/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060315.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 15, 2006, Vol. 10, No. 63 Headlines AAMES MORTGAGE: Moody's Slices Rating on Class B-1 Certs. to B1 ACTIVANT SOLUTIONS: Hellman's Purchase Plan Cues S&P's Neg. Watch AIR 2 US: S&P Affirms B- Rating on Series B Equipment Notes ALASKA COMMUNICATIONS: Fox Paine Entities Sell Remaining Stake ALLIANCE LAUNDRY: Incurs $29.1 Million Net Loss in 2005 ALLIED HOLDINGS: Gets Court Nod to Assume Norfolk Lease Agreement ALLIED HOLDINGS: Gateway Wants to Proceed with Civil Action ALLIED HOLDINGS: Wants to Get Funds Back from Volvo Parts ALLSERVE SYSTEMS: Founder Faces Criminal Fraud Charges APPLETON PAPERS: Posts $3.6 Million Net Loss in Fiscal Year 2005 ARIUS RESEARCH: Balance Sheet Upside Down by CDN$969K at Nov. 30 ASSOCIATED MATERIALS: Earns $10.3M of Net Income in Fourth Quarter ATLANTIC MUTUAL: Moody's Junks Insurer's Surplus Note Rating AZTAR CORP: Accepts Pinnacle's $2.1 Billion Merger Proposal AZTAR CORP: Pinnacle Merger Cues S&P's Negative Watch to Remain BLOCKBUSTER INC: Moody's Affirms Ratings on Weak Credit Metrics CENTRAL VERMONT: Owes Connecticut Yankee $10.3M for Plant Expenses COMMERCIAL MORTGAGE: S&P Holds BB+ Rating on Class E Certificates CONGOLEUM CORP: Wants to Register Judgments Against GHR & Kenesis CONGOLEUM CORP: Court Okays Akin Gump as Bond Committee's Counsel CONGOLEUM CORP: Gets Court OK to Continue Hiring E&Y as Auditor CONNORS BROTHERS: S&P Assigns B+ Long-Term Corp. Credit Rating COUNTRYWIDE ALTERNATIVE: Moody's Rates Class B-1 Cert. at Ba1 CYBERCARE INC: Court Establishes March 24 as Claims Bar Date DANA CORP: Court Okays Payment of Prepetition Tax Obligations DANA CORPORATION: Can Continue Workers' Compensation Programs DEEP RIVER: Wants Plan-Solicitation Period Stretched to June 24 DELTA MILLS: Moody's Withdraws Junk Rating on $150M Senior Notes DOMINO'S PIZZA: January 1 Balance Sheet Upside-Down by $510 Mil. ENRON CORP: KBC Bank Hold $162.3 Million General Unsecured Claim EMERITUS CORP: Gets $4.96 Million from Exercise of Warrants EXIDE TECHNOLOGIES: Wants Court to Okay Deere Credit Settlement FAIRPOINT COMMS: Reports $6.5 Mil. Income from Operations in 2005 FORD MOTOR: Supplier Base Concerns Cue Fitch to Pare Low-B Ratings FOSTER WHEELER: Balance Sheet Upside-Down by $341.15M at Dec. 30 GLIMCHER REALTY: Earns $9.8 Mil. of Net Income in Fourth Quarter GRAFTECH INT'L: Balance Sheet Upside Down by 209.6-Mil. at Dec. 31 GRUPO IUSACELL: December 31 Equity Deficit Widens to Ps$2 Billion GULFMARK OFFSHORE: Earns $8.2 Million in Quarter Ended December 31 HUDSON'S BAY: Posts $10 Million Net Loss in Fiscal Year 2006 HUNTSMAN CORP: Posts $34.6 Million Net Loss in Fiscal Year 2005 IMAX CORP: S&P Places B- Corporate Credit Rating on CreditWatch INDYMAC SERIES: Bad Debt Cues Moody's to Review Two Cert. Ratings INTEGRATED ELECTRICAL: U.S. Trustee Amends Committee Membership INTEGRATED ELECTRICAL: Taps Financial Balloting as Balloting Agent INTEGRATED ELECTRICAL: Still Needs Ordinary Course Professionals INTERSTATE BAKERIES: Wants to Consolidate Upper Midwest Operations J.L. FRENCH: To Pay $529,487 to Two Electric Utility Companies J.L. FRENCH: Wants Court to Establish May 1 as Claims Bar Date J.L. FRENCH: Seeks Court's Nod to Pay Ordinary Trade Creditors J.P. MORGAN: Moody's Rates Cert. Classes M-10 & M-11 at Low-B J.P. MORGAN: S&P Affirms Low-B Ratings on 14 Certificate Classes JAMES RIVER: S&P Lowers Unsecured Debt Rating to CCC from CCC+ LONG BEACH: Moody's Reviewing Ba3 Ratings on Two Cert. Classes MILLAR WESTERN: S&P Downgrades Sr. Unsecured Debt Rating to B- MOVIE GALLERY: Moody's Junks $920-Mil. Facility & $325-Mil. Notes NATIONAL CENTURY: JPMorgan Settles Creditor Dispute for $425MM NATIONAL ENERGY: Steering Panel Wants Reserve for Some Claims NAVISITE INC: Atlantic Investors Extends Loan Payment Deadline NEIMAN MARCUS: Earns $3 Million in Second Qtr. of Fiscal Year 2006 NEW CENTURY: Moody's Puts Low-B Ratings on Cert. Classes M-& & M-8 NORTEK INC: Moody's Holds Junk Rating on $625 Mil. Senior Notes NORTEK INC: S&P Assigns B Rating to $900 Million Credit Facility NORTEL NETWORKS: S&P Places B- Corporate Credit Rating on Watch OCA Inc: Voluntary Chapter 11 Case Summary PINNACLE ENTERTAINMENT: Plans to Acquire Aztar for $2.1 Billion PINNACLE ENT: Aztar Merger Deal Prompts Fitch's Negative Watch PLIANT CORP: Releases Schedules of Assets and Liabilities RECYCLED PAPERBOARD: Files Disclosure Statement in New Jersey RIDDELL BELL: Moody's Rates $70 Million Credit Facility at B1 RIVERSTONE NETWORKS: Panel Wants Landis Rath as Local Counsel RIVERSTONE NETWORKS: Trustee Names Equity Security Holders Panel ROTECH HEALTHCARE: Reports 4th Quarter & Annual Financial Results S-TRAN HOLDINGS: Wants Plan-Filing Period Extended to June 6 S-TRAN HOLDINGS: Has Until May 8 to Remove Civil Actions SAINT VINCENTS: Has Until May 31 to Decide on Primary Care Lease SAINT VINCENTS: Two Prospective Purchasers Hire Proskauer Rose SAINT VINCENTS: Withdraws Request to Sell Parsons Manor for $12.5M SCHLOTZSKY'S INC: Court Confirm Joint Liquidating Plan SFA CABS: Fitch Shaves Rating on $12MM Class C Notes to CC from C SOUNDVIEW HOME: Fitch Rates Cert. Classes M-10 & M-11 at Low-B SOUTHWEST GAS: Failed ACC Deal Prompts Moody's to Review Ratings SOYODO GROUP: September 31 Balance Sheet Upside-Down by $35,000 STILLWATER MINING: Posts $2.9 Million Net Loss in Fourth Quarter STRUCTURED ASSET: Moody's Puts Low-B Ratings on Classes B1 & B2 SYNAGRO TECHNOLOGIES: Moody's Withdraws B2 Rating on $305MM Loan T&W FUNDING: Portfolio Decline Prompts Fitch to Hold Junk Ratings TECH DATA: Earns $29.5 Million of Net Income in Fourth Quarter TRUMAN CAPITAL: Moody's Downgrades Ratings on Poor Credit Levels UAL CORP: Wants to Settle Internal Revenue Claims for $23 Million ULTIMATE DESIGN: Voluntary Chapter 11 Case Summary USA MOBILITY: Paid Bank Debt Cues Moody's to Withdraw Ba3 Ratings USGEN NEW ENGLAND: Battles TransCanada Over New Discovery Requests W.S. LEE: Case Summary & 20 Largest Unsecured Creditors WEBSTER FINANCIAL: Fitch Affirms BB+ Ratings on Units' Pref. Stock WESTERN OIL: Earns $149.4 Million of Net Income in 2005 WILLIAMS CONTROLS: To Spend $3MM to Move Some Operations to China WINDOW ROCK: Court Sets Disclosure Statement Hearing for March 22 YUKOS OIL: Bank Lenders File Bankruptcy Suit in Moscow * Upcoming Meetings, Conferences and Seminars ********* AAMES MORTGAGE: Moody's Slices Rating on Class B-1 Certs. to B1 --------------------------------------------------------------- Moody's Investors Service downgraded one tranche issued by Aames Mortgage Trust in 2001 and placed four tranches issued by Aames in 2001 and 2002 on review for possible downgrade. The tranches were issued out of Aames' 2001-1, 2001-3 and 2002-1 mortgage securitizations. In addition, Moody's has placed one tranche from Aames' 2002-2 transaction on review for possible upgrade. Moody's has also downgraded one class of certificates issued in Morgan Stanley's 2001-AM1 securitization, which is backed by Aames collateral, and placed four additional Aames backed tranches issued by Morgan Stanley on review for possible downgrade. The underlying collateral in each deal consists of subprime residential mortgage loans. These actions are being taken based on higher than anticipated severities on liquidated loans, an accelerating pace of losses, as well as an accompanying deterioration of credit enhancement, some of which can be attributed to passing performance triggers. The collateral backing the tranche being review for possible upgrade has experienced low levels of cumulative loss and a generally slow pace of losses relative to similar transactions. Complete rating actions are: Issuer: Aames Mortgage Trust 2001-1 * Class M-2, Downgraded to Baa1, Previously A2; Issuer: Aames Mortgage Trust 2001-3 * Class M-2, Currently Ba3, on review for possible downgrade; * Class B, Currently B3, on review for possible downgrade; Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust 2001-AM1 * Class B-1, Downgraded to B1, Previously Baa3; Issuer: Aames Mortgage Trust 2002-1 * Class M-2, Currently A2, on review for possible downgrade; * Class B, Currently Baa2, on review for possible downgrade; Issuer: Aames Mortgage Trust 2002-2 * Class M-1, Currently Aa2, on review for possible upgrade; Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust 2002-AM1 * Class B-1, Currently Baa3, on review for possible downgrade; Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust 2002-AM2 * Class B-1, Currently Baa3, on review for possible downgrade; Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust 2002-AM3 * Class B-2, Currently Baa3, on review for possible downgrade; Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust 2002-HE2 * Class B-2, Currently Baa3, on review for possible downgrade. ACTIVANT SOLUTIONS: Hellman's Purchase Plan Cues S&P's Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit and senior unsecured debt ratings on Austin, Texas-based Activant Solutions Inc. on CreditWatch with negative implications. The CreditWatch listing follows the announcement that Hellman & Friedman LLC and Thoma Cressey Equity Partners will acquire Activant from its existing owner, HM Capital Partners LLC. The CreditWatch listing reflects uncertainty surrounding the financing plans for this acquisition. "While the terms of the acquisition are not currently known, operating lease-adjusted leverage will likely increase from current levels in the mid-5x area, given EBITDA multiples recently paid for similarly positioned software companies," Standard & Poor's credit analyst Ben Bubeck said. The transaction is expected to close during the quarter ending June 2006, and Activant plans to refinance its existing indebtedness. Standard & Poor's will meet with management to discuss financing plans for the transaction, Activant's operating performance, and future acquisition strategy to resolve the CreditWatch listing. AIR 2 US: S&P Affirms B- Rating on Series B Equipment Notes ----------------------------------------------------------- Standard & Poor's Ratings Services completed its CreditWatch review of Air 2 US LLC, affirming its 'BB-' rating on the Series A enhanced equipment notes and its 'B-' rating on the Series B notes. The rating on the Series C notes was lowered to 'CC' from 'CCC-' and that on the Series D notes lowered to 'D' from 'CC'. Ratings on the Series C and Series D notes were then withdrawn. All ratings were removed from CreditWatch with negative implications, where they were placed Sept. 21, 2001. Air 2 US is a Cayman Islands-based limited liability company that in 1999 issued more than $1.1 billion of enhanced aircraft notes. This special-purpose entity relies on lease rental payments on planes leased to United Air Lines Inc. (B/Stable/--) and American Airlines Inc. (B-/Stable/--) by various financing subsidiaries of Airbus Industries SAS. United leases 22 A320-200 jet aircraft from those Airbus units, representing more than half of the total rentals related to this transaction, with the remainder paid by American Airlines to lease 19 A300-600R planes (one of which has since been removed due to its loss in an accident) from other units of Airbus. In contrast to an enhanced equipment trust certificate, planes repossessed from a bankrupt airline lessee would not be sold, and therefore might later generate higher lease revenues when the aircraft market recovers. Airbus would direct the repossession and re-leasing of any aircraft rejected in a bankruptcy of United or American. On Aug. 29, 2003, United, operating in bankruptcy, reached agreement with Air 2 US LLC on revised lease terms for the A320-200 aircraft. Subsequently, United performed on its revised leases during the remainder of its bankruptcy, and assumed them upon emerging from Chapter 11 on Feb. 1, 2006. "The terms remain confidential, but, assuming American continues to pay on its leases and United performs on its revised leases, the Class A and Class B notes should be fully repaid," Standard & Poor's credit analyst Philip Baggaley said. The Class C notes, while current on interest payments at present due to the presence of a liquidity facility, will not receive full interest or principal, and the Class D notes, which do not benefit from access to a liquidity facility, have defaulted. Ultimate recovery for the Class C notes could improve somewhat if lease rates paid by United increase under a provision whereby rates are reset to market levels in the future. Because the Class C notes will ultimately default and the Class D notes have already defaulted, Standard & Poor's withdrew its ratings on those notes after lowering them. ALASKA COMMUNICATIONS: Fox Paine Entities Sell Remaining Stake -------------------------------------------------------------- Alaska Communications Systems Group, Inc., (NASDAQ:ALSK) disclosed that affiliates of its largest shareholders have commenced a secondary offering of approximately 9.5 million shares of its common stock. The shares are being offered entirely by affiliates of Fox Paine & Company, LLC, and ACS will not receive any proceeds from the sale of shares. Following this offering, the selling stockholders will not have any shares of ACS common stock. RBC Capital Markets is acting as sole manager of this offering. When available, copies of the final prospectus supplement relating to this offering may be obtained from: RBC Capital Markets Syndicate Department Phone:(612) 371-2818. The shares of common stock will be offered under the ACS registration statement on Form S-3 declared effective on Jan. 11, 2005 by the Securities and Exchange Commission. On March 10, 2006, Alaska Communications announced the pricing of the previously announced secondary offering of approximately 9.5 million shares of ACS' common stock at $11.00 per share. The offering is expected to close today, March 15, 2006. About Alaska Communications Alaska Communications -- http://www.alsk.com/-- is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. * * * As reported in the Troubled Company Reporter on Feb. 23, 2006, 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. ALLIANCE LAUNDRY: Incurs $29.1 Million Net Loss in 2005 ------------------------------------------------------- Alliance Laundry Holdings LLC disclosed its financial results for the year ended December 31, 2005. Net revenues for the full year 2005 increased $36.3 million, or 12.9%, to $317.3 million from $281.0 million for the full year 2004. Net loss for 2005 was $29.1 million as compared to income of $11.8 million for 2004. Adjusted EBITDA for 2005 was $60.4 million compared with Adjusted EBITDA of $59.5 million for 2004. The overall net revenue increase of $36.3 million was attributable to higher commercial laundry revenue of $29.1 million, higher U.S. and Canadian consumer laundry revenue of $4.9 million and higher service parts revenue of $2.3 million. Net loss for the full year 2005 included $18.8 million of transaction costs associated with the sale of the business on January 27, 2005, $9.9 million for loss on early extinguishment of debt and $8.1 million of transaction costs to establish our new asset backed facility. In announcing the Company's results, CEO and President Thomas F. L'Esperance said, "We are extremely pleased with our top line performance for 2005. Throughout the year, we continued to successfully execute our operational strategies while navigating a challenging cost environment. Our financial performance reflects our success in offsetting cost increases with required price increases." "On October 14, 2005, we announced that we would be moving our Marianna operations to Ripon, Wisconsin. This strategic project remains on schedule and should be completed by the end of the third quarter of 2006. We expect to begin seeing efficiencies from the consolidation during the fourth quarter of 2006," said Mr. L'Esperance. Alliance Laundry Holdings LLC is the parent company of Alliance Laundry Systems LLC -- http://www.comlaundry.com/-- a leading North American manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries, on- premise laundries and drycleaners. Alliance offers a full line of washers and dryers for light commercial use as well as large frontloading washers, heavy duty tumbler dryers, and presses and finishing equipment for heavy commercial use. The Company's products are sold under the well known brand names Speed Queen(R), UniMac(R), Huebsch(R) and Ajax(R). * * * As reported in the Troubled Company Reporter on Jan. 7, 2005, Moody's Investors Service assigned a B3 rating to Alliance Laundry Systems LLC's proposed guaranteed senior subordinated notes (the notes will be co-issued by Alliance Laundry Corporation) and a B1 rating to Alliance Laundry Systems LLC's proposed senior secured revolving credit facility and senior secured term loan. Additionally, Moody's assigned a B1 senior implied rating to Alliance Laundry Systems LLC and withdrew the B2 senior implied rating of Alliance Laundry Holdings, Inc. Ratings assigned: * $150 million guaranteed senior subordinated notes, due 2013 -- B3 * $50 million guaranteed senior secured revolver, due 2011 -- B1 * $200 million guaranteed senior secured term loan B, due 2012 -- B1 * Senior implied rating -- B1 * Senior unsecured issuer rating -- B2 ALLIED HOLDINGS: Gets Court Nod to Assume Norfolk Lease Agreement ----------------------------------------------------------------- The U.S Bankruptcy Court for the Northern District of Georgia authorized Allied Holdings, Inc., and its debtor-affiliates to assume a lease agreement with Norfolk Southern Railway. As reported in the Troubled Company Reporter on Feb. 17, 2006, the Debtors and Norfolk Southern are parties to a lease agreement wherein Norfolk Southern agreed to lease to Allied four acres of its property in Walkertown, Forsyth County, North Carolina. The Parties executed a second amendment to the Agreement on Dec. 28, 2005, extending the term of the Lease to Feb. 28, 2009. The Second Amendment permits the Debtors to install a two-inch sewer line with pump station, which is expected to cost around $240,000. The Second Amendment acknowledges and confirms Allied's $10 cure amount. Norfolk Southern has agreed to cap its claim for future rent at $19,620, if Allied later rejects their Agreement. Alisa H. Aczel, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, tells the Court that since executing the Second Amendment, the Parties have discovered that Allied owes Norfolk Southern $368 for 2005 property taxes. Accordingly, in addition to the $10 cure amount, the Parties have agreed that Allied will also remit the Taxes to Norfolk Southern in full satisfaction of Allied's 2005 tax obligations. