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/raid1/www/Hosts/bankrupt/TCR_Public/060223.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 23, 2006, Vol. 10, No. 46 Headlines ACANDS INC: Wants Exclusive Period Stretched to July 14 ADELPHIA COMMS: Expands Scope of Dechert's Retention ADELPHIA COMMS: Global Cable Says Plan Prematurely Ends Lawsuits ADELPHIA COMMS: Plan Voting Deadline Moved to March 6 ADI PACIFIC: Case Summary & 19 Largest Unsecured Creditors ADZONE RESEARCH: Inks Deal with Nutmeg Group to Pay Off Debt AES CORP: S&P Withdraws BB+ Corp. Credit Ratings on Subsidiaries ALASKA COMMS: S&P Rates Proposed $57 Mil. Term Loan Add-On at B+ AMERICAN MEDIA: Filing Delay Cues S&P to Put Ratings on Neg. Watch AMEROPA DEVELOPMENT: Case Summary & 3 Largest Unsecured Creditors ANCHOR GLASS: Gets Open-Ended Deadline to Decide on Leases ANCHOR GLASS: Reaches Clean-Air Act Agreement With EPA ANCHOR GLASS: Resolves Supply Spat with RTS Packaging ANDREW MARTIN: Case Summary & 8 Largest Unsecured Creditors APCO LIQUIDATING: Wants Until May 16 to Remove Civil Actions ASARCO LLC: Directed by Ct. to Pay Pinal County Treasurer $2 Mil. ASARCO LLC: Ct. Allows Property Panel to Deliberate Wingard Claim ASARCO LLC: Sells Hardshell Mine to Arizona Minerals for $8.250MM ATA AIRLINES: Gets Court Nod to Decide on ILFC & Castle Leases ATA AIRLINES: Wants to Assume Amended Qwest Agreement AZTAR CORP: Redevelopment Plan Cues Moody's Low-B Rating Review BABCOCK & WILCOX: Exits Chapter 11 Bankruptcy Protection BAREFOOT RESORT: Case Summary & 19 Largest Unsecured Creditors CALPINE CORP: Can Hire Covington as Special Counsel on Final Basis CALPINE CORP: Court Okays Use of Cash Collateral on Final Basis CALPINE CORP: Geysers & Silverado Can Pledge Assets for DIP Loan CANADIAN IMPERIAL: Fitch Affirms Individual Rating at B CASE NEW: S&P Puts BB- Rating on Proposed $350 Million Sr. Notes CITGO PETROLEUM: Says It Will Cooperate in Oil Program Probe COLLINS & AIKMAN: Committee's Deal With JP Morgan Gets Court's Nod COLLINS & AIKMAN: Objects to 118 Duplicate Claims COLLINS & AIKMAN: Landlord Demands Payment of $230,744 Tax Bill CREATIVE VISTAS: Secures $8.25 Million Refinancing CYBERCARE INC: AmerisourceBergen Wants Tardy Claims Deemed Timely DECORATIVE SURFACES: Selling Columbus Facility to Campus Partners DPL INC: Reports $52.9 Million of Net Income for 4th Quarter 2005 DYNTEK INC: Secures New Debt Financing to Increase Working Capital EDS CORP: Board of Directors Authorize $1 Billion Share Repurchase EAGLEPICHER HOLDINGS: Amends Terms of Newmont Mining Lease EAGLEPICHER HOLDINGS: Cuts GE Railcar's $231,065 Claim to $129,000 EAGLEPICHER HOLDINGS: Hires Deloitte & Touche as Auditors EMERGE CAPITAL: Names Fred Zeidman as Chairman of the Board FRUIT OF THE LOOM: Creditor Trust Ready to Make Final Distribution FUTURE MEDIA: Case Summary & 20 Largest Unsecured Creditors GMAC: Moody's Says "Stand-Alone" Profile Weakens to Mid-Ba Rating GREEN MOUNTAIN: Earns $11 Million in Year Ended Dec. 31, 2005 HEDSTROM CORP: Has Until July 14 to Object to Proofs of Claim HOLLYWOOD CASINO: Asks Court for Final Decree Closing Three Cases INTEGRATED ELECTRICAL: Court Okays Joint Administration of Cases INTEGRATED ELECTRICAL: Section 341(a) Meeting Set for March 14 INTEGRATED ELECTRICAL: U.S. Trustee Picks 3-Member Creditors Panel J.A. JONES: Trustee Wants Until April 24 to Object to Claims JAKE'S GRANITE: Files Plan of Reorganization in Arizona LL INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors LOVESAC CORP: Wants to Auction & Walk Away From 21 Leases MALLARD CABLEVISION: Entry of Final Decree Extended Until June 30 MCLEODUSA INC: Court Found Former CEO Guilty of Illegal Trading MCLEODUSA INC: Joe Ceryanec Promoted as Chief Financial Officer MEGO FINANCIAL: Chapter 7 Trustee Revises Real Property Sale Deal MERIDIAN AUTOMOTIVE: Court Okays BDO Seidman as Auditor MERIDIAN AUTOMOTIVE: Wants Until July 1 to Remove Civil Actions MERISTAR HOSPITALITY: Inks $2.6 Bil. Merger Deal with Blackstone MERISTAR HOSPITALITY: Blackstone Merger Prompts S&P's CreditWatch MERITAGE HOMES: Directors Okay $100 Mil. Share Repurchase Program MOOG INC: Closes Sale of 2,875,000 Shares of Class A Common Stock MULTIPLAN INC: Inks Pact for Acquisition by Carlyle Group MUSICLAND HOLDING: Can Maintain Existing Insurance Policies MUSICLAND HOLDING: Court Approves Abacus as Advisors & Consultants NAVISTAR INT'L: Launches Cash Tender Offers for $1.43 Bil. Notes NAVISTAR INT'L: S&P Holds BB- Corp. Credit Rating on Neg. Watch NEW WORLD: Hearing to Recognize Bermudan Proceeding Set for Today OPTIMER INT'L: Voluntary Chapter 11 Case Summary PATRON SYSTEMS: Names Martin Johnson as Chief Financial Officer PEACHTREE CASUALTY: S&P Raises Financial Strength Rating to BBpi PERFORMANCE TRANSPORTATION: Court Okays AFCO Insurance Agreement PERFORMANCE TRANSPORTATION: Hires FTI as Financial Advisors PERFORMANCE TRANSPORTATION: Taps Hodgson Russ as Co-Counsel PIER 1: S&P Rates $165 Mil. Convertible Sr. Unsecured Notes at B- PRICE OIL: Wants Court to Set March 1 as Admin. Claim Bar Date R.A.B. ENTERPRISES: Retired Debt Cues Moody's Rating Withdrawal RICHARD CHADO: Case Summary & 5 Largest Unsecured Creditors RIM SEMICONDUCTOR: Annual Shareholders Meeting Set for April 11 RISK MANAGEMENT: Court Sets March 17 as Special Claims Bar Date RONALD OLZMANN: Case Summary & 20 Largest Unsecured Creditors RUSSELL CORP: Discloses Fourth Quarter Financial Results SCOTTISH RE: Earns $58.5 Million in Quarter Ended Dec. 31 SI TANKA: Judge Hoyt Dismisses Chapter 11 Proceeding SOLUTIA INC: Financial Projections Under Joint Chapter 11 Plan SOLUTIA INC: Liquidation Analysis Under Joint Chapter 11 Plan SOLUTIA INC: Plans Estimates Claims at 20x Less Amounts Asserted SONIC AUTOMOTIVE: Completes New $1.2 Billion Credit Facility SPANISH BROADCASTING: Repays Second Lien Credit Facility STANDARD PACIFIC: S&P Affirms Subordinated Notes' Rating at B+ STEPHENS COMPANY: Case Summary & 20 Largest Unsecured Creditors STONE ENERGY: Moody's Puts Junk Rated $400MM Sr. Notes on Review SUPERB SOUND: Court Okays Sale of Louisville Store to Phase One SURETY CO: S&P Lowers Financial Strength Rating to Bpi from BBpi TORCH OFFSHORE: Administrative Claims Bar Date Set on April 3 TRUST ADVISORS: Creditors Committee Taps Murtha Cullina as Counsel TSR IMPORTS: Case Summary & 4 Largest Unsecured Creditors URBAN HOTELS: Court Okays Jonathan Hayes' Retention as Counsel URBAN HOTELS: Levene Neale Approved as Creditors Committee Counsel USG: Asbestos PD Panel Insists PI Estimation Should Not Be Stayed USG CORP: Disclosure Statement Hearing Scheduled for April 3 VILLAS AT HACIENDA: Judge Hollowell Confirms Modified Amended Plan WAMU MORTGAGE: Moody's Assigns Ba1 Rating to Class B-12 Certs. WILBERT ROSS: Case Summary & 17 Largest Unsecured Creditors WINN-DIXIE: Judge Funk Okays $1.15 Million Retention Bonus to CEO WINN-DIXIE: Wants Grossman-Dickson Settlement Agreement Approved WINN-DIXIE: Wants Open-Ended Lease Decision Deadline * Sheppard Mullin Welcomes Lucantonio Salvi as Partner in D.C. ********* ACANDS INC: Wants Exclusive Period Stretched to July 14 ------------------------------------------------------- ACandS, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to further extend, through and including the earlier of the effective date of its chapter 11 plan or June 14, 2006, the time within which it alone can file a chapter 11 plan. The Debtor also asks the Court for more time to solicit acceptances of that plan from its creditors, through the earlier of the effective date of that plan or Sept. 19, 2006. The Debtor wants to preserve its exclusive periods as it pushes its pending Plan to confirmation and to allow for any alternative structure that may result from continuing negotiations. The extension, the Debtor says, will result in a more efficient use of its estate assets and resources. Headquartered in Lancaster, Pennsylvania, ACandS, Inc., was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on September 16, 2002, (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represents the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. When the Company filed for protection from its creditors, it estimated debts and assets of over $100 million. Chapter 11 Plan Update As previously reported, Judge Fitzgerald approved the adequacy of the Debtor's Amended Disclosure Statement explaining their proposed Plan of Reorganization on Oct. 3, 2003. On Jan. 26, 2004, Judge Fitzgerald entered Proposed Findings of Fact and Conclusions of Law Re Chapter 11 Plan Confirmation (Doc. 979), recommending that the U.S. District Court deny confirmation of the Debtor's Plan. On Feb. 5, 2004, the Debtor and the Official Committee of Asbestos Personal Injury Claimants jointly filed with the District Court an objection to the Bankruptcy Court's Proposed Findings. In that filing, the Debtor and the Committee asked the District Court to reject the Bankruptcy Court's Findings and Conclusions and confirm the proposed chapter 11 plan. ADELPHIA COMMS: Expands Scope of Dechert's Retention ---------------------------------------------------- Adelphia Communications Corporation and its debtor-affiliates requested Dechert LLP to represent them in additional cases, including: * Representation of Adelphia in In the Matter of an Arbitration between Moctesuma Esparza, et al. -- Arbitration proceeding brought by the former shareholders of Buenavision Telecommunications, Inc., and Buenavision Telecommunications of Boyle Heights, Inc., against Adelphia and its former officers, alleging certain violations of federal and state securities laws and breaches of representations and warranties made in connection with the merger between Buenavision and Adelphia. Pursuant to Section 362 of the Bankruptcy Code, the action has been stayed and is not proceeding against as to the Debtors. * Representation of Adelphia in Esparza et al. v. Adelphia -- Former shareholders of Buenavision have brought an adversary proceeding against Adelphia in the bankruptcy court requesting that certain debts allegedly owed by Adelphia to the plaintiffs for alleged securities law violations be declared non-dischargeable in Adelphia's bankruptcy. * Representation of Adelphia in In the Matter of an Arbitration between Benchmark Media, Inc., v. Adelphia Communications Corp. -- Former shareholders of Benchmark Media, Inc., brought an arbitration proceeding against Adelphia asserting claims for breach of contract and fraud in the inducement in connection with a merger. Pursuant to Section 362 of the Bankruptcy Code, the action has been stayed and is not proceeding against Adelphia. * Representation of Adelphia in Searle Communications, Inc. v. Monument Colorado Cablevision, Inc., et al. -- An arbitration proceeding brought by former shareholders of Searle Communications against Monument Colorado Cablevision and Adelphia alleging claims for fraudulent concealment, fraudulent misrepresentation and rescission of a merger between the parties. Pursuant to Section 362 of the Bankruptcy Code, the action has been stayed and is not proceeding against Adelphia. * General advice with respect to In re Adelphia Communications Corp. Securities & Derivatives Litigation (MDL Proceedings), in which Adelphia is a non-party. In conjunction with its ongoing representation of Adelphia in conjunction with the matter of Adelphia v. Deloitte & Touche LLP, Dechert is also representing the Debtors' interests with respect to its claims against Deloitte & Touche LLP, in a voluntary mediation proceeding, arising out of the MDL proceedings. * Providing legal advice with respect to potential claims and actions against the Debtors' former legal counsel, Buchanan Ingersoll P.C. Robert C. Heim, Esq., a partner at Dechert, said that his firm has examined these additional matters and determined that it has no conflict of interest in representing the Debtors in these matters. Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York permits Dechert to provide the additional services to the Debtors. About Dechert Dechert LLP, an international law firm, provides general representation to its clients in numerous areas, including corporate matters, litigation, tax and government practices. Dechert has significant expertise in large-scale litigation and has received commendation for successfully litigating numerous high-stakes civil cases. The firm can be contacted at: Robert C. Heim, Esq. Dechert LLP 30 Rockefeller Plaza New York, NY 10112-2200 Tel: +1 212 698 3500 Fax: +1 212 698 3599 http://dechert.com/ About Adelphia Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Global Cable Says Plan Prematurely Ends Lawsuits ---------------------------------------------------------------- Global Cable, Inc., which buys, sells, and distributes cable television and telecommunications equipment, objects to confirmation of Adelphia Communications Corporation and its debtor-affiliates' Fourth Amended Plan of Reorganization. Global Cable had an agreement with ACOM that ACOM will sell 400,000 digital converter units to Global Cable. ACOM later breached its contract by advising Global Cable that it had no intention of honoring its commitment. As a result, Global Cable suffered $34,200,000 in damages. Global Cable filed a lawsuit seeking damages and a timely proof of claim for $34,200,000. The parties settled that dispute with ACOM agreeing to sell, and Global Cable agreeing to buy, $2,500,000 worth of converter boxes. Global Cable later complained that ACOM failed to provide the correct number of converter boxes and some converter boxes delivered were damaged. ACOM contends that it doesn't owe any money Global Cable. But ACOM also seeks to estimate the Claim at $1,000,000. ACOM's Fourth Amended Joint Plan of Reorganization provides that all holders of any claims are deemed to forever release, waive and discharge all claims as a result of the Plan being consummated. The Debtors will also obtain a discharge and release from any right of recoupment relating to the litigation. Global Cable objects to the timing of the Third Party Releases and Recoupment Discharge because it appears to prematurely terminate Global Cable of its basic due process right to assert a recoupment defense. A full-text copy of the Fourth Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?31b A full-text copy of the Fourth Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?31a Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Plan Voting Deadline Moved to March 6 ----------------------------------------------------- The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York extends the deadline for the submission of ballots and master ballots to accept or reject Adelphia Communications Corporation and its debtor-affiliates' Fourth Amended Plan of Reorganization to March 6, 2006, at 4:00 p.m., prevailing New York time. The hearing to consider confirmation of the plan is set for March 15, 2006, at 9:45 a.m. (prevailing New York time). A full-text copy of the Fourth Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?31b A full-text copy of the Fourth Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?31a Headquartered in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 122; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADI PACIFIC: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: ADI Pacific, LLC 3215 Corridor Drive Mira Loma, California 91752 Bankruptcy Case No.: 06-10305 Chapter 11 Petition Date: February 17, 2006 Court: Central District Of California (Riverside) Judge: Mitchel R. Goldberg Debtor's Counsel: J.L. Borrie, Esq. J.L. Borrie and Associates 4333 Orange Street, Suite 21 Riverside, California 92501 Tel: (909) 686-6432 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Copper Investment Unsecured Loan $386,118 Commercial Financial 15572 Fallen Oak Lane Chino Hills, CA 91709 Western States Transportation Unsecured Loan $153,519 1822 Panoramic Avenue Corona, CA 92880 Triton Distribution LLC Unsecured Loan $118,618 15572 Fallen Oak Lane Chino Hills, CA 91709 First Site Staffing Trade Debt $63,252 Fox Transport, Inc. Trade Debt $61,025 State Compensation Trade Debt $43,937 Creditors Adjustment Bureau Trade Debt $43,134 On Time Personnel Trade Debt $39,041 JCM Unlimited, Inc. Trade Debt $32,692 Finishing Solutions Trade Debt $29,972 Leaf Funding Trade Debt $25,301 Tops Staffing, Inc. Trade Debt $19,477 Kent Landsburg Co. Trade Debt $15,258 America's Staffing Trade Debt $13,027 Empire Distributors Trade Debt $11,323 Chase Business Credit Card $10,875 Southern California Edison Utility Service $10,747 DSC Logistics Trade Debt $7,799 Winner Circle Trade Debt $6,800 ADZONE RESEARCH: Inks Deal with Nutmeg Group to Pay Off Debt ------------------------------------------------------------ Citing a rapidly improving operating outlook, AdZone Research, Inc. (OTCBB:ADZR) signed an agreement to pay off a $1.2 million Convertible Debenture from The Nutmeg Group, L.L.C. "We are very pleased to have reached this agreement with Nutmeg, and dramatically reduce potential shareholder dilution," said AdZone's Chairman & CEO, Charles A. Cardona. "The Nutmeg Group, led by Randy Goulding, has been unwavering in its support of the company over the past two years. It has helped position AdZone to be where it is today, and remains a valued ally and major shareholder of the company. "It's not often that a Bulletin Board company can take a step like this," said the CEO. "It is a very proud moment for the company, and should be for all our loyal shareholders as well." Headquartered in Calverton, New York, AdZone Research, Inc. engages in the extraction of data through the monitoring of Internet Web sites. The company operates as an Internet advertising research firm that provides various market research statistics and other focused information on the Internet. The company focuses on providing Internet analysis of security related data transmissions. AdZone, through NetGet Internet monitoring technology, a subscription-based online application, accesses data from Web sites that are hosted within the United States, the United Kingdom, Europe, and Asia, and provides such data to its clients in various customizable report formats. The company markets its products and services through email distributions, direct sales contacts and its Web sites. The company hosts two Web sites at http://www.adzoneinteractive.com/and http://www.adzoneresearch.com/ As of March 31, 2005, the Company's total liabilities exceeded its total assets by $1,878,288. * * * Going Concern Doubt As reported in the Troubled Company Reporter on July 20, 2005, Aidman, Piser & Company, P.A., expressed substantial doubt about Adzone Research, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Mar. 31, 2005. The auditing firm points to the Company's significant losses and the usage of significant levels of cash for its operations. AES CORP: S&P Withdraws BB+ Corp. Credit Ratings on Subsidiaries ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB+' corporate credit ratings on The AES Corp.'s El Salvador-based electric distribution subsidiaries: * Compania de Alumbrado Electrico de San Salvador S.A. de C.V.; * Empresa Electrica de Oriente S.A. de C.V.; and * Distribuidora Electrica de Usulutan S.A. de C.V. following the payment of the outstanding $103 million initially purchased by Fortis Bank N.V./S.A. and insured by MBIA Insurance Corp. Management confirmed that the notes were refinanced with $300 million senior guaranteed notes. ALASKA COMMS: S&P Rates Proposed $57 Mil. Term Loan Add-On at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating and '3' recovery rating to Alaska Communications Systems Holdings Inc.'s proposed $57 million incremental term loan. The term loan is an add-on to the existing $375 million term loan B that was rated in January 2005. At the same time, Standard & Poor's affirmed: -- its 'B+' corporate credit rating and stable outlook; -- its 'B+' debt rating and '3' recovery rating on the company's existing $375 million senior secured bank facility; and -- its 'B+' corporate credit rating and stable outlook on Alaska Communications Systems Group Inc. The senior secured debt rating, which is the same as the corporate credit rating, along with the recovery rating, reflect Standard & Poor's expectation of meaningful (50%-80%) recovery of principal by creditors in the event of a payment default or bankruptcy. Pro forma total debt is approximately $439 million. Proceeds from the proposed incremental term loan will be used for a cash tender offer for $56.9 million aggregate principal amount of outstanding 9 7/8% senior notes due 2011, which will allow the company to reduce interest costs by roughly $3 million annually. "The ratings on ACS reflect significant competitive pressure within the limited Alaskan telecommunications market and a shareholder-oriented financial policy. Tempering factors include expectations for healthy growth in the wireless business, coupled with improved operating trends in the wireline segment," said Standard & Poor's credit analyst Allyn Arden. As capital expenditures from wireless upgrades wind down, the company is expected to produce positive discretionary cash flow in the second half of 2006. AMERICAN MEDIA: Filing Delay Cues S&P to Put Ratings on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on American Media Operations Inc. (B-/Watch Neg/--) on CreditWatch with negative implications, based on the company's need to restate its SEC Form 10-K for the fiscal year ended March 31, 2005, and its Form 10-Q for the first two quarters of 2006. Also, the company has not filed its Form 10-Q for the quarter ended Dec. 31, 2005. "The CreditWatch listing will be resolved pending a review of the company's operations, cash flow, and liquidity following the filing of its restated financials," said Standard & Poor's credit analyst Hal F. Diamond. American Media received a waiver of covenants, until June 28, 2006, in its bank credit agreement, which was put in place on Jan. 30, 2006. The company expects to file the restated financial statements with the SEC in a timely manner. However, a continued delay in filing could lead to an event of default if the company receives a notice from 25% of the bondholders or the trustees. An event of default could be avoided if bondholders waive their rights relating to the company's failure to comply with the reporting covenant under its indentures. The Boca Raton, Florida-based magazine and tabloid newspaper publisher had debt of about $1 billion as of Sept. 30, 2005. The company has modestly revised downward its guidance for the full fiscal year 2006. It now anticipates an 11% drop in EBITDA compared with fiscal 2005, reflecting the lackluster celebrity magazine advertising environment and declining newsstand sales for its core publications. The company expects that the restatement will primarily address reclassifications related to accounting for costs of display racks, which are expected to be netted against revenues. This element of the restatement will not affect EBITDA or cash flow. AMEROPA DEVELOPMENT: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Ameropa Development, Inc. 407 Lincoln Road #12E Miami Beach, Florida 33139 Bankruptcy Case No.: 06-10572 Chapter 11 Petition Date: February 22, 2006 Court: Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: Douglas J Snyder, Esq. Douglas J. Snyder, P.A. 1320 South Dixie Highway #731 Coral Gables, Florida 33146 Tel: (305) 663-0740 Fax: (305) 667-8529 Debtor's financial condition as of January 3, 2006: Total Assets: $1,600,000 Total Debts: $1,935,507 Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dean Maxwell Real Estate $729,257 3450 Northeast Miami Gardens Drive Miami, FL 33180 Givner, Jaroslawicz Legal Services $5,000 and Chepnik 1177 Kane Concourse #232 Miami, Florida 33154 Internal Revenue Service Unknown P.O. Box 21126 Philadelphia, PA 19114 ANCHOR GLASS: Gets Open-Ended Deadline to Decide on Leases ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida extended, until confirmation of a plan of reorganization, Anchor Glass Container Corporation's period to assume or reject several real property, railroad track and pipe, and warehouse space leases. As reported in the Troubled Company Reporter on Jan 11, 2006, the real properties include: 1) 1555 Fairview Road Zanesville, Ohio 2) 4343 Anchor Plaza Parkway Tampa, Florida 3) Hazlet Sales Office 1 Bethany Road & Route 35, Suites 74/76 Hazlet, New Jersey 4) St. Louis Sales Office 7750 Clayton Road, Suite 203 St. Louise, Missouri 5) Cincinnati Sales Office 8172 Mall Road, Suite 220 Florence, Kentucky 6) Warehouse #173 DMI, 100 East Short Street Winchester, Indiana 7) Warehouse #102 Gateway Warehouse, 50 Kent Drive Cartersville, Georgia 8) Warehouse #156 1075 Valley Industrial Boulevard North Shakopee, Minnesota 9) Salem Land Leases for property situated at: -- Block No. 12, Lot No. 19 Fourth St. & Griffin St. -- Block No. 3, lot No. 24 Griffin St. -- Block No. 3, Lot No. 22 Griffin St. Anchor Glass is also a party to numerous leases of public warehouse, and several side track pipe and track leases with various railroad companies. In particular, the Debtor is a party to side track-pipe and track leases with: * CSX Transportation, * CSXT Transportation, Inc., * JP Rail/Southern Railroad, * Norfolk Southern Railway Co., * Southern & Florida, * Southern Railroad Co. of New Jersey, * St. Louis - San Francisco Railroad, * Texas & Pacific Railroad, and * Union Pacific Railroad Kathleen S. McLeroy, Esq., at Carlton Fields, P.A., in Tampa, Florida, related that Anchor Glass is currently analyzing its lease and executory contracts to determine which should be assumed or rejected. Ms. McLeroy asserted that extending the Lease Decision Period will assist the Debtor in its reorganization. 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: Reaches Clean-Air Act Agreement With EPA ------------------------------------------------------ The U.S. Environmental Protection Agency Region 5 reached an agreement with Anchor Glass Container Corp. on alleged clean-air violations at the company's container glass manufacturing plant at 200 W. Belleview Dr., Lawrenceburg, Ind. The agreement, which includes a $96,901 penalty, resolves EPA allegations that Anchor Glass failed to use its baghouses to control emissions of particulate matter at the plant as required by the company's state operating permit. Also resolved are allegations that the company failed to comply with a number of other requirements in its state operating permit. The alleged violations were discovered during a November 2004 inspection by EPA and the Indiana Department of Environmental Management. Inhaling high concentrations of particulates can affect children, the elderly and people with heart and lung diseases the most. 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: Resolves Supply Spat with RTS Packaging ----------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to approve the Settlement Agreement resolving its dispute with RTS Packaging, LLC. As reported in the Trouble Company Reporter on Sept. 20, 2005, RTS, a seller of cardboard partitions, asked the Bankruptcy Court to affirm its right to reclamation and grant a replacement lien with respect to certain goods ordered by the Debtor. Alternatively, RTS asked the Court to direct the Debtor to immediately pay $160,304 as an expense of administration to RTS. The Debtor responded to RTS' request, saying RTS' demand for the return of goods did not sufficiently identify the goods. Also, the Debtor pointed out that any goods allegedly subject to RTS' demand were not in the Debtor's possession at time of the demand. The Debtor and RTS investigated the merits of the Complaint and the defenses asserted by the Debtor in its Answer, and agreed to compromise and settle all disputes relating to the Complaint. The Settlement Agreement provides that: (a) RTS will have an administrative claim for $27,500; (b) RTS will also file an amended unsecured claim for $595,412, reflecting the balance owed by Anchor Glass. Kathleen S. McLeroy, Esq., at Carlton Fields PA, in Tampa, Florida, counsel to the Debtor, tells the Court that the settlement is fair and equitable. Ms. McLeroy notes that the settlement stops all litigation between the Debtor and RTS, thus avoiding the uncertainty of a trial and the costs associated with litigating the issue. 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) ANDREW MARTIN: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Andrew Alfred Martin 21591 Montbury Drive Lake Forest, California 92630 Bankruptcy Case No.: 06-10130 Chapter 11 Petition Date: February 13, 2006 Court: Central District Of California (Santa Ana) Judge: John E. Ryan Debtor's Counsel: James C. Bastian, Jr., Esq. Shulman Hodges & Bastian LLP 26632 Towne Centre Drive, Suite 300 Foothill Ranch, California 92610-2808 Tel: (949) 340-3400 Total Assets: $923,904 Total Debts: $1,192,624 Debtor's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ultima Design Group Architectural $20,000 1602 Babcock Street Services Costa Mesa, CA 92627 Johnson/Hyster Lease - Personal $0 P.O. Box 60007 Guarantee City of Industry, CA 91716 Lollipop Land Company, LLC Lease - Guarantee $0 385 Grand Avenue, Suite 200 Oakland, CA 94610 Lota USA Duplicate 1999 Avenue of the Stars Suite 1050 Los Angeles, CA 90067 Evan Chuck, Esq. Duplicate Bryan Cave LLP 120 Broadway, Suite 300 Santa Monica, CA 90401 Creative Rock Concepts, Inc. Construction Fees Unknown 20358 Laguna Canyon Road Laguna Beach, CA 92651 Kwikset Corp. Unknown 333 South Grand Avenue 38th Floor Los Angeles, CA 90071-1543 Xiamen Lota International Unknown Corporation Ltd. No. 61 Xingnan Road Jimei District Xiamen, 361022 China APCO LIQUIDATING: Wants Until May 16 to Remove Civil Actions ------------------------------------------------------------ The APCO Liquidating Trust and the APCO Missing Stockholder Trust ask the U.S. Bankruptcy Court for the District of Delaware to further extend, until May 16, 2006, the period within which they can remove civil actions. The Reorganized Debtors are parties to multiple civil actions pending in various courts throughout the United States. The Debtors decided to analyze each of their civil action in light of these factors: a) the importance of the proceeding to the expeditious resolution of the Debtors' chapter 11 cases; b) the time it would take to complete the proceeding in its current value; c) the presence of federal questions in the proceeding that increase the likelihood that one or more aspects thereof will be heard by a federal court; d) the relationship between the proceeding and matters to be considered in connection with any proposed plan in the chapter 11 cases, the claims allowance process, and the assumption or rejection of executory contracts; and e) the progress made to date in the proceeding. The Debtors tell the Court that the extension period will give them enough time to make fully informed decisions regarding the removal of each civil action. Headquartered in Oklahoma City, Oklahoma, APCO Liquidating Trust and APCO Missing Stockholder Trust were created on behalf of the common stockholders of APCO Oil Corporation. The Debtors filed for chapter 11 protection on August 19, 2005 (Bankr. D. Del. Case No. 05-12355). Gregory P. Williams, Esq., John Henry Knight, Esq., and Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtor filed for protection, they estimated assets and debts between $10 million to $50 million. As reported in the Troubled Company Reporter on Feb. 10, 2006, the Bankruptcy Court confirmed the First Amended Liquidating Plan of Reorganization filed by APCO Liquidating Trust and its debtor- affiliate, APCO Missing Stockholder Trust. ASARCO LLC: Directed by Ct. to Pay Pinal County Treasurer $2 Mil. ----------------------------------------------------------------- ASARCO LLC owns and operates the Ray Copper Complex in the town of Kearney, Pinal County. ASARCO is the major business and major tax payer in Kearney. The Unified School District, which serves the town of Kearney is the Ray Unified School District No. 3. The School District's schools are a gathering place and focal point of the Kearney community. The Ray Unified School District operates three schools -- Ray Primary School, Ray Elementary School and Ray High School. As of Jan. 9, 2006, there are 147 sibling groups in the School District who have one or more parents working for ASARCO. Matthew A. Rosentein, Esq., in Corpus Christi, Texas, tells the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi that ASARCO has defaulted and failed to pay its 2004 and 2005 ad valorem personal and real property taxes totaling $2,040,315 to the treasurer of Pinal County, Dolores J. Doolittle. "ASARCO's failure to pay the Taxes has created an immediate and severe financial crisis and hardship for Pinal County and the Ray Unified School District No. 3," Mr. Rosentein says. As a direct result, the Ray School District will suffer negative cash flow deficiencies from February to June 2006, Mr. Rosentein notes. The School District is only entitled by law to receive 48% of the total Taxes or $970,478. The School District's bank has suspended its line of credit because ASARCO has not paid its ad valorem taxes. In addition, the School District's Improvement Project of 1999 Series A requires a payment of principal totaling $135,000, plus a $74,721 interest, in immediately available funds on July 1, 2006. The School District will not be able to make the Required Bond Payment without ASARCO's payment of the 2005 ad valorem taxes, Mr. Rosentein states. ASARCO's tax levy represents approximately 62% of the Ray Unified School District's total tax levy. Accordingly, the Pinal County Treasurer asks the Court to grant it adequate protection by compelling ASARCO to pay in full the $2,040,315 as secured 2004 and 2005 ad valorem taxes, no later than Feb. 15, 2006. In the alternative, the Pinal County Treasurer asks the Court to lift the automatic stay to allow her to exercise all of her rights at law and equity, including the seizure and sale of personal property and tax liens of ASARCO in Pinal County and the foreclosure of the right to redeem. * * * Judge Schmidt directs ASARCO LLC to immediately pay the Pinal County Treasurer: (a) $1,020,158 no later than Feb. 15, 2006. The amount represents the October Tax Payment; and (b) $1,020,158 no later than March 1, 2006. The amount represents the March Tax Payment. The Treasurer waives all interest, costs, attorneys' fees and penalties related to the Tax Payment. ASARCO reserves all of its rights, to the extent they exist, to contest the amount of the 2005 ad valorem taxes on any theory. 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. