court rules that the postpetition filings previously made by First Union and BNY that are either (i) continuation statements filed for the purpose of or within the meaning of Section 9-515 of the Uniform Commercial Code; (ii) financing statements filed for the purpose of assuring that a security interest "remains perfected" as provided by UCC Section 9-316; or (iii) amendments of financing statements of BNY and First Union, are deemed: a. renewals or extensions of their prepetition liens or security interests within the meaning of "Permitted Encumbrances"; and b. "Prior Liens" as the term is defined in the Final DIP Order. Accordingly, Judge Schmidt denies First Union and BNY's request. 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. Lehman Brothers Inc. gives the Debtor financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP gives legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. 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. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASIA PREMIUM: Dec. 31 Balance Sheet Upside-Down by $4 Million ------------------------------------------------------------- Asia Premium Television Group, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. For the three months ended Dec. 31, 2005, Asia Premium reported a $31,434 net loss on $16,243,541 of revenues, as compared to $78,048 of net income on $5,899,038 of revenues for the same period in 2004. The Company's balance sheet at Dec. 31, 2005, showed $11,182,758 in total assets and $15,262,886 of liabilities, resulting in a stockholders' deficit of $4,080,128. At Dec. 31, 2005, the Company had a $4,530,424 working capital deficiency. HJ & Associates, LLC, issued a clean and unqualified opinion after it audited Asia Premium's financial statements for the fiscal year ended March 31, 2005. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?599. About Asia Premium Asia Premium Television Group, Inc., provides marketing, brand management, advertising, media planning, public relations and direct marketing services to clients in the People's Republic of China. The Company's primary operating activities are: -- Publishing advertisements as agents for clients; -- Media consulting services; and -- Advertising production. ATARI INC: Announces 20% Worldwide Workforce Reduction ------------------------------------------------------ Atari, Inc. (Nasdaq: ATAR) reported, on Feb. 17, 2006, the restructuring of its operations, which will result in a worldwide workforce reduction of approximately 20%. Atari's "corporate action plan" announcement last week follows the company's statement earlier this month that it would act on cost control, dispose of non-core assets and place a stronger emphasis on external development studios. "The decisive action will provide us with the flexibility necessary in a changing business environment," Bruno Bonnell, Chairman and Chief Executive Officer, said. "Adjusting our cost structure is a significant first step and demonstrates our commitment to restoring shareholder value." New York-based Atari, Inc. -- http://www.atari.com/-- develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include hard-core, genre-defining franchises such as DRIVER(TM), The Matrix(TM), Stuntman(TM) and Test Drive(R); and mass-market and children's franchises such as Nickelodeon's Blue's Clues(TM) and Dora the Explorer(TM), and Dragon Ball Z(R). Atari, Inc. is a majority- owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), the largest interactive games publisher in Europe. * * * HSBC Default A weak holiday season for the industry combined with product launch delays have contributed to third quarter results substantially below the Company's expectations. The Company has been advised by HSBC Business Credit (USA) Inc. that it is in default on certain covenants under its revolving credit facility and that HSBC will not currently extend further credit. As of Feb. 9, 2006, the Company had no balance outstanding under the credit facility. HSBC also stated that it may agree to review revised business plans or projections and make or not make future advances under the facility. Going Concern Doubt "The uncertainties caused by these conditions raise substantial doubt about the Company's ability to continue as a going concern," Atari said. AZTAR CORP: S&P Reviewing BB Corp. Credit Rating & May Downgrade ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Aztar Corp., including its 'BB' corporate credit rating, on CreditWatch with negative implications. The CreditWatch listing follows the company's earnings conference call on February 15, where management provided additional details concerning its potential development plans for the north site of its Trop. L.V. property. Although a definitive development decision has not yet been made, the targeted budget is estimated to now be roughly $1.2 billion, excluding the land, and will take about 30 months from commencement to construct. This project is expected to include 2,725 hotel rooms, 100,000 sq. ft. of casino space, 3,800 car parking garage, and various entertainment and retail amenities. While Standard & Poor's expects that this project may be financed as an unrestricted subsidiary, S&P believes that Aztar will likely contribute a meaningful amount of equity and would potentially support this subsidiary if required given the strategic importance of this property to the company. Also, Aztar previously announced that it might proceed with a minimum $325 million project in Pennsylvania if awarded the license and over the long run, may decide to pursue development of the south portion of its Las Vegas property. In resolving the CreditWatch listing, Standard & Poor's will meet with management to further discuss its capital spending plans, operating performance, and longer-term growth and financing strategies. Standard & Poor's expects that if a downgrade were to occur, it would not likely be more than two notches. BALL CORP: S&P Revises Outlook on BB+ Credit Rating to Stable ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Broomfield, Colo.-based Ball Corp. to stable from positive. At the same time, Standard & Poor's affirmed its ratings, including its 'BB+' corporate credit rating, on the metal can and plastic packaging producer. These actions follow the recent announcement by Ball that it has entered into a definitive agreement to acquire U.S. Can Corp.'s (B/Watch Dev/--) U.S. and Argentinean operations for approximately 1.1 million shares of Ball common stock plus the assumption of $550 million of U.S. Can's debt. The transaction is expected to close by the end of the first quarter of 2006, subject to customary closing conditions. Ball's total debt pro forma for the acquisition at Dec. 31, 2005, will increase to about $2.1 billion from about $1.6 billion. "The outlook revision incorporates the meaningful increase in Ball's debt levels associated with the proposed transaction, which would limit prospects for an improved financial profile to the extent previously incorporated in the positive outlook. As a result, an upgrade is not likely during the timeframe that we had previously envisioned," said Standard & Poor's credit analyst Liley Mehta. Although management has a good track record of buying and integrating businesses, the U.S. Can acquisition also poses challenges associated with integration and generation of synergies from the acquired operations. U.S. Can's operations in Argentina and the U.S. have sales of about $600 million, and it is the largest manufacturer of aerosol cans in the U.S. In addition to aerosol cans, the company manufactures paint cans, plastic containers and custom and specialty cans. The acquisition will broaden Ball's metal packaging portfolio that includes metal beverage and food cans, and provide the company with a leading market share in the domestic aerosol can market. Ball also expects to realize certain cost reductions as a result of synergies between U.S. Can's operations and its existing metal food container operations, since both utilize tinplate steel and both share similar manufacturing processes. The ratings reflect Ball's solid market positions and stable cash flow generation, which are offset by intense competition in the global beverage can market and management's use of debt to support growth. With annual revenues of over $5.6 billion, Ball is one of the world's largest beverage can producers, with leading positions in the two largest can markets, North America and Europe. BANCO BRADESCO: Good Performance Cues Moody's Positive Outlook --------------------------------------------------------------- Moody's Investors Service changed to positive, from stable, the outlook on the C- bank financial strength rating assigned to Banco Bradesco S.A. The rating action reflects the improved core profitability and the positive trend of Bradesco's performance metrics overall, which have substantially converged to those of higher rated banks in Latin America. Moody's affirmed all other ratings and their outlooks. The rating agency noted that Bradesco's franchise has been strengthened following successive acquisitions of banking and non- bank businesses over a number of years. While such strategy has enhanced the scale of the bank's operations and further diversified its customer and product base, it has also limited the bank's focus on earnings quality and operating efficiency, thus delaying the maximization of its financial potential. The integration process is now largely completed, said Moody's, and this should ensure that earnings and efficiency gains can now be realized. Moody's observed that Bradesco's performance in the first three quarters of 2005 attested to it, as both core earnings and margins were up sharply from previous quarters. Those improved indicators were boosted by the favorable combination of high interest rates, continued strong credit demand, and adjustments to the cost base. Moody's had previously indicated that the sustainability of Bradesco's new profitability targets would be key to a potential upgrade of the bank's financial strength rating. In that regard, management has demonstrated the ability to extract value out of Bradesco's broad franchise, which Moody's views as offering many opportunities to bolster core earnings generation. The rating agency added that Bradesco's management is challenged to manage the depth and size of Bradesco's diversified business platform efficiently, and, without losing focus on its need to maximize the value of its franchise. The bank's growth dynamics have resulted in a formidably diversified conglomerate, whose asset size went up considerably over the past seven years, to reach R$202 billion in September 2005, with a customer base of more than 16.5 million account holders. This rating has been affected: * Bank Financial Strength Rating of C- : outlook changed to positive, from stable BANCO RURAL: Moody's Withdraws All Ratings ------------------------------------------ Moody's Investors Service has withdrawn all of its ratings for Banco Rural S.A. for business reasons. Moody's stressed this action does not reflect a change in Banco Rural's creditworthiness. The bank has no rated foreign currency debt outstanding. Banco Rural had total assets of US$1.9 billion as of June 2005. These ratings were withdrawn: * Bank Financial Strength Rating: E+, negative outlook * Long and Short Term Foreign Currency Deposit Ratings: B2/Not Prime, negative outlook * Long and Short Term Local Currency Deposit Ratings: B2/Not Prime, negative outlook * Long and Short Term National Scale Deposit Ratings: Ba1.br/BR-4 BERRY-HILL: Court Approves Motion Protecting Consigned Artwork -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has entered an order approving, in part, Berry-Hill Galleries, Inc.'s previously filed motion relating to consigned artwork that was received by the Company before its filing for chapter 11 protection. The Court entered a prior order relating to consigned artwork received by the Company after the filing on Jan. 17, 2006. The latest order ensures, among other things, that the agreed consignment price may be paid to the consignment party from the proceeds of the post-petition sale of any pre-petition consigned artwork and any pre-petition consigned artwork in the Company's possession may be returned to the consignment party, if certain conditions are satisfied. The order also permits Berry-Hill to make payments to partial owners of artwork, consistent with the terms of applicable agreements, if such artwork is sold. "Our customers are our most important assets," Frederick D. Hill, a director of Berry-Hill Galleries, Inc., said. "A major focus of our strategic restructuring is to ensure that the artwork placed with us on consignment may be sold in the ordinary course and any amounts due to consignors may be paid upon the sale of that artwork. With this order in place we have accomplished this." The Company also noted that preparations for its highly anticipated exhibition "Toward a New American Cubism," which will run from May 23 through July, continue. The exhibition will feature extensive new research on the subject. It will include important works of art on loan from major institutions as well as private collections, and will be accompanied by the publication of a substantial catalog. Berry-Hill Galleries is represented by the law firm of Kramer Levin Naftalis & Frankel LLP, and has engaged Gordian Group, LLC as its investment bank. Alan M. Jacobs of AMJ Advisors, LLC is the Chief Restructuring Officer. Headquartered in New York, New York, Berry-Hill Galleries, Inc. -- http://www.berry-hill.com/-- buys paintings and sculpture through outright purchase or on a commission basis and also exhibits artworks. The Debtor and its affiliate, Coram Capital LLC, filed for chapter 11 protection on Dec. 8, 2005 (Bankr. S.D.N.Y. Case Nos. 05-60169 & 05-60170). Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $100 million and debts between $1 million and $50 million. BROOKLYN HOSPITAL: Wants Plan-Filing Period Extended to July 28 --------------------------------------------------------------- The Brooklyn Hospital Center and its debtor-affiliate Caledonian Health Center, Inc., ask the U.S. Bankruptcy Court for the Eastern District of New York, to extend their time to: a) exclusively file a chapter 11 plan until July 28, 2006; and b) solicit acceptances of that plan until Sept. 25, 2006. The Debtors tell the Court that their chapter 11 cases are sufficiently large and complex to warrant the extension. Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP, in New York, relates that the Chapter 11 Cases are complicated by the Debtors' status as not-for-profit entities. Mr. Handelsman reminds the Court that the Debtors' fiduciary duties run not only to their creditors, but also to the communities they serve. Every decision the Debtors make must not only be vetted and negotiated with their traditional creditor constituencies, but the impact on other parties-in-interest must be evaluated based on the Debtors' duty of mission, Mr. Handelsman explains. In addition, Mr. Handelsman states, as health care providers, the Debtors are regulated by various governmental agencies including the United States Department of Health and Human Services and the New York State Department of Health. Hence, when making decisions, the Debtors are also required to factor in, and ensure compliance with, the complex web of federal and state rules and regulations, which further complicate their Chapter 11 Cases, Mr. Handelsman says. The Debtors believe that the additional time will enable them to stabilize their operations, negotiate a reorganization plan with their creditors, and ultimately achieve a result that maximizes the value of the estate. The Debtors assure the Court that the extension will not harm their creditors or other parties-in-interest nor delay the reorganization process. Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. C. PAUL & SONS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: C. Paul & Sons Development Company, Inc. P.O. Box 110034 Nashville, Tennessee 37211 Bankruptcy Case No.: 06-00638 Chapter 11 Petition Date: February 14, 2006 Court: Middle District of Tennessee (Nashville) Judge: George C. Paine, II Debtor's Counsel: William L. Norton, III, Esq. Boult, Cummings, Conners & Berry, PLC P.O. Box 340025 Nashville, Tennessee 37203 Tel: (615) 252-2397 Fax: (615) 252-6397 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. CACI INT'L: Inks Amended Agreement to Purchase Information Systems ------------------------------------------------------------------ CACI International Inc. (NYSE: CAI) entered into an amended and restated asset purchase agreement to purchase substantially all of the assets of Information Systems Support, Inc. On Jan. 31, 2005, both companies reported a delay in the closing after ISS informed CACI of the loss of a significant recompetition contract, which required a revised valuation of ISS. The valuation process has now been completed and the parties have entered into a revised agreement. ISS is an award-winning and ISO:9001-certified information technology solutions provider primarily to the U.S. Government. Headquartered in Gaithersburg, Maryland, ISS offers solutions in three main service areas: information technology, communications, and logistics. At the time of closing, ISS will have approximately 950 employees, more than 70% of whom hold Secret or higher clearances, serving major clients such as the U.S. Army, Navy, Air Force, other Defense Department agencies, and federal civilian agencies such as the Departments of Justice and Transportation, the General Services and Social Security Administrations, and the Library of Congress. CACI anticipates closing on or about March 1, 2006, and will issue revised revenue and earnings guidance at that time. Under terms of the agreement, CACI will pay $145 million in cash, subject to certain closing adjustments. Since this transaction is an asset purchase, it will give rise to substantial future cash tax benefits, estimated at a present value of approximately $17 million. The acquisition will be financed through the company's existing cash and borrowings under its revolving credit facility. "We are pleased to welcome the Information Systems Support team to CACI," Dr. J.P. London, CACI Chairman, President, and CEO, said. "The acquisition of ISS broadens our presence in vital, high-growth areas of the U.S. national security market, and brings us new clients, complementary to our customer base, who have increasing requirements, priority funding, and new locations targeted for expansion. Our new ISS colleagues also provide outstanding expertise and talents that are a great fit with CACI's corporate culture of quality client service, honesty and integrity, and excellence in all we do." Mr. London continued, "The acquisition of ISS continues our strong mergers and acquisitions (M&A) program, which is a key element of CACI's strategic growth plans. Along with positive organic growth and increased contract awards, our M&A activity continues to help us expand support for our clients, create opportunities for our employees, and deliver high returns for our shareholders." CACI International Inc -- http://www.caci.com/-- provides the IT and network solutions needed to prevail in today's new era of defense, intelligence, and e-government. From systems integration and managed network solutions to knowledge management, engineering, simulation, and information assurance, we deliver the IT applications and infrastructures our federal customers use to improve communications and collaboration, secure the integrity of information systems and networks, enhance data collection and analysis, and increase efficiency and mission effectiveness. The Company's solutions lead the transformation of defense and intelligence, assure homeland security, enhance decision-making, and help government to work smarter, faster, and more responsively. CACI, a member of the Russell 1000 and S&P SmallCap 600 indices, provides dynamic careers for approximately 9,500 employees working in over 100 offices in the U.S. and Europe. CACI is the IT provider for a networked world. * * * Moody's Investors Service assigned CACI a Ba2 Long-term Corporate Family Rating and a Ba2 Bank Loan Debt Rating on April 1, 2004. Standard & Poor's assigned a BB Long-term Foreign Issuer Credit Rating and a BB Long-term Local Issuer Credit Rating to CACI on March 30, 2004. CACI INTERNATIONAL INC, is the Borrower under a Credit Agreement dated as of May 3, 2004, as amended by a FIRST AMENDMENT dated as of May 17, 2005, with BANK OF AMERICA, N.A., as Administrative Agent for a consortium of Lenders, Swing Line Lender and L/C Issuer, providing the company with $346,500,000 Term Loan and access to up to $200,000,000 of credit on a revolving basis through May 3, 2009. CALPINE CORP: Curtis Mallet-Prevost Approved as Conflicts Counsel ----------------------------------------------------------------- Calpine Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's permission to employ Curtis, Mallet-Prevost, Colt & Mosle LLP as their conflicts counsel, nunc pro tunc to the Petition Date. Curtis Mallet-Prevost will handle matters which are not appropriately handled by Kirkland & Ellis, the Debtors' general bankruptcy counsel, because of actual or potential conflict of interest issues or, alternatively, which the Debtors or Kirkland request be handled by Curtis Mallet-Prevost. Curtis Mallet-Prevost will: -- 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; -- attend meetings and negotiate with representatives of creditors and other parties-in-interest; -- take all necessary actions 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; -- prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates; -- take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; -- represent the Debtors in connection with obtaining postpetition financing; -- advise the Debtors in connection with any potential sale of assets; -- appear before the 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; -- consult with the Debtors regarding tax matters; and -- perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with the Chapter 11 Cases, including: (a) the analysis of the Debtors' leases and executory contracts and the assumption, rejection or assignment thereof, (b) the analysis of the validity of liens against the Debtors; and (c) advice on corporate, litigation and environmental matters. The Debtors will pay the Firm in accordance with its current hourly rates: Billing Category Hourly Rate ---------------- ----------- Partners $495 to $675 Counsel $385 to $540 Associates $240 to $495 Paraprofessionals $120 to $170 Steve J. Reisman, a partner at CMP, ascertains that CMP does not hold or represent any interest adverse to the Debtors' estates. CMP is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code as modified by Section 1107(b). Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Gets Final Order to Maintain Existing Bank Accounts ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 29, 2005, Calpine Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's authority, on an interim basis, to continue using their existing bank accounts with the same names and account numbers as existed immediately prior to the Chapter 11 cases. The Court waives the requirement to establish separate accounts for cash collateral and tax payments. The Debtors are authorized to deposit funds in and withdraw funds from the bank accounts by all usual means and to otherwise treat the prepetition bank accounts for all purposes as debtor-in- possession accounts. * * * The Court grants the Debtors' request on a final basis. To the extent that any Bank Accounts are held at financial institutions that are not currently authorized depositories under the guidelines of the United States Trustees Office for Region 2, the Debtors are authorized to maintain these accounts for 30 days, until February 24, 2006. The Waiver Period may be extended by the Debtors with the consent of the U.S. Trustee without further Court order. Any requirements to establish separate accounts for cash collateral or tax payments are waived. The bank accounts held in the name of the CCFC Preferred Holdings, LLC, or Calpine Construction Finance Company, L.P., are excluded from the Court Order. In the event any entity related to CCFC Preferred Holdings, LLC, becomes a debtor, that CCFC Preferred Holdings Entity will be authorized to advance or otherwise transfer funds to other Debtors only to the extent of, and in accordance with, the pre- bankruptcy ordinary course of business of that CCFC Holdings Preferred Holdings Entity. The bank accounts held in the name of Calpine Deer Park, LLC, Calpine DP LLC, Calpine Deer Park Partner LLC, Deer Park Energy Center Limited Partnership and Deer Park Energy Center, LLC, are also excluded. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) CAPITAL AUTO: Moody's Assigns Ba2 Rating to $31.5MM Class D Notes ----------------------------------------------------------------- Moody's Investors Service assigned definitive ratings of Prime-1, Aaa, A1, Baa2 and Ba2 to the notes issued by Capital Auto Receivables Asset Trust 2006-1 (CARAT 2006-1). Complete rating action: Issuer: Capital Auto Receivables Asset Trust 2006-1 * $510,000,000 4.642% Class A-1 asset-backed notes, rated Prime-1 * $450,000,000 5.03% Class A-2a asset-backed notes, rated Aaa * $1,060,000,000 LIBOR + 0.03% Class A-2b asset-backed notes, rated Aaa * $650,000,000 5.03% Class A-3 asset-backed notes, rated Aaa * $252,835,000 5.04% Class A-4 asset-backed notes, rated Aaa * $126,052,000 5.26% Class B asset-backed notes, rated A1 * $47,270,000 5.55% Class C asset-backed notes, rated Baa2 * $31,513,000 7.16% Class D asset-backed notes, rated Ba2 The ratings are based on the quality of the underlying auto loans and their expected performance; the strength of the transaction's structure; the enhancement provided by subordination ranging from 6.50% to 1.00%, overcollateralization of 0.75%, a fully funded non-declining 0.50% reserve account and available excess spread; and the experience of General Motors Acceptance Corporation as servicer. CAPITAL AUTO: Fitch Rates $31.5 Million Asset-Backed Notes at BB ---------------------------------------------------------------- Fitch Ratings assigned these ratings to Capital Auto Receivables Asset Trust 2006-1: -- $510,000,000 class A-1 4.642% asset-backed notes 'F1+'; -- $450,000,000 class A-2a 5.03% asset-backed notes 'AAA'; -- $1,060,000,000 class A-2b 5.02% asset-backed notes 'AAA'; -- $650,000,000 class A-3 5.03% asset-backed notes 'AAA'; -- $252,835,000 class A-4 5.04% asset-backed notes 'AAA'; -- $126,052,000 class B 5.26% asset-backed notes 'A'; -- $47,270,000 class C 5.55% asset-backed notes 'BBB'; and -- $31,513,000 class D 7.16% asset-backed notes 'BB'. Fitch's ratings address the likelihood of noteholders receiving payment of interest and principal in accordance with the terms of the transaction's governing documents. Interest on the notes will be distributed on the 15th of each month, beginning on March 15, 2006. Payments of interest on class B, class C, and class D notes are subordinated to payments of interest on class A notes. Principal on the notes will be paid sequentially. Interest on class B, class C, and class D notes is senior to principal on class A notes, interest payments on these notes will not be allowed under an event of default and acceleration until class A notes are fully paid or the acceleration is rescinded. The receivables in the 2006-1 transaction are originated by GMAC in accordance with GMAC's underwriting standards. Like the past three transactions, 2006-1 contains non-subvented loans and used vehicles, 2006-1 includes 30% of non-subvented loans, and 19.75% used vehicles. Similar to 2005-1, there is high concentration of loans with original terms between 61-72 months, at 25.8%. The APR from the 2006-1 transaction has declined slightly to 3.85% from 4.24% in 2005-1. Average original term has decreased from 60.62 months in 2005-1 to 60.43 months. Initial credit enhancement equal to 7.75% for the class A notes (6.50% subordination, a 0.50% fully funded reserve account, and 0.75% overcollateralization), 3.75% for the class B notes (2.50% subordination, 0.50% reserve, and 0.75% OC), 2.25% for the class C notes (1.00% subordination, 0.50% reserve, and 0.75% OC) and 1.25% for the class D notes (0.50% reserve and 0.75% OC). Based on the loss statistics of GMAC's prior securitizations, as well as GMAC's U.S. retail portfolio performance, Fitch expects solid performance from the pool of receivables in the 2006-1 transaction. For the nine months ending Sept. 30, 2005, GMAC's net retail portfolio of approximately 4.60 million contracts had 60+ day delinquencies as a percentage of contracts outstanding of 0.18%, and net losses as a percentage of the average receivables were 0.82%. CATHOLIC CHURCH: Portland Responds to Estimation Objections ----------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 31, 2006, David A. Foraker, the Future Claimants Representative, Tort Claimants and the Tort Committee objected the Archdiocese of Portland in Oregon's request to estimate and temporarily allow all unresolved present child sex abuse tort claims filed by April 29, 2005, for the limited purposes of voting on, and confirmation of, Portland's Plan of Reorganization. Estimation Procedures Portland's proposed estimation methodology is based primarily on 140 prepetition claims alleging sexual abuse of minors that were actually liquidated within 2000 to 2004. The Liquidation occurred within the adversary system of the Oregon state courts, pursuant to settlements between the Archdiocese and child sex abuse tort claimants. A total of 45 claims alleging misconduct by former priest Maurice Grammond were liquidated for $28,404,500, for an average of $631,211 per claim, and 14 claims alleging misconduct by former priest Thomas Laughlin were liquidated for $10,054,765, for an average of $773,443 per claim. The remaining 82 non-Grammond and non-Laughlin claims liquidated for $14,942,834, for an average of $182,230 per claim. According to Mr. Stilley, the average value of the Settled Claims is highly probative of the aggregate actual value of the Unresolved Present Child Sex Abuse Tort Claims for purposes of Plan confirmation. The Settled Claims and the Unresolved Present Child Sex Abuse Tort Claims have similar characteristics, including: -- proximity in time of liquidation; -- type and nature of alleged abuse; -- range of time period from the alleged occurrence until the assertion of the claim; -- range of alleged damages; -- identity of employer or principal of the accused wrongdoers; -- applicable law; -- representation by and identity of claimants' attorneys; and -- requests for jury trials. Based on the Settled Claims Data, the Unresolved Present Child Sex Abuse Tort Claims is expected to actually liquidate in amounts ranging from $0 to over $1,000,000. However, since most of the Unresolved Present Child Sex Abuse Tort Claims are in the earliest stages of discovery, Mr. Stilley submits that it is speculative at this time to predict whether any Unresolved Present Child Sex Abuse Tort Claim will liquidate for $0, $1,000,000, or, more likely, at some point in between. The only certainty, Mr. Stilley says, is that a claimant's allegations of the amount of damages he or she is entitled to receive has no correlation to the amount of damages the claimant will ultimately receive. Portland Responds Susan S. Ford, Esq., at Sussman Shank LLP, in Portland, Oregon, argues that the objecting parties' theory that there should be "no estimations when the debtor is solvent" is flawed and unsupported by case law. Ms. Ford reminds the U.S. Bankruptcy Court for District of Oregon that the Archdiocese's solvency has not been established, either by quantifying assets or liabilities. Judge Perris' recent decisions in the "property of the estate" dispute did not finally determine the extent or the value of the property of the Archdiocese's estate. There are pending legal and equitable issues, which will take a long time to determine. The issues include: -- the Archdiocese's unliquidated liabilities with respect to the Unresolved Present Sex Abuse Tort Claimants; and -- the question of the Archdiocese's contingent liability to "Future Claimants", and for alleged punitive damages. Ms. Ford points out that the lengthy time that will be required to determine the assets of the Archdiocese's estate and to liquidate the amount of liabilities should not unduly delay the administration of the Chapter 11 case. The Archdiocese can proceed with confirmation of its Plan once the Court performs its duty to estimate the claims. Ms. Ford further notes that the Chapter 11 process should not be paralyzed by legally unsupportable demands for absolute certainty. The highly probative evidence currently before the Court is more than a preponderance to support undertaking estimations using the Archdiocese's proposed methodology. The Archdiocese will rely on an estimation of the fair market value of all unresolved claims, based on the recent history of liquidations of substantially similar claims against it, in the State of Oregon. Ms. Ford clarifies that Portland is not asking the Court to speculate but rather to consider the evidence of 140 actual liquidations of similar claims, in close proximity of time to the Petition Date, entered into with claimants who were represented by skilled and experienced attorneys in Oregon. According to Ms. Ford, the objecting parties' proposed $2,250,000 per claim figure is the "average" of rare and aberrational jury verdicts from all states other than Oregon. The figure includes punitive damages, which is beyond the scope of the Archdiocese's request. Possible Alternative Ms. Ford tells the Court that jury trials to estimate claims would only cause substantial delay and waste resources necessary to pay claims. However, Portland acknowledges that a number of the Unresolved Present Sex Abuse Tort Claims will be liquidated by jury trials. Accordingly, the Archdiocese is willing to cushion its estimation methodology by accounting for the possibilities of trial by jury. Specifically, Portland would add to the aggregate amount determined by the Archdiocese's existing methodology a reasonable value for compensatory damages for a plaintiff's verdict in Oregon for the one or two cases of the 116 Unresolved Present Sex Abuse Tort Claims that have the potential to be liquidated by a jury verdict. "This is a possible addition, if the [Objecting Parties] introduce evidence to show some error in [Portland's] estimation," Ms. Ford explains. Portland believes the alternative methodology is "relatively accurate so long as a jury verdict estimated value is based upon Oregon compensatory damages jury verdicts against church entities, and multiplied by the statistically established 1-3% chance of trial by jury verdict." For these reasons, the Archdiocese asks Judge Perris to approve its proposed estimation method and permit it to proceed with the confirmation of its Plan of Reorganization. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Portland Wants 7 Co-Defendants' Claims Estimated ----------------------------------------------------------------- For purposes of voting and confirmation of the Plan of Reorganization filed by the Archdiocese of Portland in Oregon, Portland asks the U.S. Bankruptcy Court for the District of Oregon to estimate the claims asserted by its co-defendants at $0: Co-defendant Claim No. ------------ --------- Order of Friar Servants of Mary 120 Redemptorist Society of Oregon 173 St. Mary's Home 323 Mt. Angel Abbey 451 Mt. Angel Abbey 453 Franciscan Friars of California 454 Franciscan Friars of Oregon 455 Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, notes that each of Claims are claims for indemnity or contribution filed by the co-defendants in relation to certain tort claims asserted against them and the Archdiocese. However, Mr. Stilley argues that no right to indemnity or contribution exists for any of the Claims because: -- the plaintiff from the lawsuit related to Claim No. 120 in which the Order of Friar Servants of Mary remains a defendant voluntarily dismissed Portland without requiring any payment; -- the lawsuit related to Claim No. 173 has been settled by all plaintiffs and defendants and none of the defendants in that case have a right to indemnity or contribution against Portland as a result of the settlement; and -- the claims related to Claim Nos. 323, 451, 453, 454, and 455 remain to be settled or tried. Portland does not believe that it has any liability for the claims. In addition, judgment on the tort claim related to Claim No. 451 was entered in favor of the Archdiocese and other defendants on May 10, 2004. The plaintiff has appealed the judgment, Mr. Stilley says. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) CELERO TECH: Court Extends Exclusive Plan-Filing Period to Feb. 20 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Pennsylvania, gave Celero Technologies, Inc., fka Sim Training Holdings, Inc., extensions of their time to: a) exclusively file a plan through and including Feb. 20,2006; and b) solicit acceptances of that plan through and including April 20,2006. As reported in the Troubled Company Reporter on Jan. 11, 2006, the Debtor stressed that it has been active and diligent in resolving important issues affecting its reorganization, including working with its largest customer, Verizon, to encourage Verizon to exercise its option to expand its license rights to use the Debtor's SimShop(R) technology for a $1,500,000 fee. The Debtor believes that the extension will allow them to pursue alternative strategies in the event Verizon elects not to exercise the option, and to address other unforeseen contingencies that may arise. 