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Gateway Wants to Proceed with Civil Action ----------------------------------------------------------- In 1997, Gateway Development and Manufacturing, Inc., filed with the New York Supreme Court, Erie County, a civil lawsuit against Commercial Carriers, Inc., Ryder Truck Rental, Inc., and Allied Holdings, Inc. Gateway's Complaint asserted claims against CCI for breach of contract, breach of implied duties, fraudulent inducement, negligent misrepresentation, and fraud. Gateway also asserted claims against Allied for tortious interference with contractual relations. In the New York Action, Gateway sought to recover from CCI and Allied at least $18,000,000, and as indicated by evidence developed in discovery, as much as $21,850,000, as well as punitive damages, judgment interest, costs and legal expenses. Frank N. White, Esq., at Arnall Golden Gregory LLP, in Atlanta, Georgia, relates that Gateway has conducted inquiry and research to determine whether and to what extent Debtors Allied Automotive Group, Inc., and Axis Group, Inc., are also liable, alternately, severally or jointly, for the damages it sustained. The New York Action has been pending for more than eight years. During that period, the Action has progressed through the bulk of discovery, the litigation of numerous discovery disputes, two separate rounds of motions for summary judgment filed by various parties, two separate and complex appeals of the court's summary judgment ruling and the majority of other pre-trial activities, Mr. White relates. Mr. White notes that only limited discovery activity remains to be completed to prepare the case for final pre-trial proceedings and trial. However, any trial of the New York Action cannot proceed by operation of the automatic stay. On February 14, 2006, Gateway filed separate, duplicative proofs of claim in the bankruptcy cases of Allied, CCI, AAGI and Axis. Because the New York Action is yet to be fully and finally adjudicated, Gateway's claims are contingent and unliquidated, Mr. White points out. Accordingly, Gateway asks the U.S. Bankruptcy Court for the Northern District of Georgia lift the automatic stay to permit the New York Action to proceed to conclusion against all defendants including Allied, CCI, AAGI and Axis, and including the completion of: -- discovery; -- filing and adjudication of any remaining pre-trial motions; -- preparations for trial; -- conduct of the trial; -- filing and adjudication of any post-trial motions; and -- final adjudication of any appeals of decisions entered in the New York Action. Gateway believes that the Debtors have been fully indemnified by one or both of the non-Debtor co-defendants in the New York Action, which are Ryder Truck Rental and Ryder System, Inc., for any liability that the Debtors may have adjudicated in the New York Action to owe to Gateway, as well as for any further legal fees or other costs of defense incurred in the New York Action. Thus, none of the ultimate financial responsibility for any claims obtained against the Debtors by Gateway will be borne by the Debtors or their estates. Mr. White assures the Court that the continuation of the New York Action will not result in any prejudice to the Debtors. The New York Action is substantially ready for trial, and dispositive motions have already been ruled upon. In addition, the New York State Court is extensively familiar with the case and New York law applies to all of the disputed issues. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Wants to Get Funds Back from Volvo Parts --------------------------------------------------------- Effective as of Jan. 12, 2004, Allied Automotive Group and Volvo Parts North America, Inc., doing business as Contact Center Solutions, entered into a Service Agreement, where in exchange for payment, CCS agreed to provide managed breakdown assistance for AAG drivers in need of mechanical service. AAG's payment to CCS is due upon receipt of an invoice from CCS. On the Petition Date, CCS began requiring AAG to post a deposit in advance of each service it provided. AAG posted $48,735 in prepetition Deposits with CCS. Between the Petition Date and October 20, 2005, AAG posted more than 1,800 additional Deposits, aggregating $1,015,104, with CCS. During that postpetition period, CCS provided $476,651 in services, Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, tells the Court. Thus, AAG has paid in full all postpetition services CCS has provided and is entitled to a return of the remaining unearned Deposits totaling $538,743, Mr. Winsberg asserts. AAG has repeatedly demanded for the return of the Remaining Funds from CCS. However, CCS refused to remit the Funds. CCS's failure to turn over the Remaining Funds and Prepetition Deposit is an act to obtain possession, or to exercise control over, property of the Debtors' estate, Mr. Winsberg contends. Furthermore, CCS did not seek relief from the automatic stay to obtain or maintain possession of the Remaining Funds and Prepetition Deposit, Mr. Winsberg relates. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Northern District of Georgia to: (1) require CCS to turn over the Remaining Funds to their estate; (2) determine that CCS' continual failure to turn over the Remaining Funds is a violation of the Bankruptcy Code; (3) grant their pre-judgment interest on the Remaining Funds and require CCS to pay that interest; (4) find CCS in violation of the automatic stay; (5) sanction CCS for its willful and continuing violation of the automatic stay; and (8) award them all costs and attorneys' fees associated with their request. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLSERVE SYSTEMS: Founder Faces Criminal Fraud Charges ------------------------------------------------------ Dinesh Dalmia, the founder of bankrupt Allserve Systems Corp., faces charges of fraud in the U.S. in connection with an $80 million alleged scam that targeted equipment finance companies and banks. Rhonda L. Lipschutz, writing for The Deal, reports that Mr. Dalmia will probably be extradited to the U.S. to answer criminal charges filed by federal prosecutors in Newark, New Jersey. Mr. Dalmia faces up to 40 years in prison if convicted, Kashar World News reports. Indian authorities arrested Mr. Dalmia in February in New Delhi for masterminding a securities fraud scheme at the Calcutta Stock Exchange in 2001. Kashar World News relates that Mr. Dalmia fled to the U.S. in the wake of the Calcutta controversy. When he was revealed as the head of a white-collar crime syndicate in New Jersey, Mr. Dalmia escaped back to India. According to Ms. Lipschutz, Allserve's creditors have accused Mr. Dalmia of illegally shipping almost $85 million of the Debtor's equipment to his native country. Ms. Lipschutz adds that Charles A. Stanziale, the Chapter 7 trustee appointed in the Debtor's bankruptcy case, hired A. Atkins Appraisal Corp. to recover missing assets. However, the firm has found only about $300,000 worth of equipment. Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. is an outsourcing company for the IT industry. The Debtor filed for chapter 11 protection on November 18, 2005 (Bankr. D. N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh represents the Debtor in its restructuring efforts. The Court converted the Debtor's chapter 11 case to a liquidation proceeding under chapter 7 of the Bankruptcy Code in February 2005. Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, serves as chapter 7 Trustee. When the Debtor filed for protection from its creditors, it estimated assets between $10 million to $50 million and debts between $50 million to $100 million. APPLETON PAPERS: Posts $3.6 Million Net Loss in Fiscal Year 2005 ---------------------------------------------------------------- Appleton Papers Inc. reported a $1.3 million net loss for fourth quarter 2005, compared to a $1 million net loss for the same quarter of 2004. The Company reported a $3.6 million net loss for fiscal 2005 compared to a $25 million net loss in fiscal 2004, which included $30.8 million in debt extinguishment expenses related to the Company's June 2004 refinancing. The loss in 2005 resulted primarily from a $10.6 million charge Appleton recorded for the restructuring of its U.S. business operations and its U.K. subsidiary, BemroseBooth. During 2005, Appleton restructured its U.S. business and eliminated 94 positions. BemroseBooth announced its exit from the traditional printing and binding portions of its information products business and began an organizational restructuring to increase market focus, centralize its operating structure and position the company to pursue growth in print services. By the end of 2005, BemroseBooth eliminated 54 positions and currently expects to eliminate approximately 26 additional positions during 2006. Appleton 's net sales for the fourth quarter ended Dec. 31, 2005, rose 3% to $269 million, compared to net sales of $260.9 million for the same quarter of 2004. The net sales figure for the fourth quarter 2005 represents the highest quarterly level achieved since the employee buyout of the Company in November 2001. The increase in net sales for the quarter was largely due to the fourth quarter net sales generated by New England Extrusion that Appleton acquired in January 2005. Appleton's net sales for fiscal 2005 were $1.046 billion compared to $989.5 million for fiscal 2004, a 6% increase. That performance marked the first time Appleton achieved annual net sales of $1 billion or more since the November 2001 employee buyout. Coated Solutions Fourth quarter 2005 net sales for carbonless products, which accounts for the majority of the Company's coated solutions business, declined 4% on a 6% shipment volume decline compared to the same quarter of 2004. Fiscal 2005 net sales for carbonless products declined 2% on a 4% shipment volume decline compared to fiscal 2004. Thermal Products Thermal net sales increased approximately 4% during fourth quarter 2005 on a 5% shipment volume increase compared to the same quarter of 2004. Fiscal 2005 net sales increased 5% on a 3% shipment volume increase compared to fiscal 2004. The increase in net sales for the full year was due to improved volume, price and product mix. U.S. Security Products Net sales from U.S.-based security products increased 11% during fourth quarter 2005 compared to the same quarter of 2004 and 17% for fiscal 2005 compared to fiscal 2004. Revenue growth was due to a combination of increased sales volume from new and existing accounts, and improved product mix. Specialized and Secure Print Services Fiscal 2005 net sales from BemroseBooth increased by 2% compared to fiscal 2004. The increase was due primarily to stronger sales of secure mail services, phone cards, and rail and car park tickets. Performance Packaging Net sales from Appleton's performance packaging companies grew 130% in the fourth quarter of 2005, compared to the fourth quarter 2004, due primarily to the January 2005 acquisition of New England Extrusion Inc. Net sales for the fourth quarter of 2005, excluding the New England Extrusion acquisition, were 10% higher than the same quarter of 2004. Net sales for fiscal 2005, excluding New England Extrusion, were approximately 3% higher than fiscal 2004. Debt Repayment During 2005, Appleton repaid $30.4 million of its debt. The Company made mandatory debt repayments of $2.4 million, plus interest, and voluntary debt repayments of $15.0 million, plus interest, on its senior credit facility. Also during the year, Appleton purchased $13.0 million, plus interest, of its $185 million outstanding 8.125% senior notes due June 15, 2011. The Company expects to file its 2005 Annual Report on Form 10-K with the Securities and Exchange Commission before March 31, 2006. About Appleton Papers Appleton Papers Inc. -- http://www.appletonideas.com/-- uses ideas that make a difference to create product solutions through its development and use of coating formulations and applications, encapsulation technology, and specialized and secure print services. The Company produces carbonless, thermal, security and performance packaging products. Appleton is headquartered in Appleton, Wisconsin, and has manufacturing operations in Wisconsin, Ohio, Pennsylvania, Massachusetts and the United Kingdom, employs approximately 3,400 people, and is 100% employee owned. * * * As reported in the Troubled Company Reporter on June 13, 2005, Standard & Poor's Ratings Services revised its outlook on specialty paper producer Appleton Papers Inc. to negative from stable. At the same time, it affirmed all ratings, including the 'BB' corporate credit rating. ARIUS RESEARCH: Balance Sheet Upside Down by CDN$969K at Nov. 30 ----------------------------------------------------------------- ARIUS Research Inc. (TSX-V:ARI) disclosed its financial results for the year ended Nov. 30, 2005 For the year ending Nov. 30, 2005, ARIUS recorded a CDN$2,914,456 net loss, compared with CDN$3,432,210 in 2004. During 2005, the Company recorded CDN$218,307 in revenues, including CDN$42,350 in material transfer fees. The remaining CDN$175,957 was recognized as revenue pursuant to a three-year collaboration formed in September 2004 with Protein Design Labs, Inc., of Fremont, California to discover, develop and commercialize antibodies for cancer treatment. Under the terms of the agreement, PDL paid the Company an up-front fee of CDN$528,480 for access to the Company's technology platform. At Nov. 30, 2005, approximately two-thirds of that fee has been recognized as revenue to reflect delivery of the Company's commitments to date under the collaboration agreement; the remaining one-third, or CDN$175,752, is deferred as unearned revenue. Interest income amounted to CDN$51,599 for the year ended Nov. 30, 2005, a 14% increase compared with CDN$45,069 for the same period in 2004. The increase primarily resulted from a higher average liquidity position during 2005. The Company's balance sheet at Nov. 301, 2005, showed CDN$1,009,995 in total assets and CDN$1,979,662 in liabilities, resulting in a stockholders' deficit of CDN$969,667. At Nov. 30, 2005, the Company's cash position was CDN$152,967. On Dec. 14, 2005, the Company completed a $2 million private placement of convertible debt and share purchase warrants resulting in net cash proceeds of approximately CDN$2,217,600, $21.5 Million Financing On March 1, 2006, ARIUS announced that it has successfully completed the first tranche of its previously announced private placement of units for gross proceeds of $21.5 million on Feb. 28, 2006. Each unit consists of one common share and one common share purchase warrant exercisable at a price of CDN$1 for a period of five years following closing. The main subscribers to the private placement, which included investors from the United States, Canada and the United Kingdom, were funds advised by OrbiMed Advisors, LLC, Xmark Opportunity Funds, Ltd., and Efficacy Capital, Ltd. A syndicate of agents, co-led by Dundee Securities Corporation and Loewen, Ondaatje, McCutcheon Limited and including Canaccord Capital Corporation, arranged the private placement. Under the terms of the offering, ARIUS issued units at a price of CDN$0.80 per unit. The agents received a cash commission equal to 7% of the aggregate gross proceeds as well as broker warrants exercisable for a period of 24 months for a number of shares and warrants equal to 6.5% of the number of shares and warrants issued in the context of the private placement, at a price of CDN$0.80 for one share and one warrant, with the warrants being exercisable at a price of CDN$1.00 for a period of five years from the date of the closing of the private placement. The shares and warrants issued at closing and any shares that will be issued by ARIUS upon exercise of such warrants will be subject to a four-month hold period expiring on June 28, 2006. In consideration of their participation under the private placement, ARIUS entered into an investor rights agreement with OrbiMed, Xmark and Efficacy, which agreement includes certain restrictive covenants; a right to proportional representation of up to 50% on the Board of Directors of ARIUS, subject to election by shareholders; rights of first refusal with respect to certain sales of common shares; and a right of participation in respect of certain future issuances of securities of ARIUS. With the completion of the private placement, OrbiMed becomes an additional control entity by virtue of holding 14,418,750 common shares or 35.2% of the issued and outstanding common shares of the Company. Assuming the 14,418,750 warrants for the additional common shares issuable to OrbiMed are exercised, this would represent, 35.7% of the issued and outstanding common shares of the Company on a fully diluted basis. In connection with the closing of the private placement, Dan Andersen has stepped down from the Board of Directors after serving as a member for six years. Joining the Board of Directors, effective immediately, will be Carl L. Gordon, General Partner of OrbiMed, and Mitchell D. Kaye, Chief Investment Officer of Xmark. With the completion of the first tranche of this financing, ARIUS now has 40,998,834 common shares issued and outstanding. ARIUS Research Inc. -- http://www.ariusresearch.com/-- is a biotechnology company dedicated to personalizing cancer therapy through the discovery and development of novel anticancer monoclonal antibodies. Established in 1999, ARIUS has built a proprietary technology platform, FunctionFIRST(TM), which rapidly identifies powerful MAbs targeting a variety of cancer indications. This antibody generation engine has enabled ARIUS to assemble a growing pipeline, which is used for commercial collaborations and in-house development. ARIUS has ongoing partnerships with key biotechnology and drug development companies. ASSOCIATED MATERIALS: Earns $10.3M of Net Income in Fourth Quarter ------------------------------------------------------------------ Associated Materials Incorporated reported a fourth quarter 2005 net sales of $311.4 million, a 13.8% increase over net sales of $273.6 million for the same period in 2004. For the 2005 fiscal year ended December 31, 2005, net sales were $1,173.6 million or 7.3% higher than net sales of $1,094.0 million for the 2004 fiscal year ended January 1, 2005. Net income for the fourth quarter of 2005 was $10.3 million. This compares to a net loss of $38.4 million for the same period in 2004. For the year ended December 31, 2005, net income was $22.5 million compared to a net loss of $10.9 million for the same period in 2004. EBITDA for the fourth quarter of 2005 was $27.9 million. EBITDA for the same period in 2004 was a loss of $42.5 million. Adjusted EBITDA for the fourth quarter of 2005 was $29.2 million compared to adjusted EBITDA of $31.3 million for the same period in 2004. Adjusted EBITDA for the quarter ended December 31, 2005, excludes $1.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction and $0.2 million of foreign currency losses. Adjusted EBITDA for the quarter ended January 1, 2005, excludes expenses incurred related to the December 2004 recapitalization transaction with certain affiliates of Investcorp S.A., $4.5 million of one-time costs associated with the closure of the Company's Freeport, Texas manufacturing facility, and foreign currency gains of $0.2 million. Costs related to the December 2004 transaction include $30.8 million of stock option compensation expense resulting from the exercise and redemption of certain stock options, $22.3 million of bonuses paid to certain members of Company management and a director in recognition of the successful completion of the transaction as well as the strong operating performance of the Company during 2004, and $16.3 million of investment banking, legal and other related expenses. EBITDA was $84.6 million for the fiscal year ended Dec. 31, 2005, compared to EBITDA of $36.5 million for the fiscal year ended January 1, 2005. For the year ended December 31, 2005, adjusted EBITDA was $93.6 million compared to adjusted EBITDA of $125.4 million for the same period in 2004. Adjusted EBITDA for the year ended December 31, 2005 excludes one-time costs of $4.0 million associated with the closure of the Company's Freeport, Texas manufacturing facility, $4.