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give 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: Ct. Allows Property Panel to Deliberate Wingard Claim ----------------------------------------------------------------- James Wingard is an eligible member of the class action environmental lawsuit -- Donald Branin, et al. v. ASARCO Inc., Case No. C-93-5132(B) FDB -- commenced in 1993 in the United States District Court for the Western District of Washington Tacoma Division, according to Viviana S. Cavada, Esq., in Corpus Christi, Texas. The claims held by the Branin Class members are for injuries caused by pollutants discharged from ASARCO's smelter located in Ruston, Washington. In 1995, the Branin Class and ASARCO Incorporated entered into a Court-approved settlement agreement, which established the "Property Value Assurance Panel and Program" to assure that the Owner Class members were fully compensated for any decrease in property values resulting from the presence of arsenic and lead in the soil of the Tacoma/Ruston Smelter. Ms. Cavada relates that Mr. Wingard filed a claim under the Property Value Assurance Program in June 2005. While Judge Robert Peterson from the Washington Court was in the midst of determining the value of Mr. Wingard's claim, ASARCO LLC filed for bankruptcy. Mr. Wingard asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to make an affirmative finding that the automatic stay is of no effect as to: a. him and his claims under the Property Value Assurance Program; and b. the arbitration process and procedures set up to determine the value of his claim and his ultimate recovery from the Property Value Assurance Funds. In the alternative, Mr. Wingard asks the Bankruptcy Court to lift the automatic stay to allow the Property Value Assurance Panel to continue its deliberations and issue a decision regarding his claims in that Fund and Program. Branin Classes Support Wingard The Owners and Renters Classes of the Branin Class Action acknowledge James Wingard as one of the members of the Owners Class. Bruce J. Borrus, Esq., at Riddell Williams PS, in Seattle, Washington, points out that Section 362(d)(2) of the Bankruptcy Code provides for automatic stay relief to an act against property if: (a) ASARCO does not have equity in the property; and (b) the property is not necessary for an effective reorganization. Mr. Borrus contends that Mr. Wingard qualifies for relief from the stay, not because of the reasons supporting his request, but because ASARCO has no equity in the funds in the Branin Escrow Account. Thus, the funds in those accounts are not necessary to an effective reorganization. Mr. Borrus notes that ASARCO cannot use the funds for any purpose other than to pay claims of the Branin Classes or members who filed a timely claim. * * * Judge Schmidt modifies the automatic stay to: (a) allow the Property Value Assurance Panel to continue its deliberations on the Wingard claim; (b) allow the Panel to pay its reasonable costs and fees as allowed by the Property Value Assurance Program, and as are necessary to complete its deliberations on the Wingard claim; (c) allow the Panel to issue a decision regarding the value of the Wingard claim; and (d) permit Mr. Wingard to satisfy his claim, if any, out of the funds in the Property Value Account. Unless expressly modified by another Bankruptcy Court Order, the automatic stay remains in effect for all other purposes. The Court clarifies that Mr. Wingard has no claim against ASARCO LLC and its estate, other than his claim against the Property Value Account and his claim as a member of the Owners Class. 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. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give 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: Sells Hardshell Mine to Arizona Minerals for $8.250MM ----------------------------------------------------------------- ASARCO LLC sought authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to sell the Hardshell Mine Property to Arizona Minerals, Inc., for $8.250 million free and clear of liens, claims encumbrances and interests. Judge Schmidt authorizes ASARCO to sell the Hardshell Mine Property to Arizona Minerals, Inc. All objections to the Sale Transaction not otherwise withdrawn, waived or settled are overruled on the merits. As previously reported in the Troubled Company Reporter on Jan 19, 2006, James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas, related that ASARCO LLC owns certain patented and unpatented lode mining claims -- the Hardshell Mine Property -- located at the Harshaw Mining District, in Santa Cruz County, Arizona: The Patented Claims total 135 acres: Claim Name Patent No. ---------- ---------- Camden Mine 1211192 Camden No. 2 1211192 Hardshell No. 1 1211192 Hardshell No. 15 1211192 Hermosa 10278 Salvador 10614 Bluff 10279 Alta 8635 The Unpatented Claims total 486 acres: Claim Name Serial No. ---------- --------- Shell 1-20 51409-51428 Shell 44-49 51452-51457 Before ASARCO's bankruptcy filing, five companies interested in acquiring silver properties approached ASARCO. Among the companies, ASARCO determined that Arizona Minerals, Inc., submitted the best offer for the Property. ASARCO LLC did not receive any competing bids for the Hardshell Mine Property, and therefore did not conduct an auction. Pursuant to the Purchase Agreement for the sale of the Hardshell Mine Property, Arizona Minerals will: * pay ASARCO $3,750,000, for the Property, with $250,000 as initial payment delivered to the escrow agent, Lawyers Title Agency of Arizona; and * execute a $4,500,000 promissory note on the Closing Date, which will be secured by a lien on the Property as evidenced by a deed of trust. The Purchase Agreement also calls for ASARCO to represent and warrant that, to the best of its actual knowledge, the Hardshell Mine Property is in compliance with all laws and regulations relating to the protection of the environment as existing as of the date of the Agreement. Except for the Environmental Warranty, the Property is being sold "as is" with limited representations and warranties relating to organization, authority, title, and that no impediments, actions or other agreements would prohibit the transfer of the Property. The Environmental Warranty only survives for a period of one year after the Closing Date. ASARCO's liability for breach of the Environmental Warranty is limited to $500,000. Any claim for that breach must be in writing and for a violation issued by a federal or state governmental agency for a violation of federal or state rules or regulations within the Survival Period for an environmental condition of the Property that was in existence at the closing. A full-text copy of the Purchase Agreement is available for free at http://bankrupt.com/misc/HardshellMine_PurchaseAgreement.pdf 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. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give 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). ATA AIRLINES: Gets Court Nod to Decide on ILFC & Castle Leases -------------------------------------------------------------- ATA Airlines, Inc., and International Lease Finance Corporation are parties to aircraft lease agreements under which the Debtor leased 13 Boeing 737-83N aircraft and 26 CFM56-7B-27 engines from ILFC. The Aircraft bear Tail Nos.: (1) N304TZ (2) N305TZ (3) N308TZ (4) N314TZ (5) N315TZ (6) N317TZ (7) N318TZ (8) N319TZ (9) N321TZ (10) N323TZ (11) N331TZ (12) N333TZ (13) N332TZ ATA Airlines is also a party to aircraft lease agreements with: * Castle 2003-1B LLC, for the lease of a Boeing 737-83N aircraft and two CFM56-7B-27 engines bearing Tail No. N301TZ; and * Castle 2003-2A LLC, for the lease of a Boeing 737-83N aircraft and two CFM56-7B-27 engines bearing Tail No. N310TZ. ILFC was the original Lessor under the Castle Leases. It assigned all of its rights, obligations and interests to the Castle Entities pursuant to an Assignment, Assumption and Amendment Agreement dated November 25, 2003. The Debtor has fully performed all of its obligations with respect to the ILFC Leases and the Castle Leases. The Agreement On January 30, 2006, the Debtor, ILFC and the Castle Entities reached an agreement with respect the assumption and rejection of the Leases. The parties agreed that the Debtor could, on or before the close of business on February 13, 2006, elect one of two options: Option 1: To assume all of the ILFC Leases and all of the Castle Leases and to sub-lease up to three of the Leased Aircraft to an agreed-upon airline. Option 2: To reject certain Leases, with the rejection being effective nunc pro tunc on the Confirmation Date. ATA will then redeliver the Rejected Aircraft. For its post-Rejection Effective Date use of each of the Rejected Aircraft, ATA will pay rent to ILFC at a pro-rata daily rate -- based on the monthly Rent -- from the first date after the Rejection Effective Date on which Rent is due until the date the applicable Rejected Aircraft is returned to ILFC. The rejection of the Leases may not be asserted as a cross-default with respect to any of the Assumed Leases and the rejections will not be an event of default under any of the Assumed Leases. ILFC and the Castle Entities will reserve all claims they may assert against ATA regarding an administrative expense claim, if the claims exist, regarding ATA's failure to return the Rejected Aircraft in the condition required by the applicable Rejected Lease. ATA will reserve all claims it may have against ILFC or the Castle Entities, including claims related to rent subsidies provided for by side letter agreements executed in connection with the ILFC Leases and the Castle Leases. The Debtor elected the second option. Assumption and Rejection of Leases Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that the Debtor has determined that the continued use of certain of the Leased Aircraft will be beneficial to its ongoing operations. Accordingly, the Debtor seeks the U.S. Bankruptcy Court for the Southern District of Indiana's authority to assume 12 leases: (1) N304TZ Lease (2) N305TZ Lease (3) N308TZ Lease (4) N314TZ Lease (5) N315TZ Lease (6) N317TZ Lease (7) N318TZ Lease (8) N319TZ Lease (9) N321TZ Lease (10) N323TZ Lease (11) Castle 1B Lease (12) Castle 2A Lease Because some of the Leased Aircraft will be unnecessary to its operations and will be an unnecessary burden, the Debtor seeks the Court's authority to reject three leases: (1) N331TZ Lease (2) N332TZ Lease (3) N333TZ Lease The Debtor wants the assumption and rejection of the Leases to be effective as of January 31, 2006. ATA Airlines intends to retain possession of, and the right to use, the Rejected Aircraft after the Rejection Effective Date until the Aircraft are returned. For its post-Rejection Effective Date use of each of the Rejected Aircraft, the Debtor will pay rent to ILFC at a pro-rata daily rate. * * * Judge Basil H. Lorch approves ATA Airlines' request in its entirety. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Wants to Assume Amended Qwest Agreement ----------------------------------------------------- ATA Airlines, Inc., and Qwest Communications Corporation are parties to a "Qwest Total Advantage Agreement" under which Qwest provides the Debtor with various telecommunication goods and services. Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that the parties have engaged in lengthy negotiations regarding an amendment to the Agreement that would allow the Debtor to continue to receive the Services on terms economically beneficial to both parties. After arm's-length negotiations, the Debtor and Qwest agreed to the Amendment. Since the Amended terms are confidential in nature, the Debtor seeks to file the terms under seal. Mr. Nelson assures the U.S. Bankruptcy Court for the Southern District of Indiana that the Amendment provides significant benefits to the Debtor by: (a) reducing the cost for the Services; (b) providing usage credits to be applied against amounts the Debtor owes; (c) reducing the Debtor's yearly revenue commitment; and (d) giving the Debtor the right to terminate the Amended Agreement after 12 months without incurring early termination fees provided that the Debtor has purchased a specified dollar amount of Services. In consideration for the Debtor's execution of the Amendment and assumption of the Amended Agreement, Qwest has agreed to waive its right to seek immediate payment of existing prepetition defaults, provided that: (1) Qwest will be deemed to have a $97,587 allowed unsecured claim; (2) The Debtor will pay $39,681 to Qwest, together with other amounts for services provided postpetition that remain past due and unpaid, and billed under account numbers: * 62-532562 * 62-923334 * 62-077271 * 70-264819 * 70-264856 * 62-532561 * 61-192196 The Cure Amount, if unpaid, will be deemed allowed as an administrative expense; and (3) All Claims existing against Qwest, whether arising under the Bankruptcy Code, the Agreement or otherwise, will be released and waived. For these reasons, the Debtor asks the Court to: -- approve the Amendment; -- authorize it to assume the Amended Agreement; and -- allow and waive certain claims between the parties. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) AZTAR CORP: Redevelopment Plan Cues Moody's Low-B Rating Review --------------------------------------------------------------- Moody's Investors Service placed the ratings of Aztar Corporation on review for possible downgrade to reflect the likelihood that its $1.2 billion Las Vegas redevelopment plan outlined on the company's most recent earnings call could negatively impact the credit profile of the assets supporting the existing rated notes. This rating action also acknowledges that the redevelopment plans have not yet been approved by the company's Board of Directors, and during the earnings call, Aztar publicly stated that it may not pursue the project at all. Although only some details were made available and no official timeline has been set, the company did indicate that any Las Vegas redevelopment, if pursued, would likely be constructed and financed on an unrestricted basis. To the extent Aztar pursues the Las Vegas redevelopment in this fashion, existing bond holders would lose the cash flow, asset support and diversification from the Las Vegas Tropicana, which currently accounts for almost 17% of total property-level EBITDA. In addition to any change in the type and amount of assets supporting existing note-holders, the review for possible downgrade will consider the amount and type of equity contribution that will likely be required to support an unrestricted subsidiary financing, as well as the potential financial impact related to the construction of a Pennsylvania slot facility should Aztar be a winning bidder for a license there. Aztar previously announced that it is considering a $325 million slot facility in Pennsylvania. Other primary rating considerations will include Aztar's historically strong credit statistics, relatively conservative financial management history and limited regulatory exposure. These Aztar ratings were placed on review for possible downgrade: * Corporate family rating -- Ba2; * $175 million 9% senior subordinated notes due 2011 -- Ba3; and * $300 million 7 7/8% senior subordinated notes due 2014 -- Ba3. Aztar owns and operates the Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana. The company generated about $915 million of net revenues in fiscal 2005. BABCOCK & WILCOX: Exits Chapter 11 Bankruptcy Protection -------------------------------------------------------- McDermott International, Inc. (NYSE:MDR) reported Feb. 22, 2006, that The Babcock & Wilcox Company and certain of its subsidiaries have exited from Chapter 11 bankruptcy and entered into its previously announced settlement. Accordingly, B&W's financial results will be re-consolidated with McDermott's and its operations managed without Bankruptcy Court supervision. "This is a transformational event for McDermott and B&W, as well as for our shareholders, employees, customers and suppliers," said Bruce W. Wilkinson, Chairman of the Board and Chief Executive Officer of McDermott. "Six years to the day since its original filing, B&W emerges at the commencement of an exciting time in the power generation industry. Electricity demand in the United States is growing, environmental requirements for our customers require new technologies, coal remains an abundant and cost- effective domestic fuel source and new power plants are being planned. For more than 138 years, B&W has supplied innovative solutions to the power generation industry to meet the world's energy needs. We are looking forward to our future, with the asbestos portion of B&W's history now behind it." McDermott also said that B&W has finalized and implemented its exit-financing package, and has funded its initial payment to the asbestos-claimants' trust. B&W, Feb. 22, 2006, paid $350 million and assigned rights to approximately $1.15 billion face-amount of insurance to the claimants' trust. Depending on the status of national asbestos legislation at Nov. 30, 2006, either an additional $25 million or $605 million in consideration will be made available to the trust in the time periods required. B&W's exit-financing package consists of three tranches for a combined total of $650 million of credit capacity; providing ample liquidity for letter-of-credit requirements, working capital needs and the possibility of refinancing the $250 million contingent note which was issued to the claimants' trust. In December 2005, Moody's Investors Services and Standard & Poor's Ratings Services issued newly assigned credit ratings for B&W of B1 and B+, respectively. "With today's announcements, McDermott is well-positioned to move forward as a worldwide energy services company with our focus on power generation, marine construction and government operations," continued Mr. Wilkinson. "Finally, I want to thank Judge Brown and Judge Vance for their patience and efforts during the six-year process, and all parties who have supported us during this journey." About McDermott International Inc. Headquartered in New Orleans, Louisiana, McDermott International, Inc. -- http://www.mcdermott.com/-- is a leading worldwide energy services company. The Company's subsidiaries provide engineering, fabrication, installation, procurement, research, manufacturing, environmental systems, project management and facility management services to a variety of customers in the energy and power industries, including the U.S. Department of Energy. About Babcock & Wilcox Company Babcock & Wilcox Company, together with its debtor-affiliates, filed for Chapter 11 protection on February 22, 2000, (Bankr. E.D. La. Case No. 00-10992). Jan Marie Hayden, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the debtors in their restructuring efforts. Since February 2000, B&W has continued to be managed by McDermott; however its results of operations have been deconsolidated from McDermott's financial statements. The Company wrote off its remaining investment in B&W of $224.7 million during the second quarter of 2002. For the year ended Dec. 31, 2004, on a deconsolidated basis, B&W generated operating income of $115.6 million on revenues of $1.37 billion. B&W's net income for the year-ended Dec. 31, 2004, was $99.1 million, including the result of favorable tax valuation allowance adjustment of $26.2 million. Beginning in 2005, McDermott spun off the pension plan assets and liabilities associated with B&W's portion of McDermott Incorporated's pension plan, creating a B&W-sponsored pension plan. As a result of the creation of a B&W-sponsored pension plan, beginning in 2005 expenses associated with this plan are accounted for on B&W's financials. In 2004, McDermott recorded approximately $38 million in pension expense associated with B&W pension on McDermott's income statement. At Aug. 24, 2005, B&W had unrestricted cash & cash equivalents of $352 million. BAREFOOT RESORT: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Barefoot Resort Yacht Club Villas, LLC 1813 Hampton Street Columbia, South Carolina 29201 Bankruptcy Case No.: 06-00640 Type of Business: The Debtor operates a resort located in North Myrtle Beach, South Carolina. Drake Development Company USA, owns Barefoot Resort. See http://www.drakedevelopment.com/ Chapter 11 Petition Date: February 21, 2006 Court: District of South Carolina (Columbia) Judge: John E. Waites Debtor's Counsel: William McCarthy, Jr., Esq. Daniel J. Reynolds, Jr., Esq. Robinson, Barton, McCarthy, Calloway & Johnson, P.A. P.O. Box 12287 1715 Pickens Street Columbia, South Carolina 29201 Tel: (803) 256-6400 Fax: (803) 779-0267 Total Assets: $69,003,578 Total Debts: $60,980,655 Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sally Stowe Interiors $1,258,131 7751 North Kings Highway, Suite C Myrtle Beach SC 29572 David Klein Real Estate $360,225 2200 West Hamilton, Suite 204 Allentown, PA 18104 David Klein Real Estate $230,160 2200 West Hamilton, Suite 204 Allentown, PA 18104 REMAX Coastal Properties $40,665 Century 21 Thomas $40,395 Robert Young PA $22,500 Century 21 Barefoot $18,600 Sloan Real Estate $17,925 Century 21 Coastal Lifestyles $15,555 SW Associates $14,785 Grand Dunes Properties LLC $14,625 Vanessa G. Chrisafis $14,505 Horry Electric Cooperative $12,499 Sandstone Realty $12,465 Jenkins Hancock and Sides $10,166 Lewis Babcock Hawkins $9,492 Rogers Townsend Thomas $952 A Services Group Inc. $912 Grand Strand Disposal $754 CALPINE CORP: Can Hire Covington as Special Counsel on Final Basis ------------------------------------------------------------------ Calpine Corporation and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York, on a final basis to employ Covington & Burling as their special counsel, nunc pro tunc to the Petition Date. Covington is a leading full service international law firm, with offices in San Francisco, New York and Washington D.C. as well as London, England, and Brussels, Belgium. Lisa M. Bodensteiner, Esq., Executive Vice President and General Counsel of Calpine Corporation, states that Covington has represented Calpine Corporation and certain of its subsidiaries since 1997 in a wide spectrum of matters. Since 1999, Covington has been Calpine's primary corporate and securities counsel and has maintained a dedicated core group of attorneys who have worked closely with the Debtors, each other, and the Debtors' other attorneys and professionals, to provide coordinated, non- duplicative legal services for all assigned matters. Covington has represented or advised Calpine in these litigation matters: (a) Harbert Convertible Arbitrage Master Fund, Ltd. et al. v. Calpine Corporation; (b) Calpine Corporation v. The Bank of New York and Wilmington Trust Company; (c) Informal Securities and Exchange Commission Inquiry; (d) Steel Los III, LP and Associated Brook, Corp. v. Calpine Corporation and Bethpage Energy Center 3 LLC; (e) Harbert Distressed Investment Master Fund, Ltd. v. Calpine Canada Energy Finance II ULC, et al.; and (f) In the Matter of Reliance Insurance Company (In Liquidation) v. KIAC Partners. Ms. Bodensteiner relates that through its work for Calpine, Covington has derived considerable and intimate knowledge concerning the Debtors, and is already familiar with the Debtors' business affairs to the extent necessary for the scope of the proposed and anticipated services. The Debtors believe that Covington's experience and knowledge and its dedication to the Debtors' interests will be valuable to the Debtors in their efforts to reorganize. As special counsel, Covington will: -- advise the Debtors and assist the Debtors' bankruptcy and reorganization counsel in connection with any prepetition corporate finance matters; -- advise the Debtors in connection with Federal securities law compliance matters, including disclosure advice and assistance that are assigned by the Debtors to Covington; -- represent the Debtors in several litigation matters that have not been concluded as of the Petition Date or stayed by Calpine's bankruptcy filing; -- advise the Debtors' bankruptcy and reorganization counsel with respect to the Debtors' ownership and capital structures and prepetition financings in connection with structuring the DIP financing as requested by the Debtors; and -- provide non-bankruptcy advice, in coordination with the Debtors' bankruptcy and reorganization counsel and other special counsel and -- at the Debtors' request -- with respect to legal matters arising in or relating to the Debtors' business, including but not limited to employee benefits, general energy regulatory, and tax matters, and negotiation, documentation and execution of asset divestitures, provided that the Debtors' bankruptcy and reorganization counsel will be responsible, in consultation with the Debtors and their creditors, for selecting any assets for divestiture and determining the timing and context of their divestiture, and Covington will play no role in those decisions. The Debtors' principal counsel on employee benefits and executive compensation will be Thelen Reid. However, from time to time, the Debtors may consult with Amy Moore, the principal Covington lawyer who provided employee benefits services. The Debtors will pay Covington based on the Firm's current hourly rates: Billing Category Hourly Rate ---------------- ----------- Partners $500 to $760 Of Counsel $470 to $580 Associates $270 to $490 Paraprofessionals $170 to $215 During the 90-day period ending December 20, 2005, Covington received $7,940,498 from the Debtors in the ordinary course of business for professional services performed and expenses incurred. The Debtors made payments to Covington aggregating $13,411,232 during the 12 months ending December 20, 2005, on account of fees and expenses incurred by Covington in its work for the Debtors. "The source of the Prepetition Payments was the Debtors' operating cash. The Prepetition Payments do not constitute voidable preferential transfers pursuant to Section 547 of the Bankruptcy Code, as each Prepetition Payment was made in the ordinary course of business between the Debtors and Covington," Ms. Bodensteiner says. The Debtors also provided Covington with a $500,000 retainer on December 20, 2005. Covington applied $175,000 of the retainer to satisfy the fees and expenses incurred during the period from December 16 through 20. Covington will waive any prepetition time and expenses that have not been recorded as of the Petition Date. It will use any surplus from the retainer to satisfy its postpetition fees and expenses, subject to Court approval, Ms. Bodensteiner relates. William R. Collins, Esq., a partner at Covington, assures the Court that Covington is a "disinterested person" as the term is defined by Section 101(14) of the Bankruptcy Code. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Court Okays Use of Cash Collateral on Final Basis --------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 27, 2005, the Honorable Burton R. Lifland of the Bankruptcy Court for the Southern District of New York permits Calpine Corporation and its debtor-affiliates, on an interim basis, to: (a) use the Calpine Corp. Cash Collateral to pay ordinary and necessary business expenses, chapter 11 administration expenses and other expenses approved by the Court; (b) use Restricted Cash subject to restrictions under Project Loan Documents (notwithstanding the existence of any event of default triggered by the bankruptcy filing or the Debtors' insolvency); and (c) allow the Project Debtors to dividend Unrestricted Cash to their parent entities. * * * On a final basis, the Court authorizes the Debtors to: 1. use the Calpine Corp. Cash Collateral to: * pay the Debtors' ordinary and necessary business expenses; * pay expenses related to the administration of the Debtors' estates and the Chapter 11 cases; and * make adequate protection payments of principal and interest or other amounts; 2. use the Restricted Cash in accordance with any applicable Cash Waterfall Provisions; 3. distribute Unrestricted Cash to their parent entities that are Debtors through a Project Intercompany Loan notwithstanding the existence of an event of default or cross-default under the Project Loan Documents, or the insolvency of, the Project Debtors or any affiliates of the Project Debtors or resulting from the failure by any Debtor to make any payment during the prepetition period; and 4. incur indebtedness under a Project Intercompany Loan, provided, however, that Calpine Greenleaf, Inc. will also be authorized to use Restricted Cash to pay the prepetition portion of the invoices for maintenance and similar expenses. Judge Lifland authorizes Calpine Greenleaf, Inc., to use Restricted Cash to pay the prepetition portion of the invoices for maintenance and similar expenses, to the extent payment of the invoices is reasonably necessary for the adequate protection of the interest of the project lenders for Calpine Greenleaf in any collateral pledged by the Debtors to secure obligations under the Greenleaf Project Documents. Adequate Protection to Noteholders Judge Lifland directs the Debtors to provide replacement liens to the First Lien Holders and Second Lien Holders as adequate protection (i) to protect the Calpine First Lien Holders' interest in the Calpine Corp. Collateral during the Chapter 11 cases, including the use of the Calpine Corp. Cash Collateral, (ii) for any diminution in value of the Calpine Corp. Collateral, and (iii) for the imposition of the automatic stay pursuant to Section 362 of the Bankruptcy Code. Provided that no default or event of default under the DIP Facility occurs, the Debtors will pay Wilmington Trust Company, the First Lien Trustee, for the benefit of the Calpine First Lien Holders, all accrued but unpaid interest on the Calpine First Lien Indenture at the non-default contract rate on the dates when due. The First Lien Trustee reserves all claims with respect to an order dated December 16, 2005, by the Delaware Supreme Court directing restoration of $312,000,000 in sale proceeds to a segregated cash collateral account at Union Bank of California, N.A. The Debtors will also pay all reasonable fees and disbursements of counsel for and the financial advisor to the First Lien Trustee. The Debtors will also provide Jefferies & Company, Inc., the financial advisor to the First Lien Trustee, with the same indemnity that is provided to Miller Buckfire & Co., the Debtors' financial advisors and investment bankers. In addition, the Court permits the Debtors to pay to the applicable Second Lien Trustee and Term Loan Agent of the Calpine Second Lien Debt for the ratable benefit of the Calpine Second Lien Holders, $78 million on March 31, 2006 and $78 million on June 30, 2006. The Debtors are not required to make any additional payments to the Calpine Second Lien Holders in 2006 beyond those payments. Any payments beyond December 31, 2006, must be mutually agreed upon by the Debtors, the Official Committee and the ad hoc committee of the Calpine Second Lien Holders, subject to the consent of the DIP Lenders and Court approval. Designated Projects The DIP Facility will only be utilized directly or indirectly for purposes that maximize or sustain the overall enterprise value of Calpine, including, its direct and indirect equity interests. On or before March 1, 2006, the Debtors and the Committees, in consultation with the First Lien Trustee, will agree upon: -- a list of those projects and facilities of the Debtors that do not meet the criteria; and -- a list of those projects and facilities of the Debtors that require further analysis to determine if they meet the criteria. Neither Geysers Power Company, LLC, Calpine Construction Finance Company, L.P., Calpine Generating Company, LLC, Rocky Mountain Energy Center, LLC, nor their direct or indirect parents or subsidiaries will be designated as Designated Projects or Projects under Review. >From and after the Determination Date, the Debtors will not (i) provide any funding, including advancing any amounts available under the DIP Facility, to or for the benefit of the Designated Projects or (ii) make any payments to or for the benefit of the Designated Projects under tolling or other intercompany agreements. By April 15, 2006, the Debtors and the Committees, in consultation with the First Lien Trustee, will agree on those Projects under Review that will be deemed Designated Projects. If the Debtors and the Committees are unable to reach any of the agreements within the timeframe set forth, then the Second Lien Committee may seek Court approval to terminate the adequate protection arrangements. >From January 30 through and including April 15, 2006, the Debtors will not provide any funding, including advancing any amounts available under the DIP Facility, to or for the benefit of any projects or facilities -- excluding Geysers Power Company, Calpine Construction Finance Company, Calpine Generating Company, Rocky Mountain Energy Center and their parents or subsidiaries -- except amounts required by the entities to discharge obligations arising in the ordinary course of business. The Debtors and the Committees will use commercially reasonable efforts to agree upon and implement risk management policies for Calpine Energy Services, LP and Calbear Energy L.P.'s activities. The Second Lien Trustee reserves all claims with respect to the Delaware Supreme Court order on the restoration of $312,000,000 in sale proceeds to the Control Account. Adequate Protection to Project Lenders The Court permits the Debtors to make adequate protection payments: (i) to protect the Project Lenders' interest in collateral pledged by the Project Debtors to secure the applicable Project Debtor's obligations under the applicable Project Loan Documents, including the use of the Restricted Cash and the Unrestricted Cash; (ii) for any diminution in value of the Project Lender Collateral, including, without limitation, from the use of the Restricted Cash in accordance with the applicable Cash Waterfall Provisions, the use of the Unrestricted Cash in accordance with the terms of the Cash Collateral Order and the use of the Project Lender Collateral; and (iii) for the imposition of the automatic stay. Adequately Protected Debtor Any Debtor that transfers property to or for the benefit of any other Debtor having a fair value in excess of the fair value of the property or benefit received postpetition by the Adequately Protected Debtor from the Beneficiary Debtor, will have a Junior Reimbursement Claim and a Junior Reimbursement Lien on all property of the Beneficiary Debtor's estate. Investigation Termination Date The Debtors, the Official Committee or other person or entity may challenge the validity, perfection, priority, enforceability or amount of, or assert or prosecute any defense, counterclaim or offset to, any of the First Lien Obligations, the Calpine Second Lien Debt, the Calpine Corp. Collateral or the Calpine Corp. Cash Collateral, or assert or prosecute any action for preferences, fraudulent conveyances, other avoidance power claims or any other claims or causes of action against the Calpine Corp Lienholders or any of their agents, advisors or counsel on or before July 30, 2006. A full-text copy of the Final Cash Collateral Order is available for free at: http://bankrupt.com/misc/Calpine_cashcollateralorder.pdf 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Geysers & Silverado Can Pledge Assets for DIP Loan ---------------------------------------------------------------- Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's authority to enter into the $2,000,000,000 DIP Credit Agreement as guarantors and pledge their assets in support of Calpine Corporation and its debtor- affiliates' repayment obligations under the DIP Credit Agreement. On an interim basis, the Geysers Debtors will grant superpriority claims to the DIP Lenders payable from, and having recourse to, all property of the Geysers Debtors' estates and related proceeds. As previously reported, the Court authorized the Debtors to obtain the DIP Financing from Credit Suisse and Deutsche Bank Securities Inc., as joint lead arrangers, joint book-runners, joint syndication agents, and as joint documentation agents, on a final basis. Among its central findings, the Court determined that certain Debtors immediately required proceeds of the DIP Financing to continue their operations, and that any Debtors that did not immediately require the proceeds nonetheless would derive a substantial indirect benefit from the survival of their Debtor affiliates. The Court also determined that the DIP Lenders would not have agreed to provide the DIP Financing unless Geysers Power Company and Silverado subsequently entered into the DIP Credit Agreement as guarantors and granted superpriority interests in their assets. According to Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York, the Geysers Debtors must pledge their assets or an event of default will be triggered under the DIP Credit Agreement. Mr. Cantor explains that in the event of default, the DIP Lenders will be entitled to accelerate the DIP Financing, which would have a catastrophic effect on the Debtors and foreclose the possibility of a successful restructuring. Geysers Power Company and Silverado are project companies with no employees of their own. Mr. Cantor notes that the Geysers Debtors depend on Calpine for the continued provision of critical administrative and operations and maintenance services, including critical steam resource management and augmentation services. Calpine generally provides the services to GPC and Silverado on a cost reimbursable basis at rates that are favorable relative to non-Debtor providers, given Calpine's ability to perform the maintenance services in-house and its access to less expensive spare parts. The Geysers Debtors also depend on Calpine to provide information, administrative and other support systems quickly and cost-effectively. GPC and Silverado use Calpine's systems to support some of their most critical operations, including legal, accounting and treasury, and wide-area computer networks. If the DIP Lenders accelerate the DIP Financing, freezing Calpine Energy Services, L.P., and Calpine's access to capital, Mr. Cantor says CES and Calpine likely could not continue to perform under their contracts with the Geysers Debtors, disrupting the Geysers Debtors' operations in the short term and threatening the Geysers Debtors' survival over the long term. As a commodities business, Mr. Cantor relates, GPC is highly vulnerable to price and demand volatility. That volatility requires GPC to maintain maximum liquidity at all times. GPC's ability to compete in the energy markets depends critically on maintaining the confidence of vendors, customers and creditors, each of whom expect GPC to have access to sufficient liquidity via the DIP Financing. Mr. Cantor also points out that the DIP Financing has provided and will continue to provide GPC with substantial direct benefits including, most notably, the elimination of approximately $100,000,000 in cash rent expense over the next two years. The Honorable Burton R. Lifland of the Bankruptcy Court for the Southern District of New York will convene a hearing to consider final approval of the Geysers Debtors' request today, Thursday, February 23, 2006, at 10:00 a.m., if objections are received. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) CANADIAN IMPERIAL: Fitch Affirms Individual Rating at B ------------------------------------------------------- Fitch Ratings affirmed its ratings on Canadian Imperial Bank of Commerce at 'AA-/F1+' and maintained a Stable Rating Outlook. CIBC had a rather eventful year in 2005, with the settlement of Enron-related litigation in 3Q05 offsetting the year's earnings and reducing capital levels materially. Management has restructured and reorganized its core businesses, positioning to achieve significant expense savings primarily in fiscal 2006. In 4Q05, CIBC's capital levels evidenced a partial rebound, not to prior levels but in line with management's targeted projections as indicated last August. Asset quality remains quite manageable and CIBC's domestic franchise, in both consumer and corporate, remains solid. Ratings Affirmed, Outlook Stable: Canadian Imperial Bank of Commerce: -- Senior debt at 'AA-' -- Subordinated debt at 'A+' -- Short-term debt at 'F1+' -- Individual rating at 'B' -- Support rating at '1' Canadian Imperial Holdings, Inc.: -- Short-term debt at 'F1+' CASE NEW: S&P Puts BB- Rating on Proposed $350 Million Sr. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to $350 million in proposed senior notes to be issued by agricultural and construction equipment maker Case New Holland Inc. The notes, due in 2014, are to be issued in accordance with SEC Rule 144A with registration rights. Case New Holland, a wholly owned subsidiary of CNH Global N.V. (BB-/Stable/--), will use the proceeds to pay down debt maturing in 2006. The notes will be guaranteed by CNH and certain direct and indirect subsidiaries, including those of Case New Holland. Italy-based automaker Fiat SpA (BB-/Stable/B) is CNH's parent company. Standard & Poor's also affirmed its 'BB-' corporate credit rating on CNH Global. Case New Holland and CNH's total consolidated debt stood at about $6.3 billion on Dec. 31, 2005. The outlook is stable. Publicly traded CNH, with executive headquarters in Lake Forest, Illinois, has a satisfactory business position as the world's second-largest agricultural equipment maker and as a major manufacturer of construction equipment. It also has an aggressive but improving financial profile. Because of their close ties, CNH and Fiat have the same ratings and outlook, thus CNH's ratings are hindered by the fortunes of the challenged automaker. "CNH's outlook is stable, the same as Fiat's," said Standard & Poor's credit analyst Daniel R. DiSenso. "The parent company should benefit from its cost-cutting actions and from the introduction of new auto models, which should stem the decline of the automotive unit. In addition, CNH's earnings and cash flows are expected to continue strengthening over the next two years because of reasonably favorable business conditions and the benefits of the company's cost-reduction programs." Fiat views CNH as a core business and continues to provide strong liquidity support to the subsidiary in the way of intercompany loans and bank loan guarantees. Fiat also has an approximate 90% equity ownership stake in CNH, which takes into account the conversion of preferred stock held by the parent. From November 1999, when CNH was formed by a merger between Case Corp. and New Holland N.V., through 2004, the company achieved about $1 billion in cost reductions from a massive rationalization and integration program. Additional cost-reduction benefits were achieved in 2005, and CNH is on target to obtain $500 million of savings for the 2005-2007 period in the areas of: * product design, * manufacturing efficiencies, * purchasing, and * logistics. The company's markets started rebounding in the second half of 2003 and gained momentum in 2004, although growth slowed in 2005. Its net income, excluding restructuring charges, was $223 million for 2005, up 16% from 2004. Year-over-year agricultural equipment sales, excluding currency variations, were down 4% because of a dramatic volume decline in Latin America and softness in Western Europe that more than offset the modest growth in North America. However, the softer agricultural equipment markets were more than offset by continued robust demand for construction equipment, which saw year-over-year sales growth of 10%, excluding currency variations. CITGO PETROLEUM: Says It Will Cooperate in Oil Program Probe ------------------------------------------------------------ The Associated Press reports that Citgo Petroleum Corporation pledges cooperation with the U.S. House Energy chairman's request for documents relating to Venezuela's program that provides heating oil to poor Americans. Felix M. Rodriguez, Citgo's president and chief executive officer, assured in a letter to the committee chairman, Representative Joe Barton, of the company's compliance, AP relates. Mr. Rodriguez said he thinks the requested documents can be delivered within 30 days. According to reports, U.S. lawmakers are concerned that the oil deals are "part of an unfriendly government's increasingly belligerent and hostile foreign policy" toward the United States. Diplomatic relations between Venezuela and the United States have been strained lately. Some of President Hugo Chavez's critics have charged that the oil program is an attempt to embarrass President George Bush, the AP relates. Rep. Miller told the AP that the committee was eager to resolve the oil records inquiry "before President Chavez starts hiding Citgo's records under his obnoxious, 'don't-mess-with-me-girl' policy toward the United States." Former Rep. Joe Kennedy, defended the program, saying Reps. Barton and Whitfield should acknowledge Venezuela's efforts to help needy Americans rather than question the political motives of President Chavez, the AP relates. Mr. Kennedy heads Boston-based Citizens Energy Corp., a nonprofit energy agency helping to deliver the discounted oil in several states. Citgo has delivered discounted heating oil in Massachusetts, New York, Maine, Rhode Island, Vermont, Connecticut, Delaware and the Philadelphia area. CITGO is owned by PDV 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 on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. The ratings on CITGO Petroleum Corp. 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. The company's throughput places it among the largest refiners in the US. CITGO gains substantial competitive advantage from its ability to process large volumes of heavy, sour crude oils, which trade at sharp discounts to better-quality crude oil, into high- margin products, and large average unit sizes that translate into economies of scale. The refiner's profitability, S&P says, is limited by the concentration of its operations in the highly competitive Gulf Coast market, which usually has the lowest margins in the US Geographic concentration also exposes the company to the risk of regional disruption, as demonstrated by recent hurricanes. The credit effect of interrupted operations at the Lake Charles refinery was offset somewhat by strong refining margins realized at CITGO's other facilities. 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. COLLINS & AIKMAN: Committee's Deal With JP Morgan Gets Court's Nod ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan approved the agreement further extending the deadline for the Official Committee of Unsecured Creditors of Collins & Aikman Corporation and its debtor-affiliates to file an adversary proceeding or contested matter challenging stipulations and admissions contained in the Final DIP Order, to March 23, 2006. As reported in the Troubled Company Reporter on Feb. 15, 2006, the Committee and JP Morgan Chase Bank, NA, in its capacity as Agent for the DIP Lenders and Prepetition Agent for the Prepetition Secured Lenders, agreed to further extend the deadline to March 23, 2006, solely with respect to: (a) stipulations and admissions relating to real property; and (b) any challenges arising from the alleged absence of a vote of the shareholders of Collins & Aikman Corporation authorizing it to enter into the transactions and grant the security interests described in the Stipulations and Admissions. 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. (Collins & Aikman Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Objects to 118 Duplicate Claims ------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates found 118 claims that are exact duplicates of other claims. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, explains that the Duplicate Claims were filed against the same Debtors for the same dollar amount on account of the same obligation. Thus, it appears that the claimant inadvertently filed the same proof of claim more than once or the clerk may have inadvertently docketed both the originals and copies as separate claims, Mr. Schrock notes. To adjust the claims database to reflect the correct liabilities to the claimants, the Debtors ask the U.S. Bankruptcy Court for the Eastern District of Michigan to disallow the Duplicate Claims. The largest Duplicate Claims are: Claimant Claim No. Claim Amount -------- --------- ------------ AB Emblem 1195 $270,456 Alicare Inc. 2665 244,607 Complete Prototype Services 1491 230,946 Dept. of Toxic Substances 6752 17,074,068 Frances H. Clayton 305 647,856 Harold R. Sunday 349 1,000,000 Hp Pelzer Automotive Systems 4450 325,815 Hp Pelzer Automotive Systems 4410 325,815 JR Automation Technologies 2957 1,350,000 Linda Keatts 415 600,000 Martin Stamm 4551 500,000 Martin Stamm 6946 500,000 Oakland County Treasurer 1356 373,064 Plymouth Tube Co. 1003 222,836 Riverside Claims LLC 2380 257,376 Ronald C. Spry 413 655,000 Tarrant County 6988 3,240,932 Unique Fabric Inc. 1326 1,063,959 Unique Fabric Inc. 1281 1,063,959 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. (Collins & Aikman Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Landlord Demands Payment of $230,744 Tax Bill --------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates are tenants under a lease agreement with Fabric (DE) GP, dated as of June 27, 2002, which covers certain real property in: -- Manchester, Michigan, -- Albemarle, North Carolina, -- Farmville, North Carolina, -- Old Fort, North Carolina, -- Holmesville, Ohio, and -- Springfield, Tennessee. Collins & Aikman Corporation guaranteed the Debtors' obligations under the Lease. Timothy A. Fusco, Esq., at Miller, Canfield, Paddock & Stone, P.L.C., in Detroit, Michigan, relates that, as set forth in the Lease, the Debtors are required to pay all taxes in the property prior to the assessment of interest or penalties. However, Mr. Fusco reports that the Debtors have failed to timely pay real estate tax obligations to various taxing authorities that became due since the Petition Date. Due to the delinquency, penalties and interest have accrued. Mr. Fusco explains that Fabric does not receive the tax bills. The bills are sent directly to the Debtors. Thus, Fabric does not know whether the Debtors have timely paid the required taxes, and generally learns of any delinquency after penalties and interest begin to accrue. Fabric believes that $230,744 in postpetition taxes, excluding interest and penalties, is outstanding under the Lease: Bldg. ID City, State Due Date Total -------- ----------- -------- ----- MI0181 Manchester, MI 02/14/06 $57,144 NC0141 Farmville, NC 01/05/06 36,410 NC0141 Farmville, NC 01/05/06 1,552 NC0141 Farmville, NC 01/05/06 972 NC0151 Old Fort, NC 01/05/06 7,222 NC0161 Albemarle, NC 01/05/06 79,440 TN0131 Springfield, TN 12/31/05 12,928 TN0131 Springfield, TN 02/28/06 35,075 Mr. Fusco asserts that the Debtors' failure to pay the taxes constitutes an Event of Default under the Lease. Fabric asks the U.S. Bankruptcy Court for the Eastern District of Michigan to direct the Debtors immediately to pay all accrued and unpaid taxes due postpetition under the Lease, to continue to make timely payments pending assumption or rejection of the Lease, and to provide Fabric with written evidence that the payments have been made. 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. (Collins & Aikman Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) CREATIVE VISTAS: Secures $8.25 Million Refinancing -------------------------------------------------- Creative Vistas, Inc., (OTCBB:CVAS) raised an aggregate of $8.25 Million in a 3 year Term Note from Laurus Master Fund, Ltd., a New York-based institutional investment fund that specializes in providing financing to small and micro-capitalization companies. The majority of the proceeds will be used to redeem the $7.5 Million Secured Convertible Term Note originally entered to in 2004. The new note is not convertible and carries a principal postponement for one year. CEO Sayan Navaratnam of Creative Vistas, Inc. said, "This Non- Convertible Term Note financing combined with the redemption of our original Convertible Note has significantly reduced equity dilution. We are pleased to have completed this important strategic step with Laurus Master Fund and look forward to continuing to execute our growth plan." Creative Vistas, Inc. is a leading provider of advanced security and surveillance products and solutions. It also provisions the deployment and servicing of broadband technologies to the commercial and residential market. It primarily operates through its wholly-owned subsidiaries AC Technical Systems Ltd and Iview Digital Video Solutions Inc, to provide integrated electronic security and surveillance systems and technologies. It provides its systems to various high profile clients including: Government, School Boards, Retail Outlets, Banks, and Hospitals. The Company operates through its subsidiary Cancable Inc. to provision the deployment of broadband technologies to the commercial and residential market. The Company has offices in Ontario, Canada. At Sept. 30, 2005, Creative Vistas, Inc.'s balance sheet showed $7,145,365 in total assets and $10,474,300 in total debts, resulting in a $3,328,935 stockholders' deficit. CYBERCARE INC: AmerisourceBergen Wants Tardy Claims Deemed Timely ----------------------------------------------------------------- AmerisourceBergen Drug Corporation, by and through its counsel, Joshua E. Burnett, Esq., at Garnder, Wilkes and Shaheen, asks the U.S. Bankruptcy Court for the Middle District of Florida to extend the time for it to file its proof of claim beyond the Dec. 27, 2005, claims bar date in CyberCare, Inc. and its debtor- affiliate's chapter 11 case. AmerisourceBergen filed its proofs of claim on Feb. 2, 2006, and asks the Court to deem those proofs of claim as timely filed. AmerisourceBergen is the Debtors' third largest unsecured creditor. Reasons for Delay in Filing Proofs of Claim AmerisourceBergen explains that it employs Jenny L. Taylor as an administrative assistant. Ms. Taylor is responsible for advising the company's counsel about bankruptcy filings and claim filing deadlines. Ms. Taylor mistakenly informed AmerisourceBergen's counsel that no bar date was yet set in the Debtors' case when in fact a bar date had actually been set. In reviewing the Debtors' cases, Ms. Taylor discovered that the Debtors had filed a request on Nov. 8, 2005, to set a claims bar date. She discovered that the Court entered an order on Nov. 18, 2005, denying the Debtors' request. Unknown to Ms. Taylor, the Court entered another order on Nov. 22, 2005, declaring Dec. 27, 2005, as the claims bar date in the Debtors' case. Consistent with the mistaken belief, Ms. Taylor informed AmerisourceBergen's counsel that no bar date had yet existed. Afterwards, Ms. Taylor took a Christmas vacation and did not return to work until Jan. 26, 2006, and only then discovered the mistake she made. Ms. Taylor immediately informed AmerisourceBergen's counsel about her mistake and counsel contacted the Debtors on the same day, informing them of the missed filing of the claim. AmerisourceBergen's counsel requested the Debtors for a modification of the bar date, but the Debtors refused AmerisourceBergen's request. AmerisourceBergen argues that the delay is the result of excusable neglect and stresses these equitable considerations: 1) there is no indication that AmerisourceBergen acted in bad faith for the late filing of its claims past the bar date because it was caused by an error in interpreting the Court's order denying the Debtors' bar date request; 2) there is no danger of prejudice to the Debtors because they have yet to file a single claims objection in their chapter 11 cases and no plan of reorganization has been proposed by them or other parties-in-interest. 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. DECORATIVE SURFACES: Selling Columbus Facility to Campus Partners ----------------------------------------------------------------- Decorative Surfaces International, Inc., will sell its Columbus facility to Campus Partners for Community Urban Redevelopment after Campus topped LG Venture Ohio, Inc.'s offer at an auction. The Columbus facility, which formerly housed Decorative's commercial wall covering and laminates business, is the Debtor's most significant remaining asset. Campus offered to buy the Columbus facility for $385,000, topping LG Venture's $300,000 bid. Campus had previously tendered an offer for the Columbus facility but terminated this offer in May 2005. As reported in the Troubled Company Reporter on Feb. 10, 2006, the Debtor asked the U.S. Bankruptcy Court for the District of Delaware for permission to sell the Columbus facility to LG Venture, free of any financial or environmental contingencies, and subject to higher and better offers. The State of Ohio's Director of Environmental Protection opposed the proposed sale to LG Venture saying the Debtor should not be allowed to pass its property to an unknown entity and then not earmark the proceeds of the sale for environmental compliance rather than payment of the Debtor's creditors. The state agency asserts $1,043,358 of administrative claims for the removal hazardous substances at the Columbus facility after the Debtor failed to conduct closure and corrective actions to ensure proper disposal of wastes and site security. New Campus Offer Pursuant to a letter of intent signed on Feb. 17, 2006, Campus proposes to pay $385,000 in immediately available funds for the Columbus facility. Campus will make a $25,000 non-refundable deposit that the Debtor will use to obtain liability insurance and install permanent fencing for the facility, in compliance with Ohio environmental law. In addition, Campus agrees to pay for the costs of the required fencing for up to $10,000 over the $25,000 deposit. The Bankruptcy Court gives Campus until Aug. 16, 2006, to conduct its due diligence on the property and obtain the necessary approval for any required remediation of the property from the Ohio Environmental Protection Agency. The proceeds of the sale will be paid to the Creditor's Trust in partial satisfaction of its residual claim. Decorative Surfaces International, Inc., manufactures wall coverings, decorative design components for floor tiled and other laminates. The Company filed for chapter 11 protection on March 19, 2002 (Bankr. D. Del Case No. 02-10841). Laura Davis Jones, Esq., James I. Stang, Esq., Bruce Grohsgal, Esq., and Robert M. Saunders, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., represent the Debtor. When the Company filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. DPL INC: Reports $52.9 Million of Net Income for 4th Quarter 2005 ----------------------------------------------------------------- DPL Inc. (NYSE:DPL) delivered its financial results for the fourth quarter ended December 31, 2005, to the Securities and Exchange Commission on Feb. 15, 2006. The company reported $52.9 million of net income for the three months ended Dec. 31, 2005, compared to $27.5 million of net income for the same period of 2004. Revenues increased 7% to $1.3 billion for 2005 compared to $1.2 billion for 2004. This increase primarily reflects improved retail sales volume as a result of an increase in cooling degree days in 2005 as compared to 2004, higher average wholesale rates, and ancillary revenues associated with participation in PJM, a regional transmission organization. These increases were partially offset by lower wholesale sales volume. The Company did not participate in PJM until October 2004. Operation and maintenance expense decreased $18.1 million or 8% in 2005 compared to 2004. The primary reasons for lower operation and maintenance expense were lower director and officer liability insurance, legal fees, executive compensation expense and Sarbanes-Oxley compliance and professional fees. Investment income increased by $42.5 million in 2005 compared to 2004 primarily resulting from a net gain of $23.5 million on the sale of public securities and $18.5 million in interest income due to higher cash and short-term investment balances. Interest expense decreased $22.5 million or 14% compared to last year due to debt reduction of approximately $450 million, and a full year impact of the $500 million debt retirement completed in 2004 (partially financed with a $175 million note). In 2005, the Company also recorded a charge of $61.2 million for the early redemption of debt. Stock Buyback DPL initiated its $400 million stock buyback program in 2005, with the repurchase of 406,000 common shares at an average price of $26.07 per share. Liquidity and Cash Flow DPL's cash and cash equivalents totaled $595.8 million and short- term investments available for sale totaled $125.8 million at December 31, 2005, compared to $202.1 million in cash and cash equivalents at December 31, 2004. The increase in cash and short- term investments of $519.5 million was primarily attributed to net proceeds from the sale of the private equity funds and an increase in cash from operating activities of $181.4 million. Construction additions were $180 million and $98 million in 2005 and 2004 respectively. The increase in construction additions in 2005 was primarily related to capital projects associated with the Company's sulfur dioxide environmental compliance program. Headquartered in Dayton, Ohio, DPL Inc. -- http://www.dplinc.com/ -- is a diversified regional energy and utility company operating through its subsidiaries: * The Dayton Power and Light Company; * DPL Energy, LLC; and * MVE, Inc. As reported in the Troubled Company Reporter on July 25, 2005, Moody's Investors Service upgraded DPL Inc.'s senior unsecured debt to Ba1 from Ba2, and upgraded The Dayton Power and Light Company's: * senior secured debt to Baa1 from Baa2; * senior unsecured debt and Issuer Rating to Baa2 from Baa3; * preferred stock to Ba1 from Ba2; and * short term rating for commercial paper to Prime-2 from Prime-3. DYNTEK INC: Secures New Debt Financing to Increase Working Capital ------------------------------------------------------------------ DynTek, Inc. disclosed a recapitalization plan that is expected to bring the company more favorable debt terms and up to $7 million in net working capital. The Company has signed a term sheet with B. Riley & Co., Inc. and Lloyd I. Miller, III for the prospective purchase of: * Senior Secured Notes in the aggregate principal amount of approximately $6.7 million and * Junior Secured Convertible Notes in the aggregate principal amount of $3 million. Proceeds from the debt financing would be used to pay the outstanding principal and accrued interest under the Secured Convertible Term Note held by Laurus Master Fund, Ltd., in an aggregate amount of approximately $6.7 million and for general working capital. The new debt financing is contingent upon secured and certain unsecured creditors of approximately $10.7 million agreeing to a negotiated settlement. The secured debt holders, which include former shareholders of Integration Technologies, Inc. (including the Company's current chief executive officer, Casper Zublin, Jr.) and B. Riley & Co., Inc. and Mr. Miller have agreed to exchange 100% of their outstanding debt for equity under the terms of the transaction. In addition, the Company has engaged Network 1 Financial Securities Inc. to act as placement agent for private placements of common stock solely to accredited investors in an aggregate amount of up to $4.5 million. The conversion price for the Junior Secured Convertible Notes and outstanding debt that is to be exchanged for equity under negotiated settlements would be equal to the price paid for the Company's common stock in the proposed private placements. Definitive terms of the restructured debt have not been determined and are subject to ongoing negotiations. The Company has not entered into any binding agreements regarding its proposed recapitalization plan and there can be no assurance that the Company will consummate its proposed recapitalization plan on favorable terms, or at all. DynTek, Inc. -- http://www.dyntek.com/-- provides professional technology services to mid-market customers, such as state and local governments, educational institutions and commercial entities in the largest IT markets nationwide. The company offers technology practices in IT security, advanced network infrastructure, voice over internet protocol, and access infrastructure. DynTek's multi-disciplinary approach allows our clients to turn to a single source for their most critical technology requirements. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 4, 2005, Marcum & Kliegman LLP expressed substantial doubt about DynTek, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005, 2004 and 2003. The auditing firm points to the Company's recurring losses and significant working capital deficiency at June 30, 2005. EDS CORP: Board of Directors Authorize $1 Billion Share Repurchase ------------------------------------------------------------------ EDS Corp. (NYSE: EDS) reported that its Board of Directors has authorized the company to repurchase up to $1 billion of its outstanding common stock over the next 18 months in open market purchases or privately negotiated transactions. "The share repurchase authorization reflects our confidence in our business direction and our ability to produce strong levels of cash flow over time," said EDS Chairman and CEO Mike Jordan. "EDS' strong balance sheet provides the financial flexibility to invest in our growth initiatives while at the same time returning value to our shareholders." The share repurchases will be financed by currently available cash. EDS ended 2005 with approximately $3 billion in available cash and approximately $850 million in available bank lines of credit. EDS Corp. -- http://www.eds.com/-- is a global technology services company delivering business solutions to its clients. EDS founded the information technology outsourcing industry more than 40 years ago. EDS delivers a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. * * * EDS Corp.'s $2.5 billion senior unsecured debt carries Standard & Poor's BB rating. EAGLEPICHER HOLDINGS: Amends Terms of Newmont Mining Lease ---------------------------------------------------------- EaglePicher Holdings, Inc., and its debtor affiliates amended the terms of their Lease of Mining Rights agreement with Newmont USA Limited, dba Newmont Mining Corporation, on Jan. 27, 2006. The Lease of Mining Rights agreement, signed by EaglePicher Filtration & Minerals, Inc., and Newmont, allows the Debtors to use nine parcels of real property totaling 3,718.67 acres in Pershing County, Nevada. The Debtors extract diatomite from the Pershing property to produce filtration aids for removing solids and impurities from food, pharmaceuticals, lubrication oils and swimming pools as well as mineral additives for enhancing the performance of plastics and coatings. The lease specifies a term of one year, but EPFM has the option to renew the lese for up to 49 additional years. EPFM has renewed its lease on the property since 1966. The Debtors ask the U.S. Bankruptcy Court for permission to assume the Lease of Mining Rights agreement and approve the amended terms so EPFM can renew the lease for another year, commencing Dec. 1, 2005. The salient terms of the amended Lease of Mining Rights are: -- the Debtor will pay $315,761 to Newmont to cure postpetition royalty amounts due under the lease; -- postpetition royalty payments under the lease will be treated as adequate protection payments under 11 U.S.C. Sec. 363 to protect Newmont's interests; -- the Debtor's consent to deliver to Newmont, by Feb. 25, 2006, cash collateral, a bond, or irrevocable letter of credit in an amount equal to $351,444 to cover the costs of reclaiming the leased premises in accordance with a reclamation plan from the U.S. Bureau of Land Management; and -- minimum annual royalty payments under the lease are equal to the greater of one-fourth the amount of production royalties under the lease for the preceding year or $40,000. A copy of the eight-page lease amendment is available for a fee at http://www.researcharchives.com/bin/download?id=060222021921 Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. Miller Buckfire & Co., LLC, was retained by the Debtors and the Official Committee of Unsecured Creditors for additional financial advice. Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP provides the Creditors' Committee with legal advice. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EAGLEPICHER HOLDINGS: Cuts GE Railcar's $231,065 Claim to $129,000 ------------------------------------------------------------------ EaglePicher Holdings, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of Ohio to approve a settlement agreement with General Electric Railcar Services Corporation. On August 11, 2005, GE Railcar sought payment of $231,065 on account of a postpetition claim that accrued between Debtors' bankruptcy petition date, April 11, 2005, and June 10, 2005. The Debtors and GE Railcar reached a settlement agreement resolving GE Railcar's request. Under the proposed settlement, the Debtors will pay GE Railcar $129,000. Patrick J. Kukla, Esq., at Carson Fischer, P.L.C., in Birmingham, Michigan, contends that GE Railcar's claim and the Debtors' defenses, the complexity of the issues and the risks inherent in litigation, the fees and expenses, which the Debtor would necessarily incur in further contesting the request through a hearing, and the delay and inconvenience which would be involved with it even if the Debtor were to prevail, point to the conclusion that the settlement is in the best interest of the Debtors' estates. Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. Miller Buckfire & Co., LLC, was retained by the Debtors and the Official Committee of Unsecured Creditors for additional financial advice. Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP provides the Creditors' Committee with legal advice. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EAGLEPICHER HOLDINGS: Hires Deloitte & Touche as Auditors --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio, Southern Division, authorized EaglePicher Holdings, Inc., and its debtor-affiliates to retain Deloitte & Touche LLP as independent auditors for EaglePicher Incorporated, nunc pro tunc to April 11, 2005. Deloitte & Touche will perform an audit of EPI's consolidated financial statements in accordance with auditing standards generally accepted in the United States of America. The objective of the audit is to express an opinion on the fairness of the presentation of the Debtor's consolidated financial statements for the year ending Nov. 30, 2005. Subject to the approval of the Bankruptcy Court, Deloitte & Touche intends to charge $200 per hour for its auditing services. The auditing firm expects to expend approximately 5,000 to 6,000 hours in conducting the audit of EPI's consolidated financial statements as of an for the year ending Nov. 30, 2005. The Debtor assures the Bankruptcy Court that Deloitte & Touche does not hold or represent any interest adverse to the bankruptcy estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. As reported in the Troubled Company Reporter on Nov. 11, 2005, the Bankruptcy Court authorized the Debtors to obtain professional tax services from Deloitte & Touche relating to transfer pricing regulations of the United States and Germany as they relate to certain intercompany transactions between EaglePicher Incorporated and Wolverine GmbH, a German affiliate of EaglePicher Incorporated. The Bankruptcy Court had also previously authorized the Debtors to employ Deloitte & Touche LLP as their bankruptcy and reorganization services provider. Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. Miller Buckfire & Co., LLC, was retained by the Debtors and the Official Committee of Unsecured Creditors for additional financial advice. Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP provides the Creditors' Committee with legal advice. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EMERGE CAPITAL: Names Fred Zeidman as Chairman of the Board ----------------------------------------------------------- Emerge Capital Corp. (OTCBB:EMGC) disclosed details concerning Fred Zeidman serving as Chairman of The Board of Emerge Capital Corp. Mr. Zeidman is internationally known as a turnaround expert and business developer. Mr. Zeidman's experience includes acting as Chairman and CEO of Seitel, Inc. (OTCBB:SELA), which he recently led through a successful $300 million reorganization, with all creditors being paid one hundred cents on the dollar. Since his appointment in 2002, the Seitel market capitalization has grown from $4 million to approximately $365 million today. Additionally, Mr. Zeidman was appointed as co-trustee of the AremisSoft Liquidating Trust, which has recovered approximately $240 million in what has been described as one of the largest recoveries ever achieved in a stock fraud case. Mr. Zeidman also contributes a significant amount of his time serving as Chairman of the United States Holocaust Memorial Council in Washington, D.C., as well as devoting time to numerous other philanthropic endeavors. Mr. Zeidman's business development efforts include building Unibar Energy Services into the largest domestic drilling fluids company in the USA. The company was sold to Anchor Drilling Fluids. Mr. Zeidman took over the reigns of Interpak Terminals as Chairman and CEO in 1993 and built it into one of the largest resin packaging and storage companies in the USA. It was sold in 1997 to Katoen Natie. Mr. Zeidman commented on his role as Chairman of Emerge Capital Corp.: "I view Emerge as an opportunity to use my skills and experience in a unique and interesting plan to help emerging and re-emerging public companies restructure, and hopefully, prosper. We provide our services largely for equity in the public companies that we contract with, and view our business as having the opportunity to produce returns far greater in equity growth than solely cash compensation. Our mission is to build the reputation of Emerge Capital as being one of the most knowledgeable, effective and aligned turnaround and business development experts in the market." Emerge Capital Corp. provides Business Restructuring, Turnaround Management, and Advisory Services for emerging and re-emerging public and private companies through its wholly owned operating subsidiary, Corporate Strategies, Inc. CSI helps micro-cap public companies accelerate growth, provides working capital strategies, funding alternatives 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. The company believes this compensation plan provides us with an opportunity to achieve venture capital like returns on our equity participation, and 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 the company's 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. FRUIT OF THE LOOM: Creditor Trust Ready to Make Final Distribution ------------------------------------------------------------------ The Unsecured Creditors' Trust, successor-in-interest to Fruit of the Loom, Inc., and its debtor-affiliates, asks the U.S. Bankruptcy Court for the District of Delaware for permission to make final distributions to holders of Class 4A Unsecured Claims. The Trust was created under the Debtors' Third Amended Joint Plan of Reorganization. The Trust took charge of completing the claims analysis and objection process for Class 4A Unsecured Claims and calculating and implementing distributions of trust assets to holders of those claims. There were 3,450 claims in Class 4A as of the Plan's Effective Date. The Trust had $2 million on that date for distribution and was given until April 30, 2006, to complete its work. David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, reminds the Court that the Trust has made three interim distributions to date. The first interim distribution for 3.9297% was made on October 30, 2002. The second interim distribution for 4.5446% was made on July 30, 2003. The third interim distribution for 2.1000% was made on March 30, 2005. The Trust wants to make a final distribution in the amount of 0.9182% of the amount of each allowed claim, for a total distribution of 11.4925% to holders of Class 4A claims. The Trust wants to establish a $100,000 reserve account for the payment of fees and expenses related to the dissolution of the Trust, including the preparation of final report and accounts. Any amounts remaining in the Reserve Account after dissolution will be contributed to a charitable organization pursuant to the Trust. The Trust also wants to dissolve after completing the final distribution. The Trust asks the Court to discharge Clingman & Hanger Management Associates, LLC, the Trust Administrator, the Unsecured Creditors Trust Advisory Committee and their members, employees, agents, representatives and professionals after the Trust dissolution. Headquartered in Chicago, Illinois, Fruit of the Loom, Inc., is a leading international, vertically integrated basic apparel company, emphasizing branded products for consumers ranging from infants to senior citizens. The Company and its debtor-affiliates filed for chapter 11 protection on Dec. 29, 1999 (Bankr. D. Del. Case No. 99-04497). Aaron A. Garber, Esq., at Pepper Hamilton LLP and Donald J. Detweiler, Esq., at Saul Ewing LLP represent the Debtors. When the Debtors filed for protection from their creditors, they listed $2,283,700,000 in total assets and $2,495,200,000 in total debts. The Court confirmed the Debtors' Third Amended Joint Plan of Reorganization on April 19, 2002, under which Berkshire Hathaway purchased substantially all of the company's assets and Berkshire's money is distributed to the Debtors' creditors. The Plan took effect on April 30, 2002. FUTURE MEDIA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Future Media Productions, Inc. 24811 Avenue Rockefeller Valencia, California 91355 Tel: (661) 294-5575 Fax: (661) 294-5583 Bankruptcy Case No.: 06-10170 Type of Business: The Debtor provides CD and DVD replication and packaging services on the West Coast. See http://www.fmpi.com/ Chapter 11 Petition Date: February 14, 2006 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: David Neale, Esq. Levene, Neale, Bender, Rankin & Brill LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Debtor's latest financial condition: Total Assets: $12,370,783 Total Debts: $30,650,669 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ U.S. Phillips Corporation $5,244,859 Intellectual Property Department (B. Freeman) 580 White Plain Road Technicolor $2,927,434 Department 7658 Los Angeles, CA 90088-7658 Bayer Polymers LLC $2,462,084 100 Bayer Road, Building 16 Pittsburgh, PA 15205 Discovision Associates $1,254,717 P.O. Box 19616 Irvine, CA 92713 Select Temporary Services $655,042 Concept One Staffing $439,346 Sericol, Inc. $141,544 Bethel Plastics, Inc. $141,500 Case, Knowlson, Jordon & Wright LLP $77,596 CH Robinson Worldwide, Inc. $76,074 DIC International (USA), Inc. $72,240 Infiniti Media, Inc. $69,524 Ponica Industries Group $69,466 Guardsmark $68,683 Avion Tool Manufacturing $65,367 Flexplay Technologies $63,200 East-West Staffing, LLC $56,046 Matchcraft, Inc. $54,856 Aeroteck, Inc. $52,486 Latham & Watkins, LLP $52,466 GMAC: Moody's Says "Stand-Alone" Profile Weakens to Mid-Ba Rating ----------------------------------------------------------------- Moody's said in its opinion that GMAC's "stand-alone" credit profile has weakened to a mid-Ba rating equivalent, a change in its view from the low-Baa level first announced in October 2005. Moody's view reflects increased risks related to GMAC's business connections with GM, as well as increased challenges to its liquidity profile and profitability levels. GMAC's Ba1 public rating, on review with direction uncertain, remains unchanged, pending the outcome of GM's efforts to sell a controlling stake in the company. Absent a sale, Moody's believes GMAC's public debt rating would be no higher than that suggested by its stand-alone credit profile. If a sale is consummated, GMAC's stand-alone credit profile would be the starting point for Moody's ratings analysis. Moody's noted that prior to October 2005, GMAC's ratings had been maintained at a single notch above the ratings of GM through several rating changes. A mid-Ba public rating for GMAC would reflect a widening of the notching differential between the GM and GMAC ratings. In evaluating GMAC's stand-alone profile, Moody's focuses on GMAC's core financing operations and considers GMAC's mortgage operations from the perspective of an equity investment. Therefore, Moody's view of GMAC's stand-alone profile does not change its current view of Residential Capital Corporation's public ratings or stand-alone credit profile. Moody's had said in October 2005 that GMAC's stand-alone credit profile at that time would warrant a low-Baa rating, based upon GMAC's strengths in the areas of risk management and liquidity management, balanced by limiting factors including the firm's business concentrations with GM and weaker than peer profitability metrics. GM's rating at that time was Ba2, under review for possible downgrade, but has since been downgraded to B2, with a negative outlook, reflecting mounting operating challenges. Moody's believes GM's difficulties heighten risks to GMAC's liquidity, asset quality, and profitability. In Moody's view, GMAC's challenges regarding its financial flexibility and liquidity in its core financing operations are likely to intensify over the next several months. Although a majority of the firm's auto loans and mortgages can be readily financed with securitizations, certain other assets -- traditionally funded with unsecured debt -- are less likely to be successfully financed through alternative means. As a consequence, Moody's does not believe GMAC can maintain its current business composition under existing circumstances. Several concurrent actions undertaken by GM and GMAC may help to address GMAC's liquidity challenges, including a potential sale of a controlling stake in the firm in an effort to restore its access to the unsecured debt markets, and the further development of alternative sources of funding such as the firm's whole loan sale agreements with Bank of America and Bank of Nova Scotia, as well as new securitization platforms. In addition, a slower pace of new asset origination has eased the need to find incremental funding sources. However, maturities of unsecured debt over the next several quarters will likely require use of the firm's cash balances, which would weaken its financial flexibility and liquidity position. The profitability of GMAC's auto financing business is also under pressure, as higher borrowing costs pressure the company's net interest margins. In Moody's view, profitability within GMAC's auto financing operations has been somewhat weaker, though historically more stable, than peers. Further asset shrinkage and net interest margin compression, together with challenges associated with adjusting operating costs to lower scale, would further impact profitability measures in the company's auto financing business. Moody's also believes that GMAC's reduced margins leave it with more limited cushion to absorb any significant weakening of its asset quality. Although asset quality is currently stable, it is sensitive to the value of used GM cars in auctions for repossessed and off-lease vehicles. Further aggressive incentives or loss of share by GM could signal lower demand for GM vehicles and potentially undermine recently positive trending used car values. GMAC, a wholly owned subsidiary of General Motors Corporation, provides retail and wholesale financing in support of GM's automotive operations and is one of the world's largest non-bank financial institutions. GREEN MOUNTAIN: Earns $11 Million in Year Ended Dec. 31, 2005 ------------------------------------------------------------- Green Mountain Power Corporation (NYSE: GMP) reported its 2005 annual consolidated financial reports. Green Mountain earned $11,180,000 of net income on $217,562,000 of revenues for the year ended Dec. 31, 2005. Increases in operating revenues in 2005 were offset by increases in power supply expenses, other operating expenses, maintenance expenses, depreciation and amortization, and transmission expenses, causing earnings from continuing operations to be essentially unchanged compared with 2004. Retail operating revenues for 2005 increased by $9.6 million compared with the same period in 2004, reflecting the 2005 effects of a 1.9% retail rate increase, warmer summer weather, an increase in the number of Company customers, and increased sales of utility services to other utilities and large industrial and commercial customers. These increases were partially offset by recognition in 2004 of $3 million in revenue deferred under our 2003 Rate Plan. Under the Company's 2003 Rate Plan, approved by the Public Service Board in December 2003, rates remained unchanged in 2004 and the Company put into effect retail rate increases of 1.9% (generating approximately $4 million in added annual revenues) in January 2005 and 0.9% (generating approximately $2 million in added annual revenues) in January 2006, upon the submission of supporting cost of service schedules. The last of these rate increases was implemented effective Jan. 1, 2006. The 2003 Rate Plan also allowed the Company to carry unused deferred revenue totaling approximately $3 million to 2004 and to recognize this revenue to help to achieve its allowed rate of return during 2004. Total retail megawatt hour sales of electricity increased by 1.9% in 2005, compared with the same period in 2004. Sales to residential and small commercial and industrial customers increased by 3.0% and 2.7%, respectively, while sales to large commercial and industrial customers increased by 0.3% in 2005. Revenues from the sale of utility services to other utilities and large industrial and commercial customers increased by approximately $4.3 million in 2005, compared with the prior year. Wholesale revenues in 2005 also increased by $5.6 million compared with 2004, reflecting substantially higher wholesale energy prices in 2005. Other operating expenses increased by $5.5 million in 2005, reflecting an increase of $4.3 million in utility services expense. The Company's utility services business is designed to recover some of its administrative and staffing costs from other parties, ultimately reducing costs to customers and improving financial results between rate cases. Power supply expenses increased $6.0 million in 2005 compared with 2004 due to increased costs of market purchases to serve marginal load, increased purchases of power under the contract with Hydro- Quebec, an increase in the cost of power under the power supply contract with Morgan Stanley, and increased costs of transmission line losses and congestion charges allocated within the New England power pool by ISO New England, the regional system operator. Congestion charges represent the cost of delivering energy to customers and reflect energy prices, customer demand, and the availability of transmission and generation resources. The Company paid an average market price of approximately $95 per megawatt hour for system purchases during hours when customer demand exceeded supply during 2005, compared to $57 per megawatt hour in the same period last year, inclusive of the effects of congestion and line losses. Increased hydro production and deliveries under long-term power supply contracts with Hydro-Quebec and Vermont Yankee had a significant dampening effect on the increase in power supply expenses the Company experienced in 2005. "The average cost of our power supply resources is substantially below current market prices," said Mr. Dutton. "We are pleased that our customers have continued to enjoy significant benefits under our long-term power supply contracts. Unfortunately, as these arrangements expire, they must be replaced with higher priced energy resources. We will feel that effect when our contract with Morgan Stanley expires at the end of 2006." Rate Increase The Company expects to file a retail rate case requesting a rate increase estimated at between 10% and 15% in 2006, effective for Jan. 1, 2007. Maintenance expenses, depreciation and amortization, and transmission expenses also increased during 2005 compared with 2004. Maintenance expenses increased by $1.5 million, reflecting an increase in transmission and distribution line maintenance and maintenance of our gas turbines. Depreciation and amortization were $1.1 million higher than in the previous year, reflecting increased plant investments and a $539,000 increase in amortization of regulatory assets. Transmission expenses increased by $797,000 during 2005, compared with the prior year, as a result of an increase in charges allocated for system support in New England by ISO New England, increased retail sales of energy and an increase in investments by Vermont Electric Power Company, the entity that owns and operates most of the transmission grid in Vermont. The Company owns approximately 30% of VELCO. Earnings on discontinued operations for 2005 and 2004 consisted primarily of changes in operating reserves or tax valuation allowances that are considered non-recurring. In other developments, the Company's most recent customer service survey indicated an overall satisfaction rate of 94% with contacts with the Company. "There is nothing more fundamental to achieving success than providing superior customer service," Mary Powell, Chief Operating Officer said. "We made efforts to improve service in a variety of ways this year, including increasing expenditures on line maintenance to shorten outages for customers when severe storms strike, increasing funding for our power partners program to help low-income customers, and expanded deployment of new automated meter reading equipment to reduce estimated readings. We look forward to further improvements in the coming year." Headquartered in Colchester, Vermont, Green Mountain Power Corporation (NYSE: GMP) -- http://www.gmpvt.com/-- is a public utility operating company that transmits, distributes and sells electricity and utility construction services in the State of Vermont. Green Mountain serves approximately 90,000 customers. * * * Green Mountain Power Corporation's Preferred Stock carry Moody's Investors Service's Ba1 rating. Moody's assigned this rating on Aug. 29, 2002. HEDSTROM CORP: Has Until July 14 to Object to Proofs of Claim ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois extended until July 14, 2006, the period for Hedstrom Corporation and its debtor-affiliates to file objections to proofs of claim. The Debtors tell the Court that they are in the process of liquidating their remaining unencumbered assets for distribution to creditors. Specifically, the Debtors continue to litigate approximately 35 avoidance actions which seek to recover $4 million in payments made shortly before their chapter 11 filing. The amount of priority claims asserted against all of the Debtors is close to $14 million. While the Debtors have begun to object to these priority claims, based on the value of the Debtors' claims and unencumbered assets, there will not be funds sufficient to make a distribution to creditors holding unsecured claims in the Debtors' cases. The Debtors believe that it is inappropriate for them to incur administrative expenses in litigating objections to proofs of claim until an estimated distribution to unsecured creditors is better known. The extension, according to the Debtors, will not prejudice any of the Debtors' creditors. Headquartered in Arlington Heights, Illinois, Hedstrom Corporation -- http://www.hedstrom.com/-- manufactures and markets well- established children's leisure, outdoor recreation and home decor products, including outdoor gym sets, spring horses, trampolines, skating equipment (through Backyard Products Unlimited, currently in a Canadian receivership proceeding); play balls (through non- debtor BBS Industries, Inc.); and arts and crafts kits, game tables, indoor sleeping bags, play tents and wall decorations (through ERO Industries). The Company filed for chapter 11 protection on October 18, 2004 (Bankr. N.D. Ill. Case No. 04-38543). Allen J. Guon, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represent the Debtors in their restructuring. When the Company filed for chapter 11 protection, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. HOLLYWOOD CASINO: Asks Court for Final Decree Closing Three Cases ----------------------------------------------------------------- Hollywood Casino Shreveport and its debtor-affiliates ask the Honorable Stephen V. Callaway of the U.S. Bankruptcy Court for the Western District of Louisiana in Shreveport to issue a final decree closing these Chapter 11 cases: Debtor Case No. ------ -------- HCS I, Inc. 04-13937 HCS II, Inc. 04-13938 HWCC-Louisiana, Inc. 04-13939 R. Patrick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, tells the Court that the three Debtors' bankruptcy cases have been fully administered. The three debtor entities have been dissolved under Louisiana Law pursuant to Section 6.8 of the Debtors' confirmed Plan. Headquartered in Shreveport, Louisiana, Hollywood Casino Shreveport operates a casino hotel and resort featuring riverboat gambling. Its creditors led by Black Diamond Capital Management filed an involuntary chapter 11 protection on September 10, 2004 (Bankr. W.D. La. Case No. 04-13259). Robert W. Raley, Esq., in Bossier City, La., and Timothy W. Wilhite, Esq. at Downer, Hammond & Wilhite, LLC, represent the petitioners that filed the involuntary petition against the Debtor. The Company owed $34,958,113 to the petitioners. On July 7, 2005, the Honorable Stephen V. Callaway confirmed the Joint Plan of Reorganization of the Debtors and the Official Bondholders' Committee. INTEGRATED ELECTRICAL: Court Okays Joint Administration of Cases ---------------------------------------------------------------- Rule 1015(b) of the Federal Rules of Bankruptcy Procedure provides, in relevant part, that "[i]f two or more petitions are pending in the same court by or against a debtor and an affiliate, the court may order joint administration of the estates." Integrated Electrical Services, Inc., and its debtor-affiliates filed 133 voluntary petitions under Chapter 11 of the Bankruptcy Code. Sanford R. Edlein, IES' chief restructuring officer, notes that the procedural burdens that might be placed on the Debtors and other creditors having to file multiple pleadings in each of the 133 Cases necessitates their joint administration. Furthermore, Mr. Edlein says, administration under the name of the parent company should help avoid confusion among the creditors and interest holders. Thus, the Debtors ask The U.S. Bankruptcy Court for the Northern District of Texas to jointly administer -- for procedural purposes only -- their chapter 11 cases under In re Integrated Electrical Systems, Inc., et al., Case No. 06-30602-BJH-11 (Jointly Administered). According to Mr. Edlein, the joint administration of the 133 Cases, including the combining of notices to creditors of the estates, as well as calling and hearing all matters at the same time, will promote economic, efficient, and convenient administration of the estates. Supervision of the administrative aspects of the Debtors' cases by the Office of the United States Trustee will also be simplified, Mr. Edlein adds. The Debtors clarify that they are not seeking substantive consolidation of their estates. * * * The Court grants the Debtors' motion. The Debtors' cases are jointly administered in accordance with Bankruptcy Rule 1015(b) under the case styled In re Integrated Electrical Services, Inc., Case No. 06-30602-BJH-11. The Bankruptcy Clerk will maintain one file for the Cases, except that all schedules and statements will be filed in the dockets of each separate case. The Bankruptcy Clerk will also maintain separate claim registers for each separate case. Headquartered in Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides everything from system design, installation, and testing to long-term service and maintenance on a wide array of projects. With approximately 140 locations nationwide, the Company is prepared to seamlessly manage and deliver all your electrical, security, and communication requirements. The Debtor and 132 of its affiliates filed for chapter 11 protection on Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins, L.L.P., represent the Debtors in their restructuring efforts. As of Dec. 31, 2005, Integrated Electrical reported assets totaling $400,827,000 and debts totaling $385,540,000. (Integrated Electrical Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTEGRATED ELECTRICAL: Section 341(a) Meeting Set for March 14 -------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of Integrated Electrical Services, Inc., and its debtor-affiliates' creditors at 2:00 p.m., on March 14, 2006, in Room 976, at 1100 Commerce Street, in Dallas, Texas 75242. This is the first meeting of creditors required under U.S.C. Sec 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office 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 Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides everything from system design, installation, and testing to long-term service and maintenance on a wide array of projects. With approximately 140 locations nationwide, the Company is prepared to seamlessly manage and deliver all your electrical, security, and communication requirements. The Debtor and 132 of its affiliates filed for chapter 11 protection on Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins, L.L.P., represent the Debtors in their restructuring efforts. As of Dec. 31, 2005, Integrated Electrical reported assets totaling $400,827,000 and debts totaling $385,540,000. (Integrated Electrical Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTEGRATED ELECTRICAL: U.S. Trustee Picks 3-Member Creditors Panel ------------------------------------------------------------------ Pursuant to Section 1102(a) of the Bankruptcy Code, William T. Neary, the United States Trustee for Region 6, appoints three creditors to the Official Committee of Unsecured Creditors in Integrated Electrical Services, Inc., and its debtor-affiliates' chapter 11 cases: 1. Tontine Capital Partners, L.P. 55 Railroad Avenue, 3rd Floor Greenwich, CT 06830 Tel: (203) 769-2015 Fax: (203) 769-2010 Attn: Joe Lash 2. Southpoint Capital Advisors, L.P. 623 Fifth Avenue, 25th Floor New York, NY 10022 Tel: (212) 692-6350 Fax: (212) 692-6355 Attn: Rob Butts 3. Fidelity Management & Research Co. 82 Devonshire Street E31C Boston, MA 02109-3614 Tel: (617) 392-8129 Fax: (617) 476-5174 Attn: Nate Van Duzer Headquartered in Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides everything from system design, installation, and testing to long-term service and maintenance on a wide array of projects. With approximately 140 locations nationwide, the Company is prepared to seamlessly manage and deliver all your electrical, security, and communication requirements. The Debtor and 132 of its affiliates filed for chapter 11 protection on Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins, L.L.P., represent the Debtors in their restructuring efforts. As of Dec. 31, 2005, Integrated Electrical reported assets totaling $400,827,000 and debts totaling $385,540,000. (Integrated Electrical Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc. 215/945-7000) J.A. JONES: Trustee Wants Until April 24 to Object to Claims ------------------------------------------------------------ Carroll Services, LLC, the Liquidation Trustee appointed in J.A. Jones, Inc.'s Chapter 11 cases, asks the U.S. Bankruptcy Court for the Western District of North Carolina for more time to file claims objections. The Liquidation Trustee intends to file objections to Other Administrative Expense Claims and all other claims except Class 6 Claims and Class 10 Claims, as appropriate. The Liquidation Trustee believes that although it has nearly completed objecting to the Other Administrative Expense Claims, it will still need additional time to review and determine the validity of the few remaining Other Administrative Expense Claims. The Liquidation Trustee asks the Court to extend the claim objection deadline to April 24, 2006. Headquartered in Charlotte, North Carolina, J.A. Jones, Inc., was founded in 1890 by James Addison Jones. J.A. Jones is a subsidiary of insolvent German construction group Philipp Holzmann and a holding company for several US construction firms. The Debtors filed for chapter 11 protection on September 25, 2003 (Bankr. W.D. N.C. Case No. 03-33532). John P. Whittington, Esq., at Bradley Arant Rose & White, LLP, and W. B. Hawfield, Jr., Esq., at Moore & Van Allen represented the Debtors in their restructuring. When the Debtors filed for protection from its creditors, they listed debs and assets of more than $100 million each. On Aug. 19, 2004, the United States Bankruptcy Court for the Western District of North Carolina approved the Third Amended and Restated Joint Plan of Liquidation of J.A. Jones and certain of its debtor-subsidiaries. The Plan took effect on Sept. 28, 2004. JAKE'S GRANITE: Files Plan of Reorganization in Arizona ------------------------------------------------------- Jake's Granite Supplies, L.L.C., filed its Plan of Reorganization with the U.S. Bankruptcy Court for the District of Arizona on February 7, 2006. Daniel E. Garrison, Esq., at Gallagher & Kennedy, P.A., in Phoenix, Arizona, tells the Court that the Debtor has sufficient cash from the sale of substantially all of its assets to Cemex Building Materials, L.P., to fully pay all allowed claims. Mr. Garrison said there's approximately $4,645,000 remaining in the estate -- net of all remaining cure payments, all claims of unsecured creditors, and anticipated administrative costs -- plus the $500,000 Cemex holdback. Holders of claims entitled to priority pursuant to Section 507(a)(3), (4), (5) or (6) of the Bankruptcy Code will be paid in cash on the effective date. If the Debtor elects to pay those claims over time, the Debtor will pay interest at 7% annually. Holders of secured claims will either be paid in cash or will receive the collateral securing their claims. In the event a secured creditor's collateral is insufficient to fully satisfy a claim, the deficiency will be treated as an unsecured claim. Holders of unsecured claims will be paid in cash on the effective date. If those claims are paid over time, they will accrue interest at 7% annually. Holders of equity interests will retain their stake in the Company. A full-text copy of the Plan of Reorganization is available for free at: http://www.ResearchArchives.com/bin/download?id=060222022212 Headquartered in Chandler Heights, Arizona, Jake's Granite Supplies, L.L.C., owns and operates a sand and gravel mining operation in Buckeye, Arizona. The Company filed for chapter 11 protection on June 13, 2005 (Bankr. D. Ariz. Case No. 05-10601). Joseph E. Cotterman, Esq., Gallagher & Kennedy, P.A., represent the Debtor in their restructuring efforts. Brian N. Spector, Esq., at Jennings Strouss & Salmon, PLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets of $16,473,500 and debts of $6,141,198. LL INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: LL International Shoe Company, Inc. dba Dada Footwear dba LL International Shoe Inc 929 East 2nd Street, Suite 205 Los Angeles, California 90012 Tel: (213) 625-7373 Fax: (213) 625-7073 Bankruptcy Case No.: 06-10561 Type of Business: The Debtor produces urban footwear and apparel. Chapter 11 Petition Date: February 22, 2006 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Anne E. Wells, Esq. Levene, Neale, Bender, Rankin & Brill LLP 10250 Constellation Boulevard Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dean Shoes Company, Ltd. $2,464,120 12400 Wilshire Boulevard, #900 Los Angeles, CA 90025 Yue Yuen Marketing Co. Ltd. $1,406,000 Pou Chen Crop Blocr Qian Shan Chui Jing Dist Zhuhai Sez, Guangdong, China Chris Webber $750,000 2150 River Plaza Drive, #450 Sacramento, CA 95833 Sacramento Kings $277,000 Bureau of Customs & Border Protection $203,385 Dada Supreme Royalties $200,000 Pat Devaney $200,000 Niro, Scavone, Naller & Niro $106,569 Catherine Simmons-Gill $100,782 Straight From the Shoulders Music $100,000 Internal Revenue Service $93,407 Greer Burns & Crain Ltd. $89,181 Asia Top Global Ltd. $78,948 Sibylle Smith $68,000 Akin, Gump, Strauss, Hauer & Feld $56,420 Allied Interstate Insurance $50,317 Loews Cineplex Ent. $50,000 Commercial Law Corp. $48,000 Bassco Promotion Goods $42,192 Newport Air Express $40,655 LOVESAC CORP: Wants to Auction & Walk Away From 21 Leases --------------------------------------------------------- The LoveSac Corporation and its debtor-affiliates ask the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware for authority to: (a) assume and assign some unexpired nonresidential real property leases, free and clear of liens, claims and encumbrances; (b) enter into lease termination agreements; (c) reject some unexpired nonresidential real property leases, effective Feb. 28, 2006; and (d) establish a deadline for assertion of claims resulting from the rejection of those leases. Auction The Debtors have 21 leases to assume, assume and assign, or reject. These leases will be sold through an auction. Those leases that will be sold will be assumed and assigned to the highest bidder. In the event that any leases get no bids, the Debtors will reject those leases. The Debtors ask the Court that any lease rejections be effective as of Feb. 28, 2006. As reported in the Troubled Company Reporter on Feb. 9, 2006, Keen Realty, LLC, is actively marketing the 21 retail leases. Keen will be auctioning the leases on Feb. 24, 2006. If a landlord is the successful bidder on the auction, the Debtors ask the Court to allow them to enter into a Lease Termination Agreement with the landlord without the need for further Court Order. Bar Date If rejection of any lease gives rise to a claim for damages, the Debtors ask the Court that the affected landlord be required to file a proof of claim for those damages no later than 30 days after entry of Court Order. A list of the 21 leases is available for free at: http://ResearchArchives.com/t/s?5ba Judge Walrath will consider the Debtors' request at 12:00 p.m. on Feb. 27, 2006. 