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. CITGO: PDVSA Crude Shipments Increase Despite Diplomatic Spat ------------------------------------------------------------- PDVA aka Petroleos de Venezuela SA's deliveries of crude to its refining and distribution arm Citgo Petroleum Corp. have not been interrupted as a result of diplomatic tensions between the United States and Venezuela. Deputy president for trade and supply Asdrubal Chavez told Business News Americas that the company's shipments could even increase by 100,000 barrels a day in March. This development is contrary to what industry analysts believe would happen after one diplomat from each side was expelled. Mr. Chavez told Business News that of the 1.5 million barrels a day of crude and oil products PDVSA sends to the U.S. every day, about 1Mb/d is still processed at Citgo refineries or refineries affiliated to PDVSA such as Hovensa (a partnership with Amerada Hess based in the Virgin Islands) and Chalmette (a similar deal with ExxonMobil in Louisiana). Mr. Chavez also disclosed to Business News that Venezuela could significantly increase its liquid fuels exports by 2008 thanks to a plan for increased natural gas usage in thermal generation and other industries. According to government figures, increased use of natural gas could free up some 100,000b/d of liquid fuels. By 2008-2009 Venezuela plans to produce some 11 billion cubic feet a day of natural gas, up from some 7Bf3/d at present, according to national gas regulator Enagas. Besides eight refining facilities, Citgo also banners about 14,000 gas stations in the continental U.S. and Puerto Rico. Citgo is owned by PDVSA America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating to CITGO Petroleum Corp. The ratings, S&P said, reflect a satisfactory business risk profile and an aggressive financial risk profile, limited by the ratings of the company's parent, Petroleos de Venezuela S.A. aka PDVSA. CITGO's credit strength as a stand-alone entity is based on the scale and complexity of its refining operations, which have net crude processing capacity of 970,000 barrels per day through three wholly owned fuel refineries, two asphalt refineries, and -- in a non-operating position -- a 41% interest in the Lyondell- CITGO Refining L.P. joint venture. Standard & Poor's 'BB' rating on CITGO is higher than the 'B+' corporate credit rating on PDVSA, because of the relative strength of the refiner's financial profile and the asset protection afforded to CITGO creditors, if CITGO defaults for PDVSA-specific reasons -- for example, a Venezuela sovereign default. Nevertheless, CITGO could be challenged by events surrounding PDVSA. * * * On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign currency ratings of Petroleos de Venezuela S.A. aka PDVSA to 'BB-' from 'B+'. The rating of PDVSA's export receivable future flow securitization, PDVSA Finance Ltd, was also upgraded to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a 'AAA(ven)' national scale rating. The Rating Outlook is Stable. Both rating actions follow Fitch's November 2005 upgrade of Venezuela's sovereign rating. COLLINS & AIKMAN: Taps Mary Ann Wright as Comm'l Management EVP --------------------------------------------------------------- Frank Macher, President and Chief Executive Officer of Collins & Aikman Corporation, reported the appointment of Mary Ann Wright as Executive Vice President Commercial and Program Management for the North American automotive supplier. Ms. Wright will be responsible for organizing, planning and implementing the overall marketing, sales, business development and program management activities for the Company. Ms. Wright joins Collins & Aikman from Ford Motor Company where she most recently served as Director of Sustainable Mobility Technologies and Hybrid Vehicle Programs. In this capacity, she was responsible for all hybrid, fuel cell and alternative fuel technology development. Ms. Wright also served as Chief Engineer of the 2005 Ford Escape Hybrid, the industry's first full hybrid SUV. She began her career at Ford in 1988, holding a variety of positions in finance, product and business planning, and engineering. She also played a major role in the launch of multiple vehicles at Ford including the initial Mercury Villager and Nissan Quest, and successive versions of the Ford Taurus and Mercury Sable. "Mary Ann is a respected, proven and recognized industry leader," Mr. Macher said. "She brings a thorough understanding of our customers' needs in terms of product development processes, and program management. She is a valuable addition to our senior management team." Ms. Wright was recently recognized by Automotive News as one of the "Leading 100 Women in the Automotive Industry" for 2005. She holds a bachelor's degree in Economics and International Business from the University of Michigan, a Master of Science degree in Engineering from the University of Michigan and a Master of Business Administration degree from Wayne State University. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. COMMERCIAL MORTGAGE: Loan Payoffs Cue Fitch's Rating Upgrades ------------------------------------------------------------- Fitch Ratings upgrades these commercial mortgage pass-through certificates, series 1998-C2, from Commercial Mortgage Acceptance Corp.: -- $173.5 million class D to 'AAA' from 'AA+'; -- $43.4 million class E to 'AAA' from 'A+'; -- $21.7 million class G to 'AA' from 'BB+'; -- $36.1 million class H to 'A' from 'BB-'; -- $65.1 million class J to 'BB' from 'B'; -- $21.7 million class K to 'B+' from 'B-'. Fitch affirms these classes: -- $506.1 million class A-2 'AAA'; -- $671.1 million class A-3 'AAA'; -- Interest-only class X 'AAA'; -- $144.6 million class B 'AAA'; -- $173.5 million class C 'AAA'. The $21.7 million class L remains at 'CC'. Fitch does not rate the $122.9 million class F or the $4.4 million class M certificates. The upgrades reflect the increased credit enhancement levels from loan payoffs and amortization. In addition, a total of 12 loans (33.7%) have defeased to date, including four of the top five loans (30.2%). As of the January 2006 distribution date, the pool's aggregate principal balance has been reduced by 29.9% to $2.0 billion from $2.89 billion at issuance. As of the January 2006 distribution date, six loans (2.4%) were in special servicing, including four 90+ days delinquent loans (1.6%), a 60 days delinquent (0.2%) and a 30 days delinquent loan (0.39%). The largest specially serviced loan (1.2%) is secured by a multi-family property in Hatboro, PA and is 90+ days delinquent. A deed in lieu is expected. he next group of specially serviced loans (0.38% and 0.12%, respectively), is secured by two multifamily properties in Dallas, TX. A discounted payoff is being negotiated between the borrower and the special servicer. The third largest specially serviced loan (0.38%) is secured by a retail property in Durham, NC. The borrower was expected to pay off the loan in October of 2005, but has not been able to pay it off so far. Realized losses in the pool total $38.9 million, or 1.4% of the pool's original principal balance. COMPASS MINERALS: Earns $13.4 Mil. in Fourth Quarter Ended Dec. 31 ------------------------------------------------------------------ Compass Minerals International, Inc. (NYSE:CMP) reported its financial reports for the fourth quarter and full year ended Dec. 31, 2005. Compass Minerals earned $13.4 million on $283.1 million of sales for the three months ended Dec. 31, 2005. Highlights -- The company set new records for quarterly and full year sales from continuing operations. Fourth quarter sales were $283.1 million, up 28% from the year ago quarter, and full year sales increased 16% over the prior year to $742.3 million. Continuing operations exclude the results of the company's British general trade plant which was sold on Dec. 30, 2005. That plant's results are reported as discontinued operations in the statement of operations; -- Fourth quarter net earnings from continuing operations were $9.3 million compared to $18.9 million in the 2004 period. Excluding special items from both years, fourth quarter net earnings from continuing operations increased 53% over the prior year quarter to $33.9 million; -- Compass's 2005 net earnings from continuing operations were $26.8 million compared with $47.8 million in 2004. When special items are excluded from both years, 2005 net earnings from continuing operations increased 27% over the prior year to $52.0 million; -- EBITDA from continuing operations declined by $4.3 million from 2004 to 2005, while 2005 adjusted EBITDA from continuing operations improved by $20.7 million over the prior year; and -- The company refinanced its 10% senior subordinated notes with a bank credit facility and incurred expenses of $33.2 million in connection with the transaction. "We posted solid growth in both of our segments in addition to the year-end sales boost that the December snows gave us," Michael E. Ducey, president and CEO of Compass Minerals International said. "We also took advantage of favorable interest rates to restructure some of our debt, and we monetized an underperforming asset in the fourth quarter so that we can make better use of our shareholders' money. In short, our disciplined focus on growing the fundamental value of the company yielded strong 2005 results, which led the board to increase our quarterly dividend by 11 percent to $0.305 per share." Heavy December snows in the Great Lakes region of North America and in the U.K., along with price improvements across all product categories, contributed to a 30% increase in salt sales over the prior year quarter. Highway deicing salt volumes increased 28% and prices increased an average of 9% over fourth quarter 2004 levels. Robust consumer-deicing salt sales and growth in the company's water conditioning salt products helped boost general trade salt volumes by 11% over the 2004 quarter, and previously announced price increases contributed to a quarter-over-quarter average price improvement of seven percent. For the full year, salt sales improved 16% over 2004 levels as a result of price improvements; severe winter weather in the first and fourth quarters, which benefited both highway deicing and general trade sales; and growth in the company's water- conditioning product lines. Compass estimates that heavier-than-normal December snowfalls contributed approximately $35 million to $45 million to fourth quarter 2005 revenues and approximately $8 million to $12 million to fourth quarter 2005 operating earnings. For the full year, the company estimates that revenues benefited by approximately $60 million to $70 million from more-severe-than-average winter weather and operating earnings benefited by approximately $12 million to $18 million. Fourth quarter sulfate of potash revenues were up 10% over the prior year quarter, though volumes were six percent lower year- over-year because of a shift of international sales from the fourth quarter to the third quarter of 2005. Full year SOP sales improved 17% over 2004 primarily through price improvements. In December 2005, the company announced a $20 per ton price increase which took effect on Feb. 1, 2006. Shipping and handling costs were 31% of gross sales in the fourth quarter and full year of 2005 compared with 29% of gross sales in the fourth quarter and full year of 2004. The year-over-year change reflects rising fuel costs and capacity constraints, which spurred increased transportation rates. Compass hedges its natural gas purchases, which helps protect the company from short-term volatility in gas prices. However, natural gas costs in the fourth quarter of 2005 were up approximately $1.6 million over the fourth quarter of 2004. Despite higher natural gas and input costs throughout the year, the company's cost of goods sold remained constant as a percent of gross sales year-over-year reflecting improved pricing throughout the company's product lines, economies of scale and savings generated by the company's Operational Excellence efficiency- improvement initiatives. Selling, general and administrative expenses declined by $2.2 million in the fourth quarter when compared to the fourth quarter of 2004 due to lower variable employee compensation costs, professional services and advertising expenses. For the year, SG&A costs were $1.3 million higher as a result of changes in foreign currency exchange rates and increased professional services costs. Accretion on the company's discount notes drove an interest expense increase of $0.9 million quarter-over-quarter and $2.6 million year-over-year. In December 2005, Compass incurred Other Expense of $33.2 million for its tender for $323.0 million principal amount of the company's 10% senior subordinated notes. Approximately $2 million principal amount of notes remains outstanding. The tender offer was financed with new senior secured credit facilities totaling $475.0 million. The facilities consist of a $350.0 million term loan due in 2012 and a $125.0 million revolving credit facility due in 2010. Other Expense also reflects interest income and foreign exchange losses. "We are continually focused on enhancing our financial flexibility, and we made significant progress in 2005. In the fourth quarter, we completed a tender offer and refinancing that substantially eliminated one of our three high-interest bond issuances and replaced it with lower-interest debt, which we can pre-pay at the company's discretion," Mr. Ducey said. Debt as of Dec. 31, 2005, was $615.9 million compared to $583.1 million at Dec. 31, 2004, and debt net of cash was $568.8 million at Dec. 31, 2005, compared to $573.4 million in 2004. In 2005, the company's fourth quarter income tax expense included a $4.1 million charge for its plan to repatriate foreign funds in accordance with the American Jobs Creation Act of 2004. Compass recorded a $3.7 million gain, net of tax, on the Dec. 30, 2005, sale of its British general trade salt plant. Proceeds from the sale totaled $36.2 million. The company plans to contribute approximately $4 million of the proceeds to the pension plan of its British subsidiary. The remaining proceeds will be used for general corporate purposes, including debt reduction. Capital expenditures in 2005 were $4.9 million above the prior year due to the previously announced expansion of the company's magnesium chloride production capacity at the Great Salt Lake and the installation of a new mill at its Goderich mine. Those projects are expected to be completed by mid-year 2006. Based in the Kansas City metropolitan area, Compass Minerals International, Inc., is the second-leading salt producer in North America and the largest in the United Kingdom. The company operates eight production facilities, including the largest rock salt mine in the world in Goderich, Ontario. The company's product lines include salt for highway deicing, consumer deicing, water conditioning, consumer and industrial food preparation, agriculture and industrial applications. In addition, Compass is North America's leading producer of sulfate of potash, which is used in the production of specialty fertilizers for high-value crops and turf, and magnesium chloride, which is a premium deicing and dust control agent. * * * Compass Minerals International, Inc.'s 12-3/4% Series B Senior Discount Notes due 2012 carry Standard and Poor's Ratings Services' B- rating. S&P assigned that rating on Dec. 15, 2003, shortly after Compass offered to exchange $123,500,000 of the Series B Notes for an equal amount of then-outstanding Series A Notes. COPEL: Inks Letter of Intent with El Paso for Power Plant Sale -------------------------------------------------------------- El Paso Corporation (NYSE: EP) entered into a Letter of Intent with COPEL (Companhia Paranaense de Energia) for the sale of El Paso's interest in the Araucaria power plant in Brazil and the settlement of a dispute over that plant. Under the terms of the Letter of Intent, El Paso will receive $190 million in exchange for its 60% ownership of the plant. Additionally, pending Petrobras' formal approval, El Paso and COPEL, as co-owners with Petrobras of the plant, agreed that legal proceedings, which currently exist in the courts of Brazil and in international arbitration, will be suspended. El Paso hopes to complete the sale of the Araucaria plant in the first half of the year. "The announcement represents another step forward for our Brazilian power business," said Doug Foshee, president and chief executive officer of El Paso Corporation. "The sale will allow us to recover our initial investment in the Araucaria plant, sharpening our focus on the significant potential of our exploration and production program in Brazil." About El Paso Corp. Headquartered in Houston, Texas, El Paso Corporation -- http://www.elpaso.com/-- provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. About COPEL Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- transmits and distributes electricity to more than 3 million customers in the state of Paran and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitly postponed. In response, COPEL is re-evaluating its corporate structure. The government of Paran controls about 59% of COPEL. * * * Copel's BRL100,000,000 debentures due March 1, 2007 is rated Ba3 by Moody's. CYBERCARE INC: Wants Until March 13 to File Chapter 11 Plan ----------------------------------------------------------- CyberCare, Inc., and CyberCare Technologies, Inc., ask the U.S. Bankruptcy Court for the Middle District of Florida to further extend until March 13, 2006, the period within which they have the exclusive right to file a chapter 11 plan and disclosure statement. The Debtors give the Court three reasons supporting the extension: a) the Debtors focused their time and effort to reconstruct their assets and liabilities; b) the Debtors need to work issues with other party to ensure that the plan is consistent with the expectations and requirements of that party; and c) the Debtors were in negotiations with their large creditors that will result in the filing of a consensual plan. The extension, the Debtors say, will allow them to work through certain issues and will provide more time to focus on a plan of reorganization. Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical Industries of America, Inc., is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business, and a healthcare technology solutions business. The Company and its debtor- affiliate, CyberCare Technologies, Inc., filed for chapter 11 protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $5,058,955 in assets and $26,987,138 in debts. DATA TRANSMISSION: S&P Revises Outlook on B+ Ratings to Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Data Transmission Network Corp. (DTN) to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B+' corporate credit rating. In addition, Standard & Poor's assigned its 'B+' ratings and recovery ratings of '3' to DTN's proposed $210 million senior secured first lien credit facilities, reflecting the expectation that lenders would realize a meaningful recovery (50%-80%) of principal in the event of a payment default. These facilities consist of a $35 million five-year revolving credit facility and $175 million seven-year tranche B term loan. Standard & Poor's also assigned its 'B-' rating and recovery rating of '5' to the company's proposed $60 million seven and a half-year senior secured second lien term loan, reflecting the expectation that lenders would realize a negligible recovery (0%-25%) of principal in the event of a payment default. The new credit facilities will be used to fund a planned $100 million dividend to DTN's equity sponsors and to refinance the existing credit facilities, whose ratings will be withdrawn once the new facilities close. Pro forma for the dividend and refinancing, about $240 million of debt is expected to be outstanding. The outlook revision reflects a significant increase in DTN's pro forma debt leverage as a result of the company's planned $100 million dividend to its shareholders. DTN's debt leverage, defined as total debt to EBITDA, increases to a level that Standard & Poor's considers to be weak for the company's 'B+' corporate credit rating given our view of DTN's business profile. In addition, the dividend payment reflects a more aggressive financial policy than was previously factored into the ratings. However, the company's improved operating performance and financial profile in recent years enable a transaction of this type to be accomplished within the existing rating. DAVITA INC: Earns $56.4 Million of Net Income in Fourth Quarter --------------------------------------------------------------- DaVita Inc. (NYSE: DVA), disclosed its results for the quarter and year ended December 31, 2005. Income from continuing operations for the three months and year ended December 31, 2005, was $56.4 million and $207.4 million. On October 5, 2005, the Company completed its acquisition of Gambro Healthcare. The operating results of Gambro Healthcare are included in the Company's operating results effective October 1, 2005. The operating results of the historical DaVita centers divested in connection with the acquisition are reflected as discontinued operations in its consolidated financial statements for all periods presented. Net income, including discontinued operations was $64.1 million and $228.6 million. Financial and operating highlights include: Cash Flow: Operating cash flow for the three months ended December 31, 2005, was $183 million and free cash flow was $152 million. For the year ended December 31, 2005 operating cash flow was $441 million and free cash flow was $378 million, excluding the tax benefit from stock option exercises and the after- tax benefit of Medicare lab recoveries related to prior years' services. Including those items, the year ended operating cash flow was $486 million and free cash flow was $422 million. Operating Income: Operating income for the three months and year ended December 31, 2005, was $158.8 million and $465.4 million. Volume: Total treatments for the fourth quarter were 3,498,231 or 44,281 treatments per day. The acquisition of Gambro Healthcare contributed 1,528,295 total treatments. Non-acquired treatment growth in the quarter was 2.8%, which was negatively impacted by the closure of 8 centers due to hurricane Katrina. Debt Expense: The increase in debt expense in the fourth quarter was due to the additional borrowings to fund the Gambro Healthcare acquisition, $2.8 million of non-cash deferred financing cost amortization and a $2.8 million interest payment to Gambro, Inc. as part of the purchase. Effective Tax Rate: The effective annual income tax rate for 2005 was 37.4%. The Company expects the annual effective tax rate for 2006 to be within a range of 39% to 40%. Center Activity: As of December 31, 2005, the Company operated or provided administrative services at 1,233 outpatient centers serving approximately 96,000 patients. During the fourth quarter, the acquisition of Gambro Healthcare resulted in a net increase of 492 centers after divestitures, and we opened 13 new centers and acquired 12 independent centers. Additionally, the Company closed or indefinitely shut down 8 centers related to hurricane Katrina. Outlook The Company is revising its 2006 operating income guidance. Operating income is now projected to be in the $630-700 million range before the impact of FASB No. 123R related to stock option expensing. Its previous guidance was for operating income to be in the $600 million to $670 million range. DaVita, Inc., headquartered in El Segundo, California, is an independent provider of dialysis services in the U.S. for patients suffering from end-stage renal disease (chronic kidney failure). * * * The Company's 6-5/8% Senior Notes due Mar. 15, 2013 carries Standard & Poor's Ratings Services B rating. DELPHI CORP: Expects to Divest Units & Exit Bankruptcy by Mid-2007 ------------------------------------------------------------------ Delphi Corporation expects to emerge from Chapter 11 in early to mid-2007 as a stronger, more financially sound business with viable U.S. operations that are well-positioned to advance global enterprise objectives, a company representative said at a meeting of Delphi's creditors. Delphi also anticipates divesting, consolidating or winding down a substantial segment of its U.S. business operations through the Chapter 11 process. The creditors' meeting was convened by Deirdre A. Martini, the United States Trustee for Region 2, pursuant to Section 341 of the Bankruptcy Code on February 3, 2006. The Section 341 meeting is a statutorily mandated meeting of creditors, presided over by the U.S. Trustee, at which a representative of the Debtor must appear and testify. All creditors of the debtor are notified of the time, date and place of and are entitled to attend a Section 341 meeting. A Delphi representative discussed the events that led to the company's Chapter 11 filing at the meeting. Delphi reported that in the first two years following Delphi's spin-off from General Motors, Delphi generated $2,000,000,000 in net income. Every year thereafter, however, with the exception of 2002, Delphi suffered losses. In calendar year 2004, Delphi reported a net operating loss of $482,000,000 on $28,600,000,000 in net sales. Delphi experienced operating losses of $1,300,000,000 for the first nine months of calendar year 2005 on nine-month net sales of $20,200,000,000, and a year-over-year decrease in sales of approximately $1,400,000,000. Delphi cited three significant issues that largely contributed to the deterioration of its financial performance: 1. A competitive U.S. vehicle production environment for domestic original equipment manufacturers resulting in the reduced number of motor vehicles that GM produces annually in the United States and related pricing pressures 2. Increasingly unsustainable U.S. legacy liabilities and operational restrictions driven by collectively bargained agreements, including restrictions preventing Delphi from exiting non-strategic, non-profitable operations, all of which have the effect of creating largely fixed labor costs; and 3. Increasing commodity prices. In filing for bankruptcy, Delphi aims to: (a) achieve competitiveness for its core U.S. operations by modifying or eliminating non-competitive legacy liabilities and burdensome restrictions under current labor agreements, which were inherited from GM at the spin-off; (b) realign its global product portfolio and manufacturing footprint to preserve its core businesses; and (c) negotiate with key stakeholders over their contributions to the company's restructuring plan or, absent consensual participation, the utilization of the chapter 11 process to achieve the necessary cost savings and operational effectiveness envisioned in the company's transformation plan. These topics were also discussed: * Delphi's executive management, * Delphi's restructuring and key advisors, * Company Background, * Corporate Structure, * Postpetition DIP Financing, * Creditors Committee, * Request for Appointment of Equity Committee, * Schedules of Assets and Liabilities & Statements of Financial Affairs, * Chapter 11 Case Update, and * Reorganization Case Calendar. A copy of the PowerPoint presentation Delphi presented at the meeting is available for free at: http://researcharchives.com/t/s?59d Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Taps Sidney Johnson as VP - Global Supply Management ----------------------------------------------------------------- The Board of Directors of Delphi Corp. (Pink Sheets: DPHIQ) reported that Sidney Johnson has been named vice president for global supply management. Mr. Johnson, currently director of global supply management for the company's Delphi Packard Electric operations, succeeds R. David Nelson, who plans to retire soon following a distinguished 48-year career in automotive and other industries. Additionally, Johnson will be a member of the Delphi Strategy Board, the company's top policy-making group. Mr. Johnson, 44, joined General Motors in 1994 as a senior supplier quality engineer at its Saturn division in Spring Hill, Tennessee. He moved to Delphi's Harrison Thermal Operations in Dayton, Ohio in 1995 and held a variety of operating assignments in manufacturing, purchasing, quality and materials management for the next several years. In 1998, he was named senior manager for supplier quality and development for Delphi Interior Systems. In 2000, he was promoted to manager of purchasing at Delphi Packard Electric Systems. He was named director of purchasing for Packard in 2002 and promoted to his most recent position in 2003. Mr. Johnson will report to Delphi President and Chief Operating Officer Rodney O'Neal. Mr. Nelson will remain at Delphi for several months to ensure an orderly transition of responsibilities. Mr. Nelson, 68, worked for TRW Inc. from 1957 to 1987 in various manufacturing, quality control, materials, purchasing, sales, and marketing positions. In 1987, he joined Honda of America manufacturing and served for ten years as a corporate officer of at the company's operations in Marysville, Ohio, as vice president of purchasing and later as senior vice president of purchasing and corporate affairs. He was promoted to the Board of Directors of Honda of America Manufacturing in 1997. Later that same year, Mr. Nelson was named vice president of worldwide supply management at Deere & Company in Moline, Illinois. Mr. Nelson joined Delphi and was named to his current position effective February 2002. Mr. Nelson has long been involved in advancing the purchasing and supply management profession and holds a Certified Purchasing Manager certification. He is chair emeritus of the Institute of Supply Management and serves as a member of the Board of trustees of CAPS Research, promoting academic research in strategic issues involving supply management. He remains actively involved in a variety of industry and professional associations and has co-authored books on Honda and supply chain management at several companies. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DELPHI CORP: To Continue Talks with General Motors & Unions ----------------------------------------------------------- Delphi Corporation (Pink Sheets: DPHIQ) reported that based upon progress in discussions with its major unions and General Motors, Delphi will continue talks in an effort to achieve a comprehensive agreement no later than March 30, 2006. Absent agreement with all parties, Delphi will file no later than March 31, 2006 its motion under Sections 1113 and 1114 of the U.S. Bankruptcy Code to initiate the process of seeking court authorization to reject the collective bargaining agreements and terminate hourly post- retirement health care plans and life insurance. "While major obstacles and difficult issues remain to be resolved, the discussions to date with GM and our major unions helped frame the concerns and objectives of each organization," Delphi Chairman and CEO Robert S. Miller said. "As we have said before, we remain committed to reaching a consensual agreement. This deadline should provide us sufficient time to deal with the complexities inherent in fashioning practical and workable solutions, and an effective agreement that works for all of us," Mr. Miller said. Previously, Delphi had announced it would file the motion no sooner than Feb. 17, 2006. About General Motors Corp. General Motors Corporation -- http://www.gm.com/-- headquartered in Detroit, Michigan, is the world's largest producer of cars and light trucks. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. General Motors Acceptance Corporation, a wholly-owned subsidiary of GM, provides retail and wholesale financing in support of GM's automotive operations and is one of the world's largest non-bank financial institutions. Residential Capital Corporation, a real estate finance company based in Minneapolis, Minnesota, is a wholly owned subsidiary of GMAC. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DELPHI FUNDING: Moody's Assigns Ba1 Rating to Preferred Stocks -------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Delphi Financial Group, Inc., and assigned an A3 long-term debt rating to the funding agreement-backed global note program of Reliance Standard Life Global Funding, a newly organized Delaware business trust. Under the program, Reliance Standard Life Global Funding will issue notes in U.S. dollars and other currencies to third party debt investors in both U.S. and foreign capital markets. These notes will be secured by funding agreement contract obligations issued by Reliance Standard Life Insurance Company and held by Reliance Standard Life Global Funding. Moody's said that it intends to rate each draw down of the Reliance Standard Life Global Funding program individually, since the terms of the program's individual series may affect its credit characteristics and rating; for example, Moody's will not rate notes linked to an external index based on equity price movements. Additionally, Moody's will not rate notes with maturities of less than one year. Under Illinois law, the funding agreements of Illinois domiciled life insurance companies are considered pari passu with the other policyholder obligations of the company in the event of an insurer's liquidation. Moody's noted that the current ratings on Delphi and Reliance Standard incorporate the rating agency's expectations that: -- Delphi's financial leverage will not exceed 25%; -- Projected cash on cash coverage of holding company obligations is greater than 2.5 times; -- Reliance Standard and Safety National Casualty Corporation maintain NAIC company action level risk based capital ratios of at least 275% and 170%, respectively; -- Reliance Standard maintain its below investment grade bond exposure to no more than 10% of its total bond portfolio; and -- Institutional Investment Products business constitutes less than 20% of Reliance Standard general account reserves on a risk-weighted basis. Lastly, Moody's commented that it expects Delphi to maintain a balance between its employee benefits and excess workers compensation business. Rapid growth of excess workers compensation business that adversely alters the risk profile of the company would place downward pressure on the ratings. In addition, significant losses on the excess workers compensation business would result in downward rating pressure. This rating was assigned with a stable outlook: * Reliance Standard Life Global Funding program at A3 These ratings were affirmed with a stable outlook: Delphi Financial Group, Inc. * senior debt rating at Baa3; * prospective senior debt rating at (P)Baa3; * prospective senior subordinated debt shelf rating at (P)Ba1; * prospective junior subordinated debt shelf rating at (P)Ba1; * prospective preferred stock shelf rating at (P)Ba2; Delphi Funding L.L.C. * preferred stock rating at Ba1; * prospective preferred stock shelf rating at (P)Ba1; Reliance Standard Life Insurance Company * insurance financial strength rating at A3. The last rating action on Delphi took place on Oct. 22, 2004, when Moody's upgraded Delphi's senior debt to Baa3 from Ba1 as well as Reliance Standard's insurance financial strength rating to A3 from Baa1. The preferred stock of Delphi Funding L.L.C. was also upgraded to Ba1 from Ba2. The outlook for all the above referenced ratings was changed to stable. Delphi Financial Group, Inc., is a financial services holding company with consolidated GAAP assets of nearly $5.3 billion and shareholders' equity of $1.0 billion at Dec. 31, 2005. Reliance Standard, a wholly owned subsidiary of Delphi, reported statutory assets of nearly $2.6 billion and capital and surplus of $351 million at Sept. 30, 2005. DENNY'S CORP: Balance Sheet Upside-Down by $265.4M at Dec. 28 ------------------------------------------------------------- Denny's Corporation (Nasdaq: DENN) reported results for its fourth quarter and year ended Dec. 28, 2005. Fourth Quarter 2005 Highlights: -- same-store sales increased 1.7% at company units and 4.0% at franchised units; -- operating income increased $1.7 million, or 16% to $12.2 million; -- net loss improved by $9.7 million to $4.5 million; Full Year 2005 Highlights: -- same-store sales increased 3.3% at company units and 5.2% at franchised units; -- average unit sales increased 4.1% at company units and 6.2% at franchised units; -- total operating revenue increased 1.9% to $978.7 million; -- net loss improved by $30.3 million over the prior year. Nelson Marchioli, President and Chief Executive Officer, stated, "We are pleased to have posted our second consecutive year of positive same-store sales growth and are optimistic about our opportunity to sustain this sales trend in 2006. We will be introducing a variety of innovative new products and placing a renewed emphasis on our dinner business, all supported with television advertising. We believe that 2006 will be a year of transition for Denny's as we begin to leverage the investments we and our franchisees have made in food, people and facilities. The Denny's brand has strengthened considerably over the past few years, and we are committed to maintaining that momentum." Fourth Quarter Results For the fourth quarter of 2005, Denny's reported total operating revenue of $243.4 million, compared with $243.7 million in the prior year quarter. Company restaurant closures in the wake of Hurricane Wilma contributed to approximately $1 million in lost sales during the quarter. Same-store sales increased 1.7% and 4.0%, respectively, at company-owned and franchised restaurants. These increases were approximately offset by a ten-unit decline in company-owned restaurants and a 15-unit decline in franchised restaurants. Company restaurant operating margin (as a percentage of company restaurant sales) for the fourth quarter was 12.8% compared with 13.5% for the same period last year. Product costs for the fourth quarter improved by 1.0 percentage points compared with last year, due primarily to the easing of commodity cost pressures and a 5.4% increase in average guest check. Payroll and benefit costs increased 0.7 percentage points over last year due primarily to wage rate pressures, incremental training, as well as incentive compensation for crew and management. Other operating costs increased 0.5 percentage points, due primarily to a $1.7 million increase in utility expense attributable to higher natural gas prices. General and administrative expenses for the fourth quarter decreased $4.7 million over the same period last year. The primary contributor was a $3.5 million decrease in stock-based compensation costs, which totaled $1.7 million for the quarter compared with $5.2 million in the prior year period. In addition, corporate incentive compensation decreased $1.5 million from the prior year. Fourth quarter operating income increased 16%, or $1.7 million, compared with the prior year, due primarily to the reduction in G&A costs. Interest expense for the fourth quarter increased $1.4 million to $14.4 million due to rising interest rates over the last year. Net loss for the fourth quarter was $4.5 million an improvement of $9.7 million compared with a net loss in the prior year of $14.2 million, or $0.16 per common share. Full Year Results For the full year 2005, Denny's reported total operating revenue of $978.7 million, an increase of 1.9%, or $18.7 million over the prior year. Company restaurant sales increased $17.7 million, as a 3.3% increase in same-store sales more than offset a ten-unit decline in company-owned restaurants. Franchise revenue increased $1.0 million, as a 5.2% increase in same-store sales more than offset a 15-unit decline in franchised restaurants. Company restaurant operating margin for 2005 was 12.3% compared with 13.3% for the prior year. This margin decline is due primarily to $7.3 million in incremental legal settlement charges recorded during the year. Restructuring charges and exit costs for 2005 increased $4.7 million over last year, attributable primarily to $3.3 million in severance related costs. Interest expense for 2005 decreased $14.3 million from the prior year as a result of the financial recapitalization in 2004, which significantly lowered Denny's borrowing costs. Net loss for 2005 was $7.3 million, which included the impact of $7.3 million in legal settlement costs. This was an improvement of $30.3 million over the prior year net loss of $37.7 million. Business Outlook Mark Wolfinger, Chief Financial Officer, stated, "While we are optimistic about the coming year, we remain cautious with regard to the economic pressures currently facing our customer demographic. We expect consumer spending in 2006 will follow the volatility in gasoline and energy prices as it did in 2005. "Our three-year strategic business plan is based on these core objectives; improve the organic cash flow of our business, capitalize on our recent successes to build our restaurant development pipeline, and finally, to evaluate and then maximize the return and efficiency of both our operational and real estate assets. We believe that by executing on these objectives we will be able to improve our long term financial performance and enhance shareholder value." Denny's is America's largest full-service family restaurant chain, consisting of 543 company-owned units and 1,035 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. As of December 28, 2005, the Company's balance sheet showed a $265,402,000 equity deficit compared to a $265,430,000 deficit at December 29, 2004. DUNKIN' BRANDS: Moody's Assigns B2 Rating to $850 Mil. Term Loan ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Dunkin Brands Acquisition, Inc.'s $850 million senior secured term loan and $150 million senior secured revolving credit facility. Moody's also assigned a B3 corporate family rating to DBAI. The outlook is stable. DBAI is an inter-mediate holding company that is wholly owned by Dunkin Brands Holdings, Inc., which in-turn is owned equally by Bain Capital LLC, The Carlyle Group, and Thomas H. Lee Partners, Inc. Proceeds from the $850 million term loan B along with $650 million in bridge financings and approximately $1,065 million of contributed equity from the three private equity firms will be used to acquire Dunkin Brands, Inc., for approximately $2,567 million. After giving affect to the merger, DBAI will merge with and into DBI, which will be the surviving entity and wholly owned subsidiary of DBHI. The company expects to complete an asset backed securitization financing in the near term that will be used to repay the secured bank financings and senior unsecured and senior subordinated initial loans in their entirety. However, it is Moody's understanding that in the event the ABS transaction is not completed within one-year of the close of the transaction the maturity on the initial loans will automatically be extended for the senior unsecured initial loans to eight years and for the senior subordinated loans to 10 years, thus eliminating any form of refunding risk. The initial loans can also be exchanged into exchange notes with the maturity of the senior unsecured exchange notes being at least eight years and the maturity of the senior subordinated exchange notes being at least ten years. The company would also be required to register for a public exchange offer within a required time period for the exchange notes. The B3 corporate family rating reflects Moody's view that the proposed transaction will result in a weak credit profile driven in large part by significant debt levels, pro forma for this transaction. The proposed rating also incorporates DBI's more aggressive growth strategy, geographic concentration, competitive pressures, and marginal tangible asset value. However, the ratings also recognize DBI's sizeable franchisee base and stable revenue stream, consistent same store sales growth, limited capex and working capital requirements, and brand awareness. Based on management projections, DBI's consolidated debt will increase to approximately $1.5 billion on an unadjusted basis upon completion of the transaction, while pro forma EBITDA for the LTM period ending Nov. 26, 2005, is approximately $180 million. As a result, initial credit metrics are expected to be weak with leverage of approximately 8.5x and coverage on an adjusted EBITDA to Interest basis of about 1.2x and adjusted EBITDA less capex to interest of under 1.0x. The higher fixed costs will also result in negative free cash flow generation over the near term with only modest improvement over the intermediate term despite relatively low capex and working capital requirements. As a result, Moody's does not expect any material reduction in debt beyond required amortization thus limiting any meaningful improvement in credit metrics over the intermediate term. DBI has three separate and distinct concepts, Dunkin Donuts, Baskin Robbins, and Togo's, although Moody's recognizes the significant contribution of the Dunkin Donuts brand to the overall enterprise. As of fiscal year ending Aug. 27, 2005, the Dunkin Donuts business generated over 70% of gross revenues and a significant portion of operating income. The Dunkin Donuts business also encompasses the sizeable operating profit DBI generates from being the primary lessor in about 1,100 operating leases, which in turn it sub-leases to its various franchisees. Over the past three years, sub-leases generated approximately 19% of gross revenue on average. Moreover, even though same store sales for Dunkin Donuts are expected to remain healthy, sales for existing Baskin Robbins and Togo units are forecasted to be flat. DBI also generates a significant portion of its operating income from the sale of ice cream and ice cream products. A licensing agreement with Dean Foods accounts for all ice cream sales in the United States, while the company manufactures the majority of ice cream and ice cream products that are sold to international markets, with the exception of some joint ventures. For the fiscal year ending Aug. 30, 2005, ice cream and ice cream products accounted for about 15% of gross revenues. Moody's recognizes DBI's success in growing its franchisee base from approximately 9,900 units in 2000 to just over 12,500 as of Aug. 27, 2005, in addition to the stable royalty stream generated from this core franchise base, which has a weighted average remaining term of about 12.5 years under existing franchise agreements. It is also Moody's understanding that DBI does not provide financing to franchisees or acquire property in any meaningful amount resulting in minimal capex and working capital requirements to support this growth. Moody's views DBI's future growth strategy as relatively aggressive and although no significant capital commitment is required on the part of DBI to meet its goal, Moody's believes such rapid growth, while achieving expected average unit volumes and maintaining a low level of unit closures could be challenging. We also view DBI's current product breadth and day period parts as limited with the majority of sales driven primarily by coffee with a concentration in the breakfast day part. Although DBI products, in particular Dunkin Donuts, has significant brand value we believe competitive pressures could increase as the company begins to expand beyond its core markets. The stable ratings outlook reflects the expectation that credit metrics will marginally improve over the near term as new unit growth continues and store closures remain relatively low. The outlook also expects that free cash flow generation will remain weak over the intermediate term resulting in marginal debt reduction but views full access to the company's $150 million revolver as providing adequate liquidity. The ratings also assume DBI will put in place covenants that will provide sufficient cushion to allow access to the entire $150 million revolving credit facility thus providing sufficient liquidity to meet its strategic initiatives and provide adequate support during challenging periods. Due to DBI's business strategy the company does not invest in land or buildings associated with its stores in a sizeable amount nor does it generate any meaningful amount of receivables or inventory. As a result, there would be marginal if any alternate sources of liquidity from a tangible asset perspective in a distress scenario. In regards to notching, the B2 rating on DBI's Term loan, one notch above the corporate family rating, reflects its secured position within the proposed capital structure, the significant amount of subordinated capital, including $650 million of initial loans and over $1.0 in equity, and reasonable brand value which should provide reasonable recovery for the secured bank lenders in a distress scenario based in part on a reasonable value multiple. The senior secured bank facility is secured by a perfected first priority security interest in all tangible and intangible assets of the company. Moody's will not be rating either the senior unsecured or senior subordinated initial loans. As customary, Moody's ratings are subject to receipt and review of final documentation. In the event the $850 million senior secured term loan and $150 million senior secured revolving credit facility are repaid in full Moody's will likely withdraw its ratings on these secured debt instruments and corporate family rating. DUQUESNE LIGHT: Posts $112.9MM of Net Income for 2005 Fiscal Year ----------------------------------------------------------------- Duquesne Light Holdings (NYSE: DQE) reported its income results for the fourth quarter and full-year year 2005. Duquesne Light reported 2005 income from continuing operations of $112.9 million compared to a 2004 income of $87.2 million. Income from continuing operations for 2005 reflects: --- a net $12.7 million gain from the Energy Solutions segment (resulting from a $19.4 million gain on the sale of investments in three energy facility management projects, partially offset by charges of $6.7 million relating to another energy facility management project), --- a $9.4 million increase from certain changes in the fair value of derivative energy contracts (Electricity Supply segment), --- a net $2.0 million gain from the Financial segment relating to sales of investments, and --- a $2.4 million gain related to the favorable settlement of an interest rate lock agreement (All Other category), and 2004 income reflects an acquisition termination charge of $4.8 million relating to the Sunbury generation station (Electricity Supply segment). 2005 Fourth-Quarter Results Income from continuing operations was $13.2 million for the fourth quarter of 2005, compared to $19.1 million for the same period in 2004. Fourth-quarter 2005 income reflects: --- a net $1.1 million gain from the Energy Solutions segment (resulting from a $7.8 million gain on the sale of investments in two energy facility management projects, partially offset by charges of $6.7 million relating to another energy facility management project), and --- a $3.7 million decrease from certain changes in the fair value of derivative energy contracts (Electricity Supply segment). As of Sept. 30, 2005, Duquesne Light reported total assets of $2,686,600,000 and total liabilities of $255,500,000. A full-text copy of Duquesne Light's Feb. 14 press release outlining 2005 income results is available for free at: http://ResearchArchives.com/t/s?598 Headquartered in Pittsburgh, Pennsylvania, Duquesne Light Holdings -- http://www.duquesnelightholdings.com/-- is comprised of an electric-utility company and several affiliate companies that complement the core business. Duquesne Light Company, its principal subsidiary, is a leader in the transmission and distribution of electric energy, offering superior customer service and reliability to more than half a million customers in southwestern Pennsylvania. * * * As reported in the Troubled Company Reporter on Oct. 24, 2005, Standard & Poor's Ratings Services assigned its preliminary 'BBB-' senior unsecured debt and 'BB+' preferred stock ratings to utility holding company Duquesne Light Holdings Inc.'s $400 million mixed shelf registration, pursuant to SEC Rule 415. The outlook is negative. EASTGROUP PROPERTIES: Discloses Fourth Quarter Financial Results ---------------------------------------------------------------- EastGroup Properties, Inc. (NYSE:EGP) disclosed the results of its operations for the three months and year ended December 31, 2005. Funds From Operations For the quarter ended December 31, 2005, funds from operations available to common stockholders was $.68 per share compared with $.64 for the same period of 2004, an increase of 6.3% per share. The increase in FFO for the fourth quarter was mainly due to higher property net operating income (PNOI) of $1,836,000 (an 8.7% increase). This increase in PNOI was primarily attributable to $1,312,000 from 2005 acquisitions, $510,000 from newly developed properties and $85,000 from same property growth. For the year ended December 31, 2005, FFO was $2.64 per share compared with $2.49 per share for 2004, an increase of 6.0% per share. The increase in FFO for 2005 was mainly due to higher PNOI of $8,156,000 (a 10.0% increase). The increase in PNOI was primarily attributable to $4,898,000 from 2004 and 2005 acquisitions, $2,377,000 from newly developed properties and $935,000 from same property growth. FFO for the current quarter and year 2005 included a $.01 per share gain on involuntary conversion resulting from insurance proceeds exceeding the net book value of a roof replaced due to hurricane damage. Hurricane damage costs that were not covered by insurance amounted to $.01 per share for the quarter and year 2005 and are included in expenses from real estate operations. PNOI from same properties increased .4% for the quarter and 1.2% for the year. Before straight-line rent adjustments, the increase was .9% for the quarter and 3.4% for the year. Rental rate decreases on new and renewal leases averaged 1.0% for the quarter; for the year, rental rate increases averaged 1.4%. Before straight-line rent adjustments, rental rate decreases on new and renewal leases averaged 5.5% for the quarter and 3.9% for the year. FFO and PNOI are non-GAAP financial measures. David H. Hoster II, President and CEO, stated, "We are pleased with our continuing growth in FFO per share with the fourth quarter representing our sixth consecutive quarter of increased FFO as compared to the previous year's quarter. It was the tenth consecutive quarter of positive same property operations for results both with and without the straight-lining of rents. "In addition, we are maintaining our track record of creating value for our shareholders over both the short- and long-term. Total shareholder returns for one, three, five, ten and fifteen year periods all average above 20% per year." Financial Position EastGroup's balance sheet "continues to be strong and flexible" with debt-to-total market capitalization of 31.1% at December 31, 2005. For the year, the Company had an interest coverage ratio of 3.6x and a fixed charge coverage ratio of 3.2x. Total debt at December 31, 2005, was $463.7 million with floating rate bank debt comprising $116.8 million of that total. On November 30, 2005, the Company closed a $39 million, nonrecourse first mortgage loan secured by five properties. The note has a fixed interest rate of 4.98%, a ten-year term and an amortization schedule of 20 years. The proceeds of the note were used to reduce floating rate bank borrowings. During 2005, the Company repaid five mortgages totaling $18,435,000 with a weighted average interest rate of 8.014%. Outlook for 2006 EastGroup confirms its previously issued FFO guidance for the first quarter and the year 2006. FFO per share for 2006 is estimated to be in the range of $2.77 to $2.87. Diluted EPS for 2006 is estimated to be in the range of $.96 to $1.06, a decrease of $.07 per share from previous earnings per share guidance. The decrease is due to increased depreciation and amortization on acquisitions. The table below reconciles projected net income to projected FFO. EastGroup Properties, Inc., is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with a special emphasis in the states of Florida, Texas, California and Arizona. EastGroup's portfolio currently includes 21.4 million square feet with an additional 863,000 square feet of properties under development. EL PASO: Inks Letter of Intent with COPEL for Power Plant Sale -------------------------------------------------------------- El Paso Corporation (NYSE: EP) entered into a Letter of Intent with COPEL (Companhia Paranaense de Energia) for the sale of El Paso's interest in the Araucaria power plant in Brazil and the settlement of a dispute over that plant. Under the terms of the Letter of Intent, El Paso will receive $190 million in exchange for its 60% ownership of the plant. Additionally, pending Petrobras' formal approval, El Paso and COPEL, as co-owners with Petrobras of the plant, agreed that legal proceedings, which currently exist in the courts of Brazil and in international arbitration, will be suspended. El Paso hopes to complete the sale of the Araucaria plant in the first half of the year. "The announcement represents another step forward for our Brazilian power business," said Doug Foshee, president and chief executive officer of El Paso Corporation. "The sale will allow us to recover our initial investment in the Araucaria plant, sharpening our focus on the significant potential of our exploration and production program in Brazil." About COPEL Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- transmits and distributes electricity to more than 3 million customers in the state of Paran and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitly postponed. In response, COPEL is re-evaluating its corporate structure. The government of Paran controls about 59% of COPEL. About El Paso Corp. Headquartered in Houston, Texas, El Paso Corporation -- http://www.elpaso.com/-- provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. * * * As reported in the Troubled Company Reporter on Feb. 17, 2006, Moody's Investors Service placed under review for possible upgrade the ratings on the debt and supported obligations of El Paso Corporation and its subsidiaries. These rating actions reflect the prospect of EP reducing more than previously expected amount of debt in the near future, the company's progress in reducing its business risks and contingent liabilities, and signs of recovery in its production operations. These positive factors, combined with a large available cash balance, help to improve the outlook for its near-term liquidity and its credit profile overall. On Review for Possible Upgrade: Issuer: ANR Pipeline Company * Issuer Rating, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 Issuer: Colorado Interstate Gas Company * Issuer Rating, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 Issuer: El Paso CGP Company * Subordinated Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Caa3 Issuer: El Paso Capital Trust II * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)Caa3 Issuer: El Paso Capital Trust III * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)Caa3 Issuer: El Paso Corporation * Corporate Family Rating, Placed on Review for Possible Upgrade, currently B3 * Speculative Grade Liquidity Rating, Placed on Review for Possible Upgrade, currently SGL-3 * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)Ca * Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently B3 * Subordinated Conv./Exch. Bond/Debenture, Placed on Review for Possible Upgrade, currently Caa3 * Subordinated Shelf, Placed on Review for Possible Upgrade, currently (P)Caa3 Issuer: El Paso Energy Capital Trust I * Preferred Stock, Placed on Review for Possible Upgrade, currently Caa3 Issuer: El Paso Exploration & Production Company * Corporate Family Rating, Placed on Review for Possible Upgrade, currently B3 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B3 Issuer: El Paso Natural Gas Company * Issuer Rating, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 Issuer: El Paso Tennessee Pipeline Co. * Preferred Stock 2 Shelf, Placed on Review for Possible Upgrade, currently (P)Ca Issuer: Tennessee Gas Pipeline Company * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 ELITE FLIGHT: Taps Emerge Capital to Develop Strategic Initiatives ------------------------------------------------------------------ Elite Flight Solutions (OTCBB:EFLT) signed a two year services agreement with Emerge Capital Corp.'s (OTCBB:EMGC) wholly owned subsidiary, Corporate Strategies, Inc. Corporate Strategies' CEO Tim Connolly will lead the restructuring, business development, and acquisition activities called for under the agreement. "We believe that Emerge Capital provides us with some of the best, most experienced advisors in the micro-cap public markets," Bruce Edwards, President and CEO of Elite, stated. "We look forward to working closely with them on developing and executing our new strategic plan for Elite." "This agreement is consistent with our plan to provide micro-cap public companies strategic services with a significant equity component in success fees," Tim Connolly, CEO of Emerge Capital, added. "As the shareholders of Elite benefit from future growth and focus, Emerge Capital should benefit from the increase in value of our own equity holdings in Elite. We look forward to working on this opportunity with Elite." Through its wholly owned operating subsidiary, Corporate Strategies, Inc. -- http://www.corporate-strategies.net/-- Emerge Capital Corp. provides Business Restructuring, Turnaround Management, and Advisory Services for emerging and re-emerging public and private companies. Corporate Strategies, Inc. (CSI) helps micro-cap public companies accelerate growth and provides working capital, management restructuring and turnaround expertise, and in select cases, makes direct investments in our client companies. CSI markets its turnaround services to hedge funds, institutional investors, and banks that have significant exposure in troubled micro-cap public companies. Typically, these companies are in operational or financial difficulty, may be in default of lending or equity agreements, and may be facing bankruptcy or liquidation if their operations are not turned around. Elite Flight Solutions, Inc., formerly known as Carcorp USA Corporation, provides air ambulance services. The Company operates Charter and Aircraft Management business through its subsidiary FlyJets.BIZ FlyJets. The Group operates through its subsidiary American Air Network Alaska Inc, Aircraft Acquisition and Sales, Maintenance Fuel, Part Sales, and Contracted Services. The Group generates major revenue form American Air Network Alaska Inc. The American Air Network Alaska Inc provides air ambulance service to Yukon-Kuskokwin Health Corporation YKHC. AANA's contract with YKHC goes through September 2008. In Sep-2004, the Group ceased the operation of charter and aircraft management. * * * Elite Flight had an accumulated deficit of $7,763,963 from inception through Dec. 31, 2004 and an accumulated deficit of $6,922,582 from inception through June 30, 2004. As mentioned, for the six months ended Dec. 31, 2004, the Company had a net loss of $841,381. As of Dec. 31, 2004, there was cash on hand of $455,954 and current liabilities of $2,675,120. Management admits there is not sufficient cash or other assets to meet the Company's current liabilities. In order to meet those obligations, it will need to raise cash from the sale of securities or from borrowings. Elite Flight must successfully expand its business operations and become profitable to achieve a sound financial condition. In connection with their audit of Elite Flight's financial statements for the year ended Dec. 31, 2004, the Company's independent auditors stated that that there is a substantial doubt about Elite Flight's ability to continue as a going concern. ELLIOTT-WILLIAMS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Elliott-Williams Co., Inc. 3500 East 20th Street Indianapolis, Indiana 46219 Bankruptcy Case No.: 06-00523 Type of Business: The Debtor is a manufacturer of freezers, coolers, refrigerators, blast chillers, and other cold storage equipment. See http://www.elliott-williams.com/ Chapter 11 Petition Date: February 17, 2006 Court: Southern District of Indiana (Indianapolis) Debtor's Counsel: Samuel D. Hodson, Esq. Barnes & Thornburg, LLP 11 South Meridian Street Indianapolis, Indiana 46204 Tel: (317) 236-1313 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allied Technologies Trade debt $200,000 P.O. Box 501 Greenwood, IN 46143 Integris Metals Ryerson Tull Trade debt $79,751 2621 West 15th PL Chicago, IL 60608 Copeland Corp. Trade debt $44,834 P.O. Box 4100 Saint Louis, MO 63136 Kason Hardware Trade debt $37,818 Heatcraft Refrigeration Trade debt $30,096 Celadon Trucking Services Trade debt $20,292 Carpenter Co. Trade debt $18,892 Jean's Extrusions Trade debt $17,553 Super Radiator Coils Trade debt $17,097 Easter & Cavosie Trade debt $16,495 Johnson Commercial Trade debt $15,234 Associates Russell Trade debt $14,561 AlumaShield Trade debt $13,974 Control Products Trade debt $13,178 Fox-Bettinardi Trade debt $12,917 Edey Mfg. Trade debt $11,842 Alexander Screw Products Trade debt $11,780 R. Tylery Perkins Trade debt $11,366 Frank Door Co. Trade debt $9,353 North Coast Indianapolis Trade debt $9,044 EMERGE CAPITAL: Will Provide Elite Flight with Reform Services -------------------------------------------------------------- Emerge Capital Corp.'s (OTCBB:EMGC) wholly owned subsidiary, Corporate Strategies, Inc., signed a two year services agreement with Elite Flight Solutions (OTCBB:EFLT). Corporate Strategies' CEO Tim Connolly will lead the restructuring, business development, and acquisition activities called for under the agreement. "We believe that Emerge Capital provides us with some of the best, most experienced advisors in the micro-cap public markets," Bruce Edwards, President and CEO of Elite, stated. "We look forward to working closely with them on developing and executing our new strategic plan for Elite." "This agreement is consistent with our plan to provide micro-cap public companies strategic services with a significant equity component in success fees," Tim Connolly, CEO of Emerge Capital, added. "As the shareholders of Elite benefit from future growth and focus, Emerge Capital should benefit from the increase in value of our own equity holdings in Elite. We look forward to working on this opportunity with Elite." Elite Flight Solutions, Inc., formerly known as Carcorp USA Corporation, provides air ambulance services. The Company operates Charter and Aircraft Management business through its subsidiary FlyJets.BIZ FlyJets. The Group operates through its subsidiary American Air Network Alaska Inc, Aircraft Acquisition and Sales, Maintenance Fuel, Part Sales, and Contracted Services. The Group generates major revenue form American Air Network Alaska Inc. The American Air Network Alaska Inc provides air ambulance service to Yukon-Kuskokwin Health Corporation YKHC. AANA's contract with YKHC goes through September 2008. In Sep-2004, the Group ceased the operation of charter and aircraft management. Through its wholly owned operating subsidiary, Corporate Strategies, Inc. -- http://www.corporate-strategies.net/-- Emerge Capital Corp. provides Business Restructuring, Turnaround Management, and Advisory Services for emerging and re-emerging public and private companies. Corporate Strategies, Inc. (CSI) helps micro-cap public companies accelerate growth and provides working capital, management restructuring and turnaround expertise, and in select cases, makes direct investments in our client companies. CSI markets its turnaround services to hedge funds, institutional investors, and banks that have significant exposure in troubled micro-cap public companies. Typically, these companies are in operational or financial difficulty, may be in default of lending or equity agreements, and may be facing bankruptcy or liquidation if their operations are not turned around. CSI is compensated with cash payments on a monthly or quarterly basis, and the most significant part of our compensation is in outright grants of equity in the form of common stock, and/or warrants for purchasing common stock. CSI believes this compensation plan aligns our interests with the client company and its shareholders because our ultimate compensation is determined by successfully increasing shareholder value. This performance-based arrangement clearly demonstrates that our interests are consistent with the goals of our clients, their shareholders, and the shareholders of Emerge Capital Corp. At Sept. 30, 2005, Emerge Capital Corp.'s balance sheet showed a stockholders' deficit of $3.4 million, compared to a $1.6 deficit at Dec. 31, 2004. ENTERGY NEW ORLEANS: U.S. Trustee Amends Committee Membership ------------------------------------------------------------- Magnus Energy Marketing, Inc., represented by Robert Helm, has resigned from the Official Committee of Unsecured Creditors in Entergy New Orleans, Inc.'s Chapter 11 case. R. Michael Bolen, the United States Trustee for Region 5, added Asplundh Tree Expert Co. to the Committee. The Committee is now comprised of: (1) Apache Corporation Attn: Roxanne Armstrong 2000 Post Oak Blvd. Houston, Texas 77056-4400 Tel: (713) 296-6501 Fax: (713) 296-6501 (2) Western Gas Resources, Inc. Attn: Brian Jeffries 1099 - 18th Street, Suite 1200 Denver, Colorado 80202 Tel: (303) 452-5603 Fax: (303) 457-9748 (3) Asplundh Tree Expert Co. Attn: Joseph P. Dwyer 708 Blair Miller Road Willow Grove, Pennsylvania 19090 Tel: (215) 784-4474 Fax: (215) 784-1444 Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) ERA AVIATION: CapitalSource Wants to Foreclose on Collateral ------------------------------------------------------------ CapitalSource Finance LLC asks the U.S. Bankruptcy Court for the District of Alaska to lift the automatic stay so it can exercise its remedies as a secured creditor of Era Aviation, Inc., including the ability to foreclose on and repossess its collateral. CapitalSource holds a security interest in all of the Debtors' personal property and assets pursuant to a Revolving Credit, Term Loan and Security Agreement signed in July 2005. Most of CapitalSource's collateral consists of aircraft the Debtor owns and uses in its commercial airline and charter aviation business. As of Jan. 4, 2006, the Debtors' obligations to CapitalSource totaled approximately $12.1 million. Jeffrey L. Jonas, Esq., at Brown Rudnick Berlack Israels LLP, tells the Bankruptcy Court that CapitalSource is entitled to relief from the automatic stay and should be allowed to recover its collateral because: -- the Debtor continues to suffer significant losses that makes the prospect of successfully reorganizing impossible; -- the Debtor's move to save cash by reducing maintenance and repair expenses by 70% will cause the value of CapitalSource's collateral to depreciate; -- the Debtor no longer has any equity on the collateral since CapitalSource's over $12 million claim is greater than the $10.2 million appraised value of the collateral; -- the Debtor allowed CapitalSource immediate relief from the automatic stay in the event of a bankruptcy filing, pursuant to a forebearance agreement; and -- no other entity holds a perfected lien against the collateral. Committee Objects The Debtor's Official Committee of Unsecured Creditors opposes CapitalSource's motion to lift the automatic stay. The Committee argues that CapitalSource is attempting to recover collateral consisting of debtor's essential operating assets. In addition, the Committee tells the Bankruptcy Court that CapitalSource's arguments ignore the existence of the Debtor's other creditors and the benefits afforded to them through bankruptcy. The Committee says that relief from stay would undo the benefits of bankruptcy administration and gut the Debtor's estate. The Hon. Donald MacDonald IV will convene a hearing at 10:00 a.m. on March 6, 2006, to consider CapitalSource's request. Judge MacDonald makes it clear that the automatic stay is in effect until the entry of a final ruling in this matter. 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. ERA AVIATION: Committee Hires Burr Pease as Counsel --------------------------------------------------- The Official Committee of Unsecured Creditors of Era Aviation, Inc., asks the U.S. Bankruptcy Court for the District of Alaska for permission to employ Burr, Pease & Kurtz, PC, as its counsel, nunc pro tunc to Jan. 27, 2006. Burr Pease will: a) give the Committee legal advice with respect to its powers and duties as the Committee; b) prepare on behalf of the Committee, necessary applications, answers, orders, reports, and other legal papers; c) assist the Committee in negotiation and preparation of a plan of arrangement; and d) perform other legal services as requested by the Committee. The lead attorney who'll represent the Committee in the Debtor's case is: John C. Seimers, Esq., Burr, Pease & Kurtz, PC 810 N Street Anchorage, Alaska 99501 Mr. Seimers bills $220 per hour for his work. The Committee assures the Bankruptcy Court that Burr Pease holds no interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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 (Bankr. Ala. Case No. 05-02265). 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. ERA AVIATION: Offshore Can Proceed With Rule 2004 Probe ------------------------------------------------------- The Hon. Donald MacDonald IV of the U.S. Bankruptcy Court for the District of Alaska directs CapitalSource Finance LLC to produce documents and certain individuals for examination by oral deposition pursuant to an inquiry to be conducted by Offshore Aviation, Inc. Offshore will investigate: * 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. CapitalSource has until March 3, 2006, to produce the documents requested by Offshore. As reported in the Troubled Company Reporter on Feb. 8, 2006, Offshore and its affiliates wanted to investigate CapitalSource to gather information that could help them recover approximately $1.5 million in customer payments mistakenly sent to Era Aviation, Inc. Some of Offshore's customers had inadvertently remitted their payments to old Era Aviation's lockbox when it should have been sent to new lockbox in Philadelphia, Pennsylvania. At that time, the old lockbox was already owned by the Debtor, which had purchased a regional airline service business from Offshore. Offshore purchased old Era Aviation's business, including the regional airline service business, from Rowan Companies, Inc., in December 2004. CapitalSource financed the Debtor's purchase of the airline service business and holds a security interest in all of the Debtor's assets. The Debtor alleged that CapitalSource had "swept out" the contents of the lockbox, including Offshore's receivables. Through a Rule 2004 examination, Offshore wants to quickly determine what happened to their receivables and what role, if any, CapitalSource played in its loss. 