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction, $0.8 million of foreign currency losses, and $0.3 million of non-cash stock compensation expense. Adjusted EBITDA for the year ended January 1, 2005 excludes transaction related costs, Freeport, Texas facility closure costs of $4.5 million, and foreign currency losses of $0.4 million. Transaction costs for the year ended January 1, 2005, include expenses related to the December 2004 transaction and a $14.5 million management and director bonus paid in conjunction with the March 2004 dividend recapitalization, which included an offering by AMH Holdings, Inc. (AMH), of senior discount notes, redemption of preferred stock and a dividend to common shareholders. Mike Caporale, Chairman, President, and Chief Executive Officer, commented, "Our sales and EBITDA during the fourth quarter benefited from strong unit volume growth, particularly in windows, as well as from the impact of price increases implemented during the quarter. During the first three quarters of 2005, the impact of raw material cost increases, net of associated price increases, had a negative impact on our EBITDA of $11.2 million. However, during the fourth quarter the negative impact on our EBITDA was only $0.1 million. In addition, the situation at our Ennis plant continued to improve, with higher production levels and lower costs compared to the first nine months of the year." Mr. Caporale continued, "As we begin 2006, there are uncertainties surrounding the strength of the new construction and remodeling markets, as a number of key economic and market indicators point to a slower growth rate for the U.S. economy and the housing industry for 2006. Despite this uncertainty which may have an impact on our top-line sales growth, we believe that in 2006 we have a substantial opportunity to improve our operations by increasing our service levels and by reducing costs in our manufacturing operations and throughout our supply chain." Net sales increased 13.8%, or $37.8 million, during the fourth quarter of 2005 compared to the same period in 2004 driven primarily by increased sales volumes for both vinyl windows and vinyl siding, along with the impact of price increases implemented during the fourth quarter of 2005. Gross profit in the fourth quarter of 2005 was $71.4 million, or 22.9% of net sales, compared to gross profit of $68.3 million, or 24.9% of net sales, in the fourth quarter of 2004. Higher freight costs, due primarily to fuel cost increases, and manufacturing inefficiencies which were incurred relating to the consolidation of the Freeport, Texas vinyl siding facility into the Ennis, Texas facility had a negative impact on gross profit of approximately $1.5 million and $2.4 million for the fourth quarter of 2005. The Company estimates that commodity cost increases, net of price increases, negatively impacted gross profit for the fourth quarter of 2005 by approximately $0.1 million, which compares favorably to the negative impact for the first three quarters of 2005 of $11.2 million. Selling, general and administrative expense increased to $48.3 million, or 15.5% of net sales, for the fourth quarter of 2005 versus $42.4 million, or 15.5% of net sales, for the same period in 2004. The increase in selling, general and administrative expense was due primarily to increased expenses in the Company's supply center network, including increased payroll costs and building and truck lease expenses, as well as expenses relating to new supply centers opened during the past twelve months. Selling, general and administrative expense for the fourth quarter of 2005 includes $1.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction. During the fourth quarter of 2004, the Company incurred transaction costs related to the December 2004 recapitalization transaction for management and director bonuses and stock option compensation expense of $53.2 million and facility closure costs of $4.5 million relating to the closing of its Freeport, Texas manufacturing facility. Income from operations was $23.0 million for the fourth quarter of 2005 compared to a loss from operations of $31.8 million for the same period in 2004. Net sales increased by 7.3%, or $79.6 million, for the year ended December 31, 2005, compared to the same period in 2004 driven primarily by price increases along with increased sales volumes for vinyl windows and vinyl siding. Gross profit for the year ended December 31, 2005, was $267.3 million, or 22.8% of net sales, compared to gross profit of $289.0 million, or 26.4% of net sales, for the same period in 2004. The decrease in gross profit margin percentage for the full year was primarily due to significantly increased costs of the Company's key raw materials -- vinyl resin and aluminum -- which were partially offset by the impact of price increases, as well as increased freight costs and manufacturing inefficiencies which were incurred relating to the consolidation of the Freeport, Texas vinyl siding facility into the Ennis, Texas facility. Selling, general and administrative expense increased to $198.5 million, or 16.9% of net sales, for the year ended December 31, 2005 versus $184.5 million, or 16.9% of net sales, for the same period in 2004, due primarily to increased expenses in the Company's supply center network. Selling, general and administrative expense for the year ended December 31, 2005, includes $4.0 million of amortization related to prepaid management fees paid in connection with the December 2004 recapitalization transaction and non-cash stock compensation expense of $0.3 million. During the year ended December 31, 2005, the Company incurred facility closure costs of $4.0 million relating to the closing of its Freeport, Texas manufacturing facility. During the year ended January 1, 2005, the Company incurred costs related to the March 2004 dividend recapitalization and the December 2004 recapitalization transaction totaling $67.6 million consisting of management and director bonuses and stock option compensation expense. In addition, in 2004 the Company recognized facility closure costs of $4.5 million related to the closing of its Freeport, Texas manufacturing facility. Income from operations was $64.9 million for the year ended December 31, 2005 compared to $32.3 million for the same period in 2004. Including AMH's interest expense, which primarily consists of the accretion on AMH's 11-1/4% senior discount notes, AMH's consolidated net income was $4.3 million for the quarter ended December 31, 2005 compared to a consolidated net loss of $43.3 million for the same period in 2004. For the year ended December 31, 2005, AMH's consolidated net income was $0.3 million compared to a consolidated net loss of $27.2 million for the same period in 2004. In connection with the December 2004 recapitalization transaction, AMH's parent AMH Holdings II, Inc., was formed, and AMH II subsequently issued $75 million of senior notes in December 2004. The AMH II senior notes, which had accreted to $77.8 million by December 31, 2005, are not guaranteed by either AMI or AMH. The senior notes accrue interest at 13 5/8%, of which 10% will be paid in cash and 3-5/8% currently accrues to the senior notes. As AMH II is a holding company with no operations, it must receive distributions, payments or loans from its subsidiaries to satisfy its obligations on its debt. Total AMH II debt, including that of its consolidated subsidiaries, was $710.3 million as of December 31, 2005. Headquartered in Akron, Ohio, Associated Materials Incorporated -- http://www.associatedmaterials.com/-- manufactures exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing, decking and railing. AMI is a privately held, wholly owned subsidiary of Associated Materials Holdings Inc., a wholly owned subsidiary of AMH, a wholly owned subsidiary of AMH II, which is controlled by affiliates of Harvest Partners, Inc., and Investcorp S.A. * * * As reported in the Troubled Company Reporter on Jan. 23, 2006, Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings, Inc. AMH Holdings' corporate family rating and ratings on the AMI's senior secured credit facilities have been downgraded to B3 from B2. The downgrade in the ratings and change in outlook reflects the company's difficulty in passing on higher raw material costs thereby decreasing margins and the uncertainty surrounding the company's ability to navigate around a slowing construction market. The ratings outlook is stable. Moody's has downgraded these ratings for Associated Materials Incorporated: * $80 million secured revolver, due 2009, downgraded to B3 from B2; * $175 million secured term loan B, due 2010, downgraded to B3 from B2; and * $165 million senior subordinated notes, due 2012, downgraded to Caa2 from Caa1. Moody's has downgraded these ratings for AMH Holdings, Inc.: * $446 million senior discount notes, due 2014, downgraded to Caa3 from Caa2; and * Corporate Family Rating, downgraded to B3 from B2. ATLANTIC MUTUAL: Moody's Junks Insurer's Surplus Note Rating ------------------------------------------------------------ Moody's Investors Service downgraded the surplus note rating of Atlantic Mutual Insurance Company to Caa3, from B1. In the same action, Moody's downgraded the insurance financial strength rating of Atlantic Mutual and it subsidiaries to B1, from Baa3. The outlook on the ratings remains negative. These actions follow the company's filing of its 2005 statutory statements which reflect a significant decline in operating results and policyholder surplus as a result of adverse reserve development on prior years' reserves. According to Moody's, the rating downgrades reflect the company's strained capital position and its limited financial flexibility. In the fourth quarter of 2005, Atlantic Mutual Insurance Company and its wholly owned subsidiary, Centennial Insurance Company, recorded a combined $81 million of adverse loss reserve development, which represented 16% of Sept. 30, 2005 reserves and 36% of policyholder surplus. This decline in operating results, and its subsequent impact on financial leverage, were well above Moody's expectations. The rating downgrade also reflects concerns about the potential for adverse selection in its homeowners' business, and a loss of confidence in the company among agents and customers, given the group's financial position. Moody's notes that the insurance company's surplus consists largely of surplus notes, and that further deterioration in the group's capital position would heighten the risks of regulatory interference with surplus note interest payments. As of Dec. 31, 2005, Atlantic Mutual's risk-based capital was 250%. The negative rating outlook reflects continued concerns over the insurance company's capital position, the run-off of its commercial lines loss reserves, as well as the potential loss in confidence among its agents and customers. During 2005, Atlantic Mutual commuted its remaining financial reinsurance treaties, entered into an adverse development cover with National Indemnity Company, and entered into a strategic affiliation with Countrywide Insurance Group. Moody's notes that a stabilization in its operating earnings and minimal adverse reserve development could return the rating outlook to stable. Conversely, meaningful adverse reserve development, operating losses, a disruption to the Countrywide affiliation, or surplus below $130 million could lead to a ratings downgrade of Atlantic Mutual. Moody's rating action also widened the notching between Atlantic Mutual's insurance financial strength and surplus note ratings to reflect the relative risks to surplus note holders versus policyholders of insurance companies at this rating level. Moody's most recent rating action prior to today was in August 2005 when Moody's confirmed the insurance financial strength ratings and surplus notes rating and changed the outlook to negative. These ratings were downgraded, and the rating outlook is negative: * Atlantic Mutual Insurance Company - surplus notes to Caa3, from B1; insurance financial strength to B1, from Baa3 * Centennial Insurance Company - insurance financial strength to B1, from Baa3 * ALICOT Insurance Company - insurance financial strength to B1, from Baa3 Atlantic Mutual Insurance Company, based in New Jersey, writes primarily personal lines insurance through a strategic alliance with Countrywide. For 2005, the company reported a statutory net loss of $67 million, and policyholders' surplus was $141 million as of Dec. 31, 2005. AZTAR CORP: Accepts Pinnacle's $2.1 Billion Merger Proposal ----------------------------------------------------------- Pinnacle Entertainment, Inc.'s (NYSE: PNK) and Aztar Corporation's (NYSE: AZR) Boards of Directors have unanimously approved a definitive merger agreement under which Pinnacle will acquire all of the outstanding shares of Aztar for $38.00 per share in cash. This represents a premium of approximately 24% over Aztar's closing stock price on March 10, 2006. The fully financed transaction is valued at approximately $2.1 billion, including approximately $1.45 billion of equity on a fully diluted basis and approximately $723 million in indebtedness. Together, Pinnacle and Aztar will have assets in most of the largest gaming markets in the U.S., with a strong presence in Nevada, New Jersey, Louisiana, Missouri and Indiana. Including current development projects, the combined company will have an expansive footprint with 12 major gaming properties in the U.S., and more than 8,800 hotel rooms and approximately 22,000 slot machines system-wide. "Combining Pinnacle and Aztar makes tremendous sense," Daniel R. Lee, Pinnacle's Chairman and Chief Executive Officer, said. "This transaction will enable Pinnacle to further broaden and diversify its geographic presence and cash flows, as well as generate cross-marketing synergies. We intend to create a nationwide casino network, not unlike that of some of our larger competitors. We believe that we will be able to leverage the combined company's extensive network to increase customer loyalty across the system and attract additional customers to the company's destination resort/hotel properties in Las Vegas and Atlantic City. The transaction is subject to approval by Aztar shareholders and the satisfaction of customary closing conditions, including the receipt of necessary regulatory and governmental approvals. The transaction is not subject to financing and is expected to close by the end of the year. Pinnacle has received a financing commitment from Bear, Stearns & Co. Inc. and Lehman Brothers Inc. to complete the transaction. Lehman Brothers Inc. and Bear, Stearns & Co. Inc. served as financial advisors to Pinnacle and Wachtell, Lipton, Rosen & Katz and Irell & Manella LLP acted as legal advisors. Goldman Sachs served as financial advisor to Aztar and Skadden, Arps, Slate, Meagher & Flom, LLP acted as legal advisor. About Pinnacle Entertainment Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc. -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. About Aztar Corporation Aztar Corp. -- http://www.aztarcorp.com/-- is a publicly traded company that operates 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. * * * Standard & Poor's Ratings Services' ratings on Aztar Corp. (BB/Watch Neg/--) remain on CreditWatch with negative implications, where they were placed on Feb. 16, 2006. AZTAR CORP: Pinnacle Merger Cues S&P's Negative Watch to Remain --------------------------------------------------------------- Standard & Poor's Ratings Services reported that its ratings on Aztar Corp. (BB/Watch Neg/--) remain on CreditWatch with negative implications, where they were placed on Feb. 16, 2006. The CreditWatch update followed the announcement by Pinnacle Entertainment Inc. (B+/Watch Neg/--) that it has signed a definitive merger agreement to acquire the outstanding shares of Aztar. At the same time, Standard & Poor's revised its CreditWatch implications on Pinnacle Entertainment Inc. to negative from positive. The CreditWatch listing reflects the potential for a substantial weakening in Pinnacle's credit profile following the acquisition announcement. The transaction, at $38 per share, would bring the total purchase price to $2.1 billion, including the assumption of $723 million of Aztar's debt. This could result in significant incremental debt of up to $2.1 billion at Pinnacle. At Dec. 31, 2005, Pinnacle had about $657 million of debt outstanding. Pro forma lease-adjusted debt to EBITDA could increase to well above levels currently expected over the near term, depending upon how the acquisition is financed. Closing of the transaction is subject to, among other things, executing the definitive documentation necessary to complete the deal and receiving the required approvals. "We will evaluate new owner Pinnacle's financial strategies and objectives, including its previously outlined capital spending initiatives and potential spending associated with a redevelopment project at the Tropicana in Las Vegas," Standard & Poor's credit analyst Peggy P. Hwan said. "If Standard & Poor's downgrades Pinnacle, it is unlikely that it would be by more than one notch." BLOCKBUSTER INC: Moody's Affirms Ratings on Weak Credit Metrics --------------------------------------------------------------- Moody's Investors Service affirmed Blockbuster Inc. long term debt ratings and its SGL-3 speculative grade liquidity rating following the company's announcement of fourth quarter and fiscal year 2005 operating results. The rating outlook remains negative. The affirmation acknowledges the signs of improvement evident in the company's fourth quarter operating performance, as well as the stabilization of its liquidity profile, but also considers the company's significantly negative free cash flow during 2005 and its still weak credit metrics. These ratings are affirmed: * Corporate family rating at B3; * Senior secured bank credit facilities at B3; * Senior subordinated notes at Caa3, * Speculative grade liquidity rating at SGL-3. The B3 corporate family rating reflects Moody's expectation that Blockbuster's operating performance will continue to be constrained during 2006 as a result of negative industry trends and the cost of management's new initiatives, particularly the on line business. The rating category reflects Moody's expectation that operating income will be insufficient to cover interest expense for fiscal 2006, that free cash flow will continue to be tenuous, and that credit metrics will remain weak. The rating category also reflects Moody's opinion that negative industry pressures have continued to grow, given the increased probability that the movie studios will test bringing forward the video-on- demand window into the retail window. Other existing negative trends continue, including: 1) the pricing war with Net Flix; 2) a lackluster new release schedule; and 3) the continuation in the consumer trend of buying rather than renting DVDs. Over the longer term, the roll-out of high definition DVD and the highly fragmented nature of the market will benefit Blockbuster; however, these benefits are unlikely to cause an improvement in the company's performance anytime soon. The ratings are supported by Blockbuster's adequate liquidity, which includes $276 million of balance sheet cash and $210 million of availability under its $500 million revolver. The company's leadership and global presence in the area of video and game rentals, as well as its brand value, also support the rating. The