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). Anthony M. Saccullo, Esq., and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey Coston, Esq., at Squire, Sanders & Dempsey LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MALLARD CABLEVISION: Entry of Final Decree Extended Until June 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware delayed until June 30, 2006, the entry of final decree closing Mallard Cablevision, LLC and its debtor-affiliates' chapter 11 cases. Howard S. Cohen, the Liquidating Trustee, has been winding up the Debtors' estates, making distributions to creditors, and complying with his obligations under the Plan. This process is not complete. The Liquidating Trustee needs more time to continue reviewing claims and resolving objections. Approximately 205 filed claims remain for disposition by the Liquidating Trustee. The extension will also give him sufficient time to bring the remaining avoidance actions to a resolution either by settlement, mediation or trial. Mallard Cablevision, LLC provides cable television services to non-metropolitan markets in 11 states. The Company filed for chapter 11 protection on May 9, 2003 (Bankr. Del. Case No. 03-11391). Michael David Debaecke, Esq., at Blank Rome LLP represents the Debtors. When the Company filed for protection from its creditors, it listed $68,961,787 in total assets and $102,035,458 in total debts. In two separate transactions in late-2003, the Debtors sold substantially all of their assets to ComSouth Corporation and LB Cable LLC, for $26.6 million. The Court confirmed the Debtors' First Amended Joint Chapter 11 Plan of Liquidation on Feb. 13, 2004, and the Plan took effect on Feb. 24, 2004. The Plan created a Liquidating Trust to distribute the sale proceeds to creditors and prosecute avoidance actions. Howard S. Cohen serves as the Liquidating Trustee. Mr. Cohen is represented by Jennifer L. Scoliard, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP. MCLEODUSA INC: Court Found Former CEO Guilty of Illegal Trading --------------------------------------------------------------- Justice Richard Lowe III of the Supreme Court of the State of New York found former chief executive officer of McLeodUSA, Inc., Clark E. McLeod, guilty of illegal stock trading. Justice Lowe held that Mr. McLeod is guilty of: -- making "material misstatement or omission," in violation of General Business Law Article 23-A, by failing to disclose his receipt of "hot IPO" stock allocations to McLeodUSA's shareholders and potential investors; -- making a "material misstatement or omission," in violation of General Business Law Article 23-A, by failing to disclose his receipt of "hot IPO" stock allocations to McLeodUSA's board of directors; -- participating in a "fraudulent illegal scheme," in violation of General Business Law Article 23-A, by receiving "hot IPO" stock allocations from Salomon Smith Barney and by profiting from their sale; and -- committing "repeated and persistent fraudulent activity" against McLeodUSA in violation of Executive Law Section 63(12). McLeod is the last remaining defendant in the civil fraud action commenced by the State of New York and Eliot Spitzer, Attorney General of the State of New York, against the top executives of four large telecommunications companies. The former defendants in the action were Bernard J. Ebbers, former CEO of WorldCom, Inc.; Stephen A. Garofalo, former chairman of Metromedia Fiber Networks, Inc.; and Philip F. Anschutz, former chairman of Qwest Communications International, Inc., and Joseph P. Nacchio, former CEO of Qwest. Stock Spinning The complaint alleged that, between approximately 1997 and 2001, Mr. McLeod and the other executives received vast, illicit compensation for participating in a "stock spinning" scheme to the detriment of their companies and to the investing public. The scheme was operated by certain investment bankers and financial analysts employed by Salomon, which was not a party to the suit. The complaint said Salomon's goal was to ensure that the telecom executives would cause their companies to continue to retain the firm, and to continue to pay it considerable investment banking fees. Salomon purportedly had certain of its employees identify privately held companies for which it was preparing potentially lucrative "initial public offerings" of their stock, and then caused those employees to divert large quantities of those companies' stock into "private wealth management" accounts that the firm maintained for the executives. Afterwards, in their official roles as financial research analysts, the Salomon employees touted the companies' stock to drive up the price of the stock prior to the launching of the companies' IPOs. As a result, the executives were able to sell the inflated stock quickly at a huge personal profit. The complaint alleged that the Salomon analysts knew that the stock of these companies was not likely to be profitable, and that the price of that stock would decrease dramatically at some point after their IPOs had been consummated. The complaint also pointed out that the executives, including Mr. McLeod, were aware of this too, but nonetheless ensured that their companies continued to retain and pay Salomon so that they, themselves, would continue to reap millions of dollars in personal profit from short-swing sales of the inflated IPO stock. Mr. McLeod sold some 2.2 million shares of his personal McLeodUSA stock and eventually realized a profit of $9.9 million. McLeod's Dismissal Motion Mr. McLeod sought dismissal of the complaint. Mr. McLeod argued he did not have any duty to disclose his purchases of "hot IPO" stock through Salomon. The Court, however, held that Mr. McLeod's fiduciary obligations as the controlling shareholder, board president, and CEO of McLeodUSA did include the duty to disclose his "hot IPO" stock allocations and trades. The Court, nonetheless, rejected the claims against Mr. McLeod for (a) unjust enrichment and (b) perpetrating "deceptive acts and practices" against McLeodUSA. Justice Lowe agreed with Mr. McLeod that his non-disclosure of his IPO purchases did not deprive McLeodUSA or its shareholders of any property or money, or deprive any member of the public of a "possessory interest" in that stock. Justice Lowe said the Attorney General failed to prove a necessary component of his unjust enrichment claim. Justice Lowe said a hearing is necessary to determine the amount of restitution Mr. McLeod must pay. McLeod Will Pursue Appeal Harold K. Gordon, a partner at Jones Day in New York, Mr. McLeod's counsel, said Judge Lowe erred in his decision and that Mr. McLeod would probably appeal. "There is no evidence that there was any connection between Mr. McLeod's receipt of these I.P.O. shares and Salomon Smith Barney acting as the company's investment banker," Mr. Gordon told The New York Times. A full-text copy of the State Court order is available at no charge at http://ResearchArchives.com/t/s?5bc Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated -- http://www.mcleodusa.com/-- provides integrated communications services, including local services in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Debtor and its affiliates filed for chapter 11 protection on Oct. 28, 2005 (Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher and Flom, represent the Debtors in their restructuring efforts. As of June 30, 2005, McLeodUSA Incorporated reported $674,000,000 in total assets and $1,011,000,000 in total debts. Judge Squires confirmed the Debtors' Joint Prepackaged Plan of Reorganization on Dec. 16, 2005, and that plan took effect on Jan. 6, 2006. McLeodUSA Inc. previously filed for chapter 11 protection on Jan. 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court confirmed the Debtor's chapter 11 plan on April 5, 2003, and that Plan took effect on April 16, 2002. The Court formally closed that case on May 20, 2005. (McLeodUSA Bankruptcy News, Issue No. 10 Bankruptcy Creditors' Service, Inc., 215/945-7000). MCLEODUSA INC: Joe Ceryanec Promoted as Chief Financial Officer --------------------------------------------------------------- The Board of Directors of McLeodUSA Incorporated approved two promotions of existing McLeodUSA executives. Group Vice President Joe Ceryanec, previously Acting Chief Financial Officer, Controller and Treasurer, has been promoted to be the Company's permanent Chief Financial Officer, and he continues as Group Vice President. Bob Reich, previously assistant Controller and Treasurer, assumes the responsibilities of Controller and Treasurer, and continues as a Vice President of the Company. Royce J. Holland, Chief Executive Officer of McLeodUSA, commended Joe and Bob, saying "Both have been instrumental in shepherding McLeodUSA successfully through its recent financial restructuring. Joe and Bob have substantial tenure with the Company and will be instrumental leaders as we move forward with a substantially strengthened balance sheet, significantly reduced liabilities and strong liquidity. The McLeodUSA Board, the Leadership Team and I congratulate them on these well-earned promotions." Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated -- http://www.mcleodusa.com/-- provides integrated communications services, including local services in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Debtor and its affiliates filed for chapter 11 protection on Oct. 28, 2005 (Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234). Peter Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher and Flom, represent the Debtors in their restructuring efforts. As of June 30, 2005, McLeodUSA Incorporated reported $674,000,000 in total assets and $1,011,000,000 in total debts. Judge Squires confirmed the Debtors' Joint Prepackaged Plan of Reorganization on Dec. 16, 2005, and that plan took effect on Jan. 6, 2006. McLeodUSA Inc. previously filed for chapter 11 protection on Jan. 30, 2002 (Bankr. D. Del. Case No. 02-10288). The Court confirmed the Debtor's chapter 11 plan on April 5, 2003, and that Plan took effect on April 16, 2002. The Court formally closed that case on May 20, 2005. (McLeodUSA Bankruptcy News, Issue No. 10 Bankruptcy Creditors' Service, Inc., 215/945-7000). MEGO FINANCIAL: Chapter 7 Trustee Revises Real Property Sale Deal ----------------------------------------------------------------- C. Alan Bentley, the Trustee appointed in Mego Financial Corp.'s Chapter 7 cases, filed with the U.S. Bankruptcy Court for the District of Nevada, a second amendment to the sale of parcels of real estate in Pahrump, Nevada. The Chapter 7 Trustee seeks the Court's authority to sell the real estate parcel groups to these successful bidders as revised: Purchaser Revised Parcel Group Price --------- -------------------- ----- Larry Gruenwald 1 and 2 $80,000 Pahrump Valley Real Estate, LLC 3 $150,000 The Chapter 7 Trustee also seeks to sell Parcel Group 4 to Edwin Padua, another successful bidder, and provide appropriate title insurance for the allocated purchase prices of all the real estate parcels. The allocation of the purchase prices on all real estate parcels has been agreed upon by the Parties before the Chapter 7 conversion of the Debtor's case. The allocation is meant to ensure the Purchasers an agreed pricing in the event the Chapter 11 Trustee obtained title insurance from an alternative title insurance provider only for some of the parcels. The Chapter 7 Trustee believes that if he fails to immediately convey the revised Parcel Groups to the Purchasers the estate will lose the opportunity to sell them at the original prices, and result in additional costs for remarketing. On Sept. 1, 2005, the Debtor's Chapter 11 Trustee sought and obtained Court's authority to sell 62 parcels in the Nevada Property in four lots or in bulk to Pahrump Valley for $625,000, subject to higher and better bids. However, the Sale Order underwent an amendment after disputes on Debtor's ownership of the Nevada Property. Notwithstanding the first amendment, the Chapter 11 Trustee failed to close the Sale even after the conversion of the Debtor's Chapter 11 case to Chapter 7. Headquartered in Henderson, Nevada, Mego Financial Corp. -- http://www.leisureindustries.com/-- is in the business of vacation time share resorts sales and management industry. The Company and its debtor-affiliates filed for chapter 11 protection on July 9, 2003 (Bankr. Nev. Case Nos. 03-52300 through 03-2304). Stephen R Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $455,179 in assets and $39,319,861 in liabilities. Its debtor -affiliates estimated more than $100 million in assets and liabilities. The Bankruptcy Court converted Mego Financial's case to a chapter 7 liquidation on Feb. 3, 2006, and the U.S. Trustee appointed C. Alan Bentley, of Ponte Vedra Beach, Florida, to serve as the chapter 7 Trustee. Judy B. Calton, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, represents Mr. Bentley. MERIDIAN AUTOMOTIVE: Court Okays BDO Seidman as Auditor ------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 6, 2006, Meridian Automotive Systems, Inc., and its debtor-affiliates seek permission from the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to employ BDO Seidman, LLP, nunc pro tunc to Dec. 1, 2005, to provide accounting and auditing services in accordance with the terms of an engagement letter, as well as to provide tax services in accordance with a separate engagement letter. BDO will audit the Debtors' consolidated financial statements for the fiscal year ending Dec. 31, 2005, as well as other services stated in the engagement letters. The Debtors and BDO estimate the professional fees associated with the 2005 Audit to total $210,000. The Debtors will pay the Estimated Audit Fee in three installments: Date Fee Amount ---- ---------- January 15, 2006 $60,000 January 31, 2006 100,000 February 15, 2006 50,000 The professional fees associated with the 2005 Expatriate Tax Return Services is estimated to total $25,000. The Debtors intend to pay the Estimated Expatriate Return Fee in four installments: Date Fee Amount ---- ---------- January, 2006 $10,000 February, 2006 5,000 March, 2006 5,000 April, 2006 5,000 In addition, the Debtors will also pay BDO a flat fee for other services contemplated under the Engagement Letters, including: (1) reviewing the U.S. 2005 federal income tax return -- $15,000; and (2) reviewing the Canadian 2005 federal income tax return -- $5,000. In sum, the Debtors propose to pay a $255,000 total flat fee. The Flat Fee, Mr. Newsted clarifies, does not cover any additional services the Debtors may request, including tax consulting or auditing their employee benefit plans. These additional services will be billed at these hourly rates, as adjusted periodically: Partners $425 - $500 Managers/Directors $225 - $300 Associates/Sr. Associates $125 - $175 To reduce the expense to the Debtors' Chapter 11 estates, BDO plans to utilize employees of BDO Trevisan Auditores Independentes and BDO Dunwoody, LLP, to perform certain auditing procedures, including inventory test counts and inventory price testing at certain of the Debtors' Brazilian and Canadian locations in connection with the 2005 Audit and potentially other services as well. "The Debtors' Brazilian subsidiary is not a debtor in this or any other bankruptcy case," Mr. Newsted tells the Court. BDO Brazil will bill the Debtors' Brazilian operation directly for these services: (1) $15,000 for limited agreed upon auditing procedures at the Brazil operation; and (b) $5,000 for reviewing the Brazilian 2005 federal income tax return. Court Order The Court approves the Debtors' application, as modified: (1) BDO Seidman, LLP, is authorized to employ the BDO Foreign Affiliates to assist BDO in providing services to the Debtors, provided, however, that: (a) BDO will be solely responsible for the compensation of the BDO Foreign Affiliates; and (b) the Debtors will not be liable to the BDO Foreign Affiliates for any fees and expenses incurred in connection with their employment by BDO to provide services to the Debtors; (2) BDO will bill the Debtors for any work performed or costs incurred by employees of BDO Canada as if they were employees of BDO. All payments to BDO Canada will be handled within the BDO International accounting process and will be the sole responsibility of BDO, except for those payments made by the Debtors' non-debtor Brazilian subsidiary to BDO Brazil; (3) The Debtors will not be directly liable for any payments due and owing to the BDO Foreign Affiliates; (4) BDO's services regarding advice on tax, other accounting and financial reporting must not be duplicative of work performed by any of the Debtors' other retained professionals; (5) Any dispute between the parties is subject to the jurisdiction of the Bankruptcy Court. Upon conclusion of the Debtors' Bankruptcy Case, unless jurisdiction is otherwise retained in the Court under the Debtors' plan of reorganization, the parties have expressed their preference and intent in the Engagement Letter to be bound by alternative dispute resolution procedures; and (6) The limitation on liability provision in the Tax Engagement Letter is stricken. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Wants Until July 1 to Remove Civil Actions --------------------------------------------------------------- Pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedure, Meridian Automotive Systems, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware for an additional four-month extension of the time by which they may file notices of removal of prepetition civil actions to and including July 1, 2006. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, explains that the Debtors want to protect their rights to remove those prepetition civil actions, which they deem appropriate. The extension will give the Debtors more time to make fully informed decisions concerning removal of each pending prepetition civil action and will assure that they do not forfeit valuable rights under Section 1452 of the Judiciary and Judicial Procedures Code. Mr. Brady assures the Court that the rights of the Debtors' adversaries will not be prejudiced by an extension because any party to a prepetition action that is removed may seek to have it remanded to the state court pursuant to Section 1452(b). The Debtors also ask the Court to approve their request without prejudice to: (a) any position they may take regarding whether Section 362 of the Bankruptcy Code applies to stay any civil action pending against them; and (b) their right to seek further extensions. The Court will convene a hearing on March 7, 2006, at 10:30 a.m. to consider the Debtors' request. By application of Delaware Bankruptcy Local Rule 9006-2, the Debtors' removal deadline is automatically extended through the conclusion of that hearing. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERISTAR HOSPITALITY: Inks $2.6 Bil. Merger Deal with Blackstone ---------------------------------------------------------------- MeriStar Hospitality Corporation (NYSE: MHX) signed a merger agreement to be acquired by an affiliate of The Blackstone Group in a transaction valued at approximately $2.6 billion. In the mergers contemplated by the merger agreement, each share of MeriStar common stock and each unit of limited partnership interest in MeriStar Hospitality Operating Partnership, L.P., MeriStar's operating partnership, will be converted into the right to receive $10.45 in cash. The $10.45 per-share consideration represents a 20% premium over MeriStar's closing stock price on Nov. 10, 2005, the date prior to published reports regarding a potential acquisition of MeriStar. The board of directors of MeriStar has unanimously approved the merger agreement and has recommended the approval of the transactions by MeriStar's stockholders. Stockholders will be asked to vote on the proposed transactions at a special meeting that will be held on a date to be announced. The mergers are expected to close in the second quarter of 2006, pending stockholder approval and other customary closing conditions. Completion of the mergers is not subject to receipt of financing by Blackstone. "We are pleased to have entered into this agreement and believe that the transaction represents attractive value to our shareholders," said Paul Whetsell, MeriStar's chairman and CEO. Jonathan D. Gray, senior managing director of The Blackstone Group, said "We are excited to acquire the company. We look forward to working with MeriStar's franchisors, managers and partners." MeriStar remains on track to close its previously announced sale of nine hotels and one golf and tennis club to affiliates of The Blackstone Group during the first quarter 2006. Bear, Stearns & Co. Inc. and Morgan Stanley acted as financial advisors to Blackstone. Acquisition financing is being provided by Bear Stearns, Bank of America and Merrill Lynch. Lehman Brothers Inc. acted as financial advisor to MeriStar. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to MeriStar. Miles & Stockbridge P.C. acted as Maryland counsel to Blackstone, and Venable LLP acted as Maryland counsel to MeriStar. About The Blackstone Group The Blackstone Group -- http://www.Blackstone.com/-- is a global private investment and advisory firm with offices in New York, Atlanta, Boston, Los Angeles, London, Hamburg, Mumbai and Paris, was founded in 1985. Blackstone's real estate group has raised approximately $10 billion for real estate investing and has a long track record of investing in hotels and other commercial properties. In addition to Real Estate, The Blackstone Group's core businesses include Private Equity, Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory, and Restructuring and Reorganization Advisory. About MeriStar Hospitality Corporation Based in Bethesda, Maryland, MeriStar Hospitality Corporation -- http://www.meristar.com/-- owns 57 principally upper-upscale, full-service hotels in major markets and resort locations with 16,507 rooms in 19 states and the District of Columbia, including 10 properties that are under contract to be sold to Blackstone. MeriStar owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and Radisson. MERISTAR HOSPITALITY: Blackstone Merger Prompts S&P's CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on hotel operator MeriStar Hospitality Corp., including its 'B' corporate credit rating, on CreditWatch with developing implications. The CreditWatch listing follows the announcement that the Bethesda, Maryland-based company has signed a merger agreement to be acquired by The Blackstone Group for about $2.6 billion. This acquisition is subject to shareholder approval and other customary conditions, and is expected to be completed in the second quarter of 2006. The closing of the merger is not subject to the receipt of financing by Blackstone. In resolving the CreditWatch listing, Standard & Poor's will monitor the situation as it develops. Should rated borrowings be fully redeemed, or if sufficient information were no longer available to render a credit opinion, Standard & Poor's would withdraw its ratings on MeriStar. MERITAGE HOMES: Directors Okay $100 Mil. Share Repurchase Program ----------------------------------------------------------------- Meritage Homes Corp. (NYSE: MTH) reported that its board of directors authorized the company to repurchase up to $100 million of the company's common stock. This new authorization is in addition to a recently completed $50 million repurchase program, under which the company repurchased 831,616 shares of common stock at an average price of $60.12 per share between November 2005 and February 2006. This completed the company's third stock repurchase program since 1999. "When the stock market affords us the opportunity to repurchase our shares at what we consider to be attractive prices, we like to take advantage of it," said John R. Landon, co-chairman and chief executive officer of Meritage. Steven J. Hilton, Meritage's co- chairman and CEO, added, "We manage our business for the long term, with a goal of maximizing returns for our stockholders, and we believe that repurchasing Meritage stock at appropriate times can further those objectives." The new authorization allows Meritage to purchase its common shares subject to applicable securities laws, in open market or privately negotiated transactions, based on market conditions and other factors. Shares repurchased will be held as treasury shares and may be used in connection with stock option or other incentive plans, or in future financings. Meritage had 26.8 million shares issued and outstanding as of Feb. 15, 2006. Meritage Homes Corp. -- http://www.meritagehomes.com/-- is a leader in the consolidating homebuilding industry. The company is ranked by Builder magazine as the 13th largest homebuilder in the United States; has been on Forbes' Platinum 400 "Best Managed Big Companies in America" list the last three years; on Fortune's "Fastest Growing Companies in America" list five of the last seven years, as well as being a "Fortune 1000" company; and is included in the S&P SmallCap 600 Index. Meritage operates in fast-growing states of the southern and western United States, including six of the top 10 single-family housing markets in the country, and has reported 18 consecutive years of record revenue and net earnings. * * * As reported in the Troubled Company Reporter on Dec. 14, 2005, Fitch affirms Meritage Homes Corporation's 'BB' issuer default rating, senior unsecured debt, and unsecured bank credit facility ratings. The rating applies to approximately $480 million in senior notes and the $600 million revolving credit facility. The Rating Outlook has been changed from Stable to Positive. MOOG INC: Closes Sale of 2,875,000 Shares of Class A Common Stock ----------------------------------------------------------------- Moog Inc. (NYSE: MOG.A and MOG.B) closed its public offering and sale of 2,875,000 shares of Class A common stock (which number of shares includes 375,000 shares sold pursuant to the underwriter's over-allotment option) at a price of $31.00 per share. Net proceeds to Moog from the offering were approximately $84.5 million. Moog will use the net proceeds from this offering to repay a portion of the outstanding indebtedness under the revolving credit facility portion of its bank credit facility, which amount may be reborrowed for general corporate purposes, including acquisitions. All of the shares were offered by Moog solely pursuant to a prospectus supplement under Moog's existing shelf-registration statements. Cowen & Co., LLC acted as the sole manager for the offering. Copies of the final prospectus supplement and accompanying prospectus related to the offering may be obtained from Cowen & Co., LLC at 1221 Avenue of the Americas, 6th Floor, New York, NY 10020. Based in East Aurora, New York, Moog Inc. -- http://www.moog.com/ -- is a worldwide designer, manufacturer, and integrator of precision control components and systems. Moog's high-performance systems control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, automated industrial machinery, and medical equipment. Moog Inc.'s $150 million 6-1/4% Senior Subordinated Notes due 2015 carry Standard & Poor's B+ rating. S&P assigned that rating on January 4, 2005. MULTIPLAN INC: Inks Pact for Acquisition by Carlyle Group --------------------------------------------------------- The Carlyle Group will acquire MultiPlan, Inc. The transaction is expected to close in the second quarter of 2006. Financial terms were not disclosed. Mark Tabak, MultiPlan Chief Executive Officer, said, "The healthcare system is in the midst of sweeping change, and in our 35 years we've developed not only a comprehensive suite of healthcare cost management services, but also a transaction and information management engine with the sophistication to embrace the scope, speed and flexibility demands of the country's largest insurers. In Carlyle we have the strategic and financial backing to propel our value even further in support of our clients' and providers' business and growth objectives." Bob Dahl, Managing Director and Co-head of Carlyle's Healthcare Group, said, "Steadily rising healthcare costs have sparked a new wave of innovation and consolidation in the managed care industry. We see MultiPlan's independent, national network and related technology as the critical building blocks in new solutions that will emerge to support this changing market. We look forward to working with Mark and his management team as we take MultiPlan to the next level of growth and success." PPOs, which are the most common type of health plan used today, offer a provider network and range of value-added services to help employers and other health plan sponsors manage the cost of medical claims. According to the Centers for Medicare and Medicaid, spending on healthcare in 2005 will have surpassed $1 trillion in the commercial sector, MultiPlan's target market. MultiPlan offers a full range of medical cost management solutions to a blue-ribbon list of clients, including the national PPO network, specialty networks, negotiation services and electronic claim routing technology. The company's top 10 clients together deliver health coverage to more than 70 million Americans. About The Carlyle Group The Carlyle Group -- http://www.carlyle.com/-- is a global private equity firm with $35 billion under management. Carlyle invests in buyouts, venture capital, real estate and leveraged finance in Asia, Europe and North America, focusing on healthcare, aerospace & defense, automotive & transportation, consumer & retail, energy & power, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $14.9 billion of equity in 439 transactions for a total purchase price of $51.9 billion. The Carlyle Group employs more than 630 people in 14 countries. In the aggregate, Carlyle portfolio companies have more than $40 billion in revenue and employ more than 370,000 people around the world. About MultiPlan MultiPlan Inc. -- http://www.multiplan.com/-- is the nation's oldest and largest independent Preferred Provider Organization (PPO) network offering nationwide access to more than 4,200 hospitals, 90,000 ancillary care facilities and 450,000 physicians and specialists. The company's 2,000 clients include large and mid-sized insurers, third-party administrators, self-funded plans, HMOs and other entities that pay claims on behalf of health plans. * * * Standard & Poor's Ratings Services placed its 'B+' counterparty credit rating on MultiPlan Inc. on CreditWatch with developing implications, following the company's announcement that it will be acquired by The Carlyle Group. The developing implications, S&P explains, reflect the uncertainty related to the financing and the prospective capital structure and operating strategy at MultiPlan. MUSICLAND HOLDING: Can Maintain Existing Insurance Policies ----------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 6, 2006, Musicland Holding Corp. and its debtor-affiliates asked the U.S. Bankruptcy Court for the Southern District of New York's permission to pay the financed premiums for the Policies and make loan payments to AFCO Credit Corporation on account of the AFCO Premium Financing Agreements. Further, the Debtors seek the Court's authority to enter into new PFAs under Section 364(c)(2) of the Bankruptcy Code and the collateral be the unearned premiums that will be created. The Debtors maintain numerous insurance policies that provide coverage for general liability, workers' compensation, directors and officers liability, umbrella liability, automotive liability, crime, special risk, fiduciary liability and property. Those policies are essential to the preservation of the Debtors' business, property and assets. In many cases, coverage is required by various regulations, laws and contracts that govern the Debtors' business conduct. James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, tells the Court that the Debtors finance the premiums on some of their policies pursuant to premium financing agreements. Accordingly, the total annual premium for the policies currently financed by the Debtors is $1,772,964. The Debtors have four unpaid Premium Financing Agreements with AFCO Credit Corporation and one with St. Paul Travelers. AFCO alleges that it is a secured creditor with regard to the AFCO PFAs. Mr. Sprayregen discloses that the total annual premium for the Policies is $1,772,966. In June 2005, November 2005, December 2005 and January 2006, the Debtors made down payments totaling $444,887 and have financed the remaining $1,328,077 pursuant to the Existing PFAs. The Existing PFAs presently require monthly installments totaling $141,074 and bear total finance charges of $20,413 on the $905,970 total financed amount. * * * At the Debtors' request, the Court approved the motion. 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. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. 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: Court Approves Abacus as Advisors & Consultants ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved Musicland Holding Corp. and its debtor-affiliates' request on an interim basis, to employ Abacus Advisors Group LLC as their advisors and consultants in the sale of certain assets of the Debtors, nunc pro tunc to the bankruptcy filing. As reported in the Troubled Company Reporter on Feb. 10, 2006, Craig G. Wassenaar, Chief Financial Officer of Musicland Holding Corp., related that the Debtors have selected Abacus Advisors Group LLC as their consultants in part because of the expertise of Alan Cohen, the Chairman of Abacus. Mr. Cohen has extensive experience and knowledge in retail chain reorganization. He has been associated with numerous Chapter 11 reorganizations of large retailers. Abacus will: -- assist in the preparation of an appropriate information package regarding closing stores for distribution to potential bidders; -- review bid proposals and assistance in negotiations with the various parties and, if appropriate, orchestration of an auction to ensure recoveries are maximized; -- provide observance, if necessary, of physical inventories that may be taken; and -- monitor the conduct and results of any third party selected to liquidate the inventory. For its services, Musicland will pay Abacus a $250,000 base fee. In addition, Abacus will be paid a value added fee to be determined in conjunction with the Company, its lenders and the creditors committee. Abacus will also be entitled reimbursement of its reasonable expenses including attorney's fees. 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. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. 