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. John C. Seimers, Esq., at Burr, Pease & Kurtz, PC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. EXIDE TECHNOLOGIES: Appoints Francis Corby Jr. as CFO and EVP ------------------------------------------------------------- Exide Technologies' (NASDAQ: XIDE) Board of Directors appointed Francis M. Corby Jr., 62, as the Company's new Executive Vice President and Chief Financial Officer, effective March 1, 2006. Mr. Corby succeeds J. Timothy Gargaro, who left the Company effective Dec. 31, 2005. Mr. Corby brings more than 35 years of financial and leadership experience to Exide, including more than 15 years in the automotive sector. Prior to joining Exide, Mr. Corby most recently served as Senior Vice President and Chief Financial Officer at GST Automotive Leather. He was Executive Vice President and CFO of Guide Corporation, an Indiana-based supplier of exterior automotive lighting systems; Executive Vice President at the investment banking firm Frederick & Company; Executive Vice President - Finance and Administration at Harnischfeger Industries, a Milwaukee-based manufacturer; and Vice President and Corporate Controller at Joy Manufacturing in Pittsburgh. Mr. Corby began his career with Chrysler Corporation, where he held a number of increasingly responsible financial management positions including that of Vice President and Treasurer of Chrysler Financial Corporation. "I am extremely pleased that Fran has agreed to join our organization," said Gordon A. Ulsh, President and Chief Executive Officer of Exide Technologies. "Fran is a seasoned financial expert who possesses the maturity, strategic leadership experience and industry knowledge that we need to help the organization achieve its growth and profitability objectives." Mr. Corby holds a bachelor's degree philosophy from St. Mary of the Lake Seminary and an MBA in finance and international business from Columbia University. Mr. Corby is a member of the Board of Directors of Magnasphere Corporation in Wisconsin. 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, represented the Debtors in their successful restructuring. 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. FOAMEX INT'L: Disclosure Statement Hearing Adjourned to March 14 ---------------------------------------------------------------- As reported in the in the Troubled Company Reporter on Dec. 26, 2005, Foamex International Inc., and its debtor-affiliates filed their proposed Joint Plan of Reorganization and accompanying Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware on Dec. 23, 2005. The Debtors tell the Court that they are still working to resolve the objections filed by the Official Committee of Unsecured Creditors and other parties-in-interest to the Disclosure Statement. To explore whether a consensual plan can be achieved, the Debtors and the interested parties agree to adjourn the Disclosure Statement Hearing to March 14, 2006, at 9:30 a.m. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945- 7000) FOAMEX INT'L: Wants Court to Deny Sealy & Continental's Request --------------------------------------------------------------- As previously reported, Sealy, Inc., and Continental Casualty Corporation seek relief from the automatic stay to pursue a Declaratory Judgment Action against American Home Assurance Company. Sealy, Inc., and Foamex International, Inc., are parties to a Supply Agreement dated January 1, 2002. Sealy supplies baled mattress scrap for use in Foamex's manufacture of flexible polyurethane foam for bedding. The Insurance Section of the Supply Agreement obligated Foamex to obtain commercial automobile liability insurance and name Sealy as an additional insured. The insurance Foamex obtained for Sealy will be primary to any other valid and collectible insurance. Sealy's affiliates are provided with the same additional insured primary coverage. Consistent with the Supply Agreement's insurance requirements, Foamex procured an American Home Auto Policy, effective October 2, 2001, to October 2, 2002. The Auto Policy contains an Additional Insured endorsement that affords additional insured status to any entity who becomes an additional insured, as a result of any contract, only with respect to liability arising out of the operations or premises owed or rented. Sealy and Continental asserted that they will only pursue their claims against American Home, thus not affecting Foamex International Inc., and its debtor-affiliates and not intervening with the Debtors' reorganization process. Pauline K. Morgan, Esq., Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, points out that Sealy's assertion that it may obtain full recovery from American Home as an "additional insured," contravenes with what was previously agreed upon with the Debtors. Sealy's status as additional insured meant that Sealy is covered subject to any deductible obligation, Ms. Morgan explains. There is a $500,000 deductible covering claims under the American Home policy, Ms. Morgan states. The deductible is secured by the Debtors' cash collateral. The settlement with Delbert Wardwell, Sr., provides for a lump sum payment of $250,000 from Continental, plus monthly payments of $3,892 to Mr. Wardwell for 20 years. The Debtors are implicated in the Settlement because the lump sum payment and the first five years of payment all fall within the deductible, and American Home might draw from the cash collateral for the deductible, Ms. Morgan points out. If their request is granted, Sealy and Continental stand to receive treatment superior to any other similarly situated creditor by having the amount of their claim paid in full and leaving it to the Debtors to litigate the deductible issue, Ms. Morgan avers. If the automatic stay is lifted, the Debtors will be forced to defend the District Court Action and engage in other litigation at a critical stage in their reorganization proceedings, Ms. Morgan contends. Defending a suit at this time will not only be a gross depletion of estate resources, but will be an unnecessary distraction to the Debtors' management while they are attempting to finalize and prosecute a plan of reorganization. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to deny Sealy and Continental's request. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945- 7000) FORD MOTOR: Huizenga & Hergt Files Charges Against Ford Waivers --------------------------------------------------------------- Charges have been filed with the Equal Employment Opportunity Commission in Detroit against the Ford Motor Company by the law firm of Huizenga & Hergt. The charges request a finding from the agency declaring that the company has not complied with Federal law in seeking a release of liability from 4,000 employees selected for termination as part of Ford's restructuring plan. Under Ford's restructuring plan, employees are offered up to nine months of additional severance pay if they agree to release their claims against the company. The charge filed with the EEOC, however, alleges that the company did not comply with the Older Workers Benefit Protection Act, because the affected employees were not provided a listing by age and job title of each person who was selected for separation. John Hergt, a partner in the law firm, explained that what Ford has done is to limit the information provided to employees so that they are unable to determine whether or not there is a pattern of selecting older workers for separation. In some cases, Mr. Hergt states that the individual is provided a listing, which lists only one person selected for separation, despite the fact that thousands of employees have been terminated. Limiting the information in such a way, "does not comply with at least two Federal Court decisions that have held that a company must provide a listing of all persons selected," Mr. Hergt said. There is still time for Ford to comply with the law and expand the information contained in the lists given to terminated workers, Mr. Huizenga said. If the company fails to do so, it runs the risk that employees who sign the agreement may retain the money they received and file a lawsuit in Federal Court for age discrimination under the Federal Act. Mr. Huizenga has previously obtained a landmark ruling in the 6th Circuit Court of Appeals affirmed by the United States Supreme Court finding that releases given to employees by the Ameritech Corporation were invalid. This is an important issue, Mr. Hergt explained, "because it is likely that many people will sign the release ignorant of the facts, and will not explore their legal rights." John Hergt of Huizenga & Hergt P.C. Telephone (313) 963-4200 Headquartered in Dearborn, Michigan, Ford Motor Company, is the world's third largest automobile manufacturer. Ford Motor Co. manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered the ratings of Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). Ford's SGL-1 Speculative Grade Liquidity rating is affirmed. The rating outlook for Ford Motor is negative. As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services lowered its corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit), and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. The outlook is negative. Consolidated debt outstanding totaled $141.7 billion at Sept. 30, 2005. As reported in the Troubled Company Reporter on Dec. 21, 2005, Fitch Ratings has downgraded the issuer default rating and senior unsecured debt ratings of Ford Motor Company, Ford Credit Company and affiliate ratings to 'BB+' from 'BBB-'. The ratings of The Hertz Corporation and its subsidiaries are not affected by this action. Ford's Rating Outlook remains Negative. FREDERICK MCNEARY: Bankruptcy Court Dismisses Chapter 11 Case ------------------------------------------------------------- The Hon. Robert E. Littlefield Jr. of the U.S. Bankruptcy Court for the Northern District of New York, dismissed Frederick J. McNeary, Sr.'s chapter 11 case, in order to facilitate the closing of Prestwick Chase, Inc.'s refinancing. On Dec. 21, 2005, the Court approved the settlement agreement between the Debtor, Prestwick Chase, APC Partners II, and non- Debtor McNeary family parties. The agreement provides $1.7 million lump-sum settlement payment to APC. As reported in the Troubled Company Reporter last week, Prestwick Chase obtained a commitment from The Community Preservation for $14 million that will pay-off M & T Real Estate, Inc. In addition, the Debtor will contribute personal funds to achieve the payments to M & T and APC. Once M & T and APC are paid, there will be no need for the continued protection afforded by Title 11 as described by the U.S. Supreme Court in this case. Lisa Ruoff Purdy, Esq., at Segel, Goldman, Mazzotta & Siegel, P.C., tells the Court that the secured creditors are protected to the extent of their security interest. In addition, priority and unsecured claimants will have the flexibility to negotiate payment from the Debtor or pursue state law remedies. Headquartered in Saratoga Springs, New York, Frederick J. McNeary, Sr., is a real estate developer and broker. He is also a shareholder of bankrupt Prestwick Chase, Inc., which filed for chapter 11 protection on March 11, 2005 (Bankr. N.D.N.Y. Case No. 05-11456). Mr. McNeary filed for chapter 11 protection on April 29, 2005 (Bankr. N.D.N.Y. Case No. 05-13007). Howard M. Daffner, Esq., at Segel, Goldman, Mazzotta & Siegel, P.C., represents the Debtor. When Mr. McNeary filed for protection from his creditors, he estimated less than $50,000 in assets and listed $10 million to $50 million in debts. FREEDOM FINANCIAL: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Freedom Financial Co., LLC 1919 Bell Street Montgomery, Alabama 36104 Tel: (334) 834-8000 Bankruptcy Case No.: 06-30166 Chapter 11 Petition Date: February 17, 2006 Court: Middle District of Alabama (Montgomery) Judge: Dwight H. Williams Jr. Debtor's Counsel: Von G. Memory, Esq. Memory, Day & Azar P.O. Box 4054 469 South McDonough Street Montgomery, Alabama 36101 Tel: (334) 834-8000 Fax: (334) 834-8001 Total Assets: $2,230,000 Total Debts: $1,760,553 Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Montgomery County Revenue $11,060 Sarah Spear P.O. Box 1667 Montgomery, AL 36101-1667 FREESCALE SEMICONDUCTOR: S&P Upgrades BB+ Credit Rating to BBB- --------------------------------------------------------------- Standard & Poor's Ratings raised its corporate credit rating and senior unsecured debt ratings on Austin, Texas-based Freescale Semiconductor Inc. to 'BBB-' from 'BB+'. The outlook is revised to stable from positive. "The action reflects the company's improving profitability. The rating reflects good free cash flows, a strong balance sheet and ample liquidity, and leadership positions in the automotive and networking semiconductor markets," said Standard & Poor's credit analyst Bruce Hyman. This is partly offset by a substantial sales reliance on Motorola, about 27% of sales, its high R&D expenses and substantial exposure to the U.S. auto industry. Freescale is the leading supplier of chips for networking, wireless base stations, and many automotive applications. Customer-supplier relationships are long-lived in the networking and automotive sectors, and product platforms can remain in production for several years, which tends to protect revenue streams. In 2005, Freescale was awarded the mid- to low-tier, third-generation (3G) business at Motorola for handsets, expected to reach the mass marketplace through 2008. Revenues were $1.48 billion in the December 2005 quarter, and have been in the $1.4 billion to $1.5 billion range since the beginning of 2004, benefiting from strong sales to Motorola's well-received cellphone lines, offsetting depressed auto markets and the end of a longstanding microprocessor supply relationship with Apple Computer Inc. Profitability has been improving, with EBITDA margins of 24% in the December 2005 quarter, compared with 19% in the March 2004 quarter. Free cash flows are good, around $700 million per year. Freescale had $3.0 billion cash and $1.23 billion debt at Dec. 31, 2005, and is expected to remain in a net cash position. Full-year 2005 revenues totaled $5.7 billion, compared with $4.9 billion in 2004. Leverage is modest, with debt to EBITDA about 1.1x. GAYLORD ENTERTAINMENT: Posts $13.0MM Loss in 4th Quarter of 2005 ---------------------------------------------------------------- Gaylord Entertainment Co., incurred a $13.0 million loss from continuing operations for the fourth quarter ended Dec. 31, 2005, a 53.2% increase from the prior year's quarter loss of $8.5 million. According to Gaylord, the loss from continuing operations in the fourth quarter of 2005 was driven by increases in both pre -opening and interest expense compared to the fourth quarter of last year. Loss from continuing operations in the fourth quarter of 2005 was also affected by a $2.0 million pre-tax net unrealized gain in the value of the company's Viacom stock investment and related derivatives, compared to a pre-tax net unrealized gain of $3.4 million in the fourth quarter of 2004, the Company says. Gaylord's consolidated revenues for the fourth quarter of 2005 is $221.4 million compared to $188.6 million in the same period last year, led by continued strength in its Hospitality segment. The Company's Hospitality segment revenue totaled $164.1 million, compared to $136.0 million in the prior-year quarter, with solid revenue growth at each of Gaylord's hotel properties. The Company's adjusted EBITDA is $17.0 million, compared to $17.3 million in the prior-year quarter. Development Update Construction continues to progress on Gaylord's newest project, the Gaylord National, with fourth quarter bookings growing by 63.4% compared to the fourth quarter of 2004. Construction costs remain volatile and have increased since the original estimate in 2004. Similarly, the property's advance bookings and average daily rate have also increased. Due to the strong demand, Gaylord plans to expand the project by 500 rooms and 25,000 to 30,000 sq. ft. of meeting space, subject to approval by Prince George's County of additional economic incentives for the project. The net increase of the construction costs, expansion costs, and economic incentives, excluding pre-opening costs and capitalized interest expense, is expected to be $235 million to $285 million. Returns for the overall project are expected to exceed the Company's targeted 12.0% un-levered, after-tax return. In 2005, Gaylord incurred $56.7 million in capital expenditures related to the construction of the Gaylord National. Gaylord Entertainment (NYSE:GET), a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates three industry-leading brands -- Gaylord Hotels -- http://www.gaylordhotels.com/-- its network of upscale, meetings- focused resorts, ResortQuest International -- http://www.resortquest.com/-- the nation's largest vacation rental property management company, the Grand Old Opry -- http://www.opry.com/-- the weekly showcase of country music's finest performers for 78 consecutive years. The Company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Springhouse Golf Club, Wildhorse Saloon and WSM-AM. For more information about the Company, visit http://www.gaylordentertainment.com/ * * * Moody's assigned its B2 Long term corporate family rating and B3 Senior unsecured debt ratings to Gaylord Entertainment Co. on Oct. 24, 2003, and said the outlook was stable at that time. Standard & Poor's assigned B ratings to Gaylord's long term foreign issuer credit and long term local issuer credit, with a stable outlook, on March 11, 2005. GENERAL GROWTH: Fitch Puts BB Rating on New $2.85 Bil. Term Loan ---------------------------------------------------------------- Fitch Ratings assigned these ratings for new credit facilities entered into by General Growth Properties, Inc.: -- $650 million revolving credit facility due 2010 'BB'; -- $2.85 billion term loan A-1 due 2010 'BB'. Following repayment of GGP's existing term loans and termination of the existing revolving credit facility, Fitch will withdraw the 'BB' ratings for those facilities that are being replaced. In addition, Fitch also withdraws the 'B+' preferred stock rating for GGP as this paper was redeemed in early 2005. The Rating Outlook for GGP is Stable. In addition Fitch also affirms these ratings for GGP's subsidiaries, also with a Stable Rating Outlook: Rouse LP -- Senior unsecured bonds 'BB'. Price Development Co. LP -- Senior unsecured bonds 'BB+'. Proceeds from the new facilities are expected to be used predominantly to refinance GGP's existing credit facilities. The revolving credit facility is also anticipated to have heavy usage over the next several years as GGP pursues a heavy development and property-repositioning pipeline. GGP's strengths center on its excellent track record as an operator of regional shopping malls. GGP, through its over 200 shopping centers spread across 44 states, manages a portfolio that is highly diversified by tenant and geographical location and which boasts a smooth, long-term lease maturity schedule. GGP has enjoyed substantial traction in its ability to raise rental rates recently, with renewal rates exceeding expiring rates by between 20% to 40% in each of the last four years. This has been driven in part by consistently improving sales per square foot, which after taking effect for the Rouse acquisition in late 2004, increased to about $425 per square foot portfolio-wide in 2005. This has been achieved while maintaining strong occupancy, which reached 92.5% on a consolidated basis at the end of 2005. While GGP has had the wind at its back courtesy of a strong retail environment in the past few years, Fitch does not believe GGP's successes are solely attributable to market environment. GGP management has undertaken significant property repositioning and upgrading activities that have improved and strengthened many properties. In addition, GGP has also actively managed properties through the departure of some anchor tenants. Despite the exceptional levels of property level performance exhibited by the company's assets, Fitch is concerned about many of GGP's financial metrics. Predominantly as a result of substantial leverage taken on to complete the acquisition of Rouse, GGP's book value-based leverage levels are at the top of the level considered appropriate for the 'BB' rating category, while fixed charge coverage is near the bottom of what is viewed as appropriate. In addition, there are very few unencumbered assets in the portfolio that Fitch believes would significantly limit GGP's operating and financial flexibility in a weak part of the economic cycle. GGP's leverage, defined as debt divided by undepreciated book capital, reached 81.87% as of Sept. 30, 2005, an increase from the mid 50% to mid 60% range prior to the Rouse acquisition. While leverage may fluctuate around this level over time, Fitch expects this metric to remain in the high 70% to low 80% range over time. As a significant component of GGP's assets were purchased in the past three years, Fitch does not believe that the disparity between book value and market value is as large for GGP as it is for some other issuers and, as a result, Fitch places significant weight on the book value analysis. GGP's leverage is also relatively high from a risk-adjusted capital perspective as the company has added significant development and joint venture assets over the past few years. In 2005, GGP took significant steps to improve its funding profile, as floating-rate debt is targeted to decline to the mid teen range as a percentage of total debt from a peak of over 45% in 2004. Also, GGP's use of secured debt is relatively low today at 66%, however, management targets the increase back into the historical 90% range over the next several years. In today's market, Fitch believes that GGP enjoys exceptional access to the mortgage and commercial mortgage-backed securities markets, providing the company with operational and financial flexibility that is near the quality of issuers with much greater use of unsecured debt. However, in a weaker environment or in the event of a shock to the commercial mortgage market, GGP would be likely face materially greater operational and financial flexibility challenges than would many of its peers. Predominantly as a result of the substantial indebtedness taken on to acquire Rouse, GGP's operating performance has also declined considerably. For the first nine months of 2005, GGP's fixed charge coverage ratio was 1.13 times (x) compared with 2.12x for the same period of 2004. There is likely some expense included in this from the process of merging and integrating the financial and operational systems of GGP and Rouse. Some of the effect is also attributable to rising interest rates and migration towards increased use of fixed-rate debt. Looking forward, Fitch expects GGP's operating performance to improve marginally, particularly to the extent that the company continues to have the same level of traction in its ability to increase rents. Nevertheless, this will also be somewhat offset by higher interest cost in conjunction with the migration to the decreasing use of floating rate debt. While Fitch is somewhat concerned with GGP's fixed charge coverage, this is offset to an extent by the company's solid property level performance metrics. This, combined with the long, stable lease maturity schedule and high quality tenant base with negligible concentrations, generates comfort at the current level. Price bonds are notched above GGP senior debt as a result of structural characteristics that place Price bondholders in a superior security position relative to investors in other parts of the GGP capital structure. Specifically, the unencumbered asset covenants and near term maturities of the Price bonds result in substantial entity-level unencumbered assets as well as meaningful repayment visibility. Although the Rouse bonds also provide protection resulting in lower leverage and lower utilization of secured debt within Rouse, the covenants do not explicitly require any unencumbered assets. Also, while leverage is limited to 65%, the Rouse bonds do not receive the same notching benefit as repayment visibility is not as high due to the longer term of the bonds as well as the potential for consolidation in a liquidation scenario. As a result, the Rouse bonds do not receive the same notching benefit that the Price bonds receive. Based in Chicago, IL, GGP is one of the nation's largest real estate investment trusts with over 200 million square feet of properties and over $27 billion of assets at undepreciated book value. GGP specializes in operating regional shopping malls but also has some limited investments in office buildings and community development projects that were acquired when the company purchased Rouse. As of Sept. 30, 2005,GGP had nearly $4 billion of undepreciated book equity. GENERAL MOTORS: To Continue Talks with Delphi Corp & Unions ----------------------------------------------------------- Based upon progress in discussions with its major unions and General Motors, Delphi Corporation (Pink Sheets: DPHIQ) will continue talks in an effort to achieve a comprehensive agreement no later than March 30, 2006. Absent agreement with all parties, Delphi will file no later than March 31, 2006, its motion under Sections 1113 and 1114 of the U.S. Bankruptcy Code to initiate the process of seeking court authorization to reject the collective bargaining agreements and terminate hourly post- retirement health care plans and life insurance. "While major obstacles and difficult issues remain to be resolved, the discussions to date with GM and our major unions helped frame the concerns and objectives of each organization," Delphi Chairman and CEO Robert S. Miller said. "As we have said before, we remain committed to reaching a consensual agreement. This deadline should provide us sufficient time to deal with the complexities inherent in fashioning practical and workable solutions, and an effective agreement that works for all of us," Mr. Miller said. Previously, Delphi had announced it would file the motion no sooner than Feb. 17, 2006. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. About General Motors Corp. General Motors Corporation -- http://www.gm.com/-- headquartered in Detroit, Michigan, is the world's largest producer of cars and light trucks. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. General Motors Acceptance Corporation, a wholly-owned subsidiary of GM, provides retail and wholesale financing in support of GM's automotive operations and is one of the world's largest non-bank financial institutions. Residential Capital Corporation, a real estate finance company based in Minneapolis, Minnesota, is a wholly owned subsidiary of GMAC. * * * As reported in the Troubled Company Reporter on Jan. 30, 2006, Moody's Investors Service placed its B1 long-term rating of General Motors Corporation on review for possible downgrade following the company's announcement of full-year 2005 results that include fourth quarter automotive operating cash generation that is materially below the rating agency's expectations. The ratings of General Motor's Acceptance Corporation (Ba1/review with direction uncertain and Not-Prime/review for possible upgrade) and of Residential Capital Corporation (Baa3 and Prime-3/review direction uncertain) remain unchanged. As reported in the Troubled Company Reporter on Dec. 14, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on General Motors Corp. to 'B' from 'BB-' and its short- term rating to 'B-3' from 'B-2' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. The outlook is negative. The 'BB/B-1' ratings on General Motors Acceptance Corp. and the 'BBB-/A-3' ratings on Residential Capital Corp. remain on CreditWatch with developing implications, reflecting the potential that GM could sell a controlling interest in GMAC to a highly rated financial institution. Consolidated debt outstanding totaled $285 billion at Sept. 30, 2005. GENESIS HEALTHCARE: Moody's Rates $125MM Credit Facility at Ba2 --------------------------------------------------------------- Moody's Investors Service upgraded the ratings for Genesis HealthCare Corporation, moving the corporate family rating to Ba3 from B1 and the $154 million outstanding 8% senior subordinated notes to B2 from B3. Moody's also assigned a Ba2 rating to the company's amended and restated $125 million revolving credit facility. The outlook for the ratings is stable. The upgrade reflects the positive operating performance and improved cash flow and credit metrics of the company since the spin-off of the nursing home operations from NeighborCare, Inc. in December 2003. Genesis has consistently grown revenue while completing a rationalization of its portfolio of facilities, including the exit of unprofitable operations. Additionally, while the company has increased investments in capital expenditures in the past year, and free cash flow is expected to be constrained by future investment, operating cash flow has been consistently strong. The company's near term liquidity is very good, which further supports the ratings upgrade. Genesis is expected to internally fund all working capital, capital expenditures and other cash needs over the next 12 months. In addition, the company has access to a $125 million revolving credit facility under the terms of its March 2005 amended and restated credit agreement. Moody's expects the revolver to remain undrawn. The company maintains very good cushion above the covenants set forth in its credit agreement and therefore, Moody's does not expect access to the revolver to be constrained. The amendment of the credit facility was coincidental with an offering of $180 million 2.5% convertible senior subordinated debentures, the proceeds of which were used to repay the outstanding term loan B and repurchase a portion of the outstanding 8% senior subordinated notes. The issuance of the convertible notes therefore improved liquidity by decreasing interest costs and eliminating the required amortization of the term loan. However, it is noted that the convertible notes may require cash conversion at specified dates, the first such date is Mar. 15, 2012, which is before the maturity of the existing subordinated notes, due 2013. The ratings reflect the risk of the near-term constraint on free cash flow resulting from increased capital expenditures related to facility modernization. Another concern involves legislative changes to Medicare reimbursement rates resulting from the refinement of resource utilization groups. The new payment rules, which took effect Jan. 1, 2006, are estimated to result in a $9 per Medicare day, or approximately $7.5 million, reduction in revenue and EBITDA per year. Other potential reimbursement changes that could adversely affect the company's cash flow include a reduction in reimbursement for Medicare bad debt expense, changes in prescription drug coverage and the reinstatement of therapy caps, albeit at a higher level. In addition, Moody's notes the potential for margin pressure from the high cost of labor and shortages of professionals in both the skilled nursing and therapy segments of the company's business. The company also has a significant concentration of facilities in five states, which creates a degree of exposure to state-specific Medicaid issues. The stable outlook anticipates continued favorable operating performance for the company. However, growth may not be as robust as it has been since the spin-off due to changes in the reimbursement environment. Moody's believes that the company will be able to absorb the expected reduction in Medicare reimbursement and retain a credit profile consistent with the Ba3 corporate family rating. Additionally, while an increased investment in capital expenditures will likely constrain free cash flow in the near term, we anticipate that some of the investments will allow the company to increase acuity levels and streamline operations, creating additional opportunities to improve margins and increase cash flow from operations. For the twelve months ended Dec. 31, 2005, Moody's calculates that adjusted cash flow from operations to adjusted debt was approximately 23% and adjusted free cash flow to adjusted debt was 9%. Adjusted debt to adjusted EBITDA was approximately 3.3 times and EBIT coverage of interest was approximately 2.6 times. If the company materially reduces leverage such that adjusted free cash flow to adjusted debt is expected to be maintained comfortably in excess of 12%, Moody's could consider changing the outlook to positive. Alternatively, Moody's could change the outlook to negative or downgrade the ratings if the company increases leverage or if the reimbursement issues described above have a more pronounced effect than expected. Moody's could consider downgrading the outlook or the ratings if the company's adjusted free cash flow to adjusted debt were expected to remain below 9%, with some flexibility built in for the increase in capital investments planned for the next two years. The borrower of the new $125 million credit facility is Genesis Healthcare Corporation. The credit facility is rated Ba2, one level above the corporate family rating, in recognition of the quality of the collateral protection and the expectation of full recovery, even in a distress scenario. Under the terms of the March 2005 amended and restated credit agreement, the credit facility is secured by a first priority lien on substantially all the assets of the company, including mortgaged properties, with the exception of the company's wholly owned captive insurance subsidiary, Liberty Health Corporation. The company owns 127 of its 158 consolidated facilities, contributing to tangible assets with a book basis of approximately $791 million as of Dec. 31, 2005. Moody's notes that the book value of these facilities underestimates their fair value. Guarantees by certain 100% owned subsidiaries of the borrower support the facility. Non-guarantors include LHC and certain mortgaged centers and represent less than 10% of the consolidated assets of the company. The upgrade of the 8% senior subordinated notes to B2 from B3 reflects the overall increase in the company's enterprise value and the corresponding improvement in recovery prospects for the notes. The notes are notched two levels below the corporate family rating to reflect the unsecured nature of the debt and the contractual subordination to a potentially considerable amount of senior secured debt. The notes are guaranteed by the same subsidiaries that guarantee the credit facility but on a senior subordinated basis. Ratings assigned: * $125 million senior secured revolving credit facility due 2010, Ba2 Ratings upgraded: * $154.15 million 8% senior subordinated notes due 2013, upgraded to B2 from B3 * Corporate family rating, upgraded to Ba3 from B1 Ratings withdrawn: * Senior secured term loan B due 2010, rated Ba3 * $75 million senior secured revolving credit facility due 2008, rated Ba3 Genesis HealthCare Corporation provides long term care through a network of 213 eldercare centers, including 178 skilled nursing centers, 22 assisted living residences and 13 transitional care units in 12 eastern states. Genesis also provides contract rehabilitation services. For the twelve months ended Dec. 31, 2005, the company had net revenue of approximately $1.7 billion. GLASS & POWDER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Glass & Powder Boardshop, Inc. 2934 West Cary Street Richmond, Virginia 23221 Bankruptcy Case No.: 06-30307 Type of Business: The Debtor sells water sports equipment, supplies, clothing and accessories. See http://www.glassandpowder.com/ Chapter 11 Petition Date: February 15, 2006 Court: Eastern District of Virginia (Richmond) Judge: Chief Judge Douglas O. Tice, Jr. Debtor's Counsel: David K. Spiro, Esq. Cantor Arkema, P.C. Post Office Box 561 Richmond, Virgiani 23218-0561 Tel: (804) 644-1400 Fax: (804) 225-8706 Total Assets: $649,000 Total Debts: $1,297,241 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ The Mall At Short Pump Town Center $110,000 Terminal Tower, 50 Public Square Cleveland, OH 44113-2267 Mervin Manufacturing, Inc. $74,470 2600 West Commodore Way Seattle, WA 98199 Forest City Enterprises, Inc. $49,789 Forest City Commercial Management P.O. Box 72069 Cleveland, OH 44192-0118 Northwave $45,230 400 North 34th Street, Suite 203 Seattle, WA 98103 Sole Technology $42,963 20161 Windrow Drive Lake Forest, CA 92630 Option Snowboards $38,578 1101 William Street Vancouver, BC V6A 2J1 Canada O'Neill, Inc. $34,465 1071 41st Avenue P.O. Box 6300 Santa Cruz, CA 95063-6300 Volcom Clothing $25,806 P.O. Box 515480 Los Angeles, CA 90051 Hurley International $20,593 File #50142 Los Angeles, CA 90074-0142 Fox Racing, Inc. $17,822 Department 33155 P.O. Box 39000 San Francisco, CA 94139 Advance Sports, Inc. $17,787 2860 California Street Torrance, CA 90503 Rome $16,669 P.O. Box 1323 Williston, VT 05495 Never Summer Snowboards $15,996 5077 Colorado Boulevard Denver, CO 80216 Flow Sports $14,788 1021 Calle Recodo San Clemente, CA 92673 Quiksilver $12,760 QS Wholesale P.O. Box 514350 Los Angeles, CA 90051-4350 Dragon Optical $11,551 5803 Newton Drive, Suite C Carlsbad, CA 92008 Visa $11,000 P.O. Box 30131 Tampa, FL 33630-3131 Osiris $10,818 Alias Distribution 7130 Convoy Court San Diego, CA 92111 Burton Snowboards $10,107 P.O. Box 116 Albany, NY 12201-0116 MBNA America $9,287 P.O. Box 15287 Wilmington, DE 19886 GMAC COMMERCIAL: Moody's Affirms B3 Rating of Class O-2 Certs. -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of nine classes and affirmed the ratings of nine classes of GMAC Commercial Mortgage Securities, Inc., Series 2002-C3 Mortgage Pass-Through Certificates as follows: * Class A-1, $175,721,361, Fixed, affirmed at Aaa * Class A-2, $406,440,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $29,153,000, Fixed, upgraded to Aaa from Aa2 * Class C, $11,661,000, Fixed, upgraded to Aaa from Aa3 * Class