negative outlook reflects Moody's concern that Blockbuster has not yet proven that the no-late-fee policy and its on-line business can generate a level of operating income and free cash flow sufficient to cover its current debt burden. The company's ratings could be further downgraded should Blockbuster not be able to cut costs and working capital requirements from its current levels during 2006. To stabilize the rating outlook, Blockbuster needs to demonstrate that it can generate sufficient earnings and cash flow such that it has reasonable prospects of reducing leverage to a manageable level, and that operating income can cover interest expense at least 1.0x. Blockbuster, Inc.'s speculative grade liquidity rating of SGL-3 reflects Moody's expectation that internally generated cash flow and cash on hand will be sufficient to fund its working capital, capital expenditures, term loan amortization, and dividend requirements over the next four quarters. Moody's expects Blockbuster will likely improve its free cash flow levels versus 2005, although this outcome is contingent on the company's ability to dramatically reduce its working capital needs. Blockbuster has a $500 million revolving credit facility for additional liquidity. As of Dec. 30, 2005, approximately $210 million was available after deducting the $150 million Viacom letters of credit, other letters of credit, and borrowings. As a result of the last amendment Blockbuster received from its bank group, Moody's anticipates that Blockbuster will have sufficient cushion to comply with its two financial covenants through the end of FY 2006. Blockbuster Inc., headquartered in Dallas, Texas, is a leading global provider of in-home movie and game entertainment with approximately 9,100 stores throughout the Americas, Europe, Asia, and Australia. Total revenues for fiscal year 2005 were $5.9 billion. CENTRAL VERMONT: Owes Connecticut Yankee $10.3M for Plant Expenses ------------------------------------------------------------------ Central Vermont Public Service Corporation owes $10.3 million to Connecticut Yankee Atomic Power Corporation as of Dec. 31, 2005. The Company's obligation pays part of decommissioning activities of Connecticut Yankee's shut down nuclear plant and all other plant costs. Central Vermont owns 2% of Connecticut Yankee. The equity ownership carries with it obligations to pay part of the expenses incurred by Connecticut Yankee. Historically, the Company's share of these costs has been recovered from its retail customers through approved rates of Vermont Public Service Board. Based on the regulatory process, management believes its share of decommissioning and closure costs will continue to be recovered through the regulatory process. According to Dale A. Rocheleau, the Company's Senior Vice President for Legal and Public Affairs and Corporate Secretary, there is a risk that Federal Energy Regulatory Commission may not allow full recovery of Connecticut Yankee's incremental increased costs in wholesale rates, and, if so, the Company anticipates that the PSB could disallow these costs for recovery in retail rates as well. The Company's share of the proposed disallowance would be about $4.7 million. In July 2004, Connecticut Yankee asked the FERC for permission to increase its annual collections for the decommissioning and closure of the plant from $16.7 million to $93 million over a 6-year period beginning January 1, 2005. The increase was necessitated by higher estimated costs for spent fuel storage, security and insurance, and the fact that Connecticut Yankee is now self-performing all work to complete the decommissioning of the plant due to the termination of the decommissioning contract with Bechtel Power Corporation in July 2003. FERC allowed the new rates to become effective in February 2005, subject to refund, pending the outcome of proceedings at FERC. Founded in 1929, Central Vermont Public Service is Vermont's largest electric utility. Central Vermont's non-regulated subsidiary, Eversant Corporation, sells and rents electric water heaters through a subsidiary, SmartEnergy Water Heating Services. * * * As reported in the Troubled Company Reporter on June 20, 2005, Fitch Ratings downgraded the rating on Central Vermont Public Service's senior secured debt to 'BBB' from 'BBB+' and cut the rating on the utility's preferred stock to 'BB+' from 'BBB-'. Fitch says the Rating Outlook is stable. COMMERCIAL MORTGAGE: S&P Holds BB+ Rating on Class E Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Commercial Mortgage Acceptance Corp.'s series 1997-ML1. At the same time, ratings are affirmed on four other classes from the same transaction. The raised and affirmed ratings reflect the increased credit support for the senior pooled classes due to the defeasance of 33% of the mortgage pool balance since December 2005, and Standard & Poor's re-analysis of the real estate collateral securing the non-defeased loans in the pool. The rating actions are tempered by the decline in the financial operating performance of five of the seven remaining non-defeased loans. Two of the seven non-defeased loans have experienced increases in net cash flow of more than 30% since issuance. The Franklin Mills loan (representing 20% of the mortgage pool balance) is the largest loan in the pool and is secured by a 1.6-million-square-foot outlet mall and an adjacent 315,000-sq.- ft. retail power center known as Liberty Plaza located in Philadelphia, Pennsylvania. For the full year 2004, NCF was 35% above its level at issuance. The Copley Place loan (representing 13% of the mortgage pool balance) is the third-largest loan in the pool and is secured by a 1.2-million-square-foot mixed-use office and retail development in the Back Bay section of Boston, Massacusetts. For the nine months ending September 2005, annualized NCF was 33% above issuance. However, the other five non-defeased loans have experienced NCF declines ranging from 11% to 58% since issuance: -- The Newton Oldacre MacDonald loan (representing 14% of the mortgage pool balance) is on the servicer's watchlist and is secured by 20 cross-collateralized and cross-defaulted neighborhood shopping centers located in Alabama, Tennessee, Florida, Mississippi, Kentucky, and Louisiana. For the full year 2004, NCF for this portfolio was 15% below its level at issuance. As of June 30, 2005, eight of the 20 properties were reporting debt service coverage ratios that were below 1.0x. The pool's overall DSC has historically been low due to poor location of the properties, which are located in secondary and tertiary areas in the Southeast. Twelve of the 20 properties have a Winn-Dixie store as an anchor tenant. Winn-Dixie Inc. filed for bankruptcy in February 2005. It was announced in June 2005 that two Winn-Dixie stores in this portfolio would be closing; -- The Shilo Inns Portfolio loan (10% of the mortgage pool balance) is currently with the special servicer. The loan was modified in April 2004 to include the addition of a $15 million advance note as trust collateral. The advance notes have paid down to $7.2 million. For the full year 2005, NCF was 58% below its level at issuance. Nonetheless, the loan is current and the 2005 DSC was 1.31x; -- The Brookfield Properties Corp. loan (9% of the mortgage pool balance) is secured by a mixed-use office and retail development known as Dain Bosworth Plaza and Gaviidae Common Phase II in Minneapolis, Minn., which consists of a 592,953-sq.-ft. class A office tower, a 119,271-sq.-ft. department store, and a 69,593-sq.-ft. four-level vertical retail mall. Full-year 2004 NCF was 46% below its level at issuance. Rent rollbacks in 2003 on the leases of the two largest office tenants, the October 2003 release of Phase I of Gaviidae Common that had provided additional income, and a soft Minneapolis office market have all contributed to the decline. As a result, while retail occupancy has remained constant in the low 90% range, office occupancy declined to 87% as of September 2005 compared with 95% at issuance; -- The Ritz Carlton St. Louis Hotel loan (6% of the mortgage pool balance) is secured by 301-room full-service hotel located in downtown Clayton, Missouri. Full-year 2004 NCF was 42% below its level at issuance. Using the operating results as of September 2005 and adjusting for franchise fees, management fees, marketing and sales fees, Standard & Poor's estimated value for this asset is 16% below its level at issuance; -- The American Apartment Communities II loan (3% of the mortgage pool balance) is secured by two multifamily rental properties located in Santa Clara, Calif. and Mountain View, Calif., containing 272 units and 184 units, respectively. Combined NCF for these properties declined by 11% for the full year 2004 compared to issuance. Ratings Raised Commercial Mortgage Acceptance Corp. Commercial mortgage pass-thru certificates series 1997-ML1 Rating ------ Class To From Credit support ----- -- ---- -------------- B AAA AA+ 35.84% C AA A+ 27.94% D BBB BBB- 20.05% Ratings Affirmed Commercial Mortgage Acceptance Corp. Commercial mortgage pass-thru certificates series 1997-ML1 Class Rating Credit support ----- ------ -------------- A-2 AAA 45.89% A-3 AAA 45.89% A-4 AAA 45.89% E BB+ 17.17% CONGOLEUM CORP: Wants to Register Judgments Against GHR & Kenesis ----------------------------------------------------------------- Congoleum Corporation and its debtor-affiliates ask the Honorable Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey for authority to register, pursuant Section 1963 of the Judiciary Procedures Code, the: -- Third Circuit Court's judgment against Gilbert Heintz & Randolph LLP, and -- Bankruptcy Court's order against The Kenesis Group LLC, in the District of Columbia and in any other jurisdictions where GHR and Kenesis may have assets. Background On March 2, 2004, the Bankruptcy Court approved the retention of Gilbert Heintz & Randolph LLP as the Debtors' special insurance counsel. On Aug. 24, 2004, the District Court upheld the Bankruptcy Court's approval order (Civil Action No. 04-1709) after the bankruptcy court order was appealed. On Oct. 13, 2005, the Court of Appeals for the Third Circuit reversed the approval order and disqualified GHR from serving as counsel to the Debtors account of conflicts of interest and remanded the matter to the District Court for further proceedings. On Feb. 19, 2004, the Debtors filed an application to retain Kenesis to perform postpetition services and the Bankruptcy Court denied the Debtors' request on Apr. 5, 2004. The Bankruptcy Court: -- ordered Kenesis to disgorge all fees related to postpetition services; -- denied some insurers' move to disgorge fees for services rendered prepetition; and -- denied some insurers' move to commence an avoidance action against Kenesis. Assets GHR conducts the majority of its business in the District of Columbia and has no apparent assets in New Jersey. Kenesis also conducts the majority of its business in the District of Columbia and has no apparent assets in New Jersey. The Debtors expect that GHR and Kenesis will appeal the Judgments. As a result, it is likely that several months may pass before the Judgments become final and capable of registration as of right under Section 1963. Objections, if any, must be received no later than 5:00 p.m. on Mar. 15, 2006, and must be filed with the Court and served on: -- Okin, Hollander & DeLuca L.L.P., and -- Pillsbury Winthrop Shaw Pittman LLP. Judge Ferguson will convene a hearing at 2:30 p.m. on Mar. 21, 2006, to consider the Debtors' request. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in their restructuring efforts. Elihu Insulbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Claimants' Committee. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Swidler Berlin LLP. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Bondholders. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At Sept. 30, 2005, Congoleum Corporation's balance sheet showed a $35,614,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL). CONGOLEUM CORP: Court Okays Akin Gump as Bond Committee's Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave the Official Committee of Unsecured Bondholders appointed in Congoleum Corporation and its debtor-affiliates' bankruptcy permission to employ Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel, nunc pro tunc to Jan. 27, 2006. Ad Hoc Bondholders Committee In January 2006, an Ad Hoc committee was formed in response to the Debtors' public statements that they may need to require concessions from the Bondholders to achieve a consensual plan of reorganization. The members of the Ad Hoc committee were the holders of Congoleum Corporation's issued 8-5/8% Senior Notes due Aug. 1, 2008. The Ad Hoc Committee retained Akin Gump as its counsel. Upon the formation of the Official Bondholders' Committee, the Ad Hoc Committee ceased to exist. The Ad Hoc Committee released Akin Gump from service. The three members of the Official Bondholders' Committee were members of the Ad Hoc Committee. Akin Gump rendered professional services to the Ad Hoc Committee, including: -- analysis of the Debtors' chapter 11 cases, -- advice regarding the plan process, -- communications with Debtors' counsel, -- coordination of strategy for successful reorganization of the Debtors' chapter 11 cases, and -- solicitation of the U.S. Trustee for formation of an official bondholders' committee. Akin Gump will ask the Court for payment of the fees and expenses for services rendered to the Ad Hoc Committee during the pre-committee period pursuant to Section 503(b) of the Bankruptcy Code. Akin Gump is expected to: (a) advise the Bondholders' Committee with respect to its rights, duties and powers in the Debtors' chapter 11 cases; (b) assist and advise the Bondholders' Committee in its consultations with the Debtors, the Unsecured Asbestos Claimants' Committee, the Future Claimants' Representative, the U.S. Trustee and other interested parties relative to the administration of the Debtors' chapter 11 cases; (c) assist the Bondholders' Committee in analyzing the claims of the Debtors' existing and future creditors and the Debtors' capital structure, and in negotiating with holders of claims and equity interests; (d) assist the Bondholders' Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and its professionals, as well as the operation of the Debtors' businesses; (e) assist the Bondholders' Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of nonresidential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Bondholders' Committee as to its communications to the bondholder creditor body regarding significant matters in the Debtors' chapter 11 cases; (g) represent the Bondholders' Committee at all hearings and other proceedings; (h) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Bondholders' Committee as to their propriety, and to the extent deemed appropriate by the Bondholders' Committee, support, join or object thereto; (i) advise and assist the Bondholders' Committee with respect to any legislative, regulatory or governmental activities; (j) assist the Bondholders' Committee in preparing pleadings and applications as may be necessary in furtherance of the Bondholders' Committee's interests and objectives; (k) assist the Bondholders' Committee in its review and analysis of all pending litigation regarding the Debtors; (l) prepare, on behalf of the Bondholders' Committee, any pleadings or applications, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the foregoing; (m) assist and advise the Bondholders' Committee in its review and analysis of any proposed plans of reorganization, disclosure statements, and any other pleadings or documents related to a proposed plan; (n) prepare, on behalf of the Bondholders' Committee, any plan of reorganization, disclosure statement, and discovery as necessary with respect to the foregoing; (o) investigate and analyze any claims against the Debtors' non-debtor affiliates or any other potential causes of action; and (p) perform other legal services as may be required or are otherwise deemed to be in the interests of the Bondholders' Committee in accordance with the Bondholders' Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Michael S. Stamer, Esq., a member at Akin Gump Strauss Hauer & Feld LLP, discloses that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $435 - $895 Special Counsel and Counsel $300 - $735 Associates $235 - $475 Paraprofessionals $65 - $225 The attorneys who will be primarily responsible for providing services to the Bondholders Committee: Professional Designation Hourly Rate ------------ ----------- ----------- Michael S. Stamer, Esq. Partner $775 Financial Restructuring Department James R. Savin, Esq. Partner $575 Financial Restructuring Department Jonathan L. Gold, Esq. Senior Counsel $475 Financial Restructuring Department Gabrielle M. Duvall, Esq. Associate $370 Financial Restructuring Department Joanna Newdeck, Esq. Associate $270 Financial Restructuring Department Mr. Stamer assures the Court that Akin Gump does not represent and does not hold any interest adverse to the Debtors' estates or their creditors in the matters upon which the Firm is to be engaged. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in their restructuring efforts. Elihu Insulbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Claimants' Committee. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Swidler Berlin LLP. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At Sept. 30, 2005, Congoleum Corporation's balance sheet showed a $35,614,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL). CONGOLEUM CORP: Gets Court OK to Continue Hiring E&Y as Auditor --------------------------------------------------------------- The Honorable Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey gave Congoleum Corporation and its debtor-affiliates permission to continue employing Ernst & Young LLP as their auditor, nunc pro tunc to Feb. 1, 2006. On Jan. 22, 2003, the Debtors asked the Court to approve Ernst & Young's employment as their auditor and tax advisor. The Court granted that request on Apr. 12, 2004. On Dec. 23, 2004, the Debtors requested that Ernst & Young continue its work as the Debtors' auditor. The Court approved that extended engagement on Jan. 27, 2005. Under a Supplemental Audit Engagement Letter, Ernst & Young's scope of services will expand to include: (a) annual audit of the financial statements of Congoleum Corporation, included in its Annual Report on Form 10-K, for the year ended Dec. 31, 2005; (b) quarterly review of the financial information of Congoleum Corporation, included in its 2006 Quarterly Reports on Form 10-Q; (c) research and consultations with management of the Company regarding financial accounting and reporting matters; (d) participation in all scheduled meetings of the Audit Committee of Congoleum Corporation; (e) attendance at Annual Meeting of the Shareholders of Congoleum Corporation; (f) preparation of management letter; and (g) consultations and assistance in connection with the Company's Sarbanes Oxley Section 404 compliance. Jaime Pereira, a partner at Ernst & Young, discloses that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners & Principals $575 - $675 Senior Managers $515 - $550 Managers $430 - $480 Senior $310 - $380 Staff $180 - $240 Mr. Pereira assures the Court that Ernst & Young continues not to hold or represent any interest materially adverse to the Debtors in the matter the Firm has been retained. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in their restructuring efforts. Elihu Insulbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Claimants' Committee. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Swidler Berlin LLP. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At Sept. 30, 2005, Congoleum Corporation's balance sheet showed a $35,614,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL). CONNORS BROTHERS: S&P Assigns B+ Long-Term Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Toronto-based Connors Bros. Income Fund. Standard & Poor's also assigned its 'B+' bank loan rating with a recovery rating of '3' to the company's indirect operating subsidiaries and co-borrowers, U.S.-based Bumble Bee Foods LLC and Canada-based Clover Leaf Seafoods L.P.'s US$275 million bank loan facility, indicating that the asset values provide lenders with the expectation of meaningful recovery of principal in a payment default scenario. The bank loan rating is based on preliminary terms and conditions and is subject to review once full documentation is received. Proceeds of the new loan will be used to refinance the company's existing debt. The outlook is positive. "The ratings on Connors reflect its aggressive acquisitive strategy, narrow product portfolio, supply variability, and limited financial flexibility," Standard & Poor's credit analyst Lori Harris said. "These factors are partially offset by the company's modest debt level and solid national consumer franchises with its Bumble Bee, Clover Leaf, and Brunswick canned seafood brands, as well as its portfolio of leading regional brands," Ms. Harris added. In the past few years, Connors has grown significantly through acquisitions that have brought some challenges including the rise in logistics and distribution costs as a percentage of sales, an excessive number of different brands and stock-keeping units, and the need to upgrade the company's IT system to increase efficiencies and improve customer services. Management is focused on improving these critical areas within the next 18 to 24 months, which should positively affect operating margins. The company's core geographic market is the U.S., and will likely remain its key area for acquisitions. Although Connors currently has a dominant position in the U.S. and Canadian canned seafood markets, the company's 2005 acquisitions of the Castleberry and Sweet Sue/Bryan brands enabled it to enter new categories, namely U.S. canned chicken and meat. Even though management has diversified its product portfolio somewhat through these acquisitions, the chicken and meat categories are very competitive, Connors' market position is not dominant, and the organic growth potential of these categories is nominal. Connors' product portfolio includes a full line of canned tuna, salmon, sardine, clam, chicken, and meat products, with canned tuna by far the company's most important product line. As wholesale fish prices make up a significant portion of the cost of goods sold, fluctuations in tuna prices and availability of supply will have an impact on margins. Fish prices are currently high because of lower tuna supply partially driven by higher fuel costs, which is expected to continue throughout 2006. The firm is also faced with government and consumer concerns over mercury levels in tuna, which have resulted in litigation risk; however, it is believed these levels are considerably below levels allowed by the U.S. government. The aggressive financial profile reflects the risks associated with management's acquisitive nature and the company's limited financial flexibility. In the medium term, Standard & Poor's expects that credit metrics will strengthen as management focuses on improving earnings. The positive outlook reflects the expectation that Connors will maintain its leading position in its core categories that acquisitions will be successfully integrated, and that credit measures will remain in line with Standard & Poor's expectations in the medium term. The ratings could be raised if the company strengthens its business risk profile through improved distribution and IT systems, while also lowering the distribution payout ratio to increase financial flexibility. Downward pressure on the ratings could come if the company fails to meet expectations, resulting in a weakening of Connors' market position, poor execution on acquisitions, internal challenges due to acquisitions, or deterioration in the company's liquidity position. COUNTRYWIDE ALTERNATIVE: Moody's Rates Class B-1 Cert. at Ba1 ------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Countrywide Alternative Loan Trust 2006-OA1, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Countrywide Home Loans Inc. originated, adjustable-rate, negative amortization Alt-A mortgage loans acquired by Countrywide Financial Corporation. 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 1.15% to 1.35%. Countrywide Home Loans Servicing LP will act as master servicer. The complete rating actions are: Countrywide Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2006-OA1 * Class 1-A-1, Assigned Aaa * Class 1-A-2, Assigned Aaa * Class 1-A-3, Assigned Aaa * Class 1-X, Assigned Aaa * Class 2-A-1, Assigned Aaa * Class 2-A-2, Assigned Aaa * Class 2-A-3, Assigned Aaa * Class 2-X, Assigned Aaa * Class A-R, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A2 * Class M-7, Assigned A3 * Class M-8, Assigned Baa1 * Class M-9, Assigned Baa2 * Class B-1, Assigned Ba1 CYBERCARE INC: Court Establishes March 24 as Claims Bar Date ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida set March 24, 2006, as the deadline for all creditors owed money by Cybercare Inc. and Cybercare Technologies, Inc., on account of claims arising before Oct. 14, 2005. Creditors must file written proofs of claim on or before the March 24 Claims Bar Date to the: The Clerk, United States Bankruptcy Court 801 North Florida Avenue - Suite 727 Tampa, Florida 33602 Copies of the written proofs of claim must be sent to: Stichter, Riedel, Blain & Prosser, P.A. 110 Madison Street - Suite 2000 Tampa, Florida 33602 Creditors who fail to file proofs of claim before the deadline will be forever barred from asserting their claim. This request for a March 24 Bar Date appears to render AmerisourceBergen Drug Corporation's request to deem its proofs of claim, filed Feb. 2, 2006, as timely filed claims, moot. 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. DANA CORP: Court Okays Payment of Prepetition Tax Obligations ------------------------------------------------------------- In the ordinary course of business, Dana Corporation and its debtor-affiliates collect or remit certain taxes owed to taxing authorities: 1. Sales Taxes The Debtors collect and remit sales, local gross receipts and other similar taxes in connection with the sale of their products to customers. However, nearly all the goods sold by the Debtors are subject to sales tax exemptions. Hence, the Debtors remit a relatively immaterial amount of sales taxes in an average month, normally amounting to a few thousand dollars or less. 2. Use Taxes & Self-Assessed Sales Taxes The Debtors pay use taxes when they purchase tangible personal property from an out-of-state vendor. Governing law requires the Debtors to self-assess the amount of sales taxes that would have been owed on purchases from out-of-state vendors and pay these amounts as use taxes to applicable taxing authorities. In certain states, the Debtors are authorized to self-assess sales taxes payable on purchases from in-state suppliers. In an average month, the Debtors remit between $400,000 and $500,000 in use taxes and self-assessed sales taxes. 3. Michigan Single Business Taxes The Debtors are subject to Michigan Single Business Tax, a value-added tax calculated based on the value that a business adds to its product during the production process. For the tax year 2005, the Debtors remitted $250,000 in MSB Taxes. They anticipate the amount to decline for tax year 2006. 4. Franchise Taxes The Debtors pay franchise taxes to operate their business in applicable taxing jurisdiction. Some states assess a flat franchise tax on all businesses; other states assess a franchise tax based on net operating income. For 2005, the Debtors remitted more than $1,200,000 for franchise taxes. They anticipate remitting a lesser amount for 2006. 5. Business License Fees The Debtors obtain a business license from, and pay corresponding fees to, many municipal and county governments. Some jurisdictions assess business license fees based on a flat rate; others on the number of employees working in the jurisdiction. The Debtors remit a few thousand dollars in business license fees in an average year. To avoid any serious disruptions and distractions to their business operations and their efforts to reorganize, the Debtors sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to pay, in their sole discretion, their prepetition tax obligations. Michael J. Burns, chairman of the board, president, chief executive officer, and chief operating officer of Dana Corporation, explains that the Debtors' failure to pay the prepetition taxes may impact their ability to conduct business in certain jurisdictions and their ability to perform under their postpetition agreements. The Debtors' officers may also face personal liability if certain taxes are not paid. According to Mr. Burns, the Debtors have made their best efforts to pay the prepetition taxes in full before the Petition Date. However, although checks have been issued on account of the taxes, Mr. Burns says certain of the payments may not have cleared the banks as of the bankruptcy filing. Moreover, the Debtors may have underestimated the prepetition taxes to be paid or inadvertently overlooked a tax obligation. Mr. Burns contends that certain of the prepetition taxes do not constitute property of the Debtors' estates within the meaning of Section 541 of the Bankruptcy Code. The taxes are "trust fund taxes" held by the Debtors for the benefit of third parties to whom payment is owed or on behalf of whom payment is being made. In addition, substantially all of the prepetition taxes constitute priority claims under Section 507(a)(8) that will have to be paid in full under a Chapter 11 plan of reorganization. Hence, payment of the prepetition taxes will not prejudice the rights of general unsecured creditors or other parties-in- interest. The Debtors' request will only affect the timing of the payment of the taxes and not whether the amounts will be paid, Mr. Burns points out. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) DANA CORPORATION: Can Continue Workers' Compensation Programs ------------------------------------------------------------- Dana Corporation and its debtor-affiliates cannot achieve their restructuring goals without the continued hard work and dedication of their employees. In this regard, the Debtors sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to continue their existing workers' compensation programs and pay prepetition workers' compensation premiums, claims and related expenses. Funded Program The Debtors maintain workers' compensation coverage for their employees in various states. In Washington, the Debtors participate in a "monopolistic" workers' compensation insurance program funded through, administered by, the Washington State Department of Labor and Industries. The Debtors pay premiums on a quarterly basis under the Program to the Washington Labor Department. The Debtors estimate the Funded Premiums that have accrued for the first quarter of 2006, but not yet paid as of the Petition Date, to total $6,000. Self-Insured Programs The Debtors operate as self-insured employers in 15 states. They maintain a variety of self-insured workers' compensation programs under which they pay applicable workers' compensation claims as the claims arise. Certain of the states require the Debtors to post various forms of collateral as security for the Debtors' obligations to pay the Self-Insured Claims in their jurisdictions. The Debtors' obligations under the Self-Insured Programs are secured by a combination of letters of credit and surety bonds totaling $80,000,000. The Debtors estimate the Self-Insured Claims that have accrued but not yet paid as of the Petition Date to total $62,000,000. Insured Programs The Debtors maintain high-deductible and no-deductible workers' compensation and employers' liability insurance programs with The Hartford in 18 states. Under the insured Programs, insurance coverage is provided by Hartford in the Insured States for workers' compensation claims in amounts required under applicable law and employer liability losses of up to $1,000,000 per accident. The Debtors are obligated to pay an annual premium and reimburse Hartford, up to $2,000,000 per claim for the loss payments that Hartford makes in respect of coverage deductibles. The Debtors estimate the Insured Premiums that accrued but not yet paid as of the Petition Date to total $200,000. The Insured Claims paid by Hartford but not yet reimbursed by the Debtors as of the Petition Date aggregate $2,750,000. The Insured Claims not yet paid by Hartford or the Debtors total $19,700,000 as of the Petition Date. Hartford has required the Debtors to post collateral, in the form of irrevocable letters of credit, to secure their obligations under the current workers' compensation and employers' liability insurance policies, as well as other liability insurance policies, with Hartford. The outstanding letters of credit the Debtors posted in support of the Hartford Insurance Policies total $41,000,000. All claims under the Insurance Policies are subject to an aggregate $9,000,000 deductible. Importance of Workers' Compensation Program Michael J. Burns, chairman of the board, president, chief executive officer, and chief operating officer of Dana Corporation, contends that if workers' compensation coverage is not maintained as required by state laws, without interruption: -- employees could bring lawsuits for potentially unlimited damages; -- the Debtors' ongoing business operations in certain states could be enjoined; and -- the Debtors' officers could be subject to criminal prosecution. There will be a risk that eligible claimants will not receive timely payments with respect to employment-related injuries. This could have a negative impact on the financial well-being and morale of the Debtors' employees and their willingness to remain in the Debtors' employ, according to Mr. Burns. Processing Costs The Debtors also obtained permission to pay all costs incident to the Self-Insured Programs and Insured Programs. They estimate the Prepetition Processing Costs that have accrued but unpaid as of the Petition Date to total $300,000. The Debtors rely primarily on Specialty Risk Services, LLC, a Hartford affiliate, to process and pay workers' compensation claims under the Self-Insured Programs and Insured Programs by drawing on a $2,750,000 pre-funded account. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) DEEP RIVER: Wants Plan-Solicitation Period Stretched to June 24 --------------------------------------------------------------- Deep River Development Group, L.L.C., asks the U.S. Bankruptcy Court for the District of New Jersey to extend the period within which it has the exclusive right to solicit acceptances of a plan to June 24, 2006. As reported in the Troubled Company Reporter on Aug. 16, 2005, the Debtor delivered a Disclosure Statement explaining its Plan to the Bankruptcy Court. The Debtor believes that the extension will give them more time to solicit acceptances and resolve any plan-related objections that may be filed. Under the Plan, as reported in the Troubled Company Reporter on Aug 16, 2005, these secured claims will be paid in full: Secured Creditor Claim Amount ---------------- ------------ Lee County Tax Assessor $23,783 G.P.G. Development, LLC $3,884,000 John and Lisa Schmidlin $683,683 Sea Jade Holding, LLC $364,208 LaRue Management, Inc. $125,894 Sycamore/Custom Living LLC $644,462 Valley Club Investment Group $462,887 Custom Living Investment Group I, LLC $167,009 Al Prince & Associates $35,952 General unsecured creditors, owed $1,039,695, are impaired. The Disclosure Statement does not discuss how the Debtor will pay unsecured claims, nor does the Debtor indicate what creditors could expect to receive if the estate were liquidated under chapter 7 of the Bankruptcy Code. The Debtor's two equity holders -- Valley Club Investment Group III, LLC (1%), and Custom Living Investment Group I, LLC (99%) -- will retain their equity interests in the Reorganized Debtor. Plan Funding The Debtor obtained a $29 million real estate construction loan commitment from Long Ridge Capital Associates LLC. The loan will refinance the development of the Debtor's property to attract a higher market value. Headquartered in Chester, New Jersey, Deep River Development Group, L.L.C., filed for chapter 11 protection on June 29, 2005 (Bankr. D.N.J. Case No. 05-31279). Morris S. Bauer, Esq., at Ravin Greenberg PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10,630,651 in assets and $7,259,431 in debts. DELTA MILLS: Moody's Withdraws Junk Rating on $150M Senior Notes ---------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Delta Mills, Inc. Moody's has withdrawn these ratings for business reasons. These ratings were affected: * The Caa1 rating on the original $150 million issue of 9.625% guaranteed senior unsecured notes due August 2007; * The B3 Corporate Family Rating. Delta Mills, Inc., based in Greenville, South Carolina, is the sole wholly-owned subsidiary of Delta Woodside Industries Inc. The company is a vertically integrated manufacturer of woven and knitted textile products using textured and spun yarns. The company had revenues of $151 million for the twelve months ended Dec. 31, 2005. DOMINO'S PIZZA: January 1 Balance Sheet Upside-Down by $510 Mil. ---------------------------------------------------------------- Domino's Pizza, Inc. (NYSE: DPZ), announced results for the fourth quarter and fiscal 2005, each ended Jan. 1, 2006. Domino's earned $108.3 million of net income on $1.5 billion of revenues for the fiscal year ended Jan. 1, 2006, and $40.2 million on $458.7 million of revenues for the three months ended Jan. 1, 2006. Revenues were down 4.4% for the fourth quarter, due primarily to the negative impact of the 53rd week in 2004 and were up 4.5% for the full year, driven primarily by increases in revenues in all business segments. Net income was up $13.2 million for the fourth quarter and up $46 million for the full year, driven primarily by a gain recognized from the sale of an equity investment in our master franchisee in Mexico. Net income was also favorably impacted by higher same store sales and store counts, higher volumes in our distribution business, lower food and insurance costs and lower interest expense, offset in part by increases in general and administrative costs, including the adoption of the SFAS 123R stock option expensing standard in 2005, and the impact of the 53rd week in 2004. The Company's balance sheet at Jan. 1, 2006, showed $456,351,000 in total assets and liabilities of $967,336,000 in total liabilities, resulting in a stockholders' deficit of $510,985,000. David A. Brandon, Domino's Chairman and Chief Executive Officer, said: "Fiscal 2005 was truly a special year for Domino's Pizza and our shareholders. For our domestic business, it was our twelfth consecutive year