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) NAVISTAR INT'L: Launches Cash Tender Offers for $1.43 Bil. Notes ---------------------------------------------------------------- Navistar International Corporation (NYSE:NAV) launched a cash tender offer and consent solicitation for three series of its outstanding senior note debt securities. The cash tender offers and consent solicitations are for each of the following series of Navistar's outstanding long-term senior debt: * $393 million in aggregate principal amount of 9-3/8% senior notes due 2006; * $250 million in aggregate principal amount of 7-1/2% senior notes due 2011; and * $400 million in aggregate principal amount of 6-1/4% senior notes due 2012. Credit Agreement On Feb. 9, 2006, the company reported that it received a commitment from a group of lenders to provide it with a $1.5 billion three-year senior unsecured credit agreement arranged by Credit Suisse, including Banc of America Securities, Citigroup Corporate and Investment Banking and J.P. Morgan Chase Bank. The company is currently negotiating the terms of the definitive loan agreement and upon satisfaction or waiver of the conditions contained in such commitment letter and such loan agreement, or the funding of an otherwise acceptable loan facility, Navistar expects to use the borrowings to fund the tender offers and consent solicitations. Daniel C. Ustian, chairman, president and chief executive officer said "Thanks to the $1.5 billion commitment from our relationship banks, Navistar will be able to tender for its outstanding senior notes, thereby controlling our capital structure and giving confidence to our customers, suppliers and other important constituents that we will be able to execute on our strategic plan." Form 10-K Filing Delay On Jan. 17, 2006, the company disclosed that it would not file its Annual Report on Form 10-K for fiscal year ended 2005 by the filing deadline because of an ongoing review of a number of complex and technical accounting items. Navistar continues to work toward a resolution of these items and progress is being made. The company's review of the accounting matters may result in changes to its previously issued financial statements, including the possibility of a restatement. In light of the accounting review, Navistar is not able to give earnings guidance for fiscal year 2005. Among the items being reviewed are whether certain leases should have been capitalized rather than accounted for as operating leases, whether certain affiliates should have been consolidated rather than reported on the equity method, and certain timing adjustments that would shift revenue and expense amounts between reporting periods. Matters identified at this stage are necessarily preliminary and subject to change. To assist in the ongoing efforts to complete the review of the company's financial statements, the company has retained external consultants, including Huron Consulting Group and Skadden, Arps, Slate, Meagher & Flom, LLP. Bob Lannert, vice chairman and chief financial officer added, "By tendering at no less than par, Navistar is meeting its full obligation to bond holders. In addition, the resulting capital structure will provide the company with the time necessary to complete its public filings and the flexibility to pursue future financings on the best terms available." "As previously announced, the trustee of our public debt has notified the company that it is in default on various issuances of the company's existing debt because we have not yet filed our Annual Report on Form 10-K for fiscal year ended 2005," said Daniel C. Ustian. "While we dispute the default notices, our tender offers will allow those bondholders who believe we are in default to redeem their holdings, ensuring that management is able to focus all of its attention on operations in this strong 2006 truck market." Terms of the Tender Offer and Consent Solicitations Under the terms of the senior notes tender offers, Navistar is offering to purchase the outstanding senior notes for a total consideration, per each $1,000.00 principal amount of the senior notes, equal to: * $960.00 with respect to the 7-1/2% notes and 6-1/4% notes and * $968.75 with respect to the 9-3/8% notes, plus in each case an additional consent payment equal to the product of $40.00 multiplied by a fraction, the numerator of which is the aggregate principal amount outstanding of the applicable series of senior notes and the denominator of which is the aggregate principal amount of such series of senior notes validly tendered and not validly withdrawn prior to the consent time, plus in each case all accrued and unpaid interest through, but not including, the date of purchase. Holders who validly tender and do not withdraw on or prior to 5:00 p.m. EST, on Mar. 2, 2006, will receive the total consideration. Holders who validly tender after the consent time and do not withdraw on or prior to the senior notes tender offer expiration date will receive the tender consideration equal to $960.00 with respect to the 7-1/2% notes and 6-1/4% notes and $968.75 with respect to the 9-3/8% notes, plus in each case all accrued and unpaid interest through, but not including, the date of purchase. The senior notes tender offers will expire at 5:00 p.m. EST, on Mar. 20, 2006, unless extended or earlier terminated. Payments of the total consideration for the senior notes validly tendered and not withdrawn on or prior to the consent time and accepted for purchase will be made after the consent time. Payments of the tender consideration for the senior notes validly tendered after the consent time and on or prior to the senior notes tender offer expiration date and accepted for purchase will be made promptly after the senior notes tender offer expiration date. In connection with the senior notes tender offers, Navistar is soliciting the consents of the holders of the senior notes to proposed amendments to the indentures governing the senior notes. The primary purpose of the solicitation and proposed amendment is to waive any and all defaults and events of defaults existing under the senior notes indentures, eliminate substantially all of the material restrictive covenants, specified affirmative covenants and certain events of default and related provisions in the senior notes indentures and rescind any and all prior notices of default or acceleration delivered to Navistar pursuant to such indentures. In order to be effective, holders of a majority in aggregate principal amount of each series of the senior notes must consent to the proposed amendments. Holders may not tender their notes without delivering the related consents. The consummation of the senior notes tender offers are conditioned upon, among other things, the receipt of sufficient proceeds from one or more debt financings to fund the senior notes tender offers, Navistar's audit for its fiscal year 2005 not being completed and the consent of the holders of a majority in aggregate principal amount of each series of the senior notes to the proposed amendment to the indenture governing each series of the senior notes. Each of the senior notes tender offers is a separate offer, but each of the senior notes tender offers are conditioned upon and subject to completion of the other senior notes tender offers, subject to waiver by Navistar. The senior notes tender offers are also subject to customary closing conditions. If any of the conditions are not satisfied, Navistar is not obligated to accept for payment, purchase or pay for, or may delay the acceptance for payment of, any tendered senior notes, and may terminate the senior notes tender offers. Full details of the terms and conditions of the senior notes tender offer are included in Navistar's Offer to Purchase and Consent Solicitation statement, dated February 21, 2006. Citigroup, Credit Suisse and Banc of America Securities LLC will act as Dealer Managers for the tender offers and consent solicitations for the senior notes. Questions regarding the tender offers or consent solicitations may be directed to Citigroup Corporate and Investment Banking at 800-558-3745 (toll- free) or at 212-723-6106 or Credit Suisse at 800-820-1653 (toll- free) or at 212-538-7969. Global Bondholder Services Corporation will act as the Information Agent for the tender offers and consent solicitations for the senior notes. Requests for documents related to the tender offers and consent solicitations may be directed to Global Bondholder Services Corporation at 866-857-2200 (toll-free) or at 212-430- 3774. Navistar International Corp. -- http://www.nav-international.com/ -- is the parent company of International Truck and Engine Corporation. The company produces International(R) brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts and service sold under the International(R) brand. A wholly owned subsidiary offers financing services. * * * As reported in the Troubled Company Reporter on Feb. 7, 2006, Moody's Investors Service lowered the ratings of Navistar International Corporation (senior unsecured to B1 from Ba3 and subordinate to B3 from B2) and placed the ratings under review for further possible downgrade. Moody's rating actions followed Navistar's announcement that it has received notice from purported holders of more than 25% of the company's approximately $200 million senior subordinated exchangeable notes due 2009, claiming that the company is in default of reporting requirements relating to the filing of its financial statements for the fiscal year ending Oct. 31, 2005. The company disputes the allegation of default. Nevertheless, receipt of the notice of default represents a further negative development for the company stemming from its inability to file financial statements in a timely manner because of accounting issues. The downgrade and review reflect the heightened financial risk stemming from uncertainty as to Navistar's ability to file its financial statements in a timely manner given the number and complexity of various open items that the company continues to discuss with its auditors Deloitte and Touche. As a result of these open issues, Navistar cannot estimate the time frame for the filing of its October 2005 financial statements. NAVISTAR INT'L: S&P Holds BB- Corp. Credit Rating on Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services held its 'BB-' corporate credit ratings on North American heavy-duty and medium-duty truck producer Navistar International Corp., and Navistar's subsidiary, Navistar Financial Corp., on CreditWatch with negative implications. The company's senior unsecured and subordinated debt ratings also remain on CreditWatch. The ratings were originally placed on CreditWatch on Jan. 17, 2006. The CreditWatch update follows the company's launching of a cash tender offer at par or more for its: -- 9 3/8% (which mature in June 2006); -- 7 1/2% (mature in 2011); and -- 6 1/4% (mature in 2012) bonds. The company expects to fund the transaction with proceeds from the recently announced $1.5 billion bank facility commitment. Navistar is still in the process of negotiating the terms of the facility, Standard & Poor's expects a closing soon. In addition to the tender announcement, Navistar has indicated that it is still in discussions with its auditors over various accounting items and that a restatement of financial results is one possible outcome. If the company were to restate its financial results, Standard & Poor's does not currently expect that the restatement will be significant or to have any cash impact. As previously announced, Navistar has received notice from its bondholders that it is in default and has between 30 and 60 days to cure the various defaults. Although the company disputes that it is in default, if the company is in default and it fails to cure the default, an acceleration of required payment could occur on various debt instruments. Standard & Poor's will monitor Navistar's progress in reaching a resolution in the very near term, as well as its current and prospective sources of liquidity. If Navistar's liquidity becomes a concern, a multiple-notch downgrade is possible. The company has not yet filed its financial statements as discussions continue with its outside auditors about a variety of open items, including some complex and technical accounting issues. Some of these issues include whether or not some of the company's leases should be capitalized or accounted for as operating leases, and certain timing-related adjustments, which could shift revenue and expenses between periods. The company has indicated that it has made progress with its auditors and Standard & Poor's expects that the company could resolve some of these issues in the near term. "We anticipate that the ratings on Navistar will remain on CreditWatch until the company has filed its 10-K with the SEC," said Standard & Poor's credit analyst Eric Ballantine. "Once the company has filed its financial statements and if results are not materially different from previous expectations, we currently expect to affirm the ratings." NEW WORLD: Hearing to Recognize Bermudan Proceeding Set for Today ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing today, Feb. 23, 2006, at 11:00 a.m., to consider Mark W.R. Smith's, the duly appointed provisional liquidator for New World Network International, Ltd., request to recognize New World's pending case before the Bermuda Supreme Court as a foreign main proceeding. Section 1517 of the Bankruptcy Code provides that "an order recognizing a foreign proceeding shall be entered" if three conditions are met: 1. The foreign proceeding for which recognition is sought is a foreign main proceeding or foreign non-main proceeding within the meaning of Section 1502; 2. The foreign representative applying for recognition is a person or body; and 3. The petition meets the requirements of Section 1515. Headquartered in Hamilton, Bermuda, New World Network International, Ltd., is a holding company for the New World Group of companies, an independent, privately held telecommunications group. Through a number of its direct and indirect subsidiaries, the New World Group owned and operated an optical fiber submarine cable system called the Americas Region Cable Ring System or ARCOS, as well as some other assets. ARCOS is an 8,600km high capacity undersea digital broadband fiber optic network that connects the United States with Puerto Rico and other countries in Central America, South America and the Caribbean. New World filed a chapter 15 petition on Jan. 26, 2006 (Bankr. S.D.N.Y. Case No.: 06-10157). Mark W.R. Smith serves as the Foreign Debtor's provisional liquidator. Ingrid Bagby, Esq., at Cadwalader, Wickersham & Taft LLP, represents the Mr. Smith in the United States. Robin J. Mayor, Esq., at Conyers, Dill & Pearman is Mr. Smith's Counsel in Bermuda. New World tells the Bankruptcy Court in New York that it has assets and debts of about $50,000. OPTIMER INT'L: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Optimer International, Inc. 14930 Northeast 95th Street, Suite A Redmond, Washington 98052 Bankruptcy Case No.: 06-10414 Type of Business: The Debtor sells home furniture. Chapter 11 Petition Date: February 21, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Craig S. Sternberg, Esq. Sternberg Thomson & Okrent 500 Union Street, Suite 500 Seattle, Washington 98101 Tel: (206) 223-9595 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. PATRON SYSTEMS: Names Martin Johnson as Chief Financial Officer --------------------------------------------------------------- Patron Systems, Inc. (OTC Bulletin Board: PTRS) named Braden Waverley as Chief Operating Officer and Martin T. Johnson as Chief Financial Officer for its management team effective immediately. As Chief Operating Officer, Mr. Waverley's initial responsibilities will be to focus on effective marketing and product development programs and new channel strategies. For two years prior to joining Patron, Mr. Waverley was President of Vsource, a business process outsourcing firm, and from 1996 to 2001 he held various senior management positions at Dell Inc., including Director of Asia-Pacific Marketing and later Vice President and General Manager in Canadian operations. As Chief Financial Officer, Mr. Johnson's initial focus will be cost controls and profitability. Since 2002, Mr. Johnson has been an independent consultant in areas of finance, strategy and operations. Previously Mr. Johnson was Vice President for Planning and Business Development for Cabletron Systems, and served as CFO for several publicly traded companies, including MessageMedia, Inc., Technology Solutions Company, COMNET Corporation and Group 1 Software, Inc. From 1990 to 1993, he was Corporate Controller for The Marmon Group, Inc. Robert Cross, CEO of Patron, stated that, "These senior executives give us the necessary management strength to aggressively move the business forward. In addition to building the company organically, Braden Waverley and Tork Johnson will also be key participants in reactivating Patron's merger and acquisition program." Cross added that, "We are also pleased to report that the recapitalization that we have been working on for several months is nearing completion. There is no guarantee at this time that the contemplated new funding or the restructuring of indebtedness will be successfully completed, but we are encouraged by the progress to date. We also have substantially reduced our overhead. With Patron more streamlined and with the prospect that the company will be relieved of the enormous burden of debts and claims, it's gratifying that executives of the caliber of Braden Waverley and Martin Johnson have joined the company." Founded in 2002, Patron Systems -- http://www.patronsystems.com/ -- was established to provide Immediate Intelligent Information Security(TM) solutions to corporations, public safety organizations, local and state governments, and federal governmental agencies. The Patron portfolio focuses on the most critical asset of the enterprise -- its intellectual property -- providing continuous, layered, security for data in motion, data in applications, and data at rest. At Sept. 30, 2005, the company's balance sheet shows $26,385,169 in total assets and a $345,194 stockholders deficit. PEACHTREE CASUALTY: S&P Raises Financial Strength Rating to BBpi ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit and financial strength ratings on Peachtree Casualty Insurance Co. to 'BBpi' from 'Bpi'. "This rating action is based on Peachtree's extremely strong capitalization and consistent operating performance," explained Standard & Poor's credit analyst Michael Swei. Offsetting these factors is Peachtree's small capital base and high geographic and product-line concentrations. Peachtree writes private passenger auto insurance with a specialization in nonstandard auto. Peachtree is licensed to operate in 22 states and the District of Columbia. First Insurance Network Inc. is the managing general agency affiliate and has an exclusive contract for: * underwriting, * claims payment, * claims adjustment, * binding authority, and * premium collection of all coverage. The company is rated on a stand-alone basis. Ratings with a 'pi' subscript are based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. Ratings with a 'pi' subscript are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a 'pi' subscript are not subject to potential CreditWatch listings. PERFORMANCE TRANSPORTATION: Court Okays AFCO Insurance Agreement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York authorized Performance Transportation Services, Inc., and its debtor-affiliates to maintain financing of their insurance policies by continuing or renewing their agreements with AFCO Credit Corporation, or entering into new premium financing agreements in the ordinary course of business. As reported in the Troubled Company Reporter on Feb. 16, 2006, the Debtors finance the premiums on some of their policies under a premium financing agreement with a third-party lender. The premiums under the financed insurance policies, which cover the period April 1, 2005 until April 1, 2006, total $7,124,851. The insurance policies are: Insurer Type of Policy ------- -------------- Discover Property & Casualty Auto Insurance Company Discover Property & Casualty General Liability Insurance Company Fidelity and Guaranty Insurance Workers' Compensation Company Lexington Insurance Company Umbrella American Home Assurance Company Excess Liability United States Fidelity & Excess Workers' Guaranty Company Compensation Great American Assurance Company Excess Liability The Debtors have one outstanding PFA with AFCO Credit Corporation under which the Debtors pay $607,144 per month, nine months per year, plus a down payment of $1,781,213. The final monthly payment under the AFCO Agreement was recently paid. The Debtors will likely consider renewing the AFCO Agreement or entering into a new PFA since the Policies will expire on March 31, 2006. The Official Committee of Unsecured Creditors reserves its rights to object to the Debtors' request. The Committee has requested information and the Debtors are still endeavoring to fulfill that request, William F. Savino, Esq., at Damon & Morey LLP, in Buffalo, New York, tells the Court. The Committee finds the Debtors' request inconsistent with normal premium financing agreements. The Debtors, Mr. Savino points out, have represented that their "obligations under the Existing PFA are not secured by any lien or security interest on the Debtors' assets." If the lien for the PFAs is limited to the short rate refunds on the policies financed, the Committee has no objection, Mr. Savino says. Mr. Savino notes that the Debtors state numerous insurance policies subject to various PFAs. "[Those] PFAs should be reviewed by the Committee before their renewal through the Committee's financial advisor, Huron Consulting Group," Mr. Savino contends. "No existing PFA should be renewed and no new PFA should be undertaken without consultation with and approval by Huron." 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Hires FTI as Financial Advisors ----------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York for authority to employ FTI Consulting, Inc., together with its wholly owned subsidiaries, agents, and independent contractors, as their financial advisors, pursuant to the terms of an engagement letter, dated Sept. 16, 2005. Jeffrey L. Cornish, president and chief executive officer of Performance Transportation Services, Inc., tells Judge Kaplan that FTI has developed a great deal of institutional knowledge regarding the Debtors' operations, finances and systems. The Debtors have engaged the firm prepetition to provide them with financial advisory services. The Debtors believe that FTI's experience and knowledge will be valuable in their efforts to reorganize. Effective on the Petition Date, FTI will: a. assist the Debtors with information and analyses required pursuant to their debtor-in-possession financing; b. assist with the identification and implementation of cash management procedures; c. assist with the review and development of a long-range business plan and supporting analyses; d. assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; e. assist in the preparation of financial information for distribution to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts and analysis of proposed transactions for which Court approval is sought; f. attend meetings and assist in discussions with potential investors, banks and other secured lenders, the Official Committee of Unsecured Creditors and any other committees appointed in the Debtors' Chapter 11 cases, the United States Trustee, other parties-in-interest and their professionals, as requested; g. assist in the preparation of information and analyses necessary for the confirmation of a plan of reorganization in the Debtors' Chapter 11 cases, including information contained in the disclosure statement; h. assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; i. provide accounting and tax support; j. testify on case-related issues as required by the Debtors; and k. render other general business consulting or other assistance as the Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the Debtors' Chapter 11 proceedings. The Debtors will pay FTI at these hourly rates: Senior Managing Directors $595 - 695 Directors / Managing Directors $435 - 590 Associates / Consultants $215 - 405 Administration / Paraprofessionals $95 - 175 The Debtors will also reimburse FTI for out-of-pocket expenses. The Debtors will indemnify and hold FTI harmless from all claims, liabilities or obligations relating to the firm's performance under the engagement, with the exception of claims arising from FTI's gross negligence or willful misconduct. Any claims for indemnification, contribution and reimbursement arising from FTI's prepetition services will not be entitled to administrative expense priority. Jeffery J. Stegenga, senior managing director at FTI, discloses that the firm has received around $100,000 in unapplied advance payments from the Debtors in excess of prepetition billings. The Debtors and FTI agree that the retainer will not be segregated in a separate account but will be held until the end of the Debtors' Chapter 11 cases and applied to FTI's final approved fees. FTI's books and records show that during the 90-day period preceding the Petition Date, FTI received $1,115,627 from the Debtors for services performed and expenses incurred. Mr. Stegenga assures the Court that FTI 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 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Taps Hodgson Russ as Co-Counsel ----------------------------------------------------------- Performance Transportation Services, Inc., and its 13 Debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York for permission to employ Hodgson Russ LLP as their co- counsel. The Debtors expect that Hodgson, together with Kirkland& Ellis LLP, will provide them with general legal services as needed throughout the course of their Chapter 11 cases. In particular, Hodgson is expected to: a. advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession continuing to operate and manage their businesses and properties under Chapter 11; b. prepare, on the Debtors' behalf, necessary applications, motions, draft orders, other pleadings, notices, schedules and other documents, and review financial and other reports to be filed in the Debtors' Chapter 11 cases; c. advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices and other papers that may be filed and served in the Chapter 11 cases; d. advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements, debt and cash collateral orders and related transactions; e. review the nature and validity of any liens asserted against the Debtors' property and advise them concerning the enforceability of the liens; f. advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; g. counsel the Debtors in connection with formulation, negotiation and promulgation of a plan or plans of reorganization and related documents; h. advise and assist the Debtors in connection with any potential property dispositions; i. advise the Debtors concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructurings and recharacterizations; j. assist the Debtors in reviewing, estimating and resolving claims asserted against their estates; k. commence and conduct any litigation necessary or appropriate to assert rights held by the Debtors, protect assets of their Chapter 11 estates or otherwise further the goal of completing their successful reorganization; l. provide general corporate, litigation, regulatory and other non-bankruptcy services as requested by the Debtors; and m. appear in Court on behalf of the Debtors as needed; and n. perform any other necessary legal services in connection with the Debtors' Chapter 11 cases for or on behalf of the Debtors. The Debtors will pay Hodgson on an hourly basis, and will reimburse the firm for actual and necessary out-of-pocket expenses. The current hourly rates of the Hodgson personnel that will represent the Debtors are: Attorneys $130 to $595 Paralegals $75 to $195 Garry M. Graber, Esq. $325 Mr. Graber, a member of Hodgson, assures the Court that the firm does not hold any adverse interest or represent any entity having an adverse interest to the Debtors in connection with their Chapter 11 proceedings. Hodgson is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code and as required by Section 327(a). Mr. Graber discloses that before the Petition Date, Hodgson received $54,546 from the Debtors for filing fees and other expenses for services rendered relating to their Chapter 11 cases. The amount, he says, will first be applied to the firm's pre-filing legal fees and expenses. The firm will hold the balance as retainer and apply to post-filing legal fees and expenses after the Court's approval. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) PIER 1: S&P Rates $165 Mil. Convertible Sr. Unsecured Notes at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to specialty home furnishings retailer Pier 1 Imports Inc.'s $165 million convertible senior unsecured notes due 2036 issued under rule 144A with registration rights. This rating is listed on CreditWatch with negative implications. The company's 'B' corporate credit rating remains on CreditWatch with negative implications. Following the issuance of these notes, Fort Worth, Texas-based Pier 1 has about $165 million in funded debt outstanding. Pier 1 will likely maintain the bulk of the proceeds from the convertible notes offering on its balance sheet to enhance its liquidity position. On Feb. 7, 2006, Standard & Poor's lowered its corporate credit rating on Pier 1 Imports Inc. to 'B' from 'BB'. The downgrade reflected the rating agency's expectation that results for the fourth quarter ending Feb. 25, 2006, deteriorated substantially following much weaker operating results for the first nine months. Pier 1 has not been able to make progress in turning around its negative sales trends and there has been a significant decline in credit protection measures. "We are concerned," said Standard & Poor's credit analyst Ana Lai, "about how successful Pier 1 will be in its efforts to turn around sales and profitability through new merchandising and marketing initiatives." PRICE OIL: Wants Court to Set March 1 as Admin. Claim Bar Date -------------------------------------------------------------- Price Oil, Inc., asks the U.S. Bankruptcy Court for the Middle District of Alabama to establish March 1, 2006, as the bar date for filing prepetition administrative expense claims. The Debtor anticipates that some vendors may seek allowance and payment of administrative expense claims for sale of goods prepetition. The Debtor believes that liquidating the administrative expense claims is necessary before it can formulate a plan and is material to negotiations with creditors and buyers of its assets. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Debtor also owns, operates and lease multiple convenience stores. The Debtor and five of its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10 million to $50 million in assets and debts. R.A.B. ENTERPRISES: Retired Debt Cues Moody's Rating Withdrawal --------------------------------------------------------------- Moody's Investors Service withdrew all ratings on R.A.B. Enterprises, Inc. All ratings have been withdrawn because the 10.5% senior notes due in 2005, the only rated debt, were previously retired. These remaining ratings are withdrawn: * Ca corporate family rating; and the * C issuer rating. R.A.B. Enterprises, Inc., of New York, wholly owned by R.A.B. Holdings, Inc., distributes specialty products to supermarkets through Millbrook Distribution Services, Inc., and produces specialty foods through the B. Manischewitz Company, LLC. RICHARD CHADO: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Richard P. Chado Darlene L. Chado 408 East 25th Street Upland, California 91784 Bankruptcy Case No.: 06-10319 Chapter 11 Petition Date: February 22, 2006 Court: Central District Of California (Riverside) Judge: Mitchel R. Goldberg Debtor's Counsel: J. L. Borrie, Esq. J. L. Borrie and Associates 4333 Orange Street, Suite 21 Riverside, California 92501 Tel: (909) 686-6432 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNL Blackacre LLP Judgment $2,713,000 75 North Paul Street, #1400 Dallas, TX 75201 Hermes Sargent Bates, LLP Attorney Fees $111,659 901 Main Street, Suite 5200 Dallas, TX 75202 Best Best & Krieger Attorney Fees $28,892 3750 University Avenue P.O. Box 1028 Riverside, CA 92502 Norton & Melnik Services $18,500 16255 Ventura Boulevard Suite 200 Encino, CA 91426 The Partners Services $11,350 3403 Tenth Street, #810 Riverside, CA 92501 RIM SEMICONDUCTOR: Annual Shareholders Meeting Set for April 11 --------------------------------------------------------------- Rim Semiconductor Company fka New Visual Corporation will hold its 2006 Annual Shareholders Meeting on 10:00 a.m. Tuesday, April 11, 2006 at the Hotel Vintage Plaza in Portland, Oregon. Rim Semiconductor's Board of Directors has selected Feb. 27, 2006, as the record date for determining shareholders entitled to vote at the meeting. At the meeting, shareholders will: * elect four directors to serve until the 2007 Annual Meeting of shareholders and their successors are elected and qualified; * ratify the appointment of Marcum & Kliegman, LLP, as the company's independent public accountants; * approve an amendment to Article IV of the company's Articles of Incorporation to increase Rim Semiconductor's authorized common stock from 500 million shares to 900 million shares; * approve an amendment to Section B(2) of Article IV of the company's Articles of Incorporation relating to Rim Semiconductor's preferred stock; * approve an amendment to Article IV of the company's Articles of Incorporation to delete Paragraph (C) of Article IV -- regarding the reverse stock split effected by the Corporation in 2000; * amend the company's Articles of Incorporation to cancel the designations of Rim Semiconductor's Series A through G preferred stock; and * transact any other business that properly comes before the meeting. Headquartered in Portland, Oregon, Rim Semiconductor Company fka New Visual Corporation -- http://www.rimsemi.com/-- is an emerging fabless communications semiconductor company. It has made available an advanced technology that allows data to be transmitted at greater speed and across extended distances over existing copper wire. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 2, 2006, Marcum & Kliegman LLP expressed substantial doubt about Rim Semiconductor Company fka New Visual Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Oct. 31, 2005, and 2004. The auditing firm pointed to Rim's $3,145,391 working capital deficiency at Oct. 31, 2005. Rim Semiconductor's Oct. 31 balance sheet shows strained liquidity with $407,512 in current assets available to pay $3,552,903 of current liabilities coming due within the next 12 months. RISK MANAGEMENT: Court Sets March 17 as Special Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, has established March 17, 2006, as the special bar date for filing litigation claims against Risk Management Alternatives, Inc., and its debtor-affiliates. The Debtors asked the Court to fix the Special Litigation Claims Bar Date to provide the 42 litigation claimants ample time within which to prepare and file their proofs of Claim. The Debtors told the Court they don't think the 42 litigation claimants received notice of the October 31, 2005 general claims bar date. The Debtors will make sure notice of this special bar date is served on them and their counsel. Headquartered in Duluth, Georgia, Risk Management Alternatives, Inc. -- http://www.rmainc.net/-- provides consumer and commercial debt collections, accounts receivable management, call center operations, and other back-office support to firms in the financial services, telecommunications, utilities, and healthcare sectors, as well as government entities. The Company and ten affiliates filed for chapter 11 protection on July 7, 2005 (Bankr. N.D. Ohio Case Nos. 05-43959 through 05-43969). Shawn M. Riley, Esq., at McDonald, Hopkins, Burke & Haber Co., LPA, represents the Debtors in their chapter 11 proceedings. Ronald E. Gold, Esq., at Frost Brown Todd LLC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and between $50 million to $100 million in debts. RONALD OLZMANN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Ronald Kurt Olzmann 4649 Brafferton Bloomfield Hills, Michigan 48302 Bankruptcy Case No.: 06-41988 Chapter 11 Petition Date: February 21, 2006 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Michael I. Zousmer, Esq. Nathan, Neuman, Nathan & Zousmer, P.C. 29100 Northwestern Highway, Suite 260 Southfield, Michigan 48034 Tel: (248) 351-0099 Fax: (248) 351-0487 Total Assets: $525,900 Total Debts: $3,940,042 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Flagstar Bank $1,981,000 5151 Corporate Drive Troy, MI 480982639 Tricounty Bank $675,000 c/o Douglas S. Touma 316 McMorran Boulevard Port Huron, MI 48060 Larry Mullins $325,000 c/o Dilger & Semaan, PC 410 West University Drive Rochester, MI 48307 Credit Union One 4649 Brafferton $239,290 400 East Nine Mile Road Value of security: Ferndale, MI 48220 $400,000 Michigan Dept. of Treasury $109,444 Infistar Credit card purchases $101,506 MBNA Credit card purchases $41,120 MBNA Credit card purchases $26,430 Alan R. Miller, P.C. Legal Fees $25,000 National City Credit card purchases $24,000 MBNA Credit card purchases $18,160 MBNA Credit card purchases $17,985 Capital One Credit card purchases $12,413 National City Credit card purchases $12,000 Advanta Credit card purchases $11,542 First Equity Credit card purchases $10,900 Bank of America Credit card purchases $9,580 MBNA Credit card purchases $7,800 Bank One Credit card purchases $5,000 Chase Credit card purchases $4,427 RUSSELL CORP: Discloses Fourth Quarter Financial Results -------------------------------------------------------- Russell Corporation (NYSE: RML) reported fiscal 2005 fourth quarter sales of $354.6 million, an increase of 6.2% over the $334.0 million reported in the same period a year ago. The Company reported earnings of $11.8 million. Net income in the fourth quarter of 2005 was impacted by a tax benefit in the quarter. Sales for the quarter ended December 31, 2005 included $27 million in incremental sales from Brooks, the only acquisition owned for less than a year. Beyond Brooks, sales gains were strongest in the Artwear business, which experienced growth in the quarter in the mid-teens. Gross profit for the fourth quarter of 2005 was $99.9 million, or a 28.2% gross margin as a percent of sales, versus a gross profit of $97.1 million, or a 29.1% gross margin, in the prior year. The positive impact of increased unit volumes in Artwear and higher margins associated with Brooks was generally offset by a shift in product mix and increased year-over-year costs for polyester, transportation and energy. Losses at Huffy Sports also negatively affected results. For the 2005 fourth quarter, selling, general and administrative expenses were up $6.2 million to $79.9 million. Excluding the SG&A associated with Brooks, these expenses were lower than a year ago. For the quarter, the Company reported operating income of $19.5 million, versus $24.9 million in the same quarter last year. During the quarter, the Company recognized the majority of its profits in lower tax countries. The Company benefited from significantly improved profitability in its RLA Manufacturing subsidiary, responsible for the management of Russell's Latin American manufacturing operations. Additionally, Spalding experienced a greater proportion of its profits outside the U.S. through its international licensing subsidiary, based in Ireland. With a greater proportion of profits in these areas, the effective tax rate was significantly reduced in the quarter versus prior year. The Company also benefited from a one-time resolution of certain tax matters relating to previous years. Year-to-Date Results For the full year ended December 31, 2005, net sales increased $136.4 million to $1.435 billion, a 10.5% increase over the prior year's sales of $1.298 billion. Excluding the sales from acquisitions owned for less than a year, sales were $1.271 billion. "As indicated earlier, we were disappointed in our 2005 financial results. Despite certain areas of our business having record performances, such as international apparel and Brooks, we did experience disappointing sales overall in our Sporting Goods segment. Unfilled orders earlier in the year contributed to weaker sales results for the balance of the year for Russell Athletic. Additionally, sales weakness in Mossy Oak continued throughout the year, with declines of approximately 20 percent from 2004," said Jack Ward, chairman and chief executive officer. Gross profit was $393.6 million, or a 27.4% gross margin as a percent of sales, for fiscal 2005 versus a gross profit of $363.9 million, or a 28.0% gross margin, in the prior year. SG&A expenses for fiscal 2005 were $311.1 million, or 21.7% of net sales, versus $270.3 million, or 20.8% of net sales, in fiscal 2004. Excluding the acquisitions owned for less than a year, SG&A was 21.0% of sales in 2005. Operating income in 2005 was $84.4 million versus $100.8 million last year. With the impact of the tax benefit in the fourth quarter, the effective rate for the year was approximately 21%, yielding net income for fiscal 2005 of $34.4 million. Net income for 2004 was $47.9 million. Outlook "We feel positive about our many growth opportunities and our cost reduction initiatives outlined in January. We also have already begun to see the benefits from our lean manufacturing initiatives and have experienced a broad base of support for these efforts throughout our operations," said Mr. Ward. "Russell's brands remain solidly positioned with our customers, and we continue to build on our reputation for quality, authenticity and performance, particularly with our primary brands, Spalding, Russell Athletic, Jerzees and Brooks." The Company reaffirmed its previous annual guidance for 2006. Russell expects sales for fiscal 2006 to be in the $1.450 billion to $1.480 billion range. As previously announced, Additionally, the Company expects to record an effective tax rate for 2006 of 30% or less. Russell Corporation -- http://www.russellcorp.com/-- makes and distributes branded athletic and sporting goods company marketing athletic apparel, uniforms, footwear and equipment for a wide variety of sports, outdoor and fitness activities. The Company's major brands included in the Sporting Goods Segment are: Russell Athletic(R), Spalding(R), Brooks(R), Huffy Sports(R), Bike(R), Moving Comfort(R), AAI(R) and Mossy Oak(R). The predominant brand in the Activewear segment is JERZEES(R). The Company's common stock is listed on the New York Stock Exchange under the symbol RML. * * * As reported in the Troubled Company Reporter on Sept. 28, 2005, Moody's Investors Service downgraded the debt ratings of Russell Corp. The rating action reflects the medium term impact on Russell's financial position of lowered performance guidance for the seasonally important second half of this year, following an unexpectedly weak second quarter. These ratings were downgraded: * Corporate family rating to B1 from Ba3, * Senior secured debt rating to Ba3 from Ba2, * Senior unsecured debt rating to B2 from B1, Moody's said the outlook is stable. SCOTTISH RE: Earns $58.5 Million in Quarter Ended Dec. 31 --------------------------------------------------------- Scottish Re Group Limited (NYSE: SCT) reported that net income available for the quarter ended Dec. 31, 2005, was $58.5 million, as compared to $21.0 million for the prior year period. Net income available for the year ended Dec. 31, 2005, was $125.4 million as compared to $71.4 million for the prior year period. Net operating earnings were $50.8 million for the quarter ended Dec. 31, 2005, as compared to $26.8 million for the prior year period. Net operating earnings was $130.1 million for the year ended Dec. 31, 2005, as compared to $80.4 million for the prior year period. "Net operating earnings available to ordinary shareholders" is a non-GAAP measurement. The Company determines net operating earnings available to ordinary shareholders by adjusting net income available to ordinary shareholders by net realized capital gains and losses and the change in value of embedded derivatives, as adjusted for the related effects upon the amortization of deferred acquisition costs, and taxes related to these items as well as acquisition-related due diligence costs in 2004. While these items may be significant components in understanding and assessing the Company's consolidated financial performance, the Company believes that the presentation of net operating earnings available to ordinary shareholders enhances the understanding of its results of operations by highlighting earnings attributable to the normal, recurring operation of its reinsurance business. However, net operating earnings available to ordinary shareholders are not a substitute for net income determined in accordance with GAAP. "We are very pleased with the results for the quarter ended Dec. 31, 2005. With this strong performance, we have met our earnings guidance for both the quarter and full year and significantly enhanced the return on equity to our shareholders. These quality earnings were driven by the excellent contribution made from our traditional reinsurance business in North America but performance from all areas of the business was solid for the period. In addition, I am particularly pleased with the successful completion of the integration of the ING business and the migration of our administration operations from Charlotte to Denver. Finally, the capital market transactions completed in December capped an excellent year for our Company and I look forward to carrying this momentum into 2006," Scott E. Willkomm, President and Chief Executive Officer of Scottish Re Group Limited said. Total revenues for the quarter increased to $675.0 million from $211.1 million for the prior year period, an increase of 220%. Excluding realized gains and losses and the change in value of the embedded derivatives, total revenues for the quarter increased to $666.0 million from $211.6 million for the prior year period, an increase of 215%. Total revenues for the year ended Dec. 31, 2005, increased to $2.3 billion from $814.4 million for the prior year, an increase of 182%. Excluding realized gains and losses and the change in value of the embedded derivatives, total revenues for the year increased to $2.3 billion from $818.1 million for the prior year, an increase of 181%. Total benefits and expenses increased to $615.8 million for the quarter from $200.1 million, an increase of 208%. For the year ended Dec. 31, 2005, total benefits and expenses increased to $2.2 billion from $758.9 million, an increase of 188%. The increases in revenues and expenses were principally driven by the acquisition on Dec. 31, 2004, of the ING individual life reinsurance business and growth in the Company's reinsurance business in North America. The Company's total assets were $12.0 billion as of Dec. 31, 2005. The core investment portfolio, comprising fixed maturity investments, preferred stock and most of the cash and cash equivalents, totaled $6.8 billion, and had an average quality rating of "AA", an effective duration of 2.9 years and a weighted average book yield of 4.9%. This compares with a portfolio balance of $4.3 billion, an average quality rating of "AA-", effective duration of 3.8 years and an average book yield of 4.2% as of Dec. 31, 2004. As of Dec. 31, 2005, the Company had approximately $1 trillion of life reinsurance in force covering 13.5 million lives with an average benefit per life of $76,000 in our North American operations. As of Dec. 31, 2004, the Company had just over $1 trillion of life reinsurance in force covering 14.2 million lives with an average benefit per life of $71,000 in our North American operations. On Dec. 21, 2005, the Company closed its second securitization of excess reserves offering $455 million of 30-year maturity securities through Orkney Re II plc, an Irish special purpose vehicle. Consistent with the first securitization, the securities have recourse only to Orkney Re II and not to any other Scottish Re entity. On Dec. 23, 2005, the Company completed a public offering of 7,660,000 shares (which includes the over allotment option of 1,410,000 shares) priced at $24.00 per share which yielded net proceeds of $174.1 million. Equity Sale Agreements In addition, the Company entered into forward equity sale agreements with Bear, Stearns & Co. Inc. and Lehman Brothers Inc., who agree to pay the Company $75 million in the third quarter of 2006 and an additional $75 million in the fourth quarter of 2006, subject to the Company's right to receive a portion of such payment prior to the settlement dates. In exchange, on each of such dates the Company has the option to deliver to Bear, Stearns & Co. Inc. and Lehman Brothers Inc. a variable number of ordinary shares based on the average market price of the ordinary shares, subject to a floor price of $22.80 and a cap price of $28.80. Dean E. Miller, Chief Financial Officer, noted "Within just twelve months of purchase, the Company has successfully and fully integrated the ING business and secured permanent funding for more than 40% of Regulation XXX reserve requirements associated with the block of business. These accomplishments clearly illustrate the Company's operational and financial effectiveness when large blocks of business are acquired." Scottish Re Group Limited -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, Windsor, England and a representative office in Singapore. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance company (Cayman) Ltd. and Scottish Re (U.S.), Inc., Scottish Re Limited, and Scottish Re Life Corporation. Scottish Re Capital Markets, Inc., a member of Scottish Re Group Limited, is a registered broker dealer that specializes in securitization of life insurance assets and liabilities. * * * As reported in the Troubled Company Reporter on Jun. 28, 2005, Fitch Ratings assigned a 'BB+' rating to Scottish Re's (NYSE: SCT) new issuance of noncumulative preferred stock. Fitch also affirmed SCT's 'BBB' long-term issuer rating and the ratings on all outstanding debt. The Rating Outlook is Stable. As reported in the Troubled Company Reporter on Jun. 29, 2005, Moody's Investors Service assigned a Ba1 rating to Scottish Re Group Limited's Non-Cumulative Perpetual Preferred Stock to be issued under its universal shelf. The proceeds of the Preferred Stock will be substantially used for general corporate purposes. The outlook for the preferred stock ratings is negative, in line with other SCT ratings. SI TANKA: Judge Hoyt Dismisses Chapter 11 Proceeding ---------------------------------------------------- The Hon. Irvin N. Hoyt of the U.S. Bankruptcy Court for the District of South Dakota dismissed Si Tanka University's chapter 11 case. The Associated Press reports that the chapter 11 trustee had asked the Court to either dismiss the case or convert it into a chapter 7 liquidation proceeding. Judge Hoyt said that the only reason to convert a case to chapter 7 would be if there were sufficient assets to liquidate for the benefit of unsecured creditors. As it turns out, the AP relates, there's not enough value to permit a dividend to unsecured creditors Judge Hoyt dismissed the case despite the objection of the Debtor's unpaid former faculty members. Judge Hoyt concluded that creditors may try to obtain relief in state court, the newswire relates. Based in Eagle Butte, South Dakota, Si Tanka University -- http://www.sitanka.edu/operates a university. The Debtor filed for chapter 11 protection on Apr. 9, 2005 (Bankr. D. S. Dak. Case No. 05-30027). Clair R. Gerry, Esq., and Laura L. Kulm Ask, Esq. at Stuart, Gerry & Schlimgen, Prof LLC, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 and $500,000 and debt between $1 million and $10 million. SOLUTIA INC: Financial Projections Under Joint Chapter 11 Plan -------------------------------------------------------------- Solutia, Inc.'s management prepared projected financial statements with the assistance of Rothschild, the Debtors' financial advisors. The Projections are based on, among other things: (a) current and projected market conditions in each of Reorganized Solutia's markets; (b) the ability to maintain sufficient working capital to fund operations; (c) final approval of the Exit Financing; and (d) confirmation of Solutia's Joint Plan of Reorganization. The Debtors project they will continue to earn income in 2006 through 2010: Actual 2003 ($987,000,000) Actual 2004 ($316,000,000) Actual 2005 $8,000,000 Projected 2006 $587,000,000 Projected 2007 $108,000,000 Projected 2008 $110,000,000 Projected 2009 $148,000,000 Projected 2010 $163,000,000 The Debtors also project that they will maintain $25,000,000 in cash and cash equivalents for the years ended 2006 through 2010. Reorganized Solutia Inc. Projected Fresh Start Balance Sheet (In Millions) Projected Debt Exit Reorganized 30-Jun-06 Discharge Financing 30-Jun-06 Balance & Reclass- Facility Fresh Start Balance Sheet ifications Transactions Adjustments Sheet --------- ---------- ------------ ----------- ----------- Assets Current Assets: Cash & Cash Equivalents $95 ($310) $444 - $229 Trade Receivables 322 - - - 322 Inventories 261 - - - 261 Prepaid Expenses & Other Assets 105 - - - 105 -------- -------- -------- -------- -------- Total $783 ($310) $444 - $917 -------- -------- -------- -------- -------- Property, Plant & Equipment, net 819 - - - 819 Investment in Affiliates 201 - - - 201 Other Assets 204 250 36 1,759 2,249 -------- -------- -------- -------- -------- TOTAL ASSETS $2,007 ($60) $480 $1,759 $4,186 ======== ======== ======== ======== ======== Liabilities & Shareholders' Equity (Deficit) Current Liabilities: Accounts Payable $202 - - - $202 Accrued Liabilities 216 $17 - - 233 Short-term Debt 370 - ($370) - - -------- -------- -------- -------- -------- Total $788 $17 ($370) - $435 -------- -------- -------- -------- -------- Long-Term Debt 291 20 850 - 1,161 Other Liabilities 256 1,201 - 133 1,590 Liabilities Subject to compromise 2,123 (2,123) - - - -------- -------- -------- -------- -------- TOTAL LIABILITIES $3,458 ($885) $480 $133 $3,186 -------- -------- -------- -------- -------- Shareholders' Deficit: Common Stock 1 - - (1) - Additional Contributed Capital 56 250 - 69 1,000 Treasury Stock (251) - - 251 - Net Deficiency of Assets at Spin-off (113) - - 113 - Accumulated Other Comprehensive Loss (89) - - 89 - Accumulated Deficit (1,055) 575 - 480 - -------- -------- -------- -------- -------- Total ($1,451) $825 - $1,626 $1,000 -------- -------- -------- -------- -------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $2,007 ($60) $480 $1,759 $4,186 ======== ======== ======== ======== ======== A full-text copy of Solutia's Financial Projections is available for free at http://ResearchArchives.com/t/s?5b9 Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA INC: Liquidation Analysis Under Joint Chapter 11 Plan ------------------------------------------------------------- Jeffry N. Quinn, president and chief executive officer of Solutia, Inc., relates that the Debtors have prepared a liquidation analysis to create a reasonable good-faith estimate of the proceeds that might be generated if they were liquidated under Chapter 7 of the Bankruptcy Code. If no Chapter 11 Plan is confirmed, the Debtors' Chapter 11 cases would be converted to cases under Chapter 7 of the Bankruptcy Code. In this event, a trustee will be appointed to liquidate the Debtors' assets. According to Mr. Quinn, the Liquidation Analysis is based on Solutia's balance sheet as of August 31, 2005, and assumes that the Debtors would commence Chapter 7 liquidation on June 30, 2006, continuing to a maximum of 12 months. In the Liquidation Analysis, it is assumed that each of the Debtors' plants will be shut down and marketed for sale separately. A 30% discount will be applied to the going-concern value of both the Pharmaceutical Services Division and the Debtors' 50% joint venture ownership of Flexsys LP, to reflect a distressed sale. The proceeds of the sale transactions are netted against certain costs associated with potential plant shutdowns. The Debtors' liquidation costs under Chapter 7 would include fees payable to a Chapter 7 trustee, as well as costs payable to professionals. The estimated net would be conveyed to the Debtors' creditors. Under the absolute priority rule, no junior creditor would receive any distribution until all senior creditors are paid in full, and no equity holder would receive any distribution until all creditors are paid in full. After consideration of the effects that a Chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors, including: (i) the increased costs and expenses of a liquidation under Chapter 7 arising from fees payable to a trustee in bankruptcy and professional advisors to that trustee, (ii) the erosion in value of assets in a Chapter 7 case in the context of the expeditious liquidation required under Chapter 7, and (iii) potential increases in Claims which may arise in a liquidation, Mr. Quinn asserts that the proposed Plan will provide creditors with a recovery that is not less than creditors would receive pursuant to a liquidation of the Debtors' assets under Chapter 7 of the Bankruptcy Code. LIQUIDATION ANALYSIS (In Millions) Asset Value Summary Book Value as of Hypothetical Estimated 08/31/2005 Recovery Liquidation ---------- ------------ ----------- Cash & Equivalents $95 100% $95 Accounts Receivable 261.3 84% 219.6 Inventory 426.9 75.7% 323 Net Fixed Assets 714 89.6% 640 Intangible Assets, Net 111.5 99.6% 111 Value of Pharma 38.7 147.6% 57.1 Other Current Assets 97.3 21.9% 21.3 Other Non-current Assets 127.8 15% 19.2 Value of Flexsys' 50% Ownership 172.6 177.9% 307.1 ========== ============ =========== Total Assets $2,045.1 $1,793.4 Less: Liquidation Fees & Expenses Ch 7 Trustee Fees (51) Ch 7 Professional Fess (12) Employee Expenses & Operating Costs (89.8) ----------- (152.8) Net Estimated Liquidation Proceeds $1,640.6 ----------- Present Value of Liquidation Proceeds $1,566.7 =========== Distribution Analysis (In Millions) Estimated Estimated Allowable Liquidation Claims Value --------- ------------ Present Value of Proceeds for Distribution $1,566.7 ------------ Less: Superpriority Admin. Claims DIP Claims $420 Hypothetical Recovery Percentage 100% (420.0) --------- ------------ Gross Proceeds after Superpriority Claims $1,146.7 Less: Secured Claims Senior Secured Notes 234.5 Maryville Lease Facility 21.4 Euronotes 249 Other Secured Claims 13.7 --------- ------------ Total Secured Claims 518.6 Hypothetical Recovery Percentage 100% (518.6) --------- ------------ Proceeds Available after Secured Claims $628.1 Less: Admin & Priority Claims Chapter 11 Postpetition Accounts 233 Chapter 11 Admin & Priority Expense 54.5 Chapter 11 Priority Tax Claims 2.3 Environmental Remediation 212.5 --------- ------------ Total Admin & Priority Claims 502.3 Hypothetical Recovery Percentage 100% (502.3) --------- ------------ Proceeds Available After Admin & Priority Claims 125.8 Less: Total Unsecured Claims Monsanto Claims TBD Pension - PBGC 972.1 OPEB 484.5 2027 Debentures 303.7 2037 Debentures 151.7 Other 359.9 --------- ------------ Total Unsecured Claims 2,271.9 Hypothetical Recovery Percentage 5.5% (2,271.9) --------- ------------ Net Estimated Deficiency (2,146.1) ============ Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA INC: Plans Estimates Claims at 20x Less Amounts Asserted ---------------------------------------------------------------- Solutia Inc.'s Plan of Reorganization reflects a significant reduction in the amount of estimated Allowed Claims: Solutia filed its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court for the Southern District of New York on February 14, 2006. The filing of the Plan of Reorganization is supported by the Official Committee of Unsecured Creditors, Monsanto Company (NYSE: MON), Pharmacia Corporation, and the Official Committee of Retirees. Asserted and Estimated Claims by Category Estimated Amount Claims Class Asserted Amount of Allowed Claims ------------ --------------- ----------------- Administrative $2,000,000 $1-$1.5 million Priority $62,000,000 $2.3-$2.8 million Secured $938,000,000 $245-$255 million Unsecured $26,980,000,000 $800MM-$1.0 billion ------------ --------------- ------------------- Solutia Total $27,990,000,000 $1.05-$1.25 billion ------------ --------------- ------------------- Axio Claims $6,600,000 N/A ------------ --------------- ------------------- TOTAL $28,000,000,000 $1.05-$1.25 billion ------------ --------------- ------------------- The Plan groups claims against and equity interests in the Debtors into 16 classes: Class Description Claim Treatment ----- ----------- --------------- N/A Administrative Paid in full, in Cash. Claims N/A Priority Tax Claims Paid in full, in cash. 1 Priority Non-Tax Claims Paid in full, in cash. Unimpaired. Estimated Aggregate Allowed Amount: $50,000 to $100,000 Recovery: 100% 2 Secured Claims Each Claim will either be: (a) reinstated; (b) paid in full, in Cash; (c) satisfied by the Debtors' surrender of collateral; (d) offset against the Debtors' claim against the holder of Secured Claim; or (e) rendered unimpaired to the extent of a different agreed treatment. Unimpaired. Estimated Aggregate Allowed Amount: $40,000,000 to $50,000,000 Recovery: 100% 3 Senior Secured For the benefit of all claim Notes Claims holders, Reorganized Solutia will pay cash to the trustee of the Senior Secured Note Claims; or reinstate the claims. Unimpaired. Estimated Aggregate Allowed Amount: $203,400,000 Recovery: 100% 4 Convenience Claims Paid in full, in Cash. Unimpaired. Estimated Aggregate Allowed Amount: $1,000,000 to $2,500,000 Recovery: 100% 5 NRD Claims NRD Claims will be reinstated. After which, the Claims will be liquidated and allocated between Reorganized Solutia and Monsanto. Unimpaired. Estimated Aggregate Allowed Amount: N/A Recovery: 100% 6 Insured Claims Holder will be entitled to receive the proceeds of any insurance policies. If insufficient, the holder will be entitled to an allowed general unsecured claim for the remaining amount not satisfied by the proceeds of the insurance policies. Unimpaired. Estimated Aggregate Allowed Amount: N/A Recovery: 100% 7 Tort Claims Under Monsanto's financial responsibility. Unimpaired. Estimated Aggregate Allowed Amount: N/A 8 Monsanto Claims Will be treated in accordance with the Global Settlement. Impaired. Estimated Aggregate Allowed Amount: N/A Recovery: N/A 9 Legacy Site Claims Under Monsanto's financial responsibility. Impaired. Estimated Aggregate Allowed Amount: N/A Recovery: N/A 10 General Unsecured Claims Each Holder will receive a Pro Rata share of the GUC Stock Pool. Each Holder will be entitled to participate in the Rights Offering. Impaired. Estimated Aggregate Allowed Amount: $800,000,000 to $1,000,000,000 Recovery: 48% to 56% 11 Retiree Claims Reorganized Solutia will contribute all of the Pool C Common Stock to a trust for the Retirees. The Retirees Committee is deemed the holder of the Retiree Claim. Impaired. Estimated Aggregate Allowed Amount: $35,000,000 Recovery: 42% to 52% 12 Non-Debtor Intercompany Each claim will be reduced to Claims 60%, and the remaining 40% will be reinstated. Impaired. Estimated Aggregate Allowed Amount: $108,000,000 13 Debtor Intercompany Claims will either be: claims (a) eliminated; or (b) discharged without distributions. Impaired. Estimated Aggregate Allowed Amount: $2,440,000,000 Recovery: 0% 14 Axio Claims No distribution. Impaired. Estimated Aggregate Allowed Amount: N/A Recovery: 0% 15 Security Claims No distribution. Impaired. Estimated Aggregate Allowed Amount: N/A Recovery: 0% 16 Equity Interests No distribution. Impaired. Estimated Aggregate Allowed Amount: N/A Recovery: 0% Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) SONIC AUTOMOTIVE: Completes New $1.2 Billion Credit Facility ------------------------------------------------------------ Sonic Automotive, Inc. (NYSE: SAH) entered into a new $1.2 billion four-year revolving syndicated credit facility with 14 financial institutions. This new credit facility replaces Sonic's existing $550 million revolving credit facility and a portion of Sonic's existing floorplan financing arrangements. Under the terms of the agreement: * up to $700 million of the syndicated credit facility is available for new vehicle inventory floorplan financing, * up to $150 million is available for used vehicle inventory floorplan financing, and * up to $350 million is available for working capital and general corporate purposes, including acquisitions. Sonic has the ability over the term of the new facility to expand the facility to provide up to $1.45 billion in total credit availability upon satisfaction of certain conditions. The lending syndicate is comprised of: * three manufacturer-affiliated finance companies: -- Toyota Motor Credit Corporation, -- BMW Financial Services NA, LLC, and -- Nissan Motor Acceptance Corporation; and * 11 commercial banks and other lending institutions: -- Bank of America, N.A., -- JP Morgan Chase Bank, -- Wachovia Bank, -- Comerica Bank, -- Sovereign Bank, SunTrust Bank, -- Fifth Third Bank, -- General Electric Capital Corporation, -- Key Bank, -- World Omni Financial Corporation, and -- Carolina First Bank. The syndication was arranged through Banc of America Securities LLC and JPMorgan Securities, Inc. Sonic also anticipates entering into or renewing separate credit arrangements with: * BMW Financial Services NA, LLC, * DaimlerChrysler Services North America LLC, * Ford Motor Credit Company and * General Motors Acceptance Corporation, for floorplan financing. These separate floorplan facilities are anticipated to provide a total of approximately $620 million of availability to finance new vehicle inventory purchased from the respective manufacturer affiliates of these captive finance companies. Jeffrey C. Rachor, Sonic's President and Chief Operating Officer stated, "The completion of this facility increases the sources of long-term, attractively priced capital for Sonic. The combination of commercial lending institutions and manufacturer-affiliated finance companies participating in our floorplan and other financing facilities demonstrates the broad attractiveness of the automotive retailing sector. Many of these entities have been outstanding financing partners for our Company for many years. We look forward to continuing to build on those relationships while also welcoming new lenders to our Company. We believe this new credit facility provides us with a stable capital structure for the foreseeable future and we can focus our efforts on successfully deploying that capital consistent with the more measured acquisition strategy we have previously communicated to the marketplace." Headquartered in Charlotte, North Carolina, Sonic Automotive, Inc. -- http://www.sonicautomotive.com/-- is one of the largest automotive retailers in the United States operating 177 franchises and 38 collision repair centers. * * * As reported in the Troubled Company Reporter on Nov. 21, 2005, Moody's Investors Service assigned a B3 to Sonic Automotive's new convertible senior subordinated notes, and affirmed existing ratings. The outlook is stable. The net proceeds from the convertible notes were expected to be used to repay a portion of approximately $260 million outstanding under the $550 million revolving credit facility, which may be reborrowed and utilized for general corporate purposes, including acquisitions. The B3 rating of the convertible senior subordinated notes reflects: 1) the contractual subordination of the notes to floor plan obligations and the secured credit facility, which are collateralized by new vehicle inventory and related accounts receivable; 2) minimal, if any, asset coverage; and 3) the lack of operating company guarantees. SPANISH BROADCASTING: Repays Second Lien Credit Facility -------------------------------------------------------- Spanish Broadcasting System, Inc. (Nasdaq: SBSA) paid its Second Lien Credit Facility in full. The company used approximately $101 million of net cash proceeds received from the sale of its Los Angeles radio stations KDAY-FM and KDAI-FM to Styles Media, completed on Jan. 31, 2006. Joseph A. Garcia, Chief Financial Officer, commented, "This is a significant step in our deleveraging plan, which reduces our interest expense by approximately $9 million and strengthens our balance sheet. Moving forward, we will continue to assess our financial position with the goal of maintaining a strong balance sheet and financial flexibility." On June 10, 2005, Spanish Broadcasting System entered into the Second Lien Credit Facility that provided for a $100 million term loan scheduled to mature on June 10, 2013, with a prepayment premium of 1%, if the full amount of such term loan was paid with the proceeds of the Styles Media Asset Sale proceeds on or before June 10, 2006. Headquartered in Coconut Grove, Fla., Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- is the largest Hispanic-controlled radio broadcasting company in the United States. SBS owns and operates 20 radio stations located in the top Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, including the #1 Spanish-language radio station in America, WSKQ-FM in New York City, as well as 3 of the Top 4 rated radio stations airing the Tropical, Regional Mexican, Spanish Adult Contemporary and Hurban format genres and the highest billing Latino-formatted stations in each of the three largest U.S. Hispanic markets. The Company also produces live entertainment concerts and events throughout the U.S. and Puerto Rico. On July 13, 2005, the Company announced the acquisition of WDLP-TV, a full-power television station serving South Florida that is expected to close by March 2006. The Company also operates LaMusica.com, a bilingual Spanish-English online site providing content related to Latin music, entertainment, news and culture. * * * Spanish Broadcasting System, Inc.'s $25 million revolving credit facility due 2010 carries Standard & Poor's B+ rating. STANDARD PACIFIC: S&P Affirms Subordinated Notes' Rating at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Standard Pacific Corp. At the same time, the 'BB' rating on the company's senior unsecured notes and the 'B+' rating on its subordinated notes are also affirmed, affecting $1.25 billion of rated securities. The outlook is positive. "The ratings and outlook acknowledge Standard Pacific's solid market position, expanded operating platform, and conservative financial risk profile. These strengths are somewhat tempered by the company's sizable investment in joint ventures," explained Standard & Poor's credit analyst George Skoufis. "Standard Pacific has grown substantially over the past few years, and in fiscal 2005 the company generated $4.0 billion in revenues from 11,411 deliveries. While Standard Pacific has historically been a California-based move-up homebuilder, much of its recent growth has come from newer markets, with more than 50% of 2005 deliveries generated from its Florida and Arizona communities." Standard Pacific remains well positioned in some of the strongest homebuilding markets in the country, and the company's strong balance sheet and land position provide a solid platform to fuel internal growth. Standard & Poor's will closely monitor the company's entry into some new markets. A one-notch upgrade would be warranted if Standard Pacific: * continues to post solid operating results amidst the backdrop of a more tempered housing market coupled with rising material and labor costs; * balances its investment and share repurchase activity to preserve its sound financial risk profile; and * appropriately structures its future joint venture investments. STEPHENS COMPANY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Stephens Company 6415 Allegheny Street Houston, Texas 77021 Bankruptcy Case No.: 06-30674 Type of Business: The Debtor provides floor covering products and services to Southwest dealers and contractors. See http://www.thestephenscompany.com/ Chapter 11 Petition Date: February 21, 2006 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Thomas S. Henderson, Esq. Lynn Chuang Kramer, Esq. Patrick E. Griffin, Esq. Munsch Hardt Kopf & Harr, P.C. 700 Louisiana, Suite 4600 Houston, Texas 77002 Tel: (713) 222-1470 Fax: (713) 222-1475 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Penske (DA) Lessor - trucks $175,000 P.O. Box 802577 Chicago, IL 60680 Beaulieu Carpets Goods and/or services $160,081 P.O. Box 120896 Dallas, TX 75312 Tarkett, Inc. Goods and/or services $160,000 1001 Yamaska East Farnham PQJ2N1J7 Canada Texas Cement Products Goods and/or services $127,656 Kronotex USA, Inc. Goods and/or services $127,500 Barnie Bigbie ESOP note claim $116,168 MP Global Products, LLC Goods and/or services $112,484 Burke Mercer Goods and/or services $106,825 Para-Chem, Inc. Goods and/or services $92,831 Ceramica Lanzi Goods and/or services $90,000 HISD Personal Property $83,810 Kronotex Germany Goods and/or services $81,000 Marko Tranportation Goods and/or services $75,855 Petula Associates, LTD Lessor - Dallas $75,000 Warehouse judgment 1/31/2006 Harris County Personal $71,887 Property Time Warner Telecom Lessor $63,852 Ray C. Sadler, III ESOP note claim $54,185 Plaza Ceramicas Goods and/or services $51,161 EPC America, Inc. Goods and/or services $43,000 Billy M. Kavanaugh ESOP note claim $34,449 STONE ENERGY: Moody's Puts Junk Rated $400MM Sr. Notes on Review ---------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family Rating for Stone Energy Corp., to B2 from B1 and the ratings on the senior subordinated notes to Caa1 from B3. The ratings are under review for further possible downgrade. Moody's also affirmed Stone's SGL-3 rating. The ratings downgrade reflects: -- the company's announcement of a second significant negative reserve revision for fiscal 2005 which combined with the first announcement, results in total reserve reduction of nearly 30% from FYE 2004 levels despite the company's indication that it replaced 106% of 2005 production; -- Moody's estimation that leverage on the Proven Developed reserve base is at historically high levels; -- Moody's estimation of very high and unsustainable leveraged full cycle costs that are incompatible even at the current ratings; -- still significantly lower production due to shut-in production related to hurricanes Rita and Katrina; -- the company's estimate that overall daily production will remain essentially flat in 2006 compared to 2005 despite spending about $500 million in 2005 and projected spending of $360 million in 2006; -- several years of weak capital productivity with Moody's expectation that 2005 will show considerably higher expected finding and development figures from previous levels which were already unsustainable long-term. Further, given the company's increased focus in the deepwater GOM, future capital productivity and production trends could continue to face inconsistencies due to the inherent higher cost and higher risk nature of the deepwater region. The ratings are placed under review for further downgrade pending resolution of the Company's announcement that it received a notice of non-compliance from 25% of the holders of the company's 6.75% senior subordinated notes. The notice is based on the delay in the filing of Stone's third quarter financial statements which the company does not believe is an actual default under the notes indenture. However, if it is agreed that a default has occurred, the company has 60 days from the receipt of the notice to cure the default or risk having the notes accelerated, which would then result in a cross-default and acceleration under the indenture for the 8.25% senior subordinated notes and the bank credit agreement, requiring the company to obtain waivers. The company filing its financials with the SEC in mid-march would cure the default declared by the 6.75% note holders. The inability to either cure the default or obtain sufficient waivers would result in a further downgrade as the company would likely face a liquidity crunch. The review will consider the potential for another borrowing base reduction on the secured credit facility given the latest revision which if significant, would put pressure on the company's near- term liquidity. However, if the company is successful in filing its SEC filings as planned in March, and there is no significant borrowing base re-determination would likely confirm the B2 Corporate Family Rating and Caa1 note rating. Stone's ratings gain support from still strong commodity prices that benefit the company through its unaffected or restarted production; and a degree of diversification of production and reserves located onshore in the more durable Rocky Mountains and the Williston Basins. Stone recently announced a negative 67 Bcfe revision, which follows a 161 Bcfe negative revision back in October, not including hurricane related revisions. Moody's estimates that the downward revisions have significantly increased the company's already historically high leverage to almost $8.00/boe on the PD reserve base assuming the company's percentage of PD's remains similar to 2004. Debt on the company's total proved reserve base would move to between $11.00/boe to $12.00/boe assuming Proven Undeveloped capex in the 2005 reserve report is similar to 2004. Moody's estimates that average three-year all-sources F&D costs excluding revisions to be approximately in the $19-20/boe range assuming 2005 capital expenditures are in-line with 2004. The affirmation of Stone's speculative grade liquidity rating at SGL-3 reflects Moody's expectation of adequate liquidity over the next four fiscal quarters given still supportive commodity prices, the slow but increasing increased production from the hurricane related shut-in GOM production, and currently ample availability under the company's revolving credit facility. However, given the second negative reserve revision combined with the recent fall in natural gas prices, Moody's believes the company is exposed to another borrowing base re-determination which could materially reduce availability under its secured revolving credit facility. Though it's unlikely that Stone would be subject to a repayment given that it currently has ample cushion, a potentially significant reduction in borrowing capacity could materially impact liquidity. In the event that a significant borrowing base reduction occurs or if the revolver lenders determine a default has also occurred under the credit agreement resulting in the need for waivers, the SGL-3 rating would be moved down to a SGL-4 given that revolver access would be considered temporary and could be revoked in the near-term. The borrowing base of the revolving credit facility was reduced after the company announced its initial 161/bcfe reserve write- down to $300 million from $425 million. The company currently still has approximately $111million of availability assuming $13 million of historical letter of credit usage and a reported $176 million of borrowings. The maintenance covenants under the credit facility have considerable room with a Debt/EBITDA test of 3.25x and a minimum tangible net worth test both of which the company is expected to easily meet. Stone's only visible alternate source of liquidity is the sale of its oil and gas reserves. Although the reserves are not pledged to the lenders, the credit facility contains a negative pledge and a restriction on material asset sales, preventing the company from selling any reserves above $15 million without lender approval. While leaving the ratings under review for possible further downgrade, Moody's ratings actions for Stone Energy are: * Downgraded to B2 from B1 -- Corporate Family Rating * Downgraded to Caa1 from B3 -- $200 million 8.25% senior sub. notes due 2011 * Downgraded to Caa1 from B3 -$200 million 6.75% senior sub. notes due 2014 * Affirmed the SGL-3 Speculative Grade Liquidity Rating Stone Energy Corp., headquartered in Lafayette, Louisiana, is engaged in the exploration, development and production of oil and natural gas with operations concentrated in the Gulf Coast region and the Gulf of Mexico. SUPERB SOUND: Court Okays Sale of Louisville Store to Phase One --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana approved Superb Sound, Inc.'s request to sell the assets of its retail store located at 4600 Shelbyville Road, in Louisville, Kentucky, free and clear of any and all liens, claims, interests, encumbrances and charges to Phase One Orace, LLC. The Court entered the sale order last week. As reported in the Troubled Company Reporter on Feb. 8, 2006, the Debtor negotiated a Three-Store Asset Purchase Agreement to sell the assets of its retail stores located at 1005 Lewis and Clark Highway, in Clarksville, Indiana, and 4600 Shelbyville Road, in Louisville, Kentucky to Phase One Orace, LLC, for $500,000 The Debtor's request to sell the Clarksville Stores remains sub judice. At an auction conducted on Feb. 3, 2006, no competing bidder topped Phase One's offer for the Louisville Assets. The amount of Phase One's winning bid for the single Louisville Store is not disclosed in court records. The Louisville Sale Order says the Debtor is authorized to issue a bill of sale to Phase One transferring the Louisville assets and directs the Debtor to distribute the proceeds of the asset sale as detailed in its sale request. Headquartered in Indianapolis, Indiana, Superb Sound, Inc., dba Ovation, Ovation Audio/Video and Ovation Home -- http://www.ovation-av.com/-- is an audio, video and mobile electronics specialist. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137). William J. Tucker, Esq., at William J. Tucker & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,416,642 in assets and $14,546,796 in debts. SURETY CO: S&P Lowers Financial Strength Rating to Bpi from BBpi ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and financial strength ratings on Surety Co. of the Pacific to 'Bpi' from 'BBpi'. "The ratings were lowered because of Surety's persistently poor operating performance, deteriorating capitalization, extremely high geographic concentration, and extremely high product-line concentration," explained Standard & Poor's credit analyst Michael Swei. Headquartered in Van Nuys, California, Surety writes contractor's license surety bonds and distributes its products primarily through independent general agents and direct marketing. The company is rated on a stand-alone basis. Ratings with a 'pi' subscript are based on an analysis of an insurer's published financial information and additional information in the public domain. They do not reflect in-depth meetings with an insurer's management and are therefore based on less comprehensive information than ratings without a 'pi' subscript. Ratings with a 'pi' subscript are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event that may affect the insurer's financial security occurs. Ratings with a 'pi' subscript are not subject to potential CreditWatch listings. TORCH OFFSHORE: Administrative Claims Bar Date Set on April 3 ------------------------------------------------------------- The Hon. Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana set April 3, 2006, as the deadline for filing requests for the allowance and payment of administrative expense claims arising after Jan. 7, 2005, in connection with Torch Offshore, Inc., and its debtor-affiliates' bankruptcy case. Each proof of administrative claim must be filed using a form available from the Debtors' counsel: Christopher T. Caplinger, Esq. 601 Poydras Street Suite 2775 New Orleans, Lousiana 70130 Phone: (504) 568-1990 Fax: (504) 529-7418 Proofs of Administrative Expense Claims may be filed electronically at: http://www.laeb.uscourts.gov/ https://ecf.uscourts.gov/cgi-bin/login.pl/ or by mail: Clerk of Court U.S. Bankruptcy Court Eastern District of Louisiana 501 Magazine Street New Orleans, Louisiana 70130 Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides integrated pipeline installation, sub-sea construction and support services to the offshore oil and gas industry, primarily in the Gulf of Mexico. The Company and its debtor- affiliates filed for chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on Jan. 7, 2005. When the Debtors filed for protection from their creditors, they listed $201,692,648 in total assets and $145,355,898 in total debts. TRUST ADVISORS: Creditors Committee Taps Murtha Cullina as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Investor Creditors of Trust Advisors Stable Value Plus Fund asks the U.S. Bankruptcy Court for the District of Connecticut for permission to employ Murtha Cullina LLP as its counsel, nunc pro tunc to Feb. 10, 2006. Murtha Cullina will: a) provide legal advice to the Creditors' Committee with respect to its duties and powers in Trust Advisors' case; b) assist the Creditors' Committee in its investigation of the acts, conduct, assets, liabilities and financial conditions of the Debtor, the operation of the Debtors' business, and the desirability of the continuance of such business, and any other matters relevant to the case and the formulation of a plan of reorganization; c) review and analyze all applications, motions, orders and schedules filed with the Court by the Debtor or third parties, advise the Committee as to their propriety, and after consultation with the Committee, take appropriate action; d) assist the Creditors' Committee in the negotiation and formulation of a plan of reorganization; e) confer with the accountants and any other professionals retained by the Committee, if any are selected and approved, so as advise the Committee and the Court more fully of the Debtors' operations, and any potential plan of reorganization; f) assist the Creditors' Committee in seeking the appointment of a chapter 11 Trustee or examiner or the conversion of the case, if necessary; and g) provide other legal advice and services as are necessary to assist the Creditors' Committee to perform its duties under the Bankruptcy Code. Rober E. Kaelin, Esq., a Murtha Cullina member, discloses the Firm's professionals' billing rates: Professionals Hourly Rates ------------- ------------ Robert A. White $375 Robert E. Kaelin $290 Lissa J. Paris $320 C. Donald Neville $200 The Creditors' Committee believes that Murtha Cullina does not represent an entity having an adverse interest to the Debtors' unsecured creditors or equity investors. Headquartered in Darien, Connecticut, Trust Advisors Stable Value Plus Fund filed for chapter 11 protection on Sept. 30, 2005 (Bankr. D. Conn. Case No. 05-51353). Scott D. Rosen, Esq., at Cohn Birnbaum & Shea P.C. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. TSR IMPORTS: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------- Debtor: TSR Imports, Inc. 1608 Ridgeland Road West Mobile, Alabama 36695 Bankruptcy Case No.: 06-10195 Chapter 11 Petition Date: February 22, 2006 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Lawrence B. Voit, Esq. Silver, Voit & Thompson 4317-A Midmost Drive Mobile, Alabama 36609-5507 Tel: (251) 343-0800 Total Assets: Unknown Total Debts: $961,940 Debtor's 4 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Compass Bank $489,197 P.O. Box 830927 Birmingham, AL 35283-0927 Signature Designs $2,597 4970 Fulton Industrial Atlanta, GA 30336 CBSi $154 P.O. Box 3227 Tuscaloosa, AL 35401 Mobile County Revenue Commissioner $46,938 P.O. Drawer 1169 Mobile, AL 36633-1169 URBAN HOTELS: Court Okays Jonathan Hayes' Retention as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, gave Urban Hotels Inc., permission to employ M. Jonathan Hayes, Esq., of Woodland Hills, California, as its bankruptcy counsel. As reported in the Troubled Company Reporter on Jan. 02, 2006, Mr. Hayes will: (a) advise and assist regarding compliance with the requirements of the U.S. Trustee; (b) advise regarding matters of bankruptcy law, including the rights and remedies of the Debtor with regard to its assets and with respect to the claims of creditors; (c) conduct examinations of witnesses, claimants or adverse parties and prepare and assist on the preparation of reports, accounts and pleadings; (d) give advice concerning the requirements of the Bankruptcy Code and the applicable rules; (e) assist with negotiation, formulation, confirmation and implementation of a chapter 11 plan; (f) make appearances in the Court on behalf of the Debtor; and (g) take such other action and perform such other services as the Debtor may require. Mr. Hayes will bill $300 per hour for his services. Mr. Hayes disclosed that he already received a $25,000 retainer from the Debtor. Mr. Hayes confirmed that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Culver City, California, Urban Hotels Inc., operates Lax Plaza Hotel. The Company filed for chapter 11 protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No. 05-50140), to stop a foreclosure sale by AN Capital, Inc. M. Jonathan Hayes, Esq., of Woodland Hills, California, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $23,000,000 in assets and $20,000,000 in debts. URBAN HOTELS: Levene Neale Approved as Creditors Committee Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, approved the retention of Levene, Neale, Bender, Rankin & Brill, LLP, as general bankruptcy counsel for the Official Committee of Unsecured Creditors of Urban Hotels, Inc., dba Lax Plaza Hotel. As reported in the Troubled Company Reporter on Jan. 17, 2006, the Committee expects Levene Neale to: a) render legal advice and guidance with respect to the Committee's powers, duties, rights and obligations; b) review and advise the Committee in regard to the Debtor's business affairs; c) interface with the Debtor's representatives, the U.S. Trustee's office and other parties-in-interest concerning all facets of the Chapter 11 case; d) assist in the protection of assets of the estate; e) prepare, on behalf of the Committee, such petitions, applications, motions, complaints, answers, orders, reports, memoranda and all other legal documents as may be necessary; and f) perform additional legal services as may be necessary or appropriate in the Debtor's chapter 11 case. Daniel H. Reiss, Esq., a Levene Neale partner, disclosed that his Firm's professionals bill: Professional Hourly Rate ------------ ----------- David W. Levene $565 Martin J. Brill $565 David L. Neale $495 Ron Bender $495 Craig M. Rankin $495 Anne E. Wells $450 Daniel H. Reiss $450 Monica Y. Kim $450 David B. Golubchik $450 Beth Ann R. Young $450 Nellwyn W. Voorhies $425 Jacqueline L. Rodriguez $365 Juliet Y. Oh $335 Susan K. Seflin $335 Ovsanna Takvoryan $290 Todd M. Arnold $280 Paraprofessionals $175 Mr. Reiss confirmed that his Firm does not hold any interest adverse to the Committee. Headquartered in Culver City, California, Urban Hotels Inc., operates Lax Plaza Hotel. The Company filed for chapter 11 protection on Nov. 29, 2005 (Bankr. C.D. Calif. Case No. 05-50140). M. Jonathan Hayes, Esq., of Woodland Hills, California, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $23,000,000 in assets and $20,000,000 in debts. USG: Asbestos PD Panel Insists PI Estimation Should Not Be Stayed ----------------------------------------------------------------- At a hearing estimating the asbestos personal injury claims against USG Corporation its debtor-affiliates before the U.S. District Court for the District of Delaware on January 30, 2006, the Honorable Joy Flowers acceded to the Official Committee of Asbestos Property Damage Claimants' request that only a short provisional stay of the personal injury estimation proceedings be entered. The PD Committee explained to Judge Conti that it was not a party to the agreements reached with the Official Committee of Asbestos Personal Injury Claimants and the Future Claimants Representative concerning the Debtors' proposed plan of reorganization. Christopher A. Ward, Esq., at The Bayard Firm, in Wilmington, Delaware, relates that the parties had chosen not to consult with the PD Committee and that it was not even clear to the PD Committee what plan treatment was being proposed in respect of asbestos PD claims under the Proposed Plan. The PD Committee also found numerous inconsistent and ambiguous statements concerning the treatment of PD Claims, which left the PD Committee unsure of what was contemplated by plan proponents for the treatment of PD Claims under the Proposed Plan. Mr. Ward notes that while the PD Committee has "made every effort to engage the Debtors in a full and unexpurgated dialogue" concerning the treatment of PD Claims under the Proposed Plan, the Debtors simply have not appeared to hold a similar interest. "While that may unfortunately forebode a contested confirmation process, the PD Committee continues to believe that the mere fact of a term sheet signed by some but not all constituencies which are also parties to the Proceeding is an insufficient ground to put the PI estimation proceedings on ice for the duration of the confirmation process," Mr. Ward tells Judge Conti. Likewise, Mr. Ward contends that the mere fact of a term sheet ought not to have the effect of imposing on the PD Committee or PD Claimholders the burden of proving why that proceeding should not be stayed. Rather, the burden should remain with the Debtors and any other party-in-interest seeking the stay. Accordingly, the PD Committee asks Judge Conti to deny a stay of the PI Claims estimation proceedings. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORP: Disclosure Statement Hearing Scheduled for April 3 ------------------------------------------------------------ In line with USG Corporation and its debtor-affiliates' filing of their plan of reorganization and accompanying disclosure statement early this month, the U.S. Bankruptcy Court for the District of Delaware scheduled a hearing to consider approval of the Disclosure Statement for April 3, 2006, and a hearing to consider confirmation of the Plan beginning on June 15, 2006. The schedule is concurrent to the implementation of the Asbestos Agreement executed by the Debtors, the Official Committee of Asbestos Personal Injury Claimants and the legal representative for future asbestos claimants, regarding the resolution of all asbestos personal injury claims and demands in the Debtors' cases. Under the Asbestos Agreement, the Debtors will use their reasonable best efforts to have the effective date of their Plan to occur on or before July 1, 2006. In addition, the Asbestos Agreement will terminate if the Plan does not become effective on or before August 1, 2006. A full-text copy of the Plan is available for a fee at: http://www.ResearchArchives.com/bin/download?id=060220031748 A full-text copy of the Disclosure Statement is available for afee at: http://www.ResearchArchives.com/bin/download?id=060220032051 Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) VILLAS AT HACIENDA: Judge Hollowell Confirms Modified Amended Plan ------------------------------------------------------------------ The Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona confirmed the Modified First Amended Plan of Reorganization filed by the Villas at Hacienda del Sol, Inc., and its creditor, Western Plains Development Corp. Judge Hollowell confirmed the Modified Plan on Feb. 6, 2006. Judge Hollowell confirmed an Amended Plan of Reorganization filed by Western Plains on Jan. 17, 2006. After negotiations between Western Plains and the Debtor, the two parties filed a Modified Plan on Jan. 26, 2006. Judge Hollowell confirmed the Modified Plan because it satisfies the requirements of 11 U.S.C. Sections 1127(b) and 1127(b) and the confirmed Amended Plan had not been substantially consummated pursuant to Section 1101(2) of the Bankruptcy Code. The Debtor previously filed a request with the Court for authority to sell its apartment project located at 2550 East River Road, Tucson, Arizona. As reported in the Troubled Company Reporter on Feb. 3, 2006, the Debtor entered into a private sale transaction with TNS LLC pursuant to a Purchase and Sale Agreement and Escrow Instructions. Under that Agreement, TNS LLC will buy the apartment project for $23 million by paying: * an initial escrow deposit of $2.8 million, of which: -- $1 million is non-refundable unless the Debtor defaults on the purchase agreement, and -- $1.8 million is refundable until the end of the due diligence period; and * $20.2 million in cash or cash equivalent on or before the closing of the sale. The private sale transaction transfers to TNS LLC all of the estate's title, right and interest in and to the project, together with its associated assets, including without limitation, all of the Debtor's personal property relating to the project and all related intangible property, including certain contracts, but specifically excluding any causes of action, free and clear of all liens, claims, encumbrances or other liabilities. Distribution of the Proceeds Upon the closing of the apartment sale, proceeds of the sale will be used immediately to: * pay the usual and ordinary costs of closing, including, without limitation, customary prorations, title insurance, and escrow fees; and * pay the secured claim of Lenox in full. All amounts remaining will held in an interest bearing account for distribution pursuant to the Modified Plan. The Settlement Agreement Western Plains will forego its rights under the first confirmed plan pursuant to the terms and conditions of a Settlement and Mutual Release Agreement. Under that Agreement, Western Plains will be paid $2,764,176 from TNC LLC's escrow deposit. Western Plains, the Debtor and all related parties will exchange mutual releases. TNS LLC will acquire Western Plains' lien to secure repayment of the refundable deposit. Judge Hollowell approves the Settlement Agreement and the Purchase and Sale Agreement and Escrow Instructions and authorizes the Debtor to sell the apartment project pursuant to the Purchase Agreement and the Modified Plan. A full-text redlined copy of the Modified First Amended Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060202020022 Headquartered in Tucson, Arizona, Villas At Hacienda Del Sol, Inc. -- http://www.thevillasathaciendadelsol.com/-- filed for chapter 11 protection on March 28, 2005. (Bankr. D. Ariz. Case No. 05-01482). Matthew R.K. Waterman, Esq., at Waterman & Waterman, PC, represents the Debtor. When the Company filed for protection from its creditors, it estimated assets and liabilities between from $10 million to $50 million. WAMU MORTGAGE: Moody's Assigns Ba1 Rating to Class B-12 Certs. -------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by WaMu Mortgage Pass-Through Certificates, Series 2006-AR1, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Washington Mutual Bank acquired adjustable-rate jumbo mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination. Moody's expects collateral losses to range from 1.00 to 1.10%. Washington Mutual Bank will service the loans. The complete rating actions are: WaMu Mortgage Pass-Through Certificates, Series 2006-AR1 * Class 1A-1A, Assigned Aaa * Class 1A-1B, Assigned Aaa * Class 2A-1A, Assigned Aaa * Class 2A-1B, Assigned Aaa * Class 2A-1C, Assigned Aaa * Class X, Assigned Aaa * Class R, Assigned Aaa * Class B-1, Assigned Aa1 * Class B-2, Assigned Aa1 * Class B-3, Assigned Aa2 * Class B-4, Assigned Aa3 * Class B-5, Assigned A1 * Class B-6, Assigned A2 * Class B-7, Assigned A2 * Class B-8, Assigned A3 * Class B-9, Assigned Baa1 * Class B-10, Assigned Baa2 * Class B-11, Assigned Baa3 * Class B-12, Assigned Ba1 WILBERT ROSS: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Wilbert Ross, Jr. 7145 Homewood Drive Oakland, California 94611 Bankruptcy Case No.: 06-40205 Chapter 11 Petition Date: February 21, 2006 Court: Northern District of California (Oakland) Debtor's Counsel: Lawrence L. Szabo, Esq. 3608 Grand Avenue, Suite 1 Oakland, California 94610-2024 Tel: (510) 834-4893 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 ------ --------------- ------------ WFS Financial $31,346 P.O. Box 25341 Santa Ana, CA 92799-5341 Neal & Associates $17,256 6200 Antioch Street, Suite 202 Oakland, CA 94611 Douglas Stewart $9,000 506 Hanbury Lane Foster City, CA 94044 Pacific Gas & Electric Utilities $6,344 P.O. Box 8329 Stockton, CA 95208 Law Office of Advertising $2,024 Gilbert A. Moret Ernest Brown $2,000 National Collection Agency $2,000 The Credit Repair $1,778 Savvy Design Services $1,277 Tom Vazquez $1,000 Marlo Davis $1,000 Select Imaging $873 D&B RMS $525 Christina Rodriguez $175 The Hertz Accident $159 Ad-Review $120 M.A.R.S., Inc. Collection $73 WINN-DIXIE: Judge Funk Okays $1.15 Million Retention Bonus to CEO ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 10, 2006, Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to pay a retention incentive to Peter L. Lynch in consideration for his remaining in their employ as their president and chief executive officer. The Debtors originally sought to pay Mr. Lynch a $2,000,000 retention incentive to assure his services through Dec. 31, 2006. However, to resolve concerns raised by the Creditors Committee, the Debtors have agreed to reduce Mr. Lynch's retention incentive to $1,150,000 in exchange for his remaining in the Debtors' employ through Aug. 31, 2006. Retirees Committee Objects The Ad Hoc Committee of Winn-Dixie Retirees is concerned with the shortening of the retention period to the end of August. The Retirees support the reduction of the retention bonus to $1,150,000 but they do not support the reduction of the applicable period to Aug. 31, 2006. Jerrett M. McConnell, Esq., at Friedline & McConnell, P.A., in Jacksonville, Florida, asserts that even if the Debtors are able to emerge from bankruptcy on the timetable they currently are projecting, it is imperative that they have a continuity of leadership to guide them through those first vital months post- confirmation. The Retirees see no harm in asking Peter L. Lynch to sacrifice for the good of Winn-Dixie and agree to stay on through the end of the year for $1,150,000. * * * Judge Funk authorizes the Debtors to pay Peter L. Lynch $1,150,000, net of taxes required to be withheld, in consideration for staying with the Debtors until Aug. 31, 2006. The Court clarifies that the CEO Retention Incentive will be subject to forfeiture under either of these circumstances: (a) The Debtors terminate Mr. Lynch for cause on or before Aug. 31, 2006; or (b) Mr. Lynch terminates his employment with the Debtors without good reason and other than for disability on or before Aug. 31, 2006. In an event of forfeiture, Mr. Lynch is directed to repay the CEO Retention Incentive, without interest, to the Debtors. A full-text copy of the Lynch Letter Agreement is available for free at http://ResearchArchives.com/t/s?5bb 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Grossman-Dickson Settlement Agreement Approved ---------------------------------------------------------------- Winn-Dixie Montgomery, Inc., as tenant, and Grossman-Dickson Dalton Georgia, LLC, as landlord, are successors-in-interest to a lease dated Aug. 25, 1994, for the Debtors' Store No. 1857 located in Dalton, Georgia. The Debtors guaranteed WD Montgomery's obligations under the Lease pursuant to a guarantee dated Aug. 25, 1994. Delray Farms of Georgia, L.L.C., subleases the Premises from WD Montgomery pursuant to a sublease dated Oct. 1, 2002. The monthly rental obligation under the Sublease is $17,806. On Nov. 11, 2005, the Debtors sought to reject the Lease and Sublease. In anticipation of rejection damages, Grossman-Dickson filed two contingent, unliquidated proofs of claim in the Debtors' cases: (1) Claim No. 9184 against the Debtors; and (2) Claim No. 9185 against WD Montgomery. On Dec. 15, 2005, the U.S. Bankruptcy Court for the Middle District of Florida authorized the Debtors to reject several leases, including the Lease and Sublease, and required that claims for rejection damages for the Lease and Sublease be filed within 30 days from the date of the Rejection Order. Subsequently, the parties agreed to set March 1, 2006, as the effective date for the rejection of the Lease. Out of an abundance of caution, Grossman-Dickson filed two more proofs of claim asserting claims for rejection damages: (1) Claim No. 12856 against the Debtors; and (2) Claim No. 12855 against WD Montgomery. The parties engaged in negotiations and have reached a settlement, which provides that: (a) The Debtors will assume and assign the Sublease to Grossman-Dickson, with the Sublease amended to provide for a $3,920 increase in Delray's monthly rental owed to Grossman. The Subtenant Rent will now be $21,726 per month; (b) WD Montgomery will reject and terminate the Lease and the Guarantee effective March 1, 2006; (c) Except to the extent modified by the Settlement, WD Montgomery will continue to meet all of its obligations under the Lease through March 1, 2006; (d) WD Montgomery and Grossman-Dickson will modify the Lease, effective as of Dec. 1, 2005, to provide for a temporary increase of the monthly rent to $29,567. Thus, over the three-month period from December 2005 through February 2006, Grossman-Dickson is entitled to receive $88,700 in the aggregate. Because the amendment to the Sublease requires Delray to make direct payments to Grossman-Dickson beginning Dec. 1, 2005, WD Montgomery will pay Grossman-Dickson a monthly amount, for December 2005 through February 2006, equal to the difference between the Modified Rent and the Subtenant Rent; (e) Grossman-Dickson's Original Claims will be deemed amended and superseded by the Amended Claims; (f) Grossman-Dickson's Amended Claims will each be deemed allowed as non-priority, unsecured claims for $350,000. However, Grossman-Dickson's total recovery on the Amended Claims will not exceed $350,000. If the estates of WD Montgomery and the Debtors are substantively consolidated, Claim No. 12855 will be deemed expunged; and (g) WD Montgomery will transfer to Grossman-Dickson the security deposit that Delray has provided to WD Montgomery under the Sublease. The Debtors ask the Court to approve their Settlement Agreement with Grossman-Dickson. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Open-Ended Lease Decision Deadline ---------------------------------------------------- As of Feb. 17, 2006, Winn-Dixie Stores, Inc., and its debtor- affiliates are lessees under more than 500 remaining unexpired non-residential real property leases, including unexpired leases for retail stores, distribution facilities and administrative offices. The Debtors ask the U.S. Bankruptcy Court for the Middle District of Florida to further extend the period within which they must move to assume, assume and assign or reject the Unexpired Leases through and including the date on which their confirmed plan of reorganization becomes effective. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, asserts that the Debtors' request for extension is necessary to allow them to maintain the flexibility, throughout the plan process, to assume or reject the Unexpired Leases. If their request is not approved, the Debtors will be compelled, prematurely and without final resolution of their Chapter 11 cases, to either: (1) assume substantial, long-term liabilities under the Unexpired Leases; or (2) reject and forfeit benefits associated with the Unexpired Leases. "Either course would be detrimental to the Debtors' ability to operate and preserve the going-concern value of their business for the benefit of all creditors and other parties-in-interest," Mr. Baker contends. Mr. Baker assures the Court that the Debtors are paying for the use of the property at the applicable lease rates and are continuing to perform their obligations under the Unexpired Leases in a timely fashion. Moreover, the Debtors propose that each Lessor be permitted to seek to shorten the Extension Period for cause with respect to a particular Unexpired Lease. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). * Sheppard Mullin Welcomes Lucantonio Salvi as Partner in D.C. -------------------------------------------------------------- Lucantonio N. Salvi has joined the Washington, D.C. office of Sheppard, Mullin, Richter & Hampton LLP. Salvi, most recently with Latham & Watkins in Washington, D.C., joins as a partner in the firm's Corporate practice group. Mr. Salvi practices in the areas of corporate law, corporate finance, securities law and mergers and acquisitions. Mr. Salvi represents companies, investment banks, and private equity firms in corporate and transactional matters, including venture capital financings, mergers and acquisitions, joint ventures, and public and private securities offerings. Mr. Salvi represents both public and private sector clients in the United States and abroad, with a practice specialization that includes cross-border transactions involving Italian companies. Mr. Salvi is a member of the International Law & Practice Section of the American Bar Association. "Luca's skills and experience will be important in expanding our East Coast transactional practice," said Guy Halgren, managing partner of the firm. "As the globalization of business deals continues to evolve, his sophisticated international corporate expertise brings tremendous value to the firm's clients." "Sheppard Mullin's Corporate practice group had a strong year in 2005," Mr. Salvi said. "I'm excited to join my new colleagues in this successful practice area and look forward to building the D.C. transactional group with Ed Schiff." "We are delighted to welcome Luca to the D.C. office, at a time of significant expansion," said Edward Schiff, managing partner of the firm's Washington, D.C. office. "His diverse specialization, in-depth market knowledge and industry relationships are an excellent fit for us, given the corporate and M&A matters which we handle." Mr. Salvi earned his law degree from Georgetown University in 1995 and graduated from Fletcher School of Law and Diplomacy, with an MALD in 1994. About Sheppard, Mullin, Richter & Hampton LLP Sheppard, Mullin, Richter & Hampton LLP -- http://sheppardmullin.com/ -- is a full service AmLaw 100 firm with more than 480 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate; Entertainment, Media and Communications; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. The firm was founded in 1927. ********* 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 ***