D, $18,463,000, Fixed, upgraded to Aa2 from A2 * Class E, $11,661,000, Fixed, upgraded to Aa3 from A3 * Class F, $9,717,000, Fixed, upgraded to A2 from Baa1 * Class G, $9,718,000, Fixed, upgraded to A3 from Baa2 * Class H, $9,718,000, Fixed, upgraded to Baa1 from Baa3 * Class J, $18,464,000, Fixed, upgraded to Baa3 from Ba1 * Class K, $8,746,000, Fixed, upgraded to Ba1 from Ba2 * Class L, $5,831,000, Fixed, affirmed at Ba3 * Class M, $4,859,000, Fixed, affirmed at B1 * Class N, $3,887,000, Fixed, affirmed at B2 * Class O-1, $2,722,000, Fixed, affirmed at B3 * Class O-2, $1,165,000, Fixed, affirmed at B3 As of the Feb. 10, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 4.1% to $745.3 million from $777.4 million at securitization. The Certificates are collateralized by 107 loans, ranging in size from less than 1.0% to 4.5% of the pool, with the top ten loans representing 29.3% of the pool. Seven loans, representing 9.2% of the pool, have defeased and are collateralized by U.S. Government securities. Two of the pool's top 10 loans have defeased, including the second largest loan, Parkway Point and the ninth largest loan, Mission Foothills Marketplace. One loan has been liquidated from the pool, resulting in a realized loss of approximately $160,000. One loan, representing 1.2% of the pool, is in special servicing. Moody's has estimated no loss on this loan. Twenty-five loans, representing 17.7% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for 94.0% of the performing loans, excluding the defeased loans, and partial year 2005 operating results for 84.0% of the performing loans. Moody's weighted average loan to value ratio is 86.2%, compared to 89.3% at securitization. Moody's is upgrading Classes B, C, D, E, F, G, H, J and K due to stable overall pool performance, a relatively high percentage of defeased loans and increased credit support. The top three loans represent 11.4% of the pool. The largest loan is the Clifton Commons Loan, which is secured by a 173,000 square foot retail center located in Clifton, New Jersey. The center is 100.0% occupied, the same as at securitization. Major tenants include a 16-screen AMC Theater, The Sports Authority and Barnes & Noble. The center is located adjacent to a community center which includes Super Stop & Shop and Staples. The property's financial performance has improved since securitization due to higher rental income and stable expenses. Moody's LTV is 90.7%, compared to 97.2% at securitization. The second largest loan is the Shops at River Park Loan, which is secured by a 134,000 square foot retail center located in Fresno, California. The property is 97.0% occupied, compared to 91.0% at securitization. Major tenants include Borders Books, Cost Plus World Market and Zany Brainy. Regal Theatres and two other stores occupy pad sites that are part of the center but not part of the collateral. The property's financial performance has improved since securitization due to higher occupancy. Moody's LTV is 80.0%, compared to 88.6% at securitization. The third largest loan is the Bailey's Crossroads Loan, which is secured by a 169,000 square foot retail center located in Fairfax, Virginia. The property is 100.0% occupied, the same as at securitization. Major tenants include Best Buy, Office Depot and K&K Men's Center. Moody's LTV is 78.0%, compared to 80.3% at securitization. The pool's collateral is a mix of multifamily, retail, office and mixed use, U.S. Government securities, industrial and self storage, lodging and CTL. The collateral properties are located in 27 states and Washington, D.C. The highest state concentrations are California, New Jersey, Arizona, Pennsylvania and Florida. All of the loans are fixed rate. GRANITE BROADCASTING: Moody's Junks Preferred Stock with C Rating ----------------------------------------------------------------- Moody's Investors Service today lowered Granite Broadcasting Corporation's corporate family rating to Caa2 from Caa1 and preferred stock rating to C from Ca following the company's announcement that it intends to market its two WB affiliate stations while AM Media Holdings LLC evaluates is interest in purchasing these assets in light of the likely loss of the WB affiliation when the network ceases operations in 2006. Additionally, Moody's affirmed the B3 rating on the company's senior secured notes. The outlook remains negative. The downgrade to the corporate family rating reflects Granite's worsening liquidity position and Moody's belief that the company will be unable to cover debt service requirements and maintenance capital expenditures with internally generated funds over the next twelve months. As such, Moody's believes Granite will need to utilize external sources in order to avoid a liquidity event. The ratings also incorporate Moody's concerns on Granite's ability to complete the sale of the Detroit and San Francisco stations for the same value as the previously announced transaction and Granite's ability to run them profitably as independents in the near-term given the extensive competition present in those markets. The negative outlook reflects Moody's expectations that the company will not be able to improve operating performance sufficiently over the next twelve months to offset anticipated liquidity pressures. We expect that in the event that asset sales are undertaken and proceeds are used to repay debt, the liquidity crunch could be neutralized in the short-term; however, in Moody's view the company would still be faced with the daunting task of improving operating performance at its remaining station portfolio to generate enough cash flow to cover its ongoing debt service and capital expenditure requirements. Thus, the outlook can not be stabilized until Granite resolves its liquidity and capital structure issues. The downgrade to the preferred stock reflects Moody's belief that there is a smaller cushion between the estimated asset values and the company's senior secured debt securities to provide full recovery. In Moody's opinion, the proposed $180 million of consideration for the Detroit and San Francisco assets was much lower than our expectations for television stations in these attractive market positions. Additionally, Moody's believes that the loss of network affiliation will result in further diminution in value deteriorating an already modest cushion. Thus, it is our belief that the preferred stock is likely to face significant impairment in a distress scenario. The affirmation of the B3 rating on the senior secured notes reflects Moody's belief that the value of Granite's middle-market stations, based on recent asset sales in similar or lower DMAs, will still provide adequate coverage of these securities in an orderly auction or liquidation scenario. Moody's took these rating actions: * Corporate Family Rating -- Lowered to Caa2 from Caa1 * Preferred Stock -- Lowered to C from Ca * Senior Secured Notes -- Affirmed B3 Rating The outlook remains negative. Granite Broadcasting Corporation is a television broadcaster headquartered in New York, New York. GREENWOOD VILLAGE: Weak Balance Sheet Cues Fitch to Shave Rating ---------------------------------------------------------------- Fitch Ratings downgrades to 'BB+' from 'BBB-' the rating on the Indiana Health Facility Financing Authority's outstanding $16.4 million revenue bonds issued on behalf of Greenwood Village South. The Rating Outlook is Stable. The rating downgrade reflects GVS' weak balance sheet, additional debt plans, declining occupancy in the skilled nursing unit, and an increased Medicaid exposure. During fiscal 2005, GVS spent approximately $3.6 million of internal cash to upgrade the HVAC system. Although management expects to reimburse itself from future bond proceeds, balance sheet indicators would still remain below Fitch's 'BBB' medians. In fiscal 2005 (ended June 30), GVS' $3.4 million of unrestricted cash and investments equated to 93 days cash on hand and 22% cash- to-debt. For the six-month interim period ended Dec. 30, 2005, cash and investments totaled just $2.96 million, or 78 days cash on hand and cash-to-debt of 19%, compared to Fitch's 'BBB' medians of 278 days and 64%, respectively. GVS is expecting to issue approximately $15.9 million of series 2006 revenue and refunding bonds in the next three to six months. Proceeds are expected to add 26 independent living apartments, refund $2.3 million of series 2000 bonds, reimburse the corporation for prior capital expenditures, and fund various capital improvements. While the new independent living units are projected to generate approximately $3.3 million of initial entrance fees the immediate effect of the series 2006 debt will leverage the balance sheet even further. Occupancy in GVS' 137 skilled nursing beds has experienced a steady decline since 2002. In fiscal 2005, occupancy of the skilled nursing beds was 82.3% as compared to 90.8%, 93.3%, and 94.0% in fiscal 2004, 2003, and 2002, respectively. In addition, the percentage of private pay residents fell to 50% in fiscal 2005 from 69% in fiscal 2002. GVS' credit strengths remain the solid occupancy in the independent living units, the presence of a reputable management company, and GVS' low cost positioning in a stable market. Occupancy rates of the independent living apartments have averaged 96.4% annually since 2002. The facility maintains an active waiting list of approximately 60 potential residents, each of whom has deposited $1,000. Fitch believes this is a positive credit factor as it relates to the proposed ILU expansion. The presence of Life Care Service Corp. (LCS) as the facility's manager allows GVS access to a unique array of in-depth services that provide a significant value-added benefit to GVS and a distinct competitive advantage in the marketplace. Operating in a market with limited competition that exhibits sound socioeconomic characteristics, GVS' positioning as an affordable provider of senior housing lends support to future occupancy stability. The Stable Rating Outlook is based on the expectation that balance sheet liquidity should improve with the reimbursement included in the proposed 2006 bond issue. Fitch believes that the entrance fees generated by the new ILUs will further enhance GVS' liquidity over the medium term. Moreover, management has implemented a new marketing effort directed at hospital discharge planners to improve occupancy and generate better reimbursement in the skilled nursing facility. Located in Greenwood, IN, approximately 11 miles south of downtown Indianapolis, GVS is a not-for-profit Type-B continuing care retirement community consisting of 259 independent living units, 60 assisted living units, and 137 skilled nursing beds. In fiscal 2005, GVS had total revenues of $14.2 million. GVS has covenanted to provide to the trustee and directly to bondholders unaudited quarterly financial statements within 45 days of each quarter-end and audited financial statements with 120 days of each fiscal year-end. However, financial disclosure on the NRMSIRs has not been timely, which is viewed negatively by Fitch. Outstanding Debt: -- $2,305,000 Indiana Health Facility Financing Authority revenue bonds, series 2000 (Greenwood Village South Project); -- $14,098,746 Indiana Health Facility Financing Authority revenue bonds, series 1998 (Greenwood Village South Project). H&E EQUIPMENT: S&P Raises Corporate Credit Rating to BB- from B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on rental equipment company H&E Equipment Services Inc. (formerly known as H & E Equipment Services LLC) to 'BB-' from 'B+'. At the same time, Standard & Poor's raised its rating on H & E's $165 million first-lien revolving credit facility due in 2009. That rating is now 'BB+', two notches higher than the corporate credit rating, while the recovery rating on the facility is '1', meaning that full recovery of principal is expected in the event of a default. The rating on H & E's $200 million second-lien notes, due in 2012, rose to 'B+', one notch lower than the corporate credit rating, and was assigned a recovery rating of '3'. This indicates that S&P expects a meaningful recovery of principal (50%-80%) in the event of a default after full recovery of the first-lien facility. All the ratings have been removed from CreditWatch with positive implications, where they were placed Oct. 18, 2005. "The upgrade follows the completion of H & E's IPO and reflects the continued good improvement in its operating performance," said Standard & Poor's credit analyst John R. Sico. H & E is using the net proceeds from the offering -- approximately $200 million (including over-allotments) -- to make an acquisition, to buy equipment it previously leased, and to repay borrowings under its revolving credit facility. The outlook is stable. H & E, based in Baton Rouge, La., is a regional operator in the competitive equipment rental industry. The company offers construction and industrial equipment for sale or rent through a network of 41 locations mainly in the intermountain and Gulf Coast regions of the U.S. Although it is now a public company, it is principally owned by Bruckmann, Rosser, Sherrill & Co. LP and by H & E management, which together own about two-thirds of the firm. The ratings reflect H & E's weak business risk profile as a regional provider of construction equipment rental services and further reflect its aggressive financial risk profile. The company has enjoyed an improvement in operating performance at the same time the equipment rental industry has been recovering, and 2006 prospects appear favorable. Nonresidential construction spending will likely grow in 2006 after several years of decline, bolstering demand for rental equipment. Meanwhile, rental rates have risen, used-equipment pricing has improved, and excess fleet capacity has diminished. The company's sales rose 20% in the 12 months through September 2005, mainly because of better conditions in the rental industry. The momentum should continue in 2006, especially in the usually strong second and third quarters. HARRIS FURNITURE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Harris Furniture Reproductions, Inc. fdba Victorian Classic,Inc. 1919 Bell Street Montgomery, Alabama 36104 Tel: (334) 834-8000 Bankruptcy Case No.: 06-30165 Type of Business: The Debtor manufactures & sells furniture. Chapter 11 Petition Date: February 17, 2006 Court: Middle District of Alabama (Montgomery) Judge: William R. Sawyer Debtor's Counsel: Von G. Memory, Esq. Memory, Day & Azar P.O. Box 4054 469 South McDonough Street Montgomery, Alabama 36101 Tel: (334) 834-8000 Fax: (334) 834-8001 Total Assets: $1,299,537 Total Debts: $1,455,031 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Newman Lumber Company $47,823 P.O. Box 2580 Gulfport, MS 39505-2580 CMT Di Paolo Vatteroni $33,791 Via Carriona, Italy 205-54033 Bank Trust $27,469 951 Taylor Road Montgomery, AL 36117 Maley & Wertz, Inc. $14,739 Blue Cross Blue Shield $12,836 Davis-Lynch Glass Co. $11,418 Foam Products Industries $10,020 Brackin Wholesale Coating $8,077 Alabama Gas Corp. $6,257 Alabama Power $5,827 Imperial Marble Corp. $3,575 Midland Container Corp. $3,342 Hafner USA Inc $2,851 Handy Button Machine Co. $2,164 Valspar Industries $1,149 Cutting Edge Casting, Inc. $1,000 Mount Vernon Mills, Inc. $983 Hickory Springs $980 Copaco $850 PI, Inc. $836 ICEWEB INC: Posts $351,658 Net Loss in Quarter Ended December 31 ---------------------------------------------------------------- IceWEB, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. IceWEB incurred a $351,658 net loss for the three-months ended Dec. 31, 2005, versus a $577,317 net loss for the comparable period in 2004. For the three months ended Dec. 31, 2005, the Company generated $1,491,216 of revenues, an increase of approximately 4.1% compared to $1,432,883 of revenues for the comparative three-month period in 2004. The Company's balance sheet at Dec. 31, 2005, showed $3,031,991 in total assets and $2,351,352 of liabilities. Going Concern Doubt Sherb & Co., LLP, expressed substantial doubt about IceWEB's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's consecutive net loss for fiscal year 2005 and 2004. About IceWEB Headquartered in Herndon, Virginia, IceWEB, Inc. (OTC BB: IWEB) -- http://www.iceweb.com/-- enables small and medium sized organizations with its, hardware, software and professional services. The Company's application service provider software delivery model reduces the customer's Total Cost of Ownership and improves the efficiency of IT environments. INDUSTRY MORTGAGE: Fitch Affirms Low-B Ratings on 3 Cert. Classes ----------------------------------------------------------------- Fitch Ratings affirmed its ratings on 17 classes of Industry Mortgage Corp. Home Equity Issues: Series 1997-3 -- Class A6 at 'AAA'; -- Class A7 at 'AAA'; -- Class M-1 at 'AA+'; -- Class M-2 at 'BB'; -- Class B at 'D'. Series 1997-5 -- Class A9 at 'AAA'; -- Class A10 at 'AAA'; -- Class M-1 at 'AA+'; -- Class M-2 at 'BB'; -- Class B remains at 'D'. Series 1998-1 -- Class A5 at 'AAA'; -- Class A6 at 'AAA'; -- Class M-1 at 'AA+'; -- Class M-2 at 'BBB-'; -- class B remains at 'C'. Series 1998-5 -- Class A5 at 'AAA'; -- Class A6 at 'AAA'; -- Class M-1 at 'AA'; -- Class M-2 at 'A+'; -- Class B at 'BB-'. The affirmations, affecting over $186.45 million certificates, reflect a stable relationship between credit enhancement and expected loss. The IMC transactions are collateralized by a pool of fixed-rate, closed-end home equity mortgage loans. As of the January 2006 distribution date, the transactions are seasoned from a range of 87 (1998-5) to 102 (1997-3) months. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 5%(1997-3) to 8% (1998-5). The percentage of loans over 60 days delinquent ranges from 26.3% to 30.5%. The cumulative loss as a percentage of the initial pool balance ranges from 6.26% to 9.4%. Select Portfolio Servicing, Inc. (Rated 'RSS2-' by Fitch) services these transactions. Fitch will continue to closely monitor this deal. INGLES MARKETS: SEC Probe Prompts Moody's to Affirm Low-B Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Ingles Markets, Incorporated, including the corporate family rating of B1, following the company's receipt of a Wells Notice from the Securities and Exchange Commission and following Ingles' disclosure of multiple material weaknesses in its system of controls in its fiscal 2005 Form 10-K. The rating outlook remains stable. The ratings affirmation reflects Moody's belief that Ingles can absorb a moderate civil penalty, if one is incurred as a result of the investigation by the SEC, at its current rating level, which already incorporates Moody's concerns about less than optimum controls and procedures as well as ownership and management concentration in the founding family. Ratings affirmed: * Corporate family rating at B1 * $350 million 8.875% senior subordinated notes due in 2011 at B3 Moody's does not rate any of the company's secured or unsecured bank debt. In January 2006, the SEC issued a "Wells Notice", indicating that the staff of the SEC intends to recommend that the Commission bring a civil enforcement action against Ingles. The civil enforcement action, which may include a civil penalty, relates to certain vendor contracts entered in 2002 and 2003 and internal control accounting issues that have been the subject of the previously disclosed formal SEC investigation and which resulted in the restatement of the company's financial statements for fiscal years 2002 and 2003 and the first three quarters of fiscal 2004. In addition, Ingles initial report on the effectiveness of its internal controls over financial reporting, as required under Section 404 of the Sarbanes-Oxley Act of 2002, disclosed multiple "material weaknesses" in the company's system of controls. This report, included in Ingles' fiscal 2005 Form 10-K, discussed material weaknesses in the company's internal controls related to the accounting for vendor income, as well as material control deficiencies related to the basic segregation of duties across accounting functions and information technology general controls. In light of Ingles' recent history of financial statement restatements, the ongoing SEC investigation and turnover in the company's key finance and accounting staff, these material weakness call into question not only management's ability to prepare accurate financial reports but also its ability to control the business. These concerns, which are factored into our current rating, are somewhat mitigated by the company's ongoing remediation efforts which to date have included the creation of an internal audit department and increased training of key accounting personnel. The Category B material weaknesses, as discussed above, also indicate weaknesses in the quality of corporate governance at Ingles. The nine member Ingles' board has very little independence, in Moody's view; the board includes three family members, three senior managers and three outside directors, only one of whom Moody's considers as independent. CEO Robert Ingle maintains substantial ownership and voting control. The financial restatements, subsequent identification of materials weak nesses and the receipt of a Wells Notice point, in our opinion, to a lack of director oversight on key accounting and financial processes. The loss through resignation of the CFO, the controller and an accounting manager in mid-year 2005 severely hampered remediation efforts. The ratings of Ingles are based on the company's solid regional franchise, robust comparable store sales growth, modern store base and the application of excess cash flow to debt reduction over the past two fiscal years, as well as the intense competition facing grocery retailers, Ingles' ongoing reliance on bilateral lines of credit, and the previously mentioned corporate governance and control issues. Ingles' solid market positions in the economically vibrant regions of Georgia, the Carolinas and Tennessee have produced comparable store sales increases that are high for a supermarket chain -- 6.7% for the fiscal year ended in September 2004, 6.1% for fiscal 2005 and 9.8% in the recent first fiscal quarter. Organic sales growth and the quality of its stores have resulted in stable operating margins, before rental income, and cash flow generation sufficient to reduce debt by approximately $76.6 million since the end of fiscal 2003. Ingles' capital expenditures are significant given the company's desire to maintain a modern store base. The negative impact of Ingles' aggressive dividend policy has been somewhat softened by the proceeds from the exercise of stock options recently. Moody's expects that shareholder enhancement will remain a major use of free cash flow. Ingles' reliance on bilateral bank lines of credit of $135 million expiring in October and November 2006, instead of a larger long-term syndicated credit agreement, is also a credit negative for a company of this size. However, the unencumbered book value of the company's large real estate portfolio provides an alternative source of long-term liquidity. The stable rating outlook reflects Moody's expectation that operating profitability and market share can be maintained and that shareholder enhancement will not increase leverage. A rating upgrade would require positive free cash flow generation and its application at least partially to debt reduction; maintenance of debt to EBITDA below 5 times; the strengthening of the company's liquidity profile by a committed syndicated bank loan facility; remediation of weaknesses in controls; and improvement in corporate governance in terms of a higher proportion of independent directors on Ingles' board. Conversely, ratings could be lowered if Ingles were to incur a material fine that challenged its financial flexibility; or if a significant deterioration in its franchise or an increase in returns to shareholders caused its credit metrics to weaken such that debt to EBITDA rose above 6 times. The B3 rating on the senior subordinated notes considers that this debt is contractually subordinated to significant amounts of more senior obligations. The more senior claims are principally comprised of $220 million of mortgages and other secured debt and $135 million of bilateral unsecured credit lines, currently used only for $16.1 million of letters of credit. Given unencumbered real property and equipment value of about $407.6 million at Sept. 24, 2005, Moody's expects that this subordinated debt class has a good level of protection in a distressed scenario. Ingles Markets, Incorporated, headquartered in Asheville, North Carolina, operates 197 supermarkets principally in Georgia, North Carolina, South Carolina, and Tennessee. Revenue for the fiscal year ended September 24, 2005 exceeded $2.27 billion. INT'L SPECIALTY: Chemco Unit Inks $1.2 Billion Senior Secured Loan ------------------------------------------------------------------ International Specialty Holdings Inc. and ISP Chemco Inc., ISP Chemicals Inc., ISP Minerals Inc. and ISP Technologies Inc., reported the successful completion of Holdings' previously reported tender offer and consent solicitation for its outstanding 10.625% Senior Secured Notes due 2009 and the Chemco Purchasers' previously reported tender offer and consent solicitation for their outstanding 10.25% Senior Subordinated Notes due 2011, both of which expired on Feb. 16, 2006, at 9 a.m. New York City time. Holdings accepted for payment Holdings Notes validly tendered by holders of approximately $195 million, or 97.5%, of the aggregate principal amount outstanding of the Holdings Notes. The Chemco Purchasers (ISP Chemicals Inc., ISP Minerals Inc. and ISP Technologies Inc.) accepted for payment Chemco Notes validly tendered by holders of $399 million, or 98.5%, of the aggregate principal amount outstanding of the Chemco Notes. In completing the tender offers, the supplemental indentures previously executed by Holdings and the Chemco Purchasers have become operative. Chemco entered into a new $1.2 billion senior secured credit facility, consisting of a $950 million term loan and a $250 million revolving credit facility. The initial borrowings under this facility were used to repay outstanding indebtedness, including amounts outstanding under its existing credit facility and the amounts necessary to complete the tender offers for the Holdings Notes and the Chemco Notes. Headquarters in Wayne, N.J., International Specialty Products Inc. -- http://www.ispcorp.com/-- is a leading multinational manufacturer of specialty chemicals, industrial chemicals, synthetic elastomers and mineral products. ISP, the parent company of International Specialty Holdings Inc. and ISP Chemco Inc., sells over 400 specialty and industrial chemicals, synthetic elastomers and minerals products to approximately 6,000 customers from a variety of industries in over 90 countries. * * * As reported in Troubled Company Reporter on Jan. 26, 2006, Standard & Poor's Ratings Services lowered its ratings on International Specialty Products Inc. (ISP) and its subsidiaries by one notch. The corporate credit rating is now 'BB-'. The outlook is stable. "The downgrade was prompted primarily by prospects that cash flow protection and debt leverage measures will remain too weak to support the former ratings, and by ongoing risks associated with financial policies and the company's private ownership," said Standard & Poor's credit analyst Cynthia Werneth. At the same time, based on preliminary terms and conditions, Standard & Poor's assigned its 'BB-' senior secured debt rating and a recovery rating of '2' to ISP Chemco Inc.'s proposed $1.15 billion senior secured credit facility. These ratings indicate Standard & Poor's belief that lenders will experience substantial (80% to 100%) recovery of principal in a payment default scenario. J.C. PENNEY'S: Strong Liquidity Cues Moody's to Lift Ba1 Ratings ---------------------------------------------------------------- Moody's Investors Service upgraded J.C. Penney's long term debt ratings following the company's announcement of fiscal year 2005 operating results which demonstrated sustained improvement in the company's operating performance and its ability to support a higher rating category. The rating outlook is stable. This rating action concludes the review for possible upgrade announced on Dec. 12, 2005. The Baa3 senior unsecured rating is supported by J.C. Penney's continued strong liquidity, healthy free cash flow generation, solid leverage and coverage metrics, and management's balanced approach to financial policy. In addition, the rating category reflects the company's geographically diverse store operations, well recognized private label brands, its multi channel approach, and the strength of its management team. Offsetting these positives is the ongoing challenge of ensuring that the company remains sufficiently nimble in developing new brands and on trend merchandise despite its size and the need to retain the cost benefits that its scale confers. In addition, the ratings are constrained by the company's need to reinvest in freshening its store base, as well as by the risk of potential disruptions as it rolls out the new store wide POS system. The ratings continue to be constrained by the persistent challenges the department store industry faces as the discounters, Wal-Mart and Target, keep on growing apparel sales and as Kohl's continues to roll out stores. The Baa3 rating reflects Moody's expectation that J.C. Penney will continue to maintain very strong liquidity as a result of its on- balance sheet liquidity reserve, solid free cash flow generation, and its $1.2 billion revolving credit facility. The new rating level assumes that J.C. Penney will maintain its focus on executing its core strategy that targets the middle income and middle age consumer through the ongoing development of private label and exclusive branded merchandise and the modest roll out of its off-mall concept. The new rating level also assumes that the company will maintain a balanced approach to financial policy such that share repurchases and dividends do not exceed free cash flow. For the fiscal year ended Jan. 29, 2006, sales increased 3.8% to $18.8 billion. As reported EBITDA and EBITDA margin from continuing operations were approximately $2.0 billion and 10.6%, respectively. Free cash flow for the fiscal year ended Jan. 29, 2006, was approximately $700 million resulting in FCF/Debt of approximately 20%. Debt/EBITDA was 2.6x. The outlook is stable reflecting Moody's expectation that J.C. Penney will continue to maintain strong liquidity, solid credit metrics and balanced financial policies. In order for a positive outlook to be assigned, J.C. Penney needs to continue to demonstrate stability in its performance by maintaining its current margin levels. An upgrade would require the company to demonstrate consistent improvement in its nationwide store environment as a result of refurbishments, as well as to maintain EBIT margins above 8.5% and credit metrics at its current levels. Given the recent upgrade, a downgrade is currently unlikely. However, ratings could be downgraded should the company aggressively increase leverage in order to finance capital expenditures, acquisitions or share repurchases. In addition, ratings could be downgraded should the company's operating performance significantly decline causing Debt/EBITDA to rise above 3.75x. These ratings are upgraded: * Senior unsecured notes to Baa3 from Ba1; * $1.2 billion senior unsecured bank credit facility to Baa3 from Ba1. This rating is upgraded and will be withdrawn: * Corporate family rating to Baa3 from Ba1. This rating is withdrawn: * Speculative grade liquidity rating of SGL-1. Headquartered in Plano, Texas, J.C. Penney Company, Inc. is one of the country's largest department store, catalogue, and e-commerce retailers. Total revenues for the fiscal year ended Jan. 29, 2006, were approximately $18.8 billion. JOURNAL REGISTER: S&P Revises Outlook on BB Rating to Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Trenton, N.J.-headquartered newspaper publisher Journal Register Co. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'BB' corporate credit rating. About $755 million of debt was outstanding at January 2006. The outlook revision reflects Journal Register's new share repurchase authorization for up to $25 million in common stock. This share buyback program comes at a time when the company's overall financial profile is weak for the ratings. Journal Register's current $30 million share repurchase program, which was authorized in April 2005, is nearly complete. Despite the new share repurchase authorization, S&P expects that Journal Register would still be able to generate sufficient cash flow to allow for some debt reduction in the near term. "A downgrade would be considered if the company does not make progress in strengthening its financial position in coming periods as a result of acquisitions and/or weaker operating performance," said Standard & Poor's credit analyst Donald Wong. KULICKE & SOFFA: S&P Reviewing Ratings for Possible Upgrade ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' corporate credit and 'CCC+' subordinated ratings on Willow Grove, Pa.-based Kulicke & Soffa Industries Inc. on CreditWatch with positive implications, following the company's announcements that it intends to divest its unprofitable test division and retire about $52 million of debt. The transactions, once concluded, will improve profitability and reduce leverage. "The test division incurred about $40 million of operating loss over the last four quarters, excluding a $100 million asset and goodwill impairment charge taken in the June 2005 quarter," said Standard & Poor's credit analyst Lucy Patricola. The company's other two divisions generated about $92 million of operating income over the same period. Kulicke will retain some costs related to the business following the sale; however, we expect a portion of the operating loss will be eliminated, improving profitability margins. The company expects the divestiture will raise about $28 million and intends to use about $18 million of the proceeds, together with new common shares, to retire $52.2 million of subordinated notes. The combination of higher profitability and lower debt will reduce leverage measures. Debt to EBITDA as of Dec. 31, 2005, was 4.4x and pro forma for the debt reduction, is 3.6x. Further improvement is likely with the partial elimination of the test division losses. Kulicke & Soffa is a leading supplier of equipment and materials used in semiconductor packaging. Total lease-adjusted debt was about $305 million as of December 2005. KULLMAN INDUSTRIES: Court Extends Deadline on Lease Until May 15 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey extended, until May 15, 2006, the time within which Kullman Industries, Inc., may assume, assume and assign, or reject an unexpired lease of a nonresidential real property. The Debtor explains that the unexpired lease is a valuable asset of the Debtor's estate as it includes the lease for the Debtor's manufacturing facility and support operations in Lebanon, New Jersey. The Debtor further discloses that the unexpired lease is also integral to a successful reorganization. The Debtor cites three reasons why the extension is warranted: (i) it continues to pay for the use of the property; (ii) the continued use by the Debtor of the property will not damage any lessor beyond compensation available under the Bankruptcy Code; and (iii) it has not yet had sufficient time to formulate a plan. 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. LEVI STRAUSS: Equity Deficit Tops $1.22 Billion at November 27 -------------------------------------------------------------- Levi Strauss & Co. (LS&CO.) disclosed its financial results for the fourth quarter and fiscal year ended Nov. 27, 2005, and delivered its 2005 Form 10-K to the Securities and Exchange Commission on Feb. 14, 2006. 2005 full-year results reflect continued improvement in the company's financial performance across key operating measures compared to the prior year. These include: * Full-year net sales increased $53 million; * Operating income improved by $228 million; and * Net income increased $126 million "We accomplished our primary objectives," said Phil Marineau, Levi Strauss's chief executive officer. "We substantially improved the company's profitability and ended an eight-year sales decline. The actions we've taken to transform the company have clearly improved our competitiveness. 