without a negative annual same store sales comparison. Our international business continued its string of 48 consecutive quarters of same store sales growth. Virtually every element of our plan came together in 2005. Strong products and promotions, backed by increased advertising, resonated with our customers. Significant increases in volumes created operational challenges for us, and our operators at both Team USA and our franchised stores did a good job of responding to the challenge. And, our international team continued to make a strong contribution with extraordinary store growth and overall, produced another banner year." The Company's reported financial results in 2005 are not comparable to the reported financial results in 2004 due to several factors, including: -- expenses incurred in 2005 related to the adoption of SFAS 123R stock option expensing standard; -- charges incurred in 2005 related to the Netherlands operations; -- expenses incurred in 2005 related to the departure of the Company's former CFO, primarily comprised of non-cash compensation expenses and a cash separation obligation; -- the gain in 2005 on the sale of the equity investment in the Company's Mexican master franchisee; -- the estimated effect on income of the 53rd week in 2004; -- charges incurred in 2004 related to the change in accounting for leases; and -- expenses incurred in connection with the Company's 2004 initial public offering. Sale of Equity Investment During the fourth quarter of 2005, the Company sold its equity investment in Alsea S.A. de C.V., its master franchisee in Mexico. In connection with this transaction, the Company received proceeds of approximately $25.5 million and recorded a gain of approximately $22.1 million ($13.7 million net of tax) in the fourth quarter of 2005, or 19.9 cents per diluted share for fiscal 2005. Founded in 1960, Domino's Pizza -- http://www.dominos.com/-- is the recognized world leader in pizza delivery. Domino's is listed on the NYSE under the symbol "DPZ." Through its primarily franchised system, Domino's operates a network of 7,945 franchised and Company-owned stores in the United States and more than 50 countries. The Domino's Pizza(R) brand, named a Megabrand by Advertising Age magazine, had global retail sales of more than $4.6 billion in 2004, comprised of nearly $3.2 billion domestically and more than $1.4 billion internationally. Domino's Pizza was named "Chain of the Year" by Pizza Today magazine, the leading publication of the pizza industry and is the "Official Pizza of NASCAR(R)." ENRON CORP: KBC Bank Hold $162.3 Million General Unsecured Claim ---------------------------------------------------------------- Enron Corp. asks the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement with KBC Bank, N.V., as agent, relating to Claim No. 11975. KBC is the agent for: -- CoBank, -- ACB, -- Bank Hapoalim B.M., -- ING (U.S.) Capital LLC, -- Banca popolare di Milano, -- Deutsche Bank Trust Company Americas, -- Barclay's Bank, PLC, and -- Societe Generale. Deutsche and Barclays are defendants in the MegaClaims Litigation. In June 2000, Enron North America Corp., on one hand, and Tenaska Energy, Inc., Tenaska Energy Holdings, LLC, Tenaska Cleburne, LLC, Continental Energy Services, Inc., and Illinova Generating Company, on the other, entered into a purchase agreement, pursuant to which ENA agreed to cause one or more entities to acquire the general partner interests in Tenaska IV Texas Partners, Ltd. Before closing, ENA assigned the GP Purchase Agreement to Ponderosa Pine Energy, LLC, an indirect wholly owned subsidiary of Delta Power Company, LLC. PPE's acquisition of the general partnership interests was financed through a loan agreement between PPE and KBC, as agent for various lenders, dated June 30, 2000, Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates. In connection with the KBC Loans, in June of 2000, Enron Corp. and KBC entered into a total return swap, which consisted of: -- an International Swap Dealers Association Master Agreement and related schedule; and -- a Total Return Swap Confirmation. KBC Claim In October 2002, KBC filed Claim No. 11975, a general unsecured claim for $216,390,440, plus contingent and unliquidated amounts against Enron alleging amounts owing under the Total Return Swap. Enron objected to the Claim asserting that KBC is not entitled to any funds under the Total Return Swap for three reasons: 1. KBC's floating payment obligation under the Total Return Swap is greater than the amount of Enron's fixed payment obligation; 2. The Lenders are being made whole through PPE's continuing loan repayments; and 3. The Lenders have not suffered any loss or damages and, as they violated the express terms of the Total Return Swap, they are barred from seeking to enforce it. KBC responded to the Objection in June 2005. In the next month, Enron sought summary judgment on the Objection. KBC subsequently filed a cross-motion for summary judgment. Settlement Agreement Enron entered into negotiations to resolve Claim No. 11975 and the Objection. The principal terms of the Settlement Agreement are: A. $162,300,000 Allowed Claim Claim No. 11975 will be allowed as a Class 4 general unsecured claim against Enron for $162,300,000. Distributions on the Claim will be made to KBC in accordance with the Reorganized Debtors' Chapter 11 Plan, and KBC will make pro rata distributions to the Lenders. B. Clawback Provision Deutsche and Barclays will be entitled to assign their pro rata distributions of Claim No. 11975 free and clear of the Reorganized Debtors' objections raised in the MegaClaims Litigation, provided that Deutsche and Barclays must fully reimburse the Reorganized Debtors for their pro rata distributions of Claim No. 11975 under certain circumstances. C. Mutual Releases Enron, KBC and the Lenders will mutually release one another provided that Enron will not grant any releases to Barclays or Deutsche with respect to any potential liability under the MegaClaims Litigation. D. Disallowed Scheduled Liabilities All scheduled liabilities related to Claim No. 11975 will be disallowed and expunged. The Settlement preserves all of the Reorganized Debtors' claims against Deutsche and Barclays in the MegaClaim Litigation. The Court approves the Settlement Agreement. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, represent the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 168; Bankruptcy Creditors' Service, Inc., 15/945-7000) EMERITUS CORP: Gets $4.96 Million from Exercise of Warrants ----------------------------------------------------------- Emeritus Corp aka Emeritus Assisted Living issued 898,766 shares of common stock pursuant to the exercise of warrants to purchase an aggregate of 1,100,000 common shares. On March 6, 2006, 829,597 common shares were issued pursuant to a "net exercise" provision of the warrants in which 170,403 shares subject to the warrants were used to pay the exercise price of $4.2 million. The shares used to pay the exercise price were valued at $24.65 per share under the terms of the warrants. On March 8, 2006, 69,169 common shares were issued pursuant to a "net exercise" provision of the warrants in which 30,831 shares subject to the warrants were used to pay the exercise price of $760,000. The shares used to pay the exercise price were valued at $24.65 per share under the terms of the warrants. The shares were issued and sold in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. Emeritus Corp aka Emeritus Assisted Living -- http://www.emeritus.com/-- is a national provider of assisted living and related services to seniors. Emeritus is one of the largest developers and operators of freestanding assisted living communities throughout the United States. These communities provide a residential housing alternative for senior citizens who need help with the activities of daily living with an emphasis on assistance with personal care services to provide residents with an opportunity for support in the aging process. Emeritus currently holds interests in 182 communities representing capacity for approximately 18,400 residents in 34 states. As of September 30, 2005, Emeritus' equity deficit widened to $134,220,000 from a $128,319,000 equity deficit at Dec. 31, 2004. EXIDE TECHNOLOGIES: Wants Court to Okay Deere Credit Settlement --------------------------------------------------------------- Exide Technologies and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve their settlement agreement with Deere Credit, Inc. On December 23, 1997, the Debtors and General Electric Capital Corporation entered into a master lease agreement for the lease of certain equipment. The Debtors and GECC executed several equipment schedules to the Master Agreement. Subsequently, GECC assigned all of its rights, title and interest in, and to, the Agreement and the Equipment, to Deere Credit, Inc., formerly known as Senstar Finance Company. On March 24, 2003, the Debtors filed an adversary proceeding -- the Recharacterization Litigation -- against various defendants, including Deere Credit. James O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub P.C., in Wilmington, Delaware, relates that the Recharacterization Litigation sought a declaration that certain purported leases, including the Master Agreement, are actually disguised financing agreements. Deere Credit responded to the complaint and asserted that the Master Agreement is a "true lease." The Recharacterization Litigation is currently pending before the Court. Mr. O'Neill informs Judge Carey that the Reorganized Debtors and Deere Credit have reached a consensual settlement regarding the Recharacterization Litigation and the claims and defenses set forth in the Litigation. The Reorganized Debtors ask the Court to approve their settlement agreement with Deere Credit. The terms of the Settlement Agreement are: (a) Deere Credit will waive, release and withdraw with prejudice all of its claims against the Reorganized Debtors, subject to reservations; (b) The Reorganized Debtors will renew the Master Agreement for an additional two-year term, effective upon expiration of the current term. The quarterly rent payable during the renewal term will equal 73% of the quarterly rent payable during the initial term and be payable quarterly, in arrears; (c) The Reorganized Debtors will have the option to purchase from Deere Credit, at any time after the Closing Date, equipment identified on a schedule to the Settlement Agreement that is presently leased or subleased by the Reorganized Debtors to Daramic, Inc.; (d) On each of the first, second, and third month after the Closing Date, the Reorganized Debtors will pay $63,243 to Deere Credit, in cash or other immediately available funds; (e) Except as provided in the Settlement Agreement, Deere Credit will waive any default under the Master Agreement that occurred on or prior to the Closing Date. In addition, Deere Credit will waive, with prejudice, any and all accrued but unpaid late charges due under the Master Agreement as of the Closing Date, aggregating $154,195; (f) All other terms of the Master Agreement not inconsistent with the terms of the Settlement Agreement will remain in full force and effect; (g) The Reorganized Debtors will voluntarily dismiss, with prejudice, the Recharacterization Litigation as to Deere Credit; and (h) The Settlement Agreement will not be construed as an admission or concession by any party of the truth of any allegation or the validity of any claim asserted in the Recharacterization Litigation, and all the allegations are expressly denied. Specifically, nothing in the Settlement Agreement will be deemed an admission that the Agreement is, or is not, a financing agreement that creates a security interest or that it is, or is not, a "true lease". The Reorganized Debtors believe that the terms of the Settlement Agreement provides a substantial benefit to the estate as it will waive accrued but unpaid late charges due under the Master Agreement as of the Closing Date. In addition, the Equipment subject to the Master Agreement is essential to the operation of the Reorganized Debtors' businesses and could not be replaced within a reasonable amount of time or at a reasonable cost, Mr. O'Neill says. Headquartered in Princeton, New Jersey, Exide Technologies -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. * * * As reported in the Troubled Company Reporter on Feb. 6, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Exide Technologies to 'CCC' from 'CCC+' because of Exide's continued poor operating performance and rising debt leverage. The senior secured rating on Exide's recently enlarged first-lien credit facility was lowered to 'CCC' from 'B-', and the recovery rating was lowered to '2' from '1', because of the lower corporate credit rating and the weaker asset protection for the enlarged facility. The senior secured rating and the recovery rating reflect Standard & Poor's expectation that lenders will realize a substantial recovery of principal (80%-100%) in the event of default or bankruptcy. The senior secured rating on Exide's second-lien notes was lowered to 'CC' from 'CCC', reflecting the lower corporate credit rating and an increase in priority debt. FAIRPOINT COMMS: Reports $6.5 Mil. Income from Operations in 2005 ----------------------------------------------------------------- FairPoint Communications, Inc., (NYSE: FRP), disclosed its financial results for the fourth quarter ended Dec. 31, 2005. Consolidated revenues for the twelve months ended Dec. 31, 2005, were $262.8 million, an increase of $10.2 million or 4% compared to the twelve months ended Dec. 31, 2004. Excluding the impact of acquisitions, revenues for the twelve months ended Dec. 31, 2005, grew $4.5 million or 1.8% compared to the twelve months ended Dec. 31, 2004. Revenue growth was the result of increases in data and Internet services revenue and long distance revenue as well as positive non-recurring interstate revenue settlement adjustments related to prior years, which offset expected decreases in Universal Service Fund revenue and intrastate access revenue. Income from operations decreased $6.5 million to $67.0 million for the twelve months ended Dec. 31, 2005, driven principally by the increase in expenses and the increased percentage of lower margin unregulated revenues in the total business mix due to HSD and long distance revenue growth. At Dec. 31, 2005, the Company's balance sheet showed $908,139,000 in total assets and $661,291,000 in total liabilities. The Company generated $18.9 million of Cash Available for Dividends during the fourth quarter compared to dividends paid during the quarter of $13.8 million and it increased its Cumulative Cash Available for Dividends to $23 million at Dec. 31, 2005, up from $17.8 million at Sept. 30, 2005, an increase of 29%. Additional highlights for the fourth quarter included: -- revenues for the fourth quarter of 2005 increased $6.1 million or 9.6% over the fourth quarter of 2004; -- adjusted EBITDA for the fourth quarter of 2005 was $37.6 million versus $35.6 million for the same period last year. -- high-speed data penetration increased to 18.6% of voice access lines as of Dec. 31, 2005, compared to 14.5% as of Dec. 31, 2004. -- at Dec. 31, 2005, access line equivalents (voice access lines and HSD subscribers, which include DSL, cable modem and wireless broadband) totaled 288,899 compared to 274,934 at Dec. 31, 2004. "FairPoint improved its dividend payout ratio in the fourth quarter and carried forward a strong Cumulative Cash Available for Dividend balance," said Gene Johnson, Chairman and CEO of FairPoint. "The Board of Directors has indicated its intention to continue paying the quarterly dividend at the current level for 2006. We believe our results clearly indicate that we entered 2006 with strong financial and operational foundations to support continued growth. I want to thank the entire FairPoint team for their continued 'customer-first' focus. Their hard work will continue to help our Company grow and provide opportunities for increased shareholder value." FairPoint Communications, Inc., provides communications services to rural communities across the United States. Incorporated in 1991, FairPoint's mission is to acquire and operate telecommunications companies that set the standard of excellence for the delivery of service to rural communities. Presently, FairPoint owns and operates 28 rural local exchange companies located in 17 states, offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * Standard & Poor's Ratings Service upgraded FairPoint Communications' credit rating to BB- on March 22, 2005. FORD MOTOR: Supplier Base Concerns Cue Fitch to Pare Low-B Ratings ------------------------------------------------------------------ Fitch Ratings has downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'BB' from 'BB+'. This rating action does not affect any of the short-term ratings. The downgrade is based on increasing concerns over the deep stresses in the supplier base, which will restrict Ford's ability to reduce costs in this area. Factors pointing toward higher direct costs from Ford's supplier base include: * the potential for labor actions, * supply disruptions, * price increases, * potential financial support, and * costs related to re-sourcing and double-sourcing. Coupled with other factors pressuring margins, including: * legacy costs, * pricing competition, * high commodity costs, and * mix issues. This will challenge Ford's ability to stabilize operating cash flows in the face of declining market share. Further market share losses and negative cash flows (including restructuring charges) are expected to continue through 2006, leading to a Negative Outlook. With a number of assembly plants scheduled for closure over the next several years, Ford will need to arrest market share losses (1.1% in North America in 2005) through continued, successful new product introductions or face an even further cycle of cost reductions. With a number of major suppliers to Ford in bankruptcy and deep financial stresses throughout the supply base, it will be difficult for Ford to get efficiency and pricing benefits out of this portion of its cost base. The risks of production disruptions and/or various forms of financial support are elevated, not just from tier one suppliers but throughout the supply chain. The U.S. automotive supplier base will be going through a period of wrenching adjustment over the near term, with an acceleration of facility closures, headcount reductions and a transition of the manufacturing base to lower-cost locales. Financial stress is increasing throughout the supply chain, receivables-based financing has been severely curtailed and access to capital is limited. High commodity costs are also likely to provide little relief in 2006. Ford's margins in the first half of 2006 will also be affected by a high level of fleet sales, which reached 41% of deliveries in February. Fitch notes that pricing of vehicles to the daily rental market have shown steady increases recently, but this level of fleet sales will continue to pressure the revenue line. Despite continuing share losses through 2005, revenues going forward are supported by healthy F-Series volumes and certain car lines. Fourth quarter North American revenues increased 4.9% despite a 3.3% decline in volumes, and North American operating losses were limited despite the full-quarter impact of the acquired Visteon assets. Over the longer term, Ford will face increased price competition for its key F-Series lineup in late 2006 and into 2007 from the opening of a new Toyota plant and refreshed products from GM. Charges and cash outflows related to employee buyout programs are expected to continue over the intermediate term as Ford attempts to take out structural costs apace with capacity reductions. Capacity reductions in the near-term include several plants that are producing outdated product (Atlanta/Taurus) or declining demand (St.Louis/Explorers). Ford's product lineup, operating profile, progress in reducing costs, and liquidity provide ample resources with which to address its structural cost issues through to the September 2007 UAW contract re-opening. Prior to this date, Ford may benefit from any concessions that the UAW grants to other suppliers or OEMs. Ford has made steady progress on its cost structure, moderating operating losses as market share losses persist. In particular, Ford has been able to realize benefits from its efforts to reduce headcount and benefits across its salaried and hourly workforces. Warranty costs were up substantially in 2005, and remain a concern. Including restructuring-related outflows, Ford is expected to produce modestly negative cash flow in 2006. Ford has made significant improvements at the Premier Automotive Group, turning substantial operating losses into modest profitability in the fourth quarter of 2005. Nevertheless, Jaguar continues to suffer significant losses, and Volvo sales continue to steadily decline. It remains uncertain whether this segment will return to being a key risk factor or whether the recent improvement can lead to sustained profitability. Ford's liquidity remains strong with $25.1 billion in cash and short-term VEBA and $6 billion in long-term VEBA. Liquidity at the automotive operations increased in 2005 with the $5.6 billion sale of Hertz and $2.75 billion in dividends from Ford Credit. Ford also added $2.7 billion to its pension and long-term VEBA funds and reduced debt by $500 million. Total debt at the automotive operations was $18 billion at Dec. 31, 2005, down from $19.8 billion in 2003. On balance-sheet liabilities declined slightly, and amendments to Ford's salaried and white-collar healthcare and pension plans are expected to lead to a decline in these liabilities. Cash savings in the near term, however, will be minimal. Dividends from Ford Credit are likely to decline substantially in 2006. The ratings of Ford Motor Credit Co. are linked to those of Ford due to the close business relationship between them. Fitch expects FMCC's earnings and dividends to decline noticeably going into 2006 primarily due to lower receivables outstanding and margins. FMCC has benefited from lower provision expense, as the quality of its receivables pool has increased, the pace of these improvements is expected to slow going forward. Fitch believes that FMCC maintains a good degree of liquidity relative to its rating. Supporting this is FMCC's ability to sell or securitize a broad spectrum of assets such as retail finance, lease, and wholesale loans. Moreover, FMCC continues to hold high cash balances and its assets mature faster than its debt. Fitch downgrades these ratings with a Negative Rating Outlook: Ford Motor Co. -- Issuer Default Rating to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Motor Credit Co. -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. FCE Bank Plc -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Capital B.V. -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Credit Canada Ltd. -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Motor Capital Trust II -- Preferred stock to 'B+' from 'BB-'. Ford Holdings, Inc. -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Motor Co. of Australia -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Credit Australia Ltd. -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. PRIMUS Financial Services (Japan) -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Credit de Mexico, S.A. de C.V. -- IDR to 'BB' from 'BB+'. Ford Motor Credit Co. of New Zealand -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. Ford Credit Co S.A. de CV -- IDR to 'BB' from 'BB+'; -- Senior debt to 'BB' from 'BB+'. FOSTER WHEELER: Balance Sheet Upside-Down by $341.15M at Dec. 30 ---------------------------------------------------------------- Foster Wheeler Ltd. (Nasdaq: FWLT) discloses its full-year and fourth-quarter financial results for the year ended Dec. 30, 2005. For the full-year 2005, net earnings were $63.7 million, excluding an after-tax charge of $113.7 million relating to the revaluation of the Company's 15-year asbestos liability and insurance asset estimates, and a primarily non-cash after-tax accounting charge of $59.7 million recorded in conjunction with the successful Trust Preferred Securities and Senior Notes exchanges and the common stock purchase warrant offers. The net loss for the full-year 2005, including these charges, was $109.7 million. The Company's operating revenues for the full year 2005 were $2.2 billion, compared to $2.7 billion in 2004. Operating revenues for the Global E&C Group over the same period were $1.5 billion, down from $1.7 billion in 2004, and the Global Power Group's operating revenues were $728.0 million, down from $988.6 million in 2004. The lower revenues in 2005 versus 2004 were primarily due to a reduction in reimbursable flow-through costs, on which the Company earns no mark-up, in the Global E&C Group, and the completion in 2004 of several large lump-sum turnkey contracts in the Global Power Group. For the fourth-quarter 2005, net earnings were $9.8 million, excluding the $113.7 asbestos-related charge and a primarily non-cash accounting charge of $18.2 million related to the successful Senior Notes exchange and the common stock purchase warrant offers. The net loss for the fourth quarter of 2005, including the charges, was $122.1 million. At Dec. 30, 2005, Foster Wheeler's balance sheet showed $1,894,706,000 in total assets and $2,235,864,000 in total liabilities, resulting in a $341,158,000 stockholders' deficit. Foster Wheeler's liabilities exceeded assets by $525,565,000 at Dec. 31, 2004. "At the beginning of 2005, recognizing the enabling effect of our very successful equity-for-debt exchange in September 2004, and believing that the initiatives we had adopted from 2002 through 2004 would provide a quality backlog and very good operating practices, we knew we had to deliver solid financial results," said Raymond J. Milchovich, chairman, president and chief executive officer. "Therefore, we stated that our priority would be to book new business, build quality backlog, and deliver 'best in class' products and services which consistently met or exceeded our clients' expectations. During 2005, we did exactly what we said we needed to do. Compared to 2004, new orders in 2005 were up by over 70 percent to $4.2 billion and backlog increased by over 80 percent to $3.7 billion. The excellent operational performance of our Global Engineering and Construction operations in Continental Europe and the United Kingdom, the much-improved performance of our Global Power operations in Europe and the solid performance of all of our other operations contributed to the significant increase in EBITDA in these two segments in 2005. "We also said that we would continue to strengthen our capital structure in 2005," added Mr. Milchovich. "We completed two successful equity-for-debt exchanges in 2005, which reduced our debt by an additional $220.5 million. At year-end 2005, our debt was $315.4 million, its lowest level in over fifteen years. In addition, in January 2006, we successfully completed common stock purchase warrant offers and plan to use the $75 million cash proceeds from these offers in our debt reduction program in 2006. All three of these debt reduction initiatives will be accretive to expected 2006 diluted earnings per share, excluding one-time accounting adjustments. "In addition to a very strong business-winning and operational performance, most of the markets we serve are already in, or are entering, an investment phase. I believe we have the right products, skills and expertise to capitalize on these opportunities." Asbestos During 2005, the Company continued quarterly monitoring of its actual experience regarding its domestic asbestos liability and compared it with its 15-year forecast made at year-end 2004. At year-end 2005, the Company and its consultants determined that it was appropriate to revise its 15-year estimate of domestic asbestos indemnity and defense costs as well as its related estimate of insurance assets. The Company subsequently increased its 15-year estimate of domestic asbestos indemnity and defense costs to $516 million and revised its related estimate of insurance assets to $320 million, of which $115 million is contested in ongoing coverage litigation. As a result of the revision of its estimates, the Company recorded a charge to earnings of $113.7 million in the fourth quarter of 2005. While the pending asbestos insurance coverage litigation has been ongoing, the Company has entered into a number of settlement agreements with various insurers. The Company has engaged in settlement discussions with various remaining unsettled insurers in 2005 and intends to continue to negotiate additional settlements where achievable on a reasonable basis while the litigation proceeds. An adverse outcome in the insurance litigation could significantly limit the Company's insurance assets. However, a favorable outcome in all or part of the litigation could significantly increase available insurance assets above its current estimate. The Company has included in its cash-flow and liquidity forecasts the potential funding from its own cash of a portion of its asbestos liabilities in 2006. These forecasts also assume no additional settlements with insurance companies in 2006. Foster Wheeler Ltd. -- http://www.fwc.com/-- is a global company offering, through its subsidiaries, a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. * * * On Feb. 7, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to stable from negative. At the same time, Standard & Poor's affirmed its 'B-' corporate credit rating and 'CCC+' senior secured debt rating on the Clinton, New Jersey-based engineering and construction company. GLIMCHER REALTY: Earns $9.8 Mil. of Net Income in Fourth Quarter ---------------------------------------------------------------- Glimcher Realty Trust, (NYSE: GRT), discloses its financial results for the fourth quarter and full year ended Dec. 31, 2005. Net income available to common shareholders in the fourth quarter of 2005 was $9.8 million, as compared to net income of $5.7 million, in the fourth quarter of 2004. Funds From Operations in the fourth quarter of 2005 was $29.4 million, compared to $28.1 million in the fourth quarter of 2004. For the twelve months of 2005, net income available to common shareholders was $3.4 million, compared to net income of $29.4 million, in the twelve months of 2004. FFO for the twelve months of 2005 was $77.7 million, as compared to $89.6 million in 2004. "We are extremely proud of our 2005 accomplishments," stated Michael P. Glimcher, President and CEO. "With our enhanced management team now in place, the addition of a new strategic acquisition joint venture partner and an improved balance sheet, we remain optimistic regarding growth prospects for 2006." Glimcher Realty Trust's common shares are listed on the New York Stock Exchange under the symbol "GRT." Glimcher Realty Trust's Series F and Series G preferred shares are listed on the New York Stock Exchange under the symbols "GRT.F" and "GRT.G." Glimcher Realty Trust, a real estate investment trust, is a component of the Russell 2000 Index, representing small cap stocks, and the Russell 3000 Index, representing the broader market. * * * As reported in the Troubled Company Reporter on Sept. 26, 2005, Standard & Poor's Ratings Services revised its outlook on Glimcher Realty Trust to stable from negative. At the same time, S&P affirmed the company's BB corporate credit and B preferred stock ratings. S&P noted that $210 million in outstanding rated preferred stock was affected. GRAFTECH INT'L: Balance Sheet Upside Down by 209.6-Mil. at Dec. 31 ------------------------------------------------------------------ GrafTech International Ltd. (NYSE:GTI) disclosed its financial results for the fourth quarter and year ended December 31, 2005. For the three months ended Dec. 31, 2005, the company reported a $148 million net loss compared to $8.9 million of net income for the same period of 2004. For the full year ended Dec. 31, 2005, the company had a $125.2 million net loss compared to $17 million of net income for the same period of 2004. Craig Shular, chief executive officer of GTI, commented, "In 2005, EAF steel production was virtually flat versus 2004. Although 2005 annual EAF steel production was lower than originally expected, graphite electrode customers took their full contracted volumes for 2005, which resulted in higher customer electrode inventory levels going into 2006." ETM Highlights GTI's Advanced Energy Technology subsidiary was awarded Frost and Sullivan's 2005 Award for Excellence in Technology for the successful development and commercialization of innovative high tech materials. It also recognizes the overall technical excellence of a company and its commitment to technology innovation. During the 2005 fourth quarter, GTI's ETM solutions were approved for use in three new applications, including the first approval for use of its eGRAF(R) SpreaderShield(TM) natural graphite family of materials in a smart phone application. Smart phones are a growing segment of the new generation cell phone market, capitalizing on the growing trend of convergence of multiple functions in cell phones. GTI also received its first approval for the use of its ETM materials in a micro projector application, and its second approval in the ruggedized laptop segment, during the 2005 fourth quarter. Mr. Shular stated, "Efficient thermal management in electronic devices is a major challenge for manufacturers. Our ETM materials and solutions address this challenge, and at the same time enable electronic device manufacturers to capitalize on the growing trend of miniaturization and increased power in a more cost efficient manner." Corporate Selling, general and administrative and research and development expenses were $29 million in the 2005 fourth quarter as compared to $25 million in the 2004 fourth quarter. The increase was primarily due to a $1 million increase in research and development expense to support growth in the company's ETM product line, and a $2 million increase in administrative expense, including $1 million of expense related to restricted stock granted to GTI employees during 2005 as part of the company's long term incentive program. The company expects to recognize about $3.3 million of restricted stock expense in 2006 related to that grant. The company realized an increase of $1 million of other administrative expense. Other expense, net, was $4 million in the 2005 fourth quarter, primarily as a result of the negative impact of changes in currency exchange rates on the company's euro-denominated inter-company loans. During the 2005 fourth quarter, GTI recorded a net restructuring charge of $9 million related to its previously announced productivity and cost savings program. The company also recorded a $3 million charge related to the impairment of its long-lived carbon electrode fixed assets in Columbia, Tennessee. The company's carbon electrode product line is facing significant production cost increases and pricing pressure. Given the recent performance of, and outlook for, its carbon electrode product line, GTI has been exploring strategic alternatives for this product line. The company now expects to completely exit these operations over the next 12 months. GTI expects to record closure expenses of approximately $2 million in 2006 and $3 million in 2007. 2005 net sales of carbon electrodes were $36 million, with slightly negative earnings before interest and taxes. GTI has produced carbon electrodes in Columbia, Tennessee for almost 70 years. Carbon electrodes are used primarily in the production of silicon metal, which is used in the manufacture of aluminum. Interest expense was $14 million in the 2005 fourth quarter as compared to $12 million in the 2004 fourth quarter, primarily due to higher interest rates and higher average borrowings. Provision for income tax expense was $166 million in 2005 as compared to $46 million in 2004. GTI recorded a $150 million net non-cash charge in the 2005 fourth quarter to increase the valuation allowance against its U.S. deferred income tax assets. An increase to the valuation allowance was determined to be appropriate in accordance with Statement of Financial Accounting Standards No. 109. This adjustment does not affect the company's ability to utilize the deferred income tax assets to reduce future income taxes of its U.S. tax paying companies, and does not impact any existing financial covenants or any other provisions of GTI's existing credit or debt agreements. The majority of these tax assets represent existing and estimated excess foreign tax credits that have extensive remaining useful lives. Of the existing excess foreign tax credit carry forwards, none will expire prior to the end of 2010; specifically, $1 million will expire at the end of 2010, $17 million in 2011, $37 million in 2012, $2 million in 2013 and $9 million in 2015. The remaining U.S. deferred tax assets primarily represent temporary differences or other actual and estimated credits that ultimately have a life in excess of ten years. The effective income tax rate in 2005, excluding the adjustment described above and other special charges, was 38 percent. GTI estimates an effective 2006 book income tax rate of 37 percent to 40 percent and an effective 2006 cash income tax rate of 32 percent to 35 percent. Free cash flow before antitrust and restructuring payments was $16 million in the 2005 fourth quarter, an increase of $31 million from the 2004 fourth quarter, primarily due to improved cash flow from operations. The company paid $2 million of restructuring and $5 million of antitrust related payments in the 2005 fourth quarter. Outlook Mr. Shular commented on the outlook stating, "GTI expects global economic conditions to remain relatively stable in 2006, with global EAF steel production growth of approximately three percent. On the cost front, significant price increases in petroleum based raw materials and energy are expected to continue to put pressure on our costs. To combat these cost pressures, we have secured firm pricing for 70 to 75 percent of our graphite electrode production costs. We anticipate holding graphite electrode production cost increases to the 10 to 12 percent range." Consistent with prior years, GTI expects graphite electrode volume in the first quarter of 2006 to be the lowest quarter of the year with anticipated volume of approximately 40 thousand metric tons. The low volume quarter is due to customers taking full contract volumes in the 2005 fourth quarter at lower 2005 prices, contributing to a build of their graphite electrode inventories at year end 2005. Graphite electrode volume is expected to recover in the second quarter of 2006, resulting in graphite electrode sales volume for the first half of 2006 that is expected to