2006 will be challenging given the ongoing uncertainty of the retail marketplace in the United States and Europe, but I'm encouraged by our prospects given the innovative and highly competitive products that we have in the pipeline." Net income for 2005 was $156 million compared to $30 million in the prior year. The increase in net income was due primarily to higher operating income and lower foreign exchange management contract losses, partially offset by costs related to refinancing bond debt and higher income tax expense. "We delivered another strong fiscal year with top-line stability and a robust improvement in bottom-line performance," said Hans Ploos van Amstel, chief financial officer. "In addition, we closed 14 open U.S. tax years and successfully completed two bond offerings that extend the majority of our unsecured debt maturities to 2012 and beyond with more favorable borrowing terms." Net income for the fourth quarter was $44 million, versus a $19 million loss in the fourth quarter of 2004. The improvement was driven primarily by higher operating income, lower foreign exchange management contract losses and lower income tax expense. "Our fourth-quarter 2005 results confirm our improved financial performance for the full year," added Ploos van Amstel. "We delivered strong operating profits and net income while holding our sales stable." The Company's balance sheet showed $2,813,648,000 in total assets at Nov. 27, 2005, and liabilities of $4,035,733,000 resulting in a $1,222,085,000 stockholders deficit. A full-text copy of the Company's quarterly report for the period ended Nov. 27, 2005, is available for free at: http://researcharchives.com/t/s?59c Levi Strauss & Co. is one of the world's leading branded apparel companies, with sales in more than 110 countries. Levi Strauss designs and markets jeans and jeans-related pants, casual and dress pants, tops, jackets and related accessories for men, women and children under its Levi's(R), Dockers(R) and Levi Strauss Signature(R) brands. Levi Strauss also licenses its trademarks in various countries throughout the world for accessories, pants, tops, footwear, home and other products. As reported in the Troubled Company Reporter on Nov. 1, 2005, Fitch Ratings has upgraded its ratings on Levi Strauss & Co.: -- Issuer default rating to 'B-' from 'CCC'; -- $1.8 billion senior unsecured debt to 'B' from 'CCC+'; -- $650 million asset-based loan (ABL) to 'BB-' from 'B'; -- $500 million term loan at 'BB-' from 'B'. Fitch's recovery ratings remain unchanged. The Rating Outlook is Stable. LIONEL LLC: Court Stretches Plan-Filing Period to July 31 --------------------------------------------------------- Lionel L.L.C., and its debtor affiliate Liontech Company sought and obtained from the U.S. Bankruptcy Court for the Southern District of New York extensions of their time to: a) file a plan of reorganization until July 31, 2006; and b) solicit acceptances on that plan through Sept. 30, 2006. The Debtors tell the Court that they have made substantial progress in their reorganization efforts, particularly in the: * Review of their intellectual property portfolio; and * Prosecution of enforcement actions against third parties who have misappropriated or otherwise wrongfully used portions of the intellectual property. MTH Litigation The Debtors relate that the intellectual property suit filed against them by Mike's Train House -- one of Lionel's main competitors -- still remains a material obstacle in the proposal of their reorganization plan. In the MTH Litigation, the Debtors brought on appeal the $38,608,305 judgment and injunctive relief, which the United States District Court for the Eastern District of Michigan granted in favor of MTH, based on a jury verdict. The Appeal is now pending in the United States Court of Appeals for the Sixth Circuit. In 2000, Mike's Train House sued Lionel accusing Lionel, among other things, of violating the Michigan Uniform Trade Secrets Act. In its suit, MTH alleged that Korea Brass -- one of Lionel's former Korean suppliers -- stole confidential design drawings and scheduling information from MTH's Korean supplier, Samhongsa, and then used that information to design and build trains for Lionel. MTH further alleged that Lionel knew or should have known that its trade secrets were being incorporated into Lionel products, and contended that it had experienced both lost sales and an erosion of its overall profitability as a result of the misconduct. Adam C. Harris, Esq., at O'Melveny & Myers LLP, in New York, asserts that due to the magnitude of the MTH Judgment on the Debtors' resources and other secured and unsecured debts, the outcome of the appeal will directly impact the terms of any plan of reorganization that the Debtors may propose. Mr. Harris points out that the MTH Judgment is more than three times the aggregate amount of all other prepetition general unsecured claims. The Debtors expect only $12 million of allowed, prepetition general unsecured claims, other than MTH's claims. Thus, Mr. Harris relates, depending on the enterprise value of the Debtors' estate, the decision of the Sixth Circuit may well determine whether the holders of allowed general unsecured claims will recover 100% of the allowed amount of their claims, or substantially less due to the dilution caused by the MTH Judgment. The outcome of the appeal will also likely dictate whether the equity security holders of Lionel receive any recovery at all, Mr. Harris adds. Based upon information, Mr. Harris confirms that although the appeal has been fully briefed, it is anticipated that the Sixth Circuit will not hold oral argument on the Appeal until the second or third quarter of 2006 and its decision on the matter may not be forthcoming until late 2006 or early 2007. The Debtors believe that allowing their exclusivity period to terminate at this juncture would invite additional litigation and divert unnecessarily their personnel and professionals from vigorously and carefully pursuing new business opportunities without actually furthering the plan formulation process. Headquartered in Chesterfield, Michigan, Lionel LLC -- http://www.lionel.com/-- is a marketer of model train products, including steam and die engines, rolling stock, operating and non- operating accessories, track, transformers and electronic control devices. The Company filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case No. 04-17324). Abbey Walsh Ehrlich, Esq., at O'Melveny & Myers, LLP, represents the Debtors on their restructuring efforts. When the Company filed for protection from its creditors, it estimated assets between $10 million and $50 million and estimated debts more than $50 million. LOVESAC CORP: Seeks Approval to Use Cash Collateral Until Mar. 26 ----------------------------------------------------------------- The LoveSac Corporation asks the U.S. Bankruptcy Court for the District of Delaware for authority to use cash collateral securing repayment of G&G, LLC's loan until March 26, 2006, as a preliminary source of funding while it continues to explore alternative methods for postpetition financing. Before filing for chapter 11 protection, the Debtor had access to a $2,800,000 loan facility from G&G. The Debtor owed $2.2 million to G&G Loan on the Petition Date. The G&G Loan is secured by: 1) real property in Weber County, Utah, appraised at $34.6 million; 2) other assets pledged by the Debtor as additional collateral; and 3) all common stock of the Guarantors. Anthony M. Saccullo, Esq., at The Bayard Firm in Wilmington, Delaware, informs the Court that the Debtors have little or no available cash or assets readily convertible to cash that are not subject to G&G's liens and security interests. Mr. Saccullo explains that given the encumbrances upon substantially all of its assets, the Debtor will be unable to continue its business operations absent immediate access to the G&G's cash collateral. Mr. Saccullo asserts that access to the Cash Collateral is crucial to the Debtor's ability to avoid immediate and irreparable harm to the estate. Without it, the Debtor will be forced to liquidate its assets and lose the real opportunity to preserve value, Mr. Saccullo contends. The Debtor proposes to use cash collateral based on an eight-week budget. A copy of the budget is available for free at http://researcharchives.com/t/s?59b Headquartered in Salt Lake City, Utah, The LoveSac Corporation -- http://www.lovesac.com/-- operates and franchises retail stores selling beanbags furniture. The LoveSac Corp. and three affiliates filed for chapter 11 protection on Jan. 30, 2006 (Bankr. D. Del. Case No. 06-10080). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MILL RUN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Mill Run Golf & Country Club, Inc. P.O. Box 219 Moyock, North Carolina 27958 Bankruptcy Case No.: 06-70165 Type of Business: The Debtor operates a golf course. See http://millrungolfclub.net/ Chapter 11 Petition Date: February 15, 2006 Court: Eastern District of Virginia (Norfolk) Judge: Stephen C. St. John Debtor's Counsel: Todd D. Rothlisberger, Esq. Harry Jernigan CPA Attorney, P.C. 258 North Witchduck Road, Suite C Virginia Beach, Virgiani 23462 Tel: (757) 490-2200 Total Assets: $1,977,981 Total Debts: $3,262,303 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Turf & Garden Fertilizer and $11,178 P.O. Box 1326 Chemicals Chesapeake, VA 23327 Johnson, McLean & Co. CPA Services $9,550 P.O. Box 467 Murfreesboro, NC 27855 Sandler Utilities Sewer Bill $7,215 P.O. Box 250 Harbinger, NC 27941 Atlantic Golf Cart & Equipment Golf Cart Repair $6,336 Services Lesco, Inc. Chemicals and $4,026 other miscellaneous Supplies Ikex Incorporated Fertilizer and $3,328 Chemicals ITT Shared Services Irrigation System $2,512 Repairs Jennette Brothers Snack Bar $2,350 Purchases Halifax Fertilizer Company Fertilizer Supplier $1,798 Currituck Sand Company Golf Course $1,745 Maintenance Top Dress and Sand Supplies The Beach Book Advertising $1,360 Green Acres Land Top Dress and $1,277 Sand Supplies Owens Gas Company, Inc. Propane Gas for $1,230 Snack Bar and Water heater Domestic Industries Gas and Diesel $1,188 Fuel for Equipment Tides Baseball Club Advertising $1,000 Dominion North Carolina Power Electric/Utility $989 AAA Utilities, Inc. Irrigation $705 Repairs Atco International Golf Course $595 Maintenance Merrell & Mauney, LLC Attorney Fees $545 D & D Portable Toilets Rental Equipment $470 MILLAR WESTERN: Moody's Affirms B2 Rating on $190 Mil. Sr. Notes ---------------------------------------------------------------- Moody's Investors Service changed Millar Western Forest Product's outlook to stable from positive while affirming the company's B2 corporate family and debt ratings. The change in outlook reflects Moody's view that near term results will, on balance, be consistent with the existing rating, and therefore, a stable outlook is warranted. Outlook Actions: Issuer: Millar Western Forest Products Ltd. Outlook, Changed To Stable From Positive Ratings Affirmed: * Corporate family: B2 * US $190 million senior unsecured notes due Nov. 15, 2013: B2 Millar Western is a relatively small company with operations located solely in Alberta, Canada. The company produces two outputs, lumber and pulp. This combination of small size, limited product diversity and geographic concentration, suggests a profile consistent with a B rating. Operations benefit from significant backward integration into electricity supply and a relatively new asset base. The electricity arrangements also stabilize margins. The observed absolute level of margins and their relative stability have both been representative of a rating level higher than the existing B2 rating. However, with a significant debt load, these advantages have been traded away, with recent measures for credit protection metrics lagging the B2 rating. When combined, the balance of these influences is consistent with the existing rating level. Other important rating influences include the fact that Millar Western is a private company. It does not have access to the equity markets, and may exhibit behavior more focused on shareholder returns than would otherwise be the case. It is noted that financial policies are aggressive, with debt having increased over time to fund growth initiatives. As well, a C$15 million special dividend was paid in 2005. It is also noted that Millar Western is exposed to increased off-shore competition from South American pulp-making capacity. Profit margins may be susceptible to decline over time as South American pulp capacity continues to increase. Millar Western has adequate liquidity, with its C$51.2 million cash position being the most important component. While the company maintains a small revolving credit facility, and usage is generally nominal, with near term free cash flow generation expected to be quite weak, it is the cash position that mitigates near term liquidity concerns. Although, the credit facility's security arrangements provide some structural subordination to the senior unsecured notes, given the small size of the credit facility relative to outstanding debt and total assets and anticipated minimal usage, the notes are rated at the corporate family level of B2. As noted, with near term performance expected to be representative of the existing rating, the outlook was changed to stable from positive. Recent performance has been adversely affected by higher input costs, continued appreciation of the Canadian dollar, and softwood lumber duty payments. While near term pulp pricing is expected to improve, average pricing for the year is expected to be approximately equal to that observed in 2005. Lumber prices are expected to retreat modestly as North American housing starts moderate. Consequently, even as some input cost pressure abates, financial results are expected to be consistent with those observed in the recent past. In the current context, it is unlikely that the outlook or ratings would be subject to upgrade. However, with the implementation of more conservative financial policies and meaningful debt reduction, were the company to be able to generate normalized retained cash flow-to-total adjusted debt (RCF/TD) approaching 10% with the commensurate (RCF-CapEx)/TD nearing 5%, an upgrade could be considered. In the current context, a downgrade could result if annual EBITDA fell to below C$5 million, the company increased leverage to support additional growth initiatives, or if financial liquidity were to deteriorate significantly. Millar Western Forest Products Ltd, headquartered in Edmonton, Alberta, is a producer of softwood lumber, and bleached chemi- thermo-mechanical pulp. Millar Western is a subsidiary of Millar Western Industries Ltd., a privately held company. MPI MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: MPI Management, Inc. dba Stroud Nursing Home P.O. Box 216 Marietta, South Carolina 29661 Bankruptcy Case No.: 06-00609 Type of Business: The Debtor operates a long-term health care facility located in Marietta, South Carolina. Chapter 11 Petition Date: February 17, 2006 Court: District of South Carolina (Spartanburg) Judge: John E. Waites Debtor's Counsel: William E. Calloway, Esq. Robinson, Barton, McCarthy, Calloway & Johnson, P.A. P.O. Box 12287 Columbia, South Carolina 29211 Tel: (803) 256-6400 Total Assets: $997,239 Total Debts: $2,477,110 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ SC Dept. of Health and Human Services $112,636 Attn: Accounts Receivable Dept. P.O. Box 8355 Columbia, SC 29202 Greenville County Tax Collector $48,000 P.O. Box 368 Greenville, SC 29602 Slater Drug $46,246 P.O. Box 156 Marietta, SC 29661 DHEC $45,757 St. Francis Hospital $35,461 State of South Carolina $34,628 Procare Rx Inc. $30,419 Haelix Medical Staffing Inc. $30,395 Ronald S. Clement, Esq. $26,000 McKesson Medical Surgical Minnesota Supply Inc. $23,752 CIGNA Healthcare of South Carolina $11,834 Robert C. Cashion Architect $9,450 Janpak Greenville Paper $7,948 Piedmont Natural Gas Company $7,012 Estate of John B. Cleveland $6,750 Duke Power Company $6,570 Crisp Hughes Evans LLP $5,641 Grove Medical Inc. $5,595 Rehab Works LLC $4,912 J and R Fence Company $3,946 MUSICLAND HOLDING: Creditor Panel Wants Facts About Benefit Plans ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 27, 2006, Musicland Holding Corp. and its debtor-affiliates sought the U.S. Bankruptcy Court for the Southern District of New York's authority to: (a) continue to honor various prepetition claims for wages, salaries, commissions, overtime pay and other unpaid compensation; (b) continue to honor severance programs, field and corporate management incentive programs, and offer a modified incentive plan for corporate management; (c) continue to provide all employee health benefits and all other employee benefits; and (d) pay related costs and expenses. Creditors Committee Objects Mark T. Power, Esq., at Hahn & Hessen LLP, in New York City, tells the Court that the Official Committee of Unsecured Creditors has asked the Debtors and their financial advisors to provide information, including the Benefit Programs, necessary for it to review the merits of the Debtors' request. However, as of Jan. 25, 2006, the Committee has not received any sufficient information. The Committee needs a clear understanding of the basic provisions of the Benefit Program as to eligibility and terms of payment, Mr. Power asserts. The Committee does not consent to a further implementation of the Benefits Program under the guise of an interim request. * * * Judge Bernstein authorizes, but does not direct, the Debtors to pay the Relocation Expenses on a final basis. Judge Bernstein allows the Debtors to pay all processing fees associated with the payment of the Employee Wages and Benefits and the Reimbursable Expenses. All objections, except that of the Official Committee of Unsecured Creditors, not otherwise withdrawn, waived or settled are overruled on the merits. Judge Bernstein will consider, at a later date, final approval of the Debtors' request as to: * the Shrink Plan, * the Severance Program, * the Field MIIP, * the Corporate MIIP, and * the Modified Corporate MIIP 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. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUSICLAND HOLDING: Gets Court Nod to Conduct Store Closing Sales ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 24, 2006, Musicland Holding Corp. and its debtor-affiliates seek Judge Bernstein's permission to conduct "Store Closing Sales" in order to liquidate inventory, furniture, equipment and trade fixtures, and other assets located at some or all of the Debtors' store locations. Bloomberg News reported that according to Musicland's attorney, James Stempel, the Company wanted to begin going out of business sales at 284 stores. * * * At least 41 landlords, taxing units and other parties-in-interest objected to the Debtors' request: * The Official Committee of Unsecured Creditors * Aronov Realty * College Square Mall Partners, LLC * Developers Diversified Realty Corporation * EklecCo Newco LLC * Federal Realty Investment Trust * General Growth Management, Inc. * Gregory Greenfield & Associates, Ltd. * Jones Lang LaSalle Americas, Inc. * Kravco Simon Company * New Plan Excel Realty Trust, Inc. * Madison Monroe Mall, LLC * Marshall Town Center * Marshall Town Center * National Amusements, Inc. * North Grand Mall Partners, LLC * Passco Real Estate Enterprises, Inc. * PREIT Services, LLC * Simon Property Group, L.P. * Steamtown Mall Partners, L.P. * Sunset Mall Limited Partnership * The Macerich Company * The Mills Corporation * Union Station Venture II, LLC * Universal Studios LLC, doing business as Universal Citywalk * Urban Retail Properties, Inc. * City of Memphis * City of Waco * County of Bowie * County of Denton * County of Taylor * County of Williamson * Denton County Road Utility District #1 * Lewisville Independent School District * Tax Appraisal District of Bell County, Texas * Waco Independent School District * Texas Tax Units, including Arlington ISD, City of Hurst, Fort Worth ISD, Clear Creek ISD, and Spring Branch ISD On the Official Committee of Unsecured Creditors' behalf, Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York City, tells the Court that as of January 25, 2006, the Committee and its financial advisors have not received sufficient information to enable them to evaluate the merits of the Debtors' request. According to Mr. Indelicato, the Committee needs information from the Debtors concerning: * the Debtors' review of the performance of all their stores, and identification of the stores where any attempt to restore profitability would be futile; * the proposed agency agreement that the Debtors have provided to interested parties; and * the Debtors' solicitation and marketing efforts to maximize bidding. The leases between the Landlords and the Debtors contain very specific restrictions and covenants, including an agreement not to conduct going-out-of-business sales at the specific premises. The Landlords assert that according to the plain meaning of Section 365(d)(3) of the Bankruptcy Code, a tenant cannot breach the terms of a lease by conducting a going out of business sale. Most of the Landlords' leases also contain detailed restrictions on signage and advertisements, any of which would be violated by the Debtors' going-out-of business signs. The Landlords complain that the proposed sale guidelines are insufficient and unclear. The Landlords also point out that the Debtors failed to address making timely postpetition obligations to them as provided in Section 365(d)(4) and that the Debtors do not propose a termination date for the store closing sales. The Landlords contend that the Debtors' proposed store closing guidelines: -- deny them the benefit of their bargained-for lease provisions in violation of the statutory protections enacted by Congress to protect shopping center landlords, and -- impermissibly violate the express terms of the leases in a manner that will damage them and other shopping center tenants. The Texas Taxing Units object to the Sale to the extent that it seeks to extinguish their secured tax liens for prepetition taxes. The Other Taxing Authorities ask the Court to rule that sufficient proceeds should be promptly placed in a segregated account from the first proceeds of sale, to provide adequate protection for certain tax claims. Auction for GOB Agent The Debtors, with the consent of their secured postpetition lender, the Unofficial Committee of the Secured Trade Creditors, and the Official Committee of Unsecured Creditors agreed to pay a $675,000 break-up fee to a joint venture comprised of Pride Capital Group, LLC, d/b/a Great American Group, The Nassi Group, LLC and SBCapital Group, LLC. After a lengthy Auction process, the Debtors executed an Agency Agreement with a joint venture comprised of Hilco Merchant Resources, LLC, and Gordon Brothers Retail Partners, LLC, the successful bidder at the Auction. A full-text copy of the Hilco-Gordon Agency Agreement is available for free at: http://bankrupt.com/misc/Musicland_HILCOAgencyAgreement.pdf * * * Judge Bernstein authorizes the Debtors to discontinue operations at 343 Stores and sell the merchandise, furniture, equipment, trade fixtures, and other assets as provided for in the Agency Agreement. A list of the 343 Closing Stores is available for free at: http://bankrupt.com/misc/Musicland_343ClosingStores.pdf The Court also authorizes the Debtors to: (a) sell assets through the Agent or through other means at least as favorable to them as those contemplated in the Agency Agreement, and conduct the GOB Sales at the Closing Stores subject to certain guidelines. The Agent is permitted to include Augmented Goods and augmented inventory, as necessary; A full-text copy of the GOB Sales Guidelines is available for free at: http://bankrupt.com/misc/Musicland_SaleGuidelines.pdf (b) pay the Break-Up Fee to the Stalking Horse Bidder from the funds received as the initial payment of the Guaranteed Amount to be paid by the Agent; (c) enter into the Agency Agreement. The Debtors are authorized to compensate the Agent in accordance with the Agency Agreement without further Court order; and (d) place $416,000 in a segregated account, to be held by the Debtors, from the funds the Debtors receive as the initial payment of the Guaranteed Amount to be paid by the Agent under the Agency Agreement: Tax Authority Amount ------------- ------ Local Tax Authorities represented by Linebarger, Goggan, Blair & Sampson, LLP $275,000 * Bexar County, * Cypress-Fairbanks ISD, * Dallas County, Ector CAD, * El Paso, * Harlingen, * Harris County, * Hidalgo County, * McAllen, Montgomery County, * Nueces County, * Round Rock ISD, * City of Frisco, * Tarrant County, * Tom Green CAD, and * City of Memphis Texas Ad Valorem Tax Authorities represented by McCreary, Veselka, Bragg & Allen, PC 65,000 * Tax Appraisal District of Bell County * County of Bowie, * County of Denton, * Denton County Road Utility District #1, * City of Waco, * Waco Independent School District, * County of Taylor, and * County of Williamson Texas Ad Valorem Tax Authorities represented by the Law Offices of Robert Luna 4,000 * Lewisville Independent School District Texas Ad Valorem Tax Authorities represented by Perdue, Brandon, Fielder, Collins & Mott 72,000 * Arlington ISD, * City of Hurst, * Fort Worth ISD, * Clear Creek ISD, and * Spring Branch ISD The liens of the Texas Ad Valorem Tax Authorities and Local Tax Authorities will attach to the segregated funds to the same extent and with the same priority they currently hold on the assets being sold, as defined by applicable state law. The segregated account will be in the nature of adequate protection for the secured claims of the Objecting Tax Authorities, and will constitute neither the allowance of their claims nor a cap on the amounts they may be entitled to be paid from the proceeds of the sale of their collateral. During the Sale Term, the Agent will have the right to move Merchandise to and from the Closing Stores as may be necessary. 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. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) NASH FINCH: S&P Reviewing B+ Credit Rating for Possible Downgrade ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Nash Finch Co., including its 'B+' corporate credit rating, on CreditWatch with negative implications. The placement follows Nash Finch's disclosure that it voluntarily contacted the SEC to discuss the results of an internal review that focused on trading in the company's stock by certain officers and directors of the company during 2005. This internal review followed an informal inquiry on this matter by the SEC late in 2005. The company also announced that its chairman of the board of directors is assuming the position of interim CEO effective immediately, along with the resignation of its current CEO. In addition, the company's general counsel is resigning, to be replaced on an interim basis by the current deputy general counsel. "Although it is too early to assess the impact of these actions," said Standard & Poor's credit analyst Stella Kapur, "issues related to the review could potentially result in negative consequences for Nash Finch, including possible penalties." In addition, Nash Finch had several shareholder lawsuits filed against the company and certain of its executive officers in December 2005, alleging the defendants issued false statements to artificially inflate the price of Nash Finch's common stock. Standard & Poor's will monitor developments related to the trading review to determine the potential effect on credit quality. NATCO INT'L: Dec. 31 Balance Sheet Upside-Down by $1.1 Million -------------------------------------------------------------- Natco International Inc., delivered its financial results for the period ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. At Dec. 31, 2005, the company's balance sheet showed assets totaling $42,586 with current liabilities totaling $1,179,299, resulting in a stockholders' deficit of $1,136,713. For the nine months ended Dec. 31, 2005, the company incurred a $119,023 net loss on $4,680 of sales. This compares to a net loss of $103,601 on sales of $30,777 for the nine-month period ended Dec. 31, 2004. Liquidity and Capital Resources The company says that it has financed its operations through equity investment from investors, shareholder loans, and credit facilities from Canadian chartered banks and increases in payables and share subscriptions. The company discloses that its recent financing has been done through debt financing from related parties. The company that it currently owes $1,011,028 to several lenders. Going Concern Doubt Staley, Okada & Partners expressed substantial doubt about the company's ability to continue as a going concern after it audited the company's financial statement for the fiscal year ended Mar. 31, 2005. The auditing firm pointed to the company's significant looses over the past several years, negative operating cash flows and working capital deficiency. Natco International Inc., fka Spectrum International Inc., sells jewelry cleaners and tire sealants. NETWORK INSTALLATION: Awarded $3.1MM Project From Station Casinos ----------------------------------------------------------------- Network Installation Corp.'s (OTCBB: NWKI) subsidiary Kelley Technologies was awarded a $3.1 million project from Station Casinos. The scope of the project includes the design and build of networking and communications infrastructure for the renovation and expansion of Station's Green Valley Ranch Resort & Casino in Henderson, Nevada, just outside of Las Vegas. "We are thrilled to have been awarded this project from such a high value customer as Station Casinos," Network Installation CEO Jeffrey R. Hultman stated. "They have been growing at a record pace and we hope that as a result of our efforts, we too may continue to benefit from their success by winning future projects from them." About Station Casinos Station Casinos, Inc. -- http://www.stationcasinos.com/-- is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station's properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino and Gold Rush Casino in Henderson, Nevada. Station also owns a 50% interest in Barley's Casino & Brewing Company, The Greens Cafe and Green Valley Ranch Station Casino in Henderson, Nevada and a 6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages the Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. About Network Installation Corp. Headquartered in Irvine, California, Network Installation Corp. -- http://www.networkinstallationcorp.net/-- is a single source provider of communications infrastructure, specializing in the design, installation, deployment and integration of specialty systems and computer networks. Through its wholly-owned subsidiaries, Com Services and Kelley Technologies, Network Installation provides its services to these customers and industries: Gaming & casinos, local and regional municipalities, K-12 and education. At Sept. 30, 2005, Network Installation's balance sheet showed a $6,700,753 stockholders' deficit, compared to a $1,877,631 deficit at Dec. 31, 2004. NORTHEAST MECHANICAL: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Northeast Mechanical Services, Inc. 8 John Walsh Boulevard, Suite 424 Peekskill, New York 10566 Bankruptcy Case No.: 06-50055 Chapter 11 Petition Date: February 17, 2006 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James M. Nugent, Esq. Harlow, Adams, and Friedman, P.C. 300 Bic Drive Milford, Connecticut 06460 Tel: (203) 878-0661 Debtor's latest financial condition: Total Assets: $68,362 Total Debts: $1,012,982 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Taxes $384,799 135 High Street Hartford, CT 06103 The Bank of New York $200,128 171 South Riverside Avenue Croton-On-Hudson, NY 10520 New York State Withholding Taxes $152,227 P.O. Box 4119 Binghamton, NY 13902 Carrier Northeast Business Expense $51,434 Michael Martin Loan $39,551 Harleysville Business Expense $28,352 Wells Fargo Business Credit Card $19,857 American Express Business Credit Card $14,768 Keevily Spero Whitelaw Business Expense $13,945 Intercounty Supply Inc. Business Expense $12,466 NES Rentals Business Expense $10,217 Citizens Automobile Finance Auto Loan $9,742 N&S Supply Business Expense $6,694 A&C Furia Electric Motors Business Expense $5,133 Tech Air Business Expense $4,938 Chase Auto Loan $4,238 Chase Auto Finance $3,399 Duso Chemical Business Expense $1,952 Lennox Industries Business Expense $1,433 NOVA BIOGENETICS: Dec. 31 Balance Sheet Upside-Down by $1.2 Mil. ---------------------------------------------------------------- Nova Biogenetics, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. The company generated revenues of $34,285 for three months ended Dec. 31, 2005, a 90% decrease compared to $326,721 for the three months ended Dec. 31, 2004. For the six months ended Dec. 31, 2005, net revenues were $76,523, an 81% decrease compared to $408,611 in net revenues during the six months ended Dec. 31, 2004. The decrease is mainly due to the acquisition of Eco Group in Europe, which was the company's customer until they were acquired on June 30, 2005. For the three months ended Dec. 31, 2005, the company incurred a $301,247 net loss compared to a net income of $51,427 for the three months ended Dec. 31, 2004. As Dec. 31, 2005, the company's balance sheet showed assets totaling $151,338 and current liabilities of $1,405,297, which resulted in a stockholders' deficit of $1,253,959. Going Concern Doubt Bouwhuis, Morrill & Company, LLC expressed substantial doubt on the company's ability to continue as a going concern after it audited the company's financial statement for the fiscal year ended June 3, 2005. The auditing firm pointed to the company's negative working capital, negative cash flows from operations and recurring operating losses. The company's management reiterated this going concern doubt in their latest filing citing sustained additional operating losses for the six-months ended Dec. 31, 2005 of $783,000. Headquartered in Atlanta, Georgia, Nova BioGenetics, Inc. -- http://www.novabiogenetics.com/-- discovers, develops, markets and sells surface-modifying antimicrobial products. The company has two principal business, Nova Biopharmaceuticals, Inc. and Nova Specialty Chemical, Inc. O'SULLIVAN IND: Objects to Lamar's Motion for Adequate Protection ----------------------------------------------------------------- The City of Lamar in Missouri sought the U.S. Bankruptcy Court for the Northern District of Georgia's authority to: a) cease the utility services to the Debtors; and b) offset held funds to its postpetition claim aggregating $208,206. In the alternative, the City asked the Court to compel O'Sullivan Industries Holdings, Inc., and its debtor-affiliates to provide adequate assurance of payment for postpetition services not less than $374,000 and allow the City to offset the funds held if any invoice remains outstanding more than 10 days past issuance. The City of Lamar provides utility services to O'Sullivan Industries Holdings, Inc., and its debtor-affiliates including electrical, water and sewer services. Lamar asserted that the Debtors are not current with their utility bills. Debtors Object James C. Cifelli, Esq., at Lamberth Cifelli Strokes & Stout, P.A., in Atlanta, Georgia, argues that the City of Lamar in Missouri is not entitled to adequate protection. Section 366(b) specifically provides that a utility may "alter, refuse or discontinue service" only if a debtor fails to provide "adequate assurance of payment," which is not to be confused with adequate protection, Mr. Cifelli says. Moreover, the Utility Order affords utility providers the right to seek additional adequate assurance of payment, not adequate protection, Mr. Cifelli notes. Even if the Court were to consider Lamar's request as one to lift the automatic stay, Lamar has not demonstrated any "cause" to lift the stay, Mr. Cifelli contends. Accordingly, the Debtors ask the Court to deny Lamar's request and direct Lamar to remove the $14,460 penalty that it had imposed against them for their failure to make payment on a timely basis. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) OMNOVA SOLUTIONS: Fitch Holds Issuer Default Rating at B+ --------------------------------------------------------- Fitch Ratings has affirmed these credit ratings for OMNOVA Solutions Inc.: -- Issuer default rating at 'B+'; -- Senior secured notes at 'B+', recovery rating '4'. In addition, the senior secured credit facility has been upgraded to 'BB+/RR1' from 'BB-/RR3'. The Rating Outlook has been revised to Stable from Negative. These rating actions affect $165 million in public securities and the company's $100 million senior secured credit facility. The Stable Rating Outlook reflects the improving trend in OMNOVA's earnings and operating margin, particularly in the last nine months of fiscal year 2005 (ended Nov. 30, 2005). Operating EBITDA grew to $47.8 million in FY2005 from $26.1 million in FY2004. Higher earnings were supported by price increases in the Performance Chemicals segment. The company's operating EBITDA margin rose to 6.0% in FY2005 from 3.5% in FY2004. The revised Rating Outlook also reflects the potential for continued improvement in earnings, operating margin, and cash flow over the next 12 to 18 months. Fitch expects that OMNOVA's operating margins may continue to strengthen in 2006 if demand and pricing remain favorable in the Performance Chemicals businesses and declining office vacancy rates spur demand in Decorative Products businesses. The upgrade of the senior secured credit facility to 'BB+/RR1' primarily reflects the high principal recovery expected from this borrowing base revolver in a liquidation scenario, as well the recent improvement in OMNOVA's operating margin and earnings and the corresponding change in Rating Outlook to Stable. OMNOVA's ratings continue to be supported by its small company size and good market position in styrene butadiene latex, offset by weak but improving operating margins and limited free cash flow. For the trailing 12 months ended Nov. 30, 2005, operating EBITDA-to-gross interest expense was 2.3 times (x) versus 1.3x at year-end 2004. Total debt-to-operating EBITDA was 3.6x for year- end 2005 compared to 7.0x at year-end 2004. Although Fitch remains concerned about the timing and magnitude of earnings recovery in the Decorative Products segment, Fitch expects better market conditions may improve earnings in the near to intermediate term. OMNOVA Solutions Inc. is a specialty chemical producer based in Fairlawn, OH. The company has leading positions in styrene- butadiene latex production, vinyl wallcovering, coated fabrics and decorative laminates. For the last 12 months ended Nov. 30, 2005, the company had EBITDA of $47.8 million on sales of $810.1 million. PARADISE MUSIC: Tinter Scheifley Raises Going Concern Doubt ----------------------------------------------------------- Tinter Scheifley Tang, LLC, expressed substantial doubt about Paradise Music and Entertainment, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2004 and 2003 The auditing firm pointed to the Company's recurring losses from operations as well as substantial deficits in its stockholders' equity and working capital. In its annual report for the year ended Dec. 31, 2004, submitted with the Securities and Exchange Commission on Feb. 15, 2005, Paradise Music reported a $126,803 net loss, as compared to a $97,203 net loss in the prior year. Management attributes the increase in net loss to expenses incurred from warrants provided in exchange for financing agreements during 2004. The Company did not generate any revenue from continuing operations for the year ended Dec. 31, 2004, just as there were no revenues for the year ended December 31, 2003. The Company's balance sheet at Dec. 31, 2004, showed $114 in total assets and $7,528,746 of liabilities, resulting in a $7,528,632 stockholders' deficit. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?591 Environmental Testing Acquisition On Feb. 14, 2005, ETL Acquisition Corp., a wholly owned subsidiary of Paradise, completed the acquisition of substantially all of the assets Environmental Testing Laboratories, Inc. Environmental Testing is engaged in the business of environmental testing. ETL acquired assets consisting primarily of accounts receivable, machinery and laboratory equipment valued at $1,915,463 at the time of the closing. The assets were sold for $1,274,079, which ETL agreed to pay at closing by the assumption of accounts payable and accrued expenses in the amount of $546,441, the assumption of additional liabilities from affiliate companies of Environmental Testing in the amount of $671,638, and the issuance of 280,000 shares of its Series A Preferred Stock. The shares were valued at $56,000. In connection with the purchase, ETL borrowed $500,000 from Capstone Business Credit LLC and executed a promissory note in that principal amount. The note bears interest at the rate of 24% per annum and is payable by ETL in 24 installments of $15,000 commencing on February 28, 2005 until February 28, 2007. About Paradise Music Paradise Music & Entertainment, Inc., is a diversified company that currently operates in the environmental testing and music and entertainment industries. The Company markets sponsor-targeted entertainment projects, including the development and production of proprietary festivals, events and branding campaigns for corporate clients. PERFORMANCE TRANSPORTATION: Outlines Executive Incentive Program ---------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York to approve an incentive program for three of its senior executives pursuant to Sections 105 and 363 of the Bankruptcy Code. During the course of their Chapter 11 cases, the Debtors will rely, in part, on the services of Jeffrey L. Cornish, president and chief executive officer; John Richter, chief operating officer; and Jack Stalker, vice president and chief financial officer, to maximize the value of their businesses and consummate a successful restructuring plan. Mr. Cornish joined the Debtors as president and CFO of Performance Transportation Services, Inc., on March 10, 2005. In September 2005, the Debtors promoted him to chief executive officer. Since joining the Debtors, he has been assessing all aspects of the Debtors' businesses in an effort to identify strategic options for strengthening the businesses. Mr. Richter became chief operating officer of PTS in 1999. As COO, he is responsible for the operations and profitability of all field operations, maintenance, customer service, damage prevention and safety. He is responsible for all staffing and personnel in the field, including drivers and mechanics. Mr. Richter is also the Debtors' top executive responsible for interfacing directly with existing and potential new customers and for developing strategies for maintaining current business sources and establishing new business opportunities. Mr. Stalker joined the Debtors as vice president and chief financial officer of PTS in September 2005. In these roles, he is responsible for all aspects of the Debtors' financing, reporting, credit and collections, cargo claims administration, risk management and accounting. The Performance Incentive Program Before the Petition Date, the board of directors of Performance Logistics Group, Inc., the ultimate parent Debtor, examined the Senior Executives' compensation package in light of the impending Chapter 11 cases. The board sought to provide a compensation package that would: (i) be competitive with the market and roughly consistent with the Senior Executives' prepetition employment contracts and (ii) motivate the Senior Executives in a manner consistent with the Debtors' fiduciary duties. In particular, the board of directors sought to incentivize the individuals responsible for managing the Chapter 11 process by providing them with compensation driven by the Debtors' performance and, in turn, the value realized by the Debtors' creditors. The Debtors consulted with their financial advisors, FTI Consulting, Inc., to devise a performance-based compensation program for the Senior Executives. The Incentive Program consists of two components: (a) the EBITDA Realization Bonus, and (b) the Value Added Bonus. The Program does not include any type of severance payments. EBITDA Realization Bonus The ERB is tied to the relative success of the Senior Executives in achieving and surpassing the pre-established 2006 EBITDA goals. The Senior Executives may each earn a bonus of up to one year's base salary. The amount ultimately realized will depend on the degree to which the Debtors realize an EBITDA in excess of that set forth in the 2006 financial forecast. In particular, the Senior Executives may earn an ERB based on these variables: Actual EBITDA as % of 2006 Bonus as % of Base Forecast Compensation -------------------------- ------------------ Below 100% 0% 100.01% - 110.00% 25% 110.01% - 125.00% 50% 125.01% - 137.50% 75% Over 137.50% 100% Payment of any ERB earned will be made in this manner: * 50% upon the internal closure of the annual financial statements; and * 50% upon completion of the required procedures by the Debtors' independent accounting professionals related to the annual financial statements. If the Debtors emerge from bankruptcy or the majority of the Debtors' assets are sold before December 31, 2006, any ERB earned as of the date of the emergence or sale would be paid upon completion of the financial statements through the emergence or sale. If a Senior Executive is terminated without cause, the ERB available to that Senior Executive will have vested in the ERB earned through the date of termination. The timing of the ERB payment in the event of termination without cause is consistent with the timing of payments under a Payment Event. Value Added Bonus This success-based bonus is based upon the total value realized by the Debtors' creditors through a Payment Event combined with whatever additional sources of recovery contribute to the overall creditor recoveries. The VAB will be based upon both the amount realized by the Debtors' creditors and upon the timeframe in which that realization occurs. A copy of the VAB Grid is available at http://bankrupt.com/misc/perf_bonus_grid.pdf As set forth in the VAB Grid, in the instance where total recovery is $105,000,000 and is achieved by September 30, 2006, a pool of $1,900,000 would be available for distribution as bonuses to the Senior Executives. Further, to the extent value realized drops below the $105,000,000, or the timeframe for the realization extends past September 30, 2006, the VAB pool decreases. After September 30 -- holding value realized constant -- the total available VAB is reduced by 7.5% monthly through the maturity date of the Debtors' postpetition financing agreement. After that date, the VAB will be zero; provided, however, that in the case of a VAB triggered by a sale of a majority of the Debtors' assets, if both an agreement for the sale is executed and a deposit related to that agreement has been collected by the Program End Date; and the sale is competed within three months after the Program End Date, then a 70% VAB will still be payable to the Senior Executives. In all cases where a VAB is earned, the PLG's board of directors will determine, in its sole discretion, how the VAB will be distributed among the Senior Executives. The board may also determine that a particular Senior Executive may receive a portion of the VAB if the Senior Executive is terminated without cause or has resigned prior to the Program End Date. Incentive Plan Must Be Approved Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, tells the Court that each of the Senior Executives plays a critical role in the Debtors' operations. In light of the importance of the Senior Executives to maximizing estate value, the Debtors have determined that the Senior Executives must receive competitive compensation during their Chapter 11 cases. The Senior Executives' current compensation packages have been diluted by the Debtors' recent circumstances. Based on FTI's recommendations, the Debtors have developed an incentive program that provides market terms in light of the facts and circumstances currently facing them. In connection with negotiating the terms of their postpetition financing, the Debtors engaged in extensive discussions with their postpetition lenders concerning the parameters of a postpetition bonus structure for the Senior Executives. As a result, the lenders agreed to subject their liens to a $1,000,000 carve-out basket for compensation to be awarded under the Incentive Program as part of the postpetition financing, which the Court approved on an interim basis on January 26, 2006. 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. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) QUICK MED: Posts $355,665 Net Loss in Quarter Ended December 31 --------------------------------------------------------------- Quick-Med Technologies, Inc., delivered its financial results for the quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. Quick-Med incurred a $355,665 net loss for the three-month period ended Dec. 31, 2005 compared to a $$395,665 net loss for the three months ended Dec. 31, 2004. This decrease is primarily attributable to increases in revenues, offset by increases in non- cash stock-based compensation, research and development expenses, and general and administrative expense. During the three months ended Dec. 31, 2005, the Company generated $274,708 of revenues, a 1,777% increase compared to $14,639 of revenues for the same period in 2004. Revenues during the three months ended Dec. 31, 2005 included $274,708 of royalties from a master agreement with Engelhard for product development, manufacturing and distribution. The Company's balance sheet at Dec. 31, 2005, showed $937,673 in total assets and $1,662,829 of liabilities, resulting in a $725,156 stockholders' deficit. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?59a Going Concern Doubt Daszkal Bolton, LLP, of Boca Raton, Florida, expressed substantial doubt about Quick Med's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses, net capital deficiency, and negative cash flows from operations for the years ended June 30, 2005 and 2004. About Quick-Med Quick-Med Technologies, Inc., (OTC Bulletin Board: QMDT) -- http://www.quickmedtech.com/-- is a life sciences company focused on developing proprietary, broad-based technologies for consumer, industrial, and healthcare use, as well as for advanced military and civilian medical applications. The Company's two core products under development are: a) MultiStat(TM) - a family of advanced compounds shown to be effective in broad-based skin therapy applications; and b) NIMBUS(TM) - a family of advanced polymers that can be used in a wide range of applications from advanced wound care to industrial and consumer preservatives. QUIGLEY CO: Wants Until June 7 to Remove Civil Actions ------------------------------------------------------ Quigley Company, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York, to extend until June 7, 2006, the period within which it can remove civil actions. The Debtor tells the Court that it continues to review asbestos related litigation in line with its plan filing process. The Debtor believes that the extension will allow its professionals to make fully informed decisions on the removal of each prepetition civil action. The Debtor assures the Court that the extension will not prejudice the rights of its adversaries. Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary of Pfizer, Inc., which used to produce and market a broad range of refractories and related products to customers in the iron, steel, glass and other industries. The Company filed for chapter 11 protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to resolve legacy asbestos-related liability. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. Michael L. Cook, Esq., Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte Roth & Zabel LLP, represent the Company in its restructuring efforts. Albert Togut, Esq., at Togut Segal & Segal serves as the Futures Representative. REFCO INC: Forex Capital Reacts to Cancelled RefcoFX Asset Sale --------------------------------------------------------------- In response to Refco Inc.'s cancellation of the auction of the online foreign-exchange assets of its Refco FX Associates LLC unit, Forex Capital Markets LLC (FXCM) said that it submitted the highest bid and won the auction. Unfortunately, the creditors of Refco are objecting to the deal indicating their belief that the approximately $110 million purchase price is not enough money. FXCM is committed to seeking a conclusion to this process that will support the RefcoFX clients. FXCM's offer, if approved by the Court, would provide for the full funding of the RefcoFX client accounts. "This move by the Creditors' Committee and Agent for the Banks is in total disregard of the damaging effects on Refco FX customers," Drew Niv, Chief Executive Officer of FXCM, said. "Refco FX customers now will continue to face uncertainty over the fate of their money despite our offer to make them completely whole and to give them full access to their accounts." "Our offer has now been shown by the auction process to be more than adequate," said Mr. Niv. "The asset sale process instituted by the Bankruptcy Court is designed to provide the best value to the bankrupt estate by giving bidders an incentive to pay top dollar. The opposition of the Creditors Committee and the Agent - - without proffering any alternative better bid -- will certainly harm the Refco FX customers without any assured benefit to the Estate." Forex Capital Markets LLC provides currency trading services to retail traders under the name FXCM -- http://www.fxcm.com/-- and to institutional clients under name FXCM Pro -- http://www.fxcmpro.com/ The firm has serviced over 50,000 accounts and is registered with the CFTC as a Futures Commission Merchant. FXCM has received numerous awards from the investment community, including Best Currency Broker from Shares, Best Retail Foreign Exchange Platform from FX Week and Best Foreign Exchange Specialist from Technical Analysis of Stocks & Commodities. In addition to currency trading, FXCM offers educational courses on forex trading, and provides research through DailyFX.com. FXCM will soon provide managed account programs for clients seeking investment diversification. 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. RELIANT ENERGY: Fitch Pares Issuer Default Rating One Notch to B ---------------------------------------------------------------- Fitch Ratings downgraded Reliant Energy, Inc.'s issuer default rating to 'B' from 'B+'. At the same time, Fitch takes these rating actions: RRI -- Senior secured debt affirmed at 'BB-'/ Recovery Rating upgraded to 'RR2' from 'RR3'; -- Senior subordinated convertible notes affirmed at 'B'/ RR upgraded to 'RR4' from 'RR5'. RRI's Rating Outlook is Stable. The lowering of RRI's IDR reflects the higher business risk and future cash flow uncertainty resulting from RRI's transition to a substantially merchant model for its U.S. wholesale generating business, limited opportunities to improve leverage and coverage ratios beyond 'B' parameters through 2008 under a conservative natural gas price scenario, and continued margin uncertainty at RRI's retail electric provider segment as the Texas market evolves from the current incumbent Price-To-Beat structure to a full competitive model in 2007. On Feb. 8, 2006, RRI unveiled a revised operating strategy for its wholesale generating segment the key component of which entails migrating to an 'open' business model. Pursuant to this strategy, RRI no longer anticipates entering into forward power sales arrangements for its coal-fired generating portfolio with existing hedges covering approximately 70% and 35% of 2006 and 2007 available capacity, respectively, scheduled to roll-off upon expiration. While adopting a pure merchant model for the coal assets should result in the return of up to $600 million of posted collateral at the wholesale segment by year-end 2006 and substantially reduce future margining demands, RRI's future wholesale margins will be fully exposed to natural gas price swings, changes in fuel prices, and ultimately the market 'dark spread'. Moreover, RRI's recent divestiture of excess emission credits potentially exposes the wholesale segment to further earnings pressure to the extent the future cost of credits are not reflected in spot prices for power. With PTB expiry set for Jan. 1, 2007, RRI's REP segment should experience greater pricing flexibility for its approximately 1.2 million Houston based residential customers. However, the overriding challenge for the Retail segment will be to demonstrate a consistent track record of margin stability as the Houston market moves to full competition. This will ultimately be determined by customer retention rates, the pricing behavior of market competitors, and RRI's ability to manage fuel and power procurement requirements in a less restrictive post-PTB world. As part of its analysis, Fitch prepared an alternative projection scenario to gauge RRI's performance in a less robust natural gas price environment. Specifically, Fitch's model incorporates an outlook for natural gas prices declining to approximately $6.00 per mmBtu in 2008 compared with management's assumption in 2008 of $9.26 per mmBtu. Although the lower gas price model results in weaker cash flow results, particularly in 2008 when RRI's coal-fired portfolio is largely un-hedged, revised credit ratios under the alternative case remain within parameters for the revised IDR level. Under this scenario, consolidated Debt/EBITDA and EBITDA/Interest approximate 5.0 times (x) and 2.5x, respectively, which are at the low end of 'B' parameters. The affirmed 'BB-' rating for RRI's outstanding senior secured debt is two notches above the revised IDR and reflects the superior recovery prospects for these debt obligations which Fitch estimates at approximately 80% under a conservative scenario assuming below market valuations for RRI's coal generating fleet and stressed financial performance at Retail. The revised recovery estimates take into consideration the pending sale of RRI's New York City generating assets for $975 million and corresponding paydown of secured Term Loan B borrowings. Fitch notes that cash proceeds generated from RRI's recent asset sale activity have generally been higher than valuation estimates used in Fitch's original recovery model. The Stable Rating Outlook reflects the prospects for continued improvement in RRI's liquidity position through 2006 and expectations that the company will continue to generate credit measures consistent with its ratings even under a more conservative gas price environment. Factors leading to potential rating improvement over time would include a sustained track record of stable financial performance at Retail and a strengthening of leverage ratios in line with management's base case projections. At the same time, the inability of Retail to effectively manage its net short supply position and/or the acceleration of environmental regulations resulting in higher capital spending or emissions allowance costs for RRI's coal generating assets would likely place pressure on RRI's ratings and/or outlook. ROUGE INDUSTRIES: Can File Notices of Removal Until April 17 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware will permit Rouge Industries, Inc., and its debtor-affiliates to file notices of removal with respect to prepetition civil actions until Apr. 17, 2006. As reported in the Troubled Company Reporter on Jan. 18, 2006, the Debtors are a party to approximately 61 civil actions and proceedings pending in various state and federal courts. The Debtors gave the Court three reasons supporting the extension: 1) immediately after the petition date, the Debtors had to focused their efforts and resources on obtaining approval and closing the sale of substantially all of their assets to SeverStal N.A.; 2) the Debtors are still devoting a substantial amount of their time and resources to winding down their affairs and addressing outstanding issues, including: a) claims administration, statutory lien analysis, employee and retiree benefit matters, avoidance action analysis and recoveries, and b) investigating potential claims and causes of action, disposition of remaining non-cash assets, cash collateral, plan formulation and other estate administrative matters; and 3) the requested extension will not prejudice the Debtors' adversaries in the civil actions because any party to a prepetition civil action that is removed may seek to have it remanded to the state court pursuant to 28 U.S.C. Section 1452(b). 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: Investing US$270MM to Launch Satmex 6 Satellite on May 17 ----------------------------------------------------------------- Satmex aka Satelites Mexicanos will be investing US$270 million to launch its new satellite, Satmex 6, on May 17, chief executive officer Sergio Autrey was quoted as saying by newspaper Reforma. Satmex 6 will be launched in the French Guiana region and will provide cable TV service to the United States and Latin America. Satmex has signed an agreement with Arianespace for the launching of the satellite. "The launching is independent from the [debt] restructuring process, since the company has enough money to pay Arianespace and [the satellite] insurance to launch it. We do not need to finish the restructuring process to do it," Autrey said in a press conference. Satmex and its senior noteholders reached a deal last week to restructure the company's debts of over US$800 million, of which US$523 million is in default. 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. SEA CONTAINERS: S&P Slices Corp. Credit Rating from BB- to B+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'B+' from 'BB-'. All ratings remain on CreditWatch with negative implications, where they were placed Aug. 25, 2005. "The downgrade is based on Sea Containers' weakened financial profile after losses incurred at its ferry operations, a business it is in the process of divesting, and lower margins expected on its GNER rail franchise," said Standard & Poor's credit analyst Betsy Snyder. "The continuing CreditWatch status reflects uncertainties about the timing and ultimate disposition of the ferry operations, and resolution of a series of disputes at GE SeaCo, a joint venture in which Sea Containers holds a 50% stake," the analyst continued. The ratings on Bermuda-based Sea Containers reflect a relatively weak financial profile, even after the planned divestiture of its unprofitable ferry operations, expected to occur in 2006. However, the company does benefit from fairly strong competitive positions in its two major remaining businesses, GNER (Great North Eastern Railway, a passenger rail line between London and Scotland) and marine cargo container leasing. Sale of the Silja assets, which account for approximately 75% of the ferry assets, will likely occur first, with bids already submitted. The timing and proceeds from sale of the other ferry assets are more uncertain. The remaining businesses generate more stable cash flow than the very competitive ferry businesses, which experienced significant losses in 2004-2005 due to excess capacity, fare discounting, and high fuel prices. Sea Containers is restructuring the ferry operations through the sale of certain operations and/or individual vessels, redeployment or chartering out vessels, and staff reductions. In November 2005, the company sold the remainder of its Orient-Express Hotels Ltd. (OEH) shares, realizing proceeds of approximately $262 million before expenses. In 2006, debt will be reduced using proceeds from the sale of OEH shares as well as expected proceeds from sale of the ferry operations. A further uncertainty, with potential ratings implications, is a series of disputes between Sea Containers and General Electric Capital Corp. regarding operations at GE SeaCo. The disputes are currently in arbitration, with a decision expected in early 2006. The outcome is not determinable at this time and no loss contingency had been recorded at Sept. 30, 2005. Therefore, the potential financial effects on Sea Containers and even possible future ownership of GE SeaCo remain uncertain. Standard & Poor's will monitor the progress of the sale of the ferry operations, as well as resolution of the GE SeaCo arbitration. If either were to result in additional significant charges that would further weaken Sea Containers' financial profile, ratings would likely be lowered. SECURUS TECH: Commences Consent Solicitation on 11% Senior Notes ---------------------------------------------------------------- SECURUS Technologies, Inc. commenced a consent solicitation to seek an amendment to the indenture governing its $154,000,000 principal amount of 11% Second-priority Senior Notes due 2011. The proposed amendment would increase the amount of indebtedness SECURUS may incur under its credit facility from $30 million to $60 million and allow SECURUS to pursue strategic opportunities to acquire corrections market assets, which it believes will further enhance its position as the largest independent provider of inmate telecommunication services to correctional facilities. A supplemental indenture containing the proposed amendment will be executed as soon as practicable following receipt by SECURUS of the consent of at least a majority in principal amount of outstanding Notes, provided that such consents are received by 5:00 p.m., New York City time, on March 2, 2006, unless extended. The proposed amendment will not become operative unless, on or prior to Feb. 19, 2007: (i) SECURUS closes an acquisition of selected inmate telecommunication businesses that meets certain financial criteria and (ii) certain other conditions are satisfied or waived, such conditions as set forth more fully in the Consent Solicitation Statement. If the proposed amendment becomes operative, as set forth above, the Company will pay a consent fee equal to $10 per $1,000 principal amount of Notes to note holders who provided their consent. SECURUS has retained Morgan Stanley & Co. Incorporated to serve as Solicitation Agent for the consent solicitation. Global Bondholder Services Corporation will act as information agent, tabulation agent and paying agent in connection with the consent solicitation. The consent solicitation is being made pursuant to a Consent Solicitation Statement dated Feb. 17, 2006 and a related Consent Letter, which more fully describe the terms and conditions of the consent solicitation. Note holders may obtain copies of these documents from: Global Bondholder Services Corporation Telephone (866) 470-4500 Questions regarding the consent solicitation should be addressed to: Morgan Stanley & Co. Incorporated Telephone 212-761-1864 Headquartered in Dallas, Texas, SECURUS Technologies, Inc. -- http://www.securustech.net-- is the country's largest independent supplier of detainee telecommunications and information management solutions, serving over 3,100 correctional facilities nationwide. A recognized leader in providing comprehensive, innovative technical solutions and responsive customer service, SECURUS' sole focus is the specialized needs of the corrections and law enforcement communities. SECURUS has offices in Selma, Alabama; Raleigh, North Carolina; Brantford, Ontario; Belleville, Ontario, and has application redundancy backup systems in Allen, Texas and Irving Texas. * * * As reported in the Troubled Company Reporter on Feb. 14, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and senior secured debt ratings on Dallas, Texas-based Securus Technologies Inc. The ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 1, 2006, following the company's announcement that it had received a notice from AT&T Operations Inc. (AT&T/SBC) indicating its intentions to terminate its billing and collections agreement and the associated services, prompted by concerns that a recent legal settlement by Securus may be viewed as admission of wrongdoing. "The ratings affirmation reflects Securus' announcement that AT&T/SBC has decided to withdraw its notice following extensive discussions with the company," said Standard & Poor's credit analyst Ben Bubeck. The ratings outlook is negative. SMK SPEEDY: Amends Repayment Terms of Senior Subordinated Notes --------------------------------------------------------------- SMK Speedy International Inc. received approval on Feb. 16, 2006, from its bank and a majority of holders of its Senior Subordinated Notes to amend certain covenant and extend dates on repayment terms under the note indenture. This will provide the Company with financial flexibility until the closing of the sale and leaseback transaction announced on Jan. 26, 2006. The proceeds from the successful completion of this transaction expected to close in late March or early April as reported previously will be substantially used to provide full and early repayment of the $19 million principal and $2.6 million of the deferred interest to the Senior Subordinated Noteholders. Headquartered in Toronto, Ontario, SMK Speedy International Inc. -- http://www.speedy.com/-- is a leading automobile service specialist with 88 company operated and 32 franchise stores under contracts with SMK Speedy International Inc. or 984781 Alberta Ltd. a subsidiary of 578098 Alberta Ltd. At Oct. 1, 2005, SMK's balance sheet showed a stockholders' deficit of $8.0 million, compared to $6.4 million deficit at Jan. 1, 2005. SOUNDVIEW HOME: Fitch Shaves Rating on Class B Certs. to BB+ ------------------------------------------------------------ Fitch Ratings rates these Soundview Home Equity Loan Trust issues: Series 2000-1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B downgraded to 'BB+' from 'BBB'; Series 2003-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; The mortgage loans consist of fixed- and adjustable-rate mortgages extended to subprime borrowers and are secured by first and second liens, primarily on one- to four-family residential properties. As of the January 2006 distribution date, the 2000-1 and 2003-2 transactions are seasoned 67 and 25 months respectively. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) are approximately 12% and 40% respectively. All of the loans in series 2000-1 were originated by ContiFinancial or its affiliates, and are serviced by Litton Loan Servicing (rated 'RPS1' by Fitch). The loans in series 2003- 2 were originated by Impac and Residential Mortgage Assistance Enterprise, LLC, and are serviced by Impac (not rated by Fitch) and GMAC Mortgage Co. (rated 'RPS1', Rating Watch Evolving, by Fitch). The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $168 million of outstanding certificates. The downgrade on the class B certificate in series 2000-1 reflects deterioration between credit enhancement and expected losses and affects approximately $2.356 million in outstanding certificates. Given the high outstanding delinquencies for the pool, Fitch does not feel that the protection offered by the overcollateralization of the transaction is sufficient to maintain the B bond at an investment grade rating. The OC is currently approximately $750,000 less than its target amount, and it is projected that this protection will continue to deteriorate. Additionally, the issue will fail its cumulative loss trigger for its remaining life, causing the transaction to pay the bonds sequentially. Fitch will continue to closely monitor these transactions. Further information regarding current delinquency, loss, and credit enhancement statistics is available on the Fitch Ratings website at http://www.fitchratings.com/ SOUTHHAVEN POWER: Court Extends Plan-Filing Period to July 17 ------------------------------------------------------------- Southaven Power, LLC, sought and obtained from the U.S. Bankruptcy Court for the Western District of North Carolina more time to file a chapter 11 plan without interference from other parties-in- interest. The Court extended the Debtor's exclusive period to file a chapter 11 plan until July 17, 2006. The Court also extended the Debtor's exclusive period to solicit acceptances of that plan until Sept. 11. As reported in the Troubled Company Reporter on Nov. 30, 2005, the most important asset in the Debtor's estate is the ongoing arbitration against PG&E Energy Trading-Power, L.P., nka NEGT Energy Trading - Power, L.P. The arbitration relates to a Dependable Capacity and Conversion Services Agreement dated June 1, 2000, with ET Power. ET Power's obligations under the Agreement were partially guaranteed by its parent, PG&E National Energy Group, nka National Energy & Gas Transmission, Inc. ET Power filed a lawsuit asserting an $8 million breach of contract claim against the Debtor. In turn, the Debtor asserted a $500 million rejection damage claim against ET Power and a $176.2 million claim against NEGT, as guarantor. The litigation was subject to an arbitration proceeding scheduled for Oct. 17 to Oct. 28, 2005. The Debtor explained that although the arbitration proceeding took place on schedule, it was not concluded. According to the Debtor, the hearings have been scheduled to resume on Feb. 6 to Feb. 24, 2006, and that even if the hearing was to proceed on the February schedule, the arbitration may not be concluded until the end of May 2006. The Debtor disclosed that until the arbitration proceeding is resolved, it has no way to determine the value of its assets and thus cannot determine which creditors are entitled to share. To put it bluntly, the Debtor said that it is impossible to file a plan of reorganization until the arbitration proceeding is resolved. The Debtor further disclosed that the extension will give it an opportunity to craft and prosecute a plan of reorganization that reflects the result of the arbitration proceeding. Headquartered in Charlotte, North Carolina, Southaven Power, LLC, operates an 810-megawatt, natural gas-fired electric power plant located in Southaven, Mississippi. The Company filed for chapter 11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141). Mark A. Broude, Esq., at Latham & Watkins LLP represents the Debtor in its restructuring efforts, and Hillary B. Crabtree, Esq., at Moore & Van Allen, PLLC, represents the Debtor in litigation against PG&E Energy Trading-Power, L.P. To date, no official committee of unsecured creditors has been appointed in the Debtor's case. Erie Power Technologies, Inc. and Centro Inc., have expressed interest in serving on an official committee. No other creditors have indicated their interest or willingness, and the U.S. Bankruptcy Administrator for the Western District of North Carolina won't appoint a two-member committee. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. STONE ENERGY: Receives Notice of Non-Compliance from Bondholders ---------------------------------------------------------------- As of Feb. 15, 2006, Stone Energy Corporation (NYSE: SGY) received notice of non-compliance from holders of over 25% of the outstanding principal amount of its 6.75% Senior Subordinated Notes Due 2014. The notice is for failure to file its SEC reports and financial statements; however, under the indenture, the delay in filing the reports does not automatically result in an event of default. Stone previously informed the trustee of the delay in filing its 2005 third quarter 10-Q and was not given notice by the trustee. Stone believes that it will be in a position to file its financials in mid-March 2006, which would resolve this issue, although no assurance can be given as to the actual filing date. Stone has 60 days from the receipt of this notice to cure a default, if a default has occurred. There is an aggregate principal amount of $200 million of 6.75% Senior Subordinated Notes Due 2014 outstanding. As previously stated, if there has been a default under these Notes, Stone has 60 days from the receipt of notice of such default to cure the default. If there is a default and the default is not cured during the 60 day cure period, the trustee, or the holders of at least 25% in aggregate principal amount of these Notes by notice to the trustee and the Company, may declare the principal amount of these Notes to be due and payable, and such principal would be due and payable immediately. If an acceleration of these Notes were to occur, Stone may be unable to meet its payment obligations with respect to these Notes. In addition, the acceleration of these Notes would result in a cross-default under Stone's indenture for its 8.25% Senior Subordinated Notes Due 2011 and its bank credit agreement. As of Feb. 17, 2006, Stone had an aggregate principal amount of $200 million of 8.25% Senior Subordinated Notes Due 2011 outstanding, and borrowings and letters of credit of $186 million outstanding under its bank credit agreement. Headquartered in Lafayette, Louisiana, Stone Energy Corporation -- http://www.stoneenergy.com/-- is an independent oil and gas company and is engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties located in the conventional shelf of the Gulf of Mexico, deep shelf of the GOM, deep water of the GOM, Rocky Mountain Basins and the Williston Basin. * * * As reported in the Troubled Company Reporter on Dec. 9, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on independent oil and gas exploration and production company Stone Energy Corp. to 'B+' from 'BB-'. The ratings remain on CreditWatch with negative implications. Stone Energy Corp.'s 8.25% Senior Subordinated Notes due 2011 carry Moody's Investor Services' B3 rating and Standard & Poor's Ratings Services' B- rating. STONERIDGE INC: Posts Net Income of $900,000 for Fiscal Year 2005 ----------------------------------------------------------------- Stoneridge, Inc., reported its financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. For the three months ended Dec. 31, 2005, Stoneridge's net loss decreased to $3 million from a net loss of $114.9 million for the same period in 2004. The fourth-quarter 2004 net loss includes a pre-tax, non-cash goodwill impairment charge of $183.5 million ($119.8 million after tax benefits of $63.7 million). For the year ended Dec. 31, 2005, the Company's net sales decreased to $671.6 million from net sales of $681.8 million for the year ended Dec. 31, 2004. The decline in net sales is predominantly attributed to reduced North American light vehicle production by the traditional domestic manufacturers and product price reductions. Net income for fiscal year 2005 was $900,000 compared to a net loss of $92.5 million in 2004. The 2004 net loss includes the non-cash goodwill impairment charge. Excluding the goodwill impairment charge, 2005 net income declined $26.3 million year-over-year. The decrease was primarily the result of operating inefficiencies, restructuring costs, product price reductions, non-cash losses from bad debt reserves resulting from customer bankruptcies, raw material cost increases and a higher effective tax rate. During 2005, the Company recorded valuation allowances to offset certain deferred tax assets that were established in prior years, which resulted in a higher effective tax rate for the full year. Net cash provided by operating activities for the year ended Dec. 31, 2005 was $19.1 million, compared with $48.3 million for the same period in 2004. The decrease in cash provided by operating activities was primarily due to the decrease in net income, excluding the impact of non-cash goodwill charges. As of Dec. 31, 2005, Stoneridge reported total assets of $462,115,000 and total liabilities of $101,991,000. Headquartered in Warren, Ohio, Stoneridge, Inc. -- http://www.stoneridge.com-- is a leading independent designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the automotive, medium-duty and heavy-duty truck, agricultural and off-highway vehicle markets. As reported in the Troubled Company Reporter on Nov. 3, 2005, Standard & Poor's Ratings Services revised its outlook on Warren, Ohio-based Stoneridge Inc. to negative from stable. The ratings on the company, including the 'BB-' corporate credit rating, were affirmed. SUPERCLICK INC: Bedinger & Company Raises Going Concern Doubt ------------------------------------------------------------- Bedinger & Company expressed substantial doubt about Superclick, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended Oct. 31, 2005. The auditing firm points to the company's recurring losses from operations. For the year ended Oct. 31, 2005, the company reported revenues of $3,205,696 compared to $2,552,739 for the year ended Oct. 31, 2004. The company posted a $4,140,235 net loss for the year ended Oct. 31, 2005 versus a net loss of $979,395 for the year ended Oct. 31, 2004. Recurring Losses The company says that from its inception to Oct. 31, 2005, it incurred an accumulated deficit of $5,496,510, and expects to incur additional losses for the foreseeable future. The company relates that this loss has been incurred through: * a combination of professional fees and expenses supporting the company's plans to acquire synergistic businesses, and * continued losses of its operating subsidiary. The company discloses that it has financed its operations since inception primarily through equity financing. During the twelve months ended Oct. 31, 2005, the company only had a net increase in cash of $21,959. Total cash resources as of Oct. 31, 2005 was $497,438 compared with $475,479 at Oct. 31, 2004. Liquidity Plan Recent operating results give rise to concerns about the Company's ability to generate cash flow from operations sufficient to sustain ongoing viability. Bedinger reported a net loss for the year ended October 31, 2005 of $4,140,235, while cash used for operations was $1,838,615. During the year ended Oct. 31, 2005, the company: (a) exercised 100,000 of the series "A" Warrants were that resulted in $60,000 net proceeds and the issuance of 60,000 restricted common shares; (b) exercised 200,000 of the series "A" Warrants that resulted in $90,000 net proceeds and the issuance of 200,000 restricted common shares; and (c) issued 127,067 shares of Common Stock in exchange for services with a total value of $96,475. The company reported that 966,668 "B" Warrants were unexercised as of Oct. 31, 2005. As of Oct. 31, 2005, the company's balance sheet showed $2,145,135 in total assets and $2,927,112 in total debts resulting to a stockholders' deficit of $781,977. Superclick, Inc. -- http://www.superclick.com/-- and its wholly owned Montreal-based subsidiary, Superclick Networks, Inc., develops, manufactures, markets and supports the Superclick Internet Management System (SIMS) in worldwide hospitality, multi- tenant unit (MTU) and hospital markets. Superclick provides hotels, MTU residences and hospital patients and visitors with cost-effective Internet access and IP-based services utilizing high-speed DSL, CAT5 wiring, wireless and dial-up modem technologies. Over 100 InterContinental Hotels Group properties have Superclick systems including Candlewood Suites, Crowne Plaza, Holiday Inn, Holiday Inn Express, Holiday Inn SunSpree, InterContinental and Staybridge Suites in Canada and the United States. TITANIUM METALS: Declares Dividend Payable on March 15 ------------------------------------------------------ Titanium Metals Corporation's (NYSE: TIE) board of directors has declared a quarterly dividend of $0.84375 per share on its 6-3/4% Series A Preferred Stock, payable on March 15, 2006, to stockholders of record as of the close of business on March 1, 2006. As reported in the Troubled Company Reporter on Feb. 17, 2006, the Company expects full year 2005 operating income of $170 million to $175 million, compared to operating income of $43.0 million for 2004. The increase in operating income primarily results from higher selling prices and volumes for both melted and mill products, offset in part by higher raw material costs. Operating income in 2004 has been restated for the effects of the Company's previously reported change its method for inventory costing from the last-in, first-out cost method to the specific identification cost method for the approximate 40% of the Company's consolidated inventories previously accounted for under the LIFO cost method. The Company expects full year 2005 net income attributable to common stockholders of approximately $142 million to $147 million, compared to $43.3 million (as restated) for 2004. The 2005 net income attributable to common stockholders includes: (1) a $13.9 million pre-tax non-operating gain on the sale of certain property; and (2) a $51 million income tax benefit related to the reversal of the Company's deferred tax valuation allowance in the U.S. and the U.K. The Company's backlog at the end of December 2005 was a record $870 million, a $160 million (23%) increase over the $710 million backlog at the end of September 2005 and a $420 million (93%) increase over the $450 million backlog at the end of December 2004. Headquartered in Denver, Colorado, Titanium Metals Corporation -- http://www.timet.com/-- is a worldwide producer of titanium metal products. * * * As reported in the Troubled Company Reporter on Mar. 18, 2005, Standard & Poor's Ratings Services raised its corporate credit rating on Denver, Colorado-based Titanium Metals Corp., to 'B+' from 'B'. Standard & Poor's also raised its preferred stock rating to 'CCC+' from 'CCC'. S&P says the outlook is stable. US CAN: Argentinean Asset Sale Spurs S&P to Review B Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on U.S. Can Corp. and its wholly owned subsidiary, United States Can Co., on CreditWatch with developing implications. This follows the announcement that U.S. Can has entered into a definitive agreement to sell its U.S. and Argentinean operations to Ball Corp. (BB+/Stable/--) for about 1.1 million shares of Ball common stock and the repayment of approximately $550 million of U.S. Can's debt. U.S. Can's operations in Argentina and the U.S. have annual sales of about $600 million and represent the majority of the company. The current shareholders of U.S. Can, Berkshire Partners will retain its smaller European businesses, including aerosol and metal can operations. The transaction is expected to close by the end of the first quarter, subject to customary closing conditions. Lombard, Ill.-based U.S. Can had total debt outstanding of about $555 million at Sept. 30, 2005. Ball will refinance U.S. Can's existing debt at closing of the transaction. Subsequently, ratings on the company's bank debt, senior secured second-priority notes, and subordinated debt will be withdrawn. "The CreditWatch with developing implications indicates that the corporate credit rating could be raised, lowered, or affirmed following an evaluation of the scaled-down business profile and discussions with management regarding its financial strategies for the remaining European business," said Standard & Poor's credit analyst Liley Mehta. S&P will monitor developments and resolve the CreditWatch listing upon completion of the transaction. The ratings on U.S. Can and its wholly owned subsidiary reflect the company's very aggressive debt leverage and its weak business profile as a leading producer of general-line metal containers. In its current form, the business generates annual revenues of about $880 million, through the production of steel aerosol and other general-line metal containers primarily for personal care, household, automotive, paint, industrial, and specialty packaging products in the U.S., Europe, and Latin America; plastic containers in the U.S.; and metal food cans in Europe. WACHOVIA BANK: S&P Assigns Low-B Ratings to Six Cert. Classes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Wachovia Bank Commercial Mortgage Trust's $4.2 billion commercial mortgage pass-through certificates series 2006-C23. The preliminary ratings are based on information as of Feb. 16, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A-PB, A-4CPI, A-4, A-1A, A-M, A-J, B, C, D, E, and F are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.26x, a beginning LTV of 105.8%, and an ending LTV of 95.2%. For class A-4CPI, Standard & Poor's rating does not apply to the receipt of interest at the floating rate, but rather Standard & Poor's rating applies only to the receipt of interest by the trust at the fixed rate payable to the class A-4CPI "regular interest", as more specifically described in the related pooling and servicing agreement. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, Standard & Poor's Web- based credit analysis system, at http://www.ratingsdirect.com/ The presale can also be found on Standard & Poor's Web site at http://www.standardandpoors.com/Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned Wachovia Bank Commercial Mortgage Trust Preliminary Recommended Credit Class Rating Amount ($) Support (%) ----- ------ ----------- ------------------ A-1 AAA 105,862,000 30.000 A-2 AAA 137,308,000 30.000 A-3 AAA 62,705,000 30.000 A-PB AAA 252,070,000 30.000 A-4CPI AAA 100,000,000 30.000 A-4 AAA 1,680,707,000 30.000 A-1A AAA 622,245,000 30.000 A-M AAA 422,985,000 20.000 A-J AAA 274,941,000 13.500 B AA+ 37,011,000 12.625 C AA 52,873,000 11.375 D AA- 37,011,000 10.500 E A+ 31,724,000 9.750 F A 42,299,000 8.750 G A- 52,873,000 7.500 H BBB+ 52,873,000 6.250 J BBB 58,160,000 4.875 K BBB- 52,874,000 3.625 L BB+ 10,574,000 3.375 M BB 21,150,000 2.875 N BB- 15,862,000 2.500 O B+ 10,574,000 2.250 P B 15,862,000 1.875 Q B- 15,862,000 1.500 S NR 63,448,337 0.000 X-P* AAA 4,069,641,000 N/A X-C* AAA 4,229,853,337 N/A * Interest-only class with a notional amount NR -- Not rated N/A -- Not applicable WALTER INDUSTRIES: Sets Price of Common Stock at $64.75 Per Share ----------------------------------------------------------------- Walter Industries, Inc. (NYSE: WLT) priced an offering of 2.3 million shares of its common stock. The price to the public is $64.75 per share. The Company has also granted to the underwriters of this offering an option to purchase up to an additional 345,000 shares, within 30 days after the date of the underwriting agreement, solely to cover over-allotments. Walter Industries will receive approximately $146.6 million net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses (approximately $168.6 million if the underwriters' over-allotment option is exercised in full). The Company intends to use the net proceeds from this offering to repay approximately $100 million of the term loan outstanding under the 2005 Walter Credit Agreement and use the balance for general corporate purposes. The Company intends to use the net proceeds from any shares sold pursuant to the underwriters' over-allotment option for general corporate purposes, which may include additional repayment of the term loan. The offering is made under a shelf registration statement relating to the Company's common stock, filed with the Securities and Exchange Commission on Feb. 16, 2006. A prospectus supplement relating to the offering will be filed with the Securities and Exchange Commission. Banc of America Securities LLC and Morgan Stanley are acting as joint book-running managers for the offering. The offering is being made only by means of a prospectus, copies of which may be obtained from: Banc of America Securities LLC Attn: Prospectus Department 100 West 33rd Street New York, NY 10001 Telephone (800) 294-1322 - or - Morgan Stanley & Co. Incorporated Prospectus Department 180 Varick Street, 2nd Floor New York, NY 10014 Telephone (866) 718-1649 prospectus@morganstanley.com Headquartered in Tampa, Florida, Walter Industries, Inc. -- http://www.walterind.com/-- is a diversified company with annual revenues of $2.7 billion. The Company is a leader in water infrastructure, flow control and water transmission products, with respected brand names such as Mueller, U.S. Pipe, James Jones, Henry Pratt and Anvil. The Company is also a significant producer of high-quality metallurgical coal and natural gas for worldwide markets and is a leader in affordable homebuilding and financing. The Company employs approximately 10,000 people. Walter Industries, Inc.'s 3.75% Convertible Senior Subordianted Notes due 2024 carry Moody's Investors Service's B2 rating and Standard & Poor's B- rating. WESTERN GAS: To Buy Coal Bed Properties in Wyoming for $136.7 Mil. ------------------------------------------------------------------ Western Gas Resources, Inc. (NYSE: WGR) signed a purchase and sale agreement to purchase certain coal bed methane properties and related gathering assets in the Big George fairway of the Powder River Basin of Wyoming from an undisclosed seller for approximately $136.7 million before adjustments. Closing is expected to occur on or before March 15, 2006 and will be funded with amounts available under the company's revolving credit facility. The purchase price includes the drilling rights on approximately 40,000 gross and net acres and 110-drilled wells. Approximately 70 of the drilled wells are currently dewatering and the remaining 40 wells are awaiting hookup. The Company expects to drill an additional 145 Big George locations of which 75 to 80 wells will be drilled in 2006. The newly acquired acreage is located in two areas in the western portion of the Big George fairway and is approximately 10 to 12 miles from Western's Kingsbury development area. Kingsbury is currently producing 72 gross million cubic feet per day (MMcfd) from the Big George coal. Gas production is expected to begin in the third quarter of 2006. Net risked probable and possible reserves are estimated to be 109 billion cubic feet (Bcf). The Company estimates additional upside potential of 50 to 100 Bcf from other recompletion zones. The acquisition also includes a 12-mile gathering line delivering into Fort Union Gas Gathering. "These assets are an excellent fit with our existing leasehold and production in the Big George fairway of the Powder River Basin CBM play," Peter Dea, President and Chief Executive Officer of Western, stated. "At Dec. 31, 2005, we had drilling rights on 523,000 net acres in the Powder River Basin CBM play and had 120 MMcfd of net production. This acquisition offers the same low-risk development that the Company has been successfully drilling for the last eight years in the Powder River Basin." Headquartered in Denver, Colorado, Western Gas Resources, Inc. -- http://www.westerngas.com/-- is an independent natural gas explorer, producer, gatherer, processor, transporter and energy marketer. The Company's producing properties are located primarily in Wyoming, including the developing Powder River Basin coal bed methane play, where Western is a leading acreage holder and producer, and the rapidly growing Pinedale Anticline. The Company also owns and operates natural gas gathering, processing and treating facilities in major gas-producing basins in the Rocky Mountain, Mid-Continent and West Texas regions of the United States. * * * Moody's Investors Service currently assigned these ratings: * Long-term corporate family rating - Ba1 * Bank loan debt rating - Ba1 * Senior unsecured debt rating - Ba2 * Senior subordinated rating - Ba3 * Subordinated debt rating - Ba3 * Preferred stock rating - B1 Standard & Poor's currently assigned these ratings: * Long-term foreign issuer credit rating - BB+ * Long-term local issuer credit rating - BB+ WESTERN IOWA: Can Employ Frankel Zacharia as Accountant ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nebraska gave Western Iowa Limestone, Inc., permission to employ Frankel, Zacharia, Arnold, Nissen, Stamp & Reinsch, L.L.C. as its accountant. The Court approved the Frankel Zacharia's employment subject to its findings that: 1) the Court's order is not a determination that the services are necessary; 2) no determination is made that the person or entity being employed represents no adverse interest; and 3) no fee agreement between the applicant and the person or entity being employed is binding on the Court. Frankel Zacharia will: 1) advise the Debtor on taxation matters and prepare its various tax returns; 2) advise the Debtor on all financial accounting and finance matters in connection with its chapter 11 case; and 3) render all other accounting services to the Debtor that are necessary in its chapter 11 case. William A. Startzer, a member at Frankel Zacharia, is one of the lead professionals from the Firm performing services to the Debtor. Bankruptcy Court records don't show if Frankel Zacharia received a retainer, nor do they disclose the Firm's professionals' compensation rates. Headquartered in Harlan, Iowa, Western Iowa Limestone, Inc., is a construction company and a producer of limestone. The Company filed for chapter 11 protection on Dec. 12, 2005 (Bankr. D. Neb. Case No. 05-85930). Richard D. Myers, Esq., and Alan E. Pedersen, Esq., McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. WILLIAM CALO: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: William Calo & Associates Inc. Road 849, Km. 2.2 Bo. Santo Domingo San Juan, Puerto Rico 00924 Bankruptcy Case No.: 06-00409 Chapter 11 Petition Date: February 16, 2006 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Antonio I. Hernandez Rodriguez, Esq. Antonio I. Hernandez Law Office P.O. Box 8509 San Juan, Puerto Rico 00910-0509 Tel: (787) 250-0575 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Margarita Borrero Torts Judicial $2,750,000 Comunidad Las Dolores Action Calle Brasil #73 Rio Grande, PR 00745 Doral Bank Commercial Loan $649,937 P.O. Box 308 Cata�o, PR 00963 G.E. Capital Equipment Loan $500,000 P.O. Box 70256 San Juan, PR 00936 Citi Capital De P.R. Bank Loan $177,000 Internal Revenue Services Debt to $170,000 Government Popular Auto Motor Vehicles $160,000 Energy Contractors Merchandise $86,035 Purchase R&F Asphalt Merchandise $68,225 Purchase Mocoroa Y Castellanos Merchandise $59,374 Purchase Municipio De Coamo Debt to $25,180 Government Ford Motor Credit Motor Vehicle $21,280 Prime Control Merchandise $17,000 Purchase Ing. Fabio Suero Diseno Professional $12,000 Racho Pocho Services Kash Petroleum Merchandise $11,870 Purchase West India Merchandise $11,000 Purchase Ready Mix Merchandise $10,032 Purchase Vasailo Bank Loan $8,168 WINN-DIXIE: Court Allows Set-Off of Claims with Dannon Company -------------------------------------------------------------- Before Winn-Dixie Stores, Inc., and its debtor-affiliates filed for bankruptcy, The Dannon Company, Inc., and the Debtors entered into various transactions related to the food services business. The transactions are related to Dannon's sale of yogurt and other food products to the Debtors. In connection with the sales, the Debtors were entitled to a credit for purchases from Dannon that were damaged or otherwise could not be sold to a customer. In addition, Dannon agreed to pay a fee to the Debtors in exchange for their placement of Dannon Product at a premium location on the shelves of their stores. As of the Petition Date, the Debtors owed $987,591 to Dannon for the purchases and Dannon owed $770,140 to the Debtors, consisting of $404,140 for Unsaleable Goods and $366,000 for Slotting Fees. In an agreed order, the U.S. Bankruptcy Court for the Middle District of Florida lifts the automatic stay to allow Dannon to set off its claims against its obligations to the Debtors. The Debtors and Dannon agree that Claim Nos. 1294 and 5426 filed by Dannon are disallowed in their entirety. Dannon's Claim No. 5427 is reduced to $141,734: * $114,294 of Claim No. 5427 will be deemed an allowed reclamation claim payable in full as an administrative claim; and * $27,440 of Claim No. 5427 will be deemed to be an allowed unsecured claim payable pursuant to a confirmed plan of reorganization. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Linpro Amends Demand for Rent Payment to $270,951 ------------------------------------------------------------- As previously reported in the Troubled Company Reporter on Nov 25, 2005, Linpro Investments, Inc., and Winn-Dixie Stores, Inc., and its debtor-affiliates are parties to a lease dated May 1, 1996, wherein the Debtors lease Store No. 223 from Linpro. Store No. 223 is a store targeted for sale or closure pursuant to the Debtors' footprint strategy. The Debtors rejected the Lease on Dec. 12, 2005. Linpro amended its request for payment of postpetition rent concerning its lease with the Debtors to include amounts that have accrued since the original request up to the Rejection Date. Accordingly, Linpro asks the U.S. Bankruptcy Court for the Middle District of Florida to compel the Debtors to pay Postpetition Rent totaling $270,951, plus reasonable attorneys' fees and other monetary obligations that continue to accrue until the Rejection Date. The $270,951 consists of: -- $109,452 in guaranteed rental, -- $11,415 in insurance premiums, -- $103,318 in ad valorem taxes, and -- $46,765 in common area and maintenance charges. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). * BOND PRICING: For the week of Feb. 13 - Feb. 17, 2006 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 64 Adelphia Comm. 7.750% 01/15/09 68 Adelphia Comm. 7.875% 05/01/09 67 Adelphia Comm. 8.125% 07/15/03 67 Adelphia Comm. 8.375% 02/01/08 69 Adelphia Comm. 9.250% 10/01/02 65 Adelphia Comm. 9.375% 11/15/09 69 Adelphia Comm. 9.500% 02/15/04 64 Adelphia Comm. 9.875% 03/01/05 65 Adelphia Comm. 9.875% 03/01/07 69 Adelphia Comm. 10.250% 06/15/11 71 Adelphia Comm. 10.250% 11/01/06 67 Adelphia Comm. 10.500% 07/15/04 69 Adelphia Comm. 10.875% 10/01/10 70 Allegiance Tel. 11.750% 02/15/08 24 Allegiance Tel. 12.875% 05/15/08 27 Amer Color Graph 10.000% 06/15/10 72 American Airline 9.980% 01/02/13 69 Ames Dept Stores 10.000% 04/15/06 0 AMR Corp. 10.290% 03/08/21 73 Anker Coal Group 14.250% 09/01/07 0 Antigenics 5.250% 02/01/25 58 Anvil Knitwear 10.875% 03/15/07 46 AP Holdings Inc 11.250% 03/15/08 15 Archibald Candy 10.000% 11/01/07 7 Armstrong World 6.350% 08/15/03 66 Armstrong World 6.500% 08/15/05 67 Armstrong World 7.450% 05/15/29 66 Asarco Inc. 7.875% 04/15/13 61 Asarco Inc. 8.500% 05/01/25 57 At Home Corp. 4.750% 12/15/06 1 ATA Holdings 12.125% 06/15/10 4 ATA Holdings 13.000% 02/01/09 5 Atlantic Coast 6.000% 02/15/34 12 Atlas Air Inc 8.770% 01/02/11 57 Autocam Corp. 10.875% 06/15/14 70 Avado Brands Inc 11.750% 06/15/09 1 Aviation Sales 8.125% 02/15/08 54 Avondale Mills 10.250% 07/01/13 72 Banctec Inc 7.500% 06/01/08 71 Bank New England 8.750% 04/01/99 7 Bank New England 9.500% 02/15/96 5 Big V Supermkts 11.000% 02/15/04 0 BTI Telecom Corp 10.500% 09/15/07 52 Budget Group Inc. 9.125% 04/01/06 0 Builders Transpt 8.000% 08/15/05 0 Burlington North 3.200% 01/01/45 60 Cell Therapeutic 5.750% 06/15/08 60 Charter Comm Hld 8.625% 04/01/09 74 Charter Comm Hld 10.000% 05/15/11 51 Charter Comm Hld 10.250% 01/15/10 67 Charter Comm Hld 11.125% 01/15/11 53 Charter Comm Inc 5.875% 11/16/09 73 Chic East Ill RR 5.000% 01/01/54 50 CIH 10.000% 05/15/14 53 Ciphergen 4.500% 09/01/08 75 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/03 0 Collins & Aikman 10.750% 12/31/11 30 Color Tile Inc 10.750% 12/15/01 0 Comcast Corp. 2.000% 10/15/29 40 Coyne Intl Enter 11.250% 06/01/08 72 CPNL-Dflt12/05 4.000% 12/26/06 10 CPNL-Dflt12/05 4.750% 11/15/23 27 CPNL-Dflt12/05 6.000% 09/30/14 22 CPNL-Dflt12/05 7.625% 04/15/06 44 CPNL-Dflt12/05 7.750% 04/15/09 48 CPNL-Dflt12/05 7.750% 06/01/15 13 CPNL-Dflt12/05 7.875% 04/01/08 45 CPNL-Dflt12/05 8.500% 02/15/11 30 CPNL-Dflt12/05 8.625% 08/15/10 30 CPNL-Dflt12/05 8.750% 07/15/07 44 CPNL-Dflt12/05 10.500% 05/15/06 46 Cray Inc. 3.000% 12/01/24 75 Cray Research 6.125% 02/01/11 29 Curative Health 10.750% 05/01/11 61 Dal-Dflt09/05 9.000% 05/15/16 22 Dana Corp 5.850% 01/15/15 66 Dana Corp 7.000% 03/01/29 68 Dana Corp 7.000% 03/15/28 67 Decorative Home 13.000% 06/30/02 0 Decrane Aircraft 12.000% 09/30/08 73 Delco Remy Intl 9.375% 04/15/12 41 Delco Remy Intl 11.000% 05/01/09 46 Delphi Auto System 6.500% 05/01/09 54 Delphi Auto System 7.125% 05/01/29 55 Delphi Corp 6.500% 08/15/13 53 Delphi Trust II 6.197% 11/15/33 28 Delta Air Lines 2.875% 02/18/24 22 Delta Air Lines 7.700% 12/15/05 23 Delta Air Lines 7.900% 12/15/09 23 Delta Air Lines 8.000% 06/03/23 22 Delta Air Lines 8.187% 10/11/17 61 Delta Air Lines 8.300% 12/15/29 24 Delta Air Lines 8.540% 01/02/07 29 Delta Air Lines 8.540% 01/02/07 38 Delta Air Lines 8.540% 01/02/07 54 Delta Air Lines 8.540% 01/02/07 61 Delta Air Lines 9.000% 05/15/16 22 Delta Air Lines 9.200% 09/23/14 69 Delta Air Lines 9.250% 03/15/22 22 Delta Air Lines 9.250% 12/27/07 17 Delta Air Lines 9.300% 01/02/10 54 Delta Air Lines 9.375% 09/11/07 70 Delta Air Lines 9.480% 06/05/06 47 Delta Air Lines 9.750% 05/15/21 22 Delta Air Lines 9.875% 04/30/08 64 Delta Air Lines 10.000% 06/01/09 56 Delta Air Lines 10.000% 06/01/10 49 Delta Air Lines 10.000% 06/01/10 64 Delta Air Lines 10.000% 06/01/11 28 Delta Air Lines 10.000% 06/05/11 54 Delta Air Lines 10.000% 06/18/13 63 Delta Air Lines 10.000% 08/15/08 21 Delta Air Lines 10.000% 12/05/14 46 Delta Air Lines 10.060% 01/02/16 66 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.080% 06/16/08 58 Delta Air Lines 10.125% 01/02/10 39 Delta Air Lines 10.125% 05/15/10 22 Delta Air Lines 10.125% 06/16/10 58 Delta Air Lines 10.125% 06/16/10 58 Delta Air Lines 10.375% 02/01/11 22 Delta Air Lines 10.375% 12/15/22 22 Delta Air Lines 10.430% 01/02/11 20 Delta Air Lines 10.500% 04/30/16 62 Delta Air Lines 10.790% 03/26/14 20 Delta Mills Inc. 9.625% 09/01/07 39 Discovery Zone 13.500% 08/01/02 0 Diva Systems 12.625% 03/01/08 1 Dura Operating 9.000% 05/01/09 52 Dura Operating 9.000% 05/01/09 54 DVI Inc. 9.875% 02/01/04 15 Eagle Food Centre 11.000% 04/15/05 1 Eagle-Picher Inc 9.750% 09/01/13 70 Encompass Service 10.500% 05/01/09 0 Enrnq-Dflt05/05 7.375% 05/15/19 39 Epix Medical Inc. 3.000% 06/15/24 64 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 3 Fedders North AM 9.875% 03/01/14 62 Federal-Mogul Co. 7.375% 01/15/06 39 Federal-Mogul Co. 7.500% 01/15/09 39 Federal-Mogul Co. 8.160% 03/06/03 32 Federal-Mogul Co. 8.370% 11/15/01 33 Federal-Mogul Co. 8.800% 04/15/07 35 Finova Group 7.500% 11/15/09 33 FMXIQ-DFLT09/05 13.500% 08/15/05 15 Foamex L.P.-DFLT 9.875% 06/15/07 18 Ford Motor Cred 5.650% 12/20/11 73 Ford Motor Cred 5.750% 01/21/14 73 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.750% 02/21/12 73 Ford Motor Cred 5.900% 02/20/14 72 Ford Motor Cred 6.000% 01/21/14 73 Ford Motor Cred 6.000% 02/20/15 70 Ford Motor Cred 6.000% 11/20/14 70 Ford Motor Cred 6.000% 11/20/14 70 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.050% 02/20/15 72 Ford Motor Cred 6.050% 03/20/14 70 Ford Motor Cred 6.050% 04/21/14 74 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.150% 01/20/15 72 Ford Motor Cred 6.150% 12/22/14 74 Ford Motor Cred 6.250% 01/20/15 71 Ford Motor Cred 6.250% 03/20/15 74 Ford Motor Cred 6.250% 04/21/14 74 Ford Motor Cred 6.500% 08/01/18 67 Ford Motor Cred 6.625% 02/15/28 66 Ford Motor Cred 7.125% 11/15/25 68 Ford Motor Cred 7.400% 11/01/46 66 Ford Motor Cred 7.500% 08/01/26 67 Ford Motor Cred 7.500% 08/20/32 71 Ford Motor Cred 7.700% 05/15/97 66 Ford Motor Cred 7.750% 06/15/43 65 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 73 General Motors 7.400% 09/01/25 65 General Motors 7.700% 04/15/16 68 General Motors 8.100% 06/15/24 67 General Motors 8.250% 07/15/23 69 General Motors 8.375% 07/15/33 71 General Motors 8.800% 03/01/21 70 General Motors 9.400% 07/15/21 72 Global Health SC 11.000% 05/01/08 1 GMAC 5.250% 01/15/14 74 GMAC 5.350% 01/15/14 75 GMAC 5.900% 01/15/19 68 GMAC 5.900% 01/15/19 71 GMAC 5.900% 02/15/19 68 GMAC 5.900% 10/15/19 74 GMAC 6.000% 02/15/19 73 GMAC 6.000% 02/15/19 74 GMAC 6.000% 03/15/19 71 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 72 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 75 GMAC 6.000% 04/15/19 73 GMAC 6.000% 09/15/19 73 GMAC 6.000% 09/15/19 73 GMAC 6.050% 08/15/19 73 GMAC 6.050% 08/15/19 74 GMAC 6.050% 10/15/19 68 GMAC 6.100% 09/15/19 74 GMAC 6.150% 08/15/19 72 GMAC 6.150% 09/15/19 72 GMAC 6.150% 10/15/19 73 GMAC 6.200% 04/15/19 71 GMAC 6.200% 11/15/19 74 GMAC 6.250% 01/15/19 71 GMAC 6.250% 04/15/19 72 GMAC 6.250% 05/15/19 70 GMAC 6.250% 07/15/19 71 GMAC 6.250% 12/15/18 74 GMAC 6.300% 08/15/19 73 GMAC 6.350% 04/15/19 71 GMAC 6.350% 07/15/19 72 GMAC 6.350% 07/15/19 73 GMAC 6.400% 11/15/19 75 GMAC 6.400% 12/15/18 74 GMAC 6.500% 02/15/20 72 GMAC 6.500% 05/15/19 74 GMAC 6.500% 11/15/18 73 GMAC 6.500% 12/15/18 74 GMAC 6.550% 12/15/19 73 GMAC 6.600% 05/15/18 73 GMAC 6.650% 02/15/13 67 GMAC 6.650% 10/15/18 75 GMAC 6.700% 06/15/19 74 GMAC 6.700% 12/15/19 74 GMAC 6.750% 03/15/20 72 GMAC 6.750% 06/15/19 74 GMAC 7.000% 06/15/22 75 GMAC 7.000% 11/15/24 75 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 72 Gulf Mobile Ohio 5.000% 12/01/56 74 Gulf States STL 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 37 Horizon Fin Corp 11.750% 05/08/09 0 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 51 Insight Health 9.875% 11/01/11 55 Insilco Corp 12.000% 08/15/07 0 Iridium LLC/CAP 10.875% 07/15/05 28 Iridium LLC/CAP 11.250% 07/15/05 29 Iridium LLC/CAP 13.000% 07/15/05 29 Iridium LLC/CAP 14.000% 07/15/05 29 Isolagen Inc. 3.500% 11/01/24 58 Jordan Industries 10.375% 08/01/07 55 JTS Corp. 5.250% 04/29/02 0 Kaiser Aluminum & Chem. 9.875% 02/15/02 51 Kaiser Aluminum & Chem. 10.875% 10/15/06 50 Kaiser Aluminum & Chem. 10.875% 10/15/06 51 Kaiser Aluminum & Chem. 12.750% 02/01/03 10 Kellstrom Inds 5.500% 06/15/03 1 Key Plastics 10.250% 03/15/07 0 Key3Media Group 11.250% 06/15/11 0 Kmart Corp. 8.540% 01/02/15 16 Kmart Corp. 8.990% 07/05/10 14 Kmart Corp. 9.350% 01/02/20 26 Kmart Funding 8.800% 07/01/10 30 Kmart Funding 9.440% 07/01/18 47 Level 3 Comm. Inc. 2.875% 07/15/10 72 Level 3 Comm. Inc. 6.000% 03/15/10 69 Level 3 Comm. Inc. 6.000% 09/15/09 74 Liberty Media 3.750% 02/15/30 56 Liberty Media 4.000% 11/15/29 60 Lifecare Holding 9.250% 08/15/13 48 Macsaver Financl 7.400% 02/15/02 3 Macsaver Financl 7.600% 08/01/07 3 MCMS Inc. 9.750% 03/01/08 0 Medquest Inc 11.875% 08/15/12 73 Merisant Co 9.500% 07/15/13 62 Metamor Worldwid 2.940% 08/15/04 1 MHS Holdings Co 16.875% 09/22/04 0 Moa Hospitality 8.000% 10/15/07 70 Mosler Inc 11.000% 04/15/03 0 Motels of Amer 12.000% 04/15/04 68 Movie Gallery 11.000% 05/01/12 61 MRS Fields 9.000% 03/15/11 70 MSX Int'l Inc. 11.375% 01/15/08 64 Muzak LLC 9.875% 03/15/09 65 Natl Steel Corp. 8.375% 08/01/06 8 Natl Steel Corp. 9.875% 03/01/09 10 New World Pasta 9.250% 02/15/09 8 Nexprise Inc. 6.000% 04/01/07 0 North Atl Trading 9.250% 03/01/12 62 Northern Pacific RY 3.000% 01/01/47 59 Northern Pacific RY 3.000% 01/01/47 59 Northwest Airlines 6.625% 05/15/23 35 Northwest Airlines 7.248% 01/02/12 13 Northwest Airlines 7.625% 11/15/23 34 Northwest Airlines 7.626% 04/01/10 61 Northwest Airlines 7.875% 03/15/08 33 Northwest Airlines 8.070% 01/02/15 70 Northwest Airlines 8.130% 02/01/14 55 Northwest Airlines 8.700% 03/15/07 35 Northwest Airlines 8.875% 06/01/06 36 Northwest Airlines 8.970% 01/02/15 26 Northwest Airlines 9.179% 04/01/10 26 Northwest Airlines 9.875% 03/15/07 35 Northwest Airlines 10.000% 02/01/09 36 NTK Holdings Inc. 10.750% 03/01/14 67 Nutritional Src. 10.125% 08/01/09 60 NWA Trust 11.300% 12/21/12 69 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 15 Osu-Dflt10/05 13.375% 10/15/09 0 O'Sullivan Ind. 10.630% 10/01/08 61 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 72 Overstock.com 3.750% 12/01/11 73 PCA LLC/PCA Fin 11.875% 08/01/09 20 Pegasus Satellite 12.375% 08/01/06 10 Pegasus Satellite 12.500% 08/01/07 10 Pegasus Satellite 13.500% 03/01/07 0 Pen Holdings Inc. 9.875% 06/15/08 62 Phar-Mor Inc. 11.720% 09/11/02 1 Piedmont Aviat 9.900% 11/08/06 0 Piedmont Aviat 10.000% 11/08/12 9 Piedmont Aviat 10.200% 05/13/12 0 Piedmont Aviat 10.250% 01/15/49 0 Piedmont Aviat 10.250% 01/15/49 0 Piedmont Aviat 10.350% 03/28/11 0 Pixelworks Inc. 1.750% 05/15/24 70 Pliant-DFLT/06 13.000% 06/01/10 24 Pliant-DFLT/06 13.000% 06/01/10 24 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 11.500% 02/15/06 0 Pope & Talbot 8.375% 06/01/13 69 Primedex Health 11.500% 06/30/08 57 Primus Telecom 3.750% 09/15/10 39 Primus Telecom 8.000% 01/15/14 66 Primus Telecom 12.750% 10/15/09 70 Psinet Inc. 10.000% 02/15/05 0 Railworks Corp. 11.500% 04/15/09 0 Read-Rite Corp. 6.500% 09/01/04 7 Refco Finance 9.000% 08/01/12 64 Reliance Group Holdings 9.000% 11/15/00 21 Reliance Group Holdings 9.750% 11/15/03 0 Renco Metals Inc 11.500% 07/01/03 0 RJ Tower Corp. 12.000% 06/01/13 69 Salton Inc. 12.250% 04/15/08 65 Scotia Pac Co 7.110% 01/20/14 73 Scotia Pac Co 7.710% 01/20/14 75 Silicon Graphics 6.500% 06/01/09 66 Solectron Corp. 0.500% 02/15/34 75 Solutia Inc 6.720% 10/15/37 75 Solutia Inc 7.375% 10/15/27 75 Source Media Inc. 12.000% 11/01/04 0 Steel Heddle 10.625% 06/01/08 0 Steel Heddle 13.750% 06/01/09 0 Sterling Chem 11.250% 04/01/07 0 Tekni-Plex Inc. 12.750% 06/15/10 59 Teligent Inc 11.500% 12/01/07 0 Thermadyne Holdings 12.500% 06/01/08 0 Tom's Foods Inc. 10.500% 11/01/04 5 Toys R Us 7.375% 10/15/18 74 Transtexas Gas 15.000% 03/15/05 0 Tribune Co 2.000% 05/15/29 73 Trism Inc 12.000% 02/15/05 0 Triton Pcs Inc. 8.750% 11/15/11 68 Triton Pcs Inc. 9.375% 02/01/11 69 Tropical SportsW 11.000% 06/15/08 10 Twin Labs Inc. 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 45 United Air Lines 7.371% 09/01/06 58 United Air Lines 7.762% 10/01/05 73 United Air Lines 7.870% 01/30/19 64 United Air Lines 8.250% 04/26/08 3 United Air Lines 9.020% 04/19/12 71 United Air Lines 9.350% 04/07/16 68 United Air Lines 9.560% 10/19/18 70 Univ Health Svcs 0.426% 06/23/20 58 Universal Stand 8.250% 02/01/06 1 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.250% 01/15/49 3 US Air Inc. 10.250% 01/15/49 7 US Air Inc. 10.250% 01/15/49 8 US Air Inc. 10.700% 01/01/49 8 US Air Inc. 10.700% 01/15/49 3 US Air Inc. 10.700% 01/15/49 25 US Air Inc. 10.750% 01/15/49 13 US Air Inc. 10.750% 01/15/49 25 US Air Inc. 10.800% 01/01/49 4 US Air Inc. 10.800% 01/01/49 27 US Air Inc. 10.900% 01/01/49 3 US Airways Pass 6.820% 01/30/14 65 Venture Hldgs 9.500% 07/01/05 1 Venture Hldgs 11.000% 06/01/07 1 Venture Hldgs 12.000% 06/01/09 0 WCI Steel Inc. 10.000% 12/01/04 54 Werner Holdings 10.000% 11/15/07 23 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 5.000% 08/01/11 72 Winstar Comm 10.000% 03/15/08 0 Winstar Comm 12.750% 04/15/10 0 World Access Inc. 13.250% 01/15/08 5 ********* 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, 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 ***