be similar to the first half of 2005. At Dec. 31, 2005, GrafTech International Ltd.'s balance sheet showed total assets of $886.8 million and $1.1 billion in total liabilities, resulting to a $209.6 million stockholders' deficit. GrafTech International Ltd. -- http://www.graftech.com/-- is one of the world's largest manufacturers and providers of high quality synthetic and natural graphite and carbon based products and technical and research and development services, with customers in 80 countries engaged in the manufacture of steel, aluminum, silicon metal, automotive products and electronics. Graftech manufactures graphite electrodes and cathodes, products essential to the production of electric arc furnace steel and aluminum. Graftech also manufactures thermal management, fuel cell and other specialty graphite and carbon products for, and provide services to, the electronics, power generation, semiconductor, transportation, petrochemical and other metals markets. Graftech is the leading manufacturer in all of our major product lines, with 13 state of the art manufacturing facilities strategically located on four continents. GRUPO IUSACELL: December 31 Equity Deficit Widens to Ps$2 Billion ----------------------------------------------------------------- Grupo Iusacell, S.A. de C.V., reported its financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. For the three months ended Dec. 31, 2005, Grupo Iusacell reported a Ps$143 million of net income compared to a Ps$375 million net loss for the same period in 2004. For the fiscal year ended Dec. 31, 2005, Grupo Iusacell's reported a Ps$706,000,000 of net income compared to a Ps$2,055,000,000 net loss for year ended Dec. 31, 2004. For the 12 months ended Dec. 31, 2005, the Company's total revenues increased to Ps$6,122,000,000 from total revenues of Ps$4,862,000,000 for the 12 months ended Dec. 31, 2004. At Dec. 31, 2005, Grupo Iusacell's balance sheet showed Ps$10,824,000,000 in total assets and Ps$12,900,000,000 in total liabilities. For the fourth quarter ended Dec. 31, 2005, total costs increased to Ps$1,048,000,000 from total costs of Ps$976,000,000 for the same period in 2004. For the three months ended Dec. 31, 2005, the Company's operating expenses increased to Ps$424 million from Ps$387 million in operating expenses for the same period in 2004. The increase in total costs for the fourth quarter of 2005 compared to the same period in 2004 is due to an increase in interconnection and technical expenses offset in part by a decrease in handset subsidy costs. The increase in operating expenses for the fourth quarter of 2005 compared to the same period in 2004 is due to increases in personnel expenses caused by an increase in the number of full-time and part-time employees, the creation of regional sales and customer care structures and an increase in professional fees mainly related with debt restructuring. Headquartered in Mexico City, Mexico, Grupo Iusacell, S.A. de C.V. (Iusacell, BMV: CEL) is a wireless cellular and PCS service provider in Mexico with a national footprint. Independent of the negotiations towards the restructuring of its debt, Iusacell reinforces its commitment with customers, employees and suppliers and guarantees the highest quality standards in its daily operations offering more and better voice communication and data services through state-of-the-art technology, including its new 3G network, throughout all of the regions in which it operate. GULFMARK OFFSHORE: Earns $8.2 Million in Quarter Ended December 31 ------------------------------------------------------------------ GulfMark Offshore, Inc., (Nasdaq:GMRK) earned $8.2 million of net income on revenue of $51.6 million for the quarter ended Dec. 31, 2005. This compares to $8.9 million of net income on revenue of $41.4 million for the fourth quarter of 2004. The fourth quarter 2004 results include an income tax benefit of $4.8 million resulting mainly from the release of deferred tax liabilities related to a tax audit. For the year ended Dec. 31, 2005, net income was $38.4 million on record revenue levels of $204 million. For the year ended Dec. 31, 2004, the reported net loss was $4.6 million. Operating income for the year ended Dec. 31, 2005 was $59.7 million compared to $15.9 million for the year ended Dec. 31, 2004. The fourth quarter 2005 financial results, when compared to the same period in 2004, reflect the continuation of a dramatic turnaround in the market. Operating income for the three months ended Dec. 31, 2005, was $13.1 million, 79% higher than the $7.3 million for the same period in 2004. The increase in operating income for the quarter was mainly driven by the 25% increase in revenue from $41.4 million in 2004 to $51.6 million in 2005. The increase in revenue resulted from: 1) increased day rates in all regions; 2) the addition of the Titan and Coloso late in the second quarter of 2005 and the addition of the Sea Intrepid in November 2005; 3) full year impact of the Highland Citadel purchased in December 2004; and 4) improved vessel utilization. Mr. Bruce Streeter, President and COO of the Company commented: "Our results for the fourth quarter and the year reflect continued strength in our primary markets. This is particularly true for the North Sea as well as those locations where we have repositioned our vessels to take advantage of the strengthening worldwide conditions. As we look ahead at 2006 and beyond, our overall contract outlook continues to improve as we have already secured approximately 75% contract cover for 2006 and 40% for 2007. This should not only help provide earnings stability, but also create a strong cash flow base as we embark on our recently announced new build program. In Southeast Asia, the continued high level of utilization in 2005 is indicative of the dynamic growth in that market. Recently, we commented on the typical low level of contract cover in Southeast Asia that we started the year with. I am pleased to announce that contract agreements now in place bring cover for that region to more than 42% for 2006 and almost 10% for 2007 compared to the 10% level for 2006 we had previously identified. In the Americas, a fully contracted market, the average day rate in 2005 is slightly below the year ago period; however, this is the result of a change in the mix of our equipment as we expand in the area and not reflective of any change in market dynamics. "In continuation of the Company's strategy to enhance earnings potential and build value, we committed to, and have begun to build, six new 10,600 BHP AHTS vessels. As we announced earlier in the year, these vessels are of a new design developed by the Company in conjunction with Keppel Singmarine. They incorporate attributes selected specifically to meet the needs of our customer base when the vessels enter the market. As a complement to the six new vessels, we also acquired two vessels already under construction, the Sea Guardian and the Sea Sovereign. These vessels are expected to deliver in the second and fourth quarters of 2006, respectively. Additionally, we are participating in a joint venture for the construction of two large platform supply vessels of the new Aker 09 design. These vessels are expected to deliver in the first and third quarters of 2007. Previous vessel additions were largely responsible for the dramatic improvement in 2005 earnings and we believe will continue to do so in years to come. The new build vessels reflect a disciplined approach to matching our equipment to our customers' needs. They will afford us significant increases in asset value while enhancing our earnings capacity at an exciting period of industry expansion. The year 2005 was a very strong year as we made great strides in earnings, in developing contractual relationships, and in expanding our areas of operations. We expect all of these factors will provide both stable forward earnings and growth potential as both our mix and type of ships continues to improve." At December 2005 the Company had working capital of $34.9 million, including $24.2 million in cash. The Company had total long term debt of $247.7 million, consisting of $159.4 million of 7.75% senior notes, $8.6 million related to certain vessel mortgages, $0.3 million related to the Aker Joint Venture capital contribution (construction of the Aker PSV09 vessel), and $79.4 million under our revolving credit facilities. GulfMark Offshore, Inc. provides marine transportation services to the energy industry through a fleet of fifty-nine (59) offshore support vessels, primarily in the North Sea, offshore Southeast Asia, and the Americas. GulfMark' 7-3/4% Senior Notes, due July 15, 2014, carry Moody's Investor Services' B2 rating and Standard & Poor's BB- rating. HUDSON'S BAY: Posts $10 Million Net Loss in Fiscal Year 2006 ------------------------------------------------------------ Hudson's Bay Company discloses its financial results for the year ending January 31, 2006. Sales and revenue for the 52-week period was $6.946 billion compared to $7.070 billion in the prior year. Comparable store sales for HBC declined 1.6% in 2005. In the fourth quarter, comparable store sales declined 1.2%. Operating income or earnings before interest and income taxes declined to a loss of $170 million for the year. Prior to normalizing for non-comparable items, net loss and loss per share for the year declined respectively to $175 million to net earnings of $60 million in the prior year. After excluding non-comparable items for the year, (reflecting primarily a goodwill write-off of $138 million and restructuring costs of $29 million, EBIT was $9 million and net loss was $10 million. Net debt levels declined $20 million in the year to $422 million. Free cash flow for fiscal 2005 was $24 million, lower than last year reflecting higher losses and capital expenditures, offset in part by an improvement in working capital management. Debt Repurchase Hudson's Bay announced on March 8, 2006, that it intends to make an offer to purchase all of its outstanding 7.50% unsecured medium term notes due June 15, 2007 at a purchase price of CDN$1,020 in cash for each CDN$1,000 principal amount of medium term notes, plus accrued and unpaid interest up to and as at the date immediately prior to the date on which the Company takes up the medium term notes under the offer. In connection with the offer, tendering debenture holders will be asked to consent to an amendment to the indenture pursuant to which the notes were created and issued to permit immediate redemption of any medium term notes not tendered to the offer. The offer will be conditional on, among other things, the Company obtaining financing sufficient to consummate the offer and the redemption of the medium term notes. Hudson Bay intends to mail the offer as soon as reasonably possible. Sprott Securities Inc. has been retained as Soliciting Dealer for the offer. Hudson's Bay Company -- http://www.hbc.com/-- established in 1670, is Canada's largest department store retailer and oldest corporation. The Company provides Canadians with the widest selection of goods and services available through retail channels that include more than 550 stores led by the Bay, Zellers and Home Outfitters chains. Hudson's Bay Company employs nearly 70,000 associates and has operations in every province in Canada. * * * As reported in the Troubled Company Reporter on Feb. 9, 2006, Standard & Poor's Ratings Services kept its ratings on Toronto-based Hudson's Bay Co. (HBC; BB-/Watch Neg/--) on CreditWatch with negative implications, where they were placed November 29, 2005. HUNTSMAN CORP: Posts $34.6 Million Net Loss in Fiscal Year 2005 --------------------------------------------------------------- Huntsman Corporation reported in financial results for the fourth quarter and fiscal year ended Dec. 31, 2005. For the three months ended Dec. 31, 2005, Huntsman Corp.'s net loss increased to $61,000,000 from a net loss of $1,200,000 for the same period in 2004. For the three months ended Dec. 31, 2005, the Company reported a $205,400,000 adjusted EBITDA from a $404,800,000 adjusted EBITDA for the same period in 2004. For the 12 months ended Dec. 31, 2005, Huntsman Corp. reported a $34,600,000 net loss on $12,961,600,000 in total revenues. This compares to a $227,700,000 net loss for the year ended Dec. 31, 2004, on $11,426,400,000 in total revenues. At Dec. 31, 2005, Huntsman Corp.'s balance sheet showed $4,315,100,000 in net liabilities. The Company did not state its total assets for the fourth quarter and year ended Dec. 31, 2005. Headquartered in Salt Lake City, Utah, Huntsman Corporation -- http://www.huntsman.com/-- is a global manufacturer of differentiated and commodity chemical products. Huntsman's products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining and synthetic fiber industries. * * * As reported in the Troubled Company Reporter on March 7, 2006, Moody's Investors Service affirmed the B1 corporate family rating of Huntsman Corporation and of Huntsman International LLC, and changed the outlook on the ratings to developing. As reported in the Troubled Company Reporter on March 6, 2006, Standard & Poor's Ratings Services placed its ratings on Huntsman Corp. and its affiliate Huntsman International LLC on CreditWatch with developing implications, including the 'BB-' corporate credit ratings. IMAX CORP: S&P Places B- Corporate Credit Rating on CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed all its ratings on IMAX Corp., including the 'B-' corporate credit rating, on CreditWatch with developing implications following the company's announcement that it will begin exploring strategic alternatives. Credit Watch with developing implications indicates that the rating could be either raised or lowered. "The rating could be raised if the company merges with or is acquired by a company with a stronger financial profile or by a company that will improve IMAX's long-term earnings potential," said Standard & Poor's credit analyst Tulip Lim. "The rating could be lowered if IMAX's leverage is meaningfully increased as a result of a merger or sale of the company." Standard & Poor's will resolve the CreditWatch listing when more information becomes available. The company released its fiscal 2005 financial results yesterday and displayed operating income growth of approximately 21%, boosted by a strong number of installations for the year. INDYMAC SERIES: Bad Debt Cues Moody's to Review Two Cert. Ratings ----------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade two certificates previously issued by IndyMac Home Equity Mortgage Loan Asset Backed Trust, Series SPMD 2001-C. The securitizations are backed by subprime mortgage loans that were originated by IndyMac Bank F.S.B. The subordinate certificates are being placed under review for downgrade due to the erosion of credit support and pipeline of seriously delinquent loans will likely contribute to ongoing weak performance. The transaction has considerable lender-paid mortgage insurance which may reduce the severity of loss associated with many of the riskier loans, including manufactured housing loans, which form a component of the loan collateral. The mortgage insurance may not, however, fully insulate investors against the losses associated with defaulted loans. IndyMac Bank F.S.B. is servicing the transaction and Deutsche Bank National Trust Company is the trustee. Moody's complete rating actions are: Issuer: IndyMac Home Equity Mortgage Loan Asset Backed Trust Depositor: IndyMac ABS, Inc * Series 2001-C; Class M-2, current rating A2, under review for possible downgrade; and * Series 2001-C; Class B, current rating Ba1, under review for possible downgrade. INTEGRATED ELECTRICAL: U.S. Trustee Amends Committee Membership --------------------------------------------------------------- William T. Neary, the United States Trustee for Region 6 added U.S. Bank Trust National Association to the Official Committee of Unsecured Creditors in Integrated Electrical Services, Inc., and its debtor-affiliates' chapter 11 cases. The Committee now consists of: 1. Tontine Capital Partners, L.P. Attn: Joe Lash 55 Railroad Avenue, 3rd Floor Greenwich, CT 06830 Tel: (203) 769-2015 Fax: (203) 769-2010 2. Southpoint Capital Advisors, L.P. Attn: Joe Lash 623 Fifth Avenue, 25th Floor New York, NY 10022 Tel: (212) 692-6350 Fax: (212) 692-6355 3. Fidelity Management & Research Co. Attn: Nate Van Duzer 82 Devonshire Street E31C Boston, MA 02109-3614 Tel: (617) 392-8129 Fax: (617) 476-5174 4. U.S. Bank Trust National Association Attn: James E. Murphy 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6174 Fax: (212) 514-6841 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. 3; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTEGRATED ELECTRICAL: Taps Financial Balloting as Balloting Agent ------------------------------------------------------------------ Integrated Electrical Services, Inc., and its debtor-affiliates selected Financial Balloting Group LLC to serve as noticing agent, ballot agent, tabulator, and consultant with respect to the general creditor notices and their Chapter 11 Plan because of the firm's reputation, its experience in all types of bankruptcy noticing and solicitation assignments, and its contacts within the investment community. The Solicitation and Noticing Agent will: (1) provide advice to the Debtors and their counsel regarding all aspects of the Plan vote, including timing issues, voting and tabulation procedures, and documents needed for the vote; (2) review the voting portions of the disclosure statement and ballots, particularly as they may relate to beneficial owners of securities held in Street name; (3) work with the Debtors to request appropriate information from The Depository Trust Company and trustee with respect to the bonds; (4) coordinate the distribution of voting documents to Street name holders of voting securities by forwarding the appropriate documents to the banks and brokerage firms holding the securities or their agent, who in turn will forward it to beneficial owners for voting; (5) distribute copies of the master ballots to the appropriate nominees so that firms may cast votes on behalf of beneficial owners; (6) prepare a certificate of service for filing with the Court; (7) handle requests for documents from parties in interest, including brokerage firm, bank back-offices, and institutional holders; (8) respond to telephone inquiries from creditors, including bondholders, nominees and other voting parties, regarding the Disclosure Statement and the voting procedures; (9) if requested to do so, establish a Web site for the posting of Plan documents, including interactive features, if needed; (10) receive and examine all ballots and master ballots cast by bondholders and other parties entitled to vote. The Solicitation and Noticing Agent will date- and time-stamp the originals of all ballots and master ballots upon receipt; and (11) tabulate all ballots and master ballots received prior to the voting deadline in accordance with established procedures, and prepare a vote certification for filing with the court. Pursuant to an engagement letter, the Debtors will pay the Solicitation and Noticing Agent pursuant to its standard fees and charges: * A project fee of $15,000, plus $3,000 for each issue of public debt securities entitled to vote on the Plan, and $3,500 for the common stock; * For the mailing to any registered holders of voting securities or other parties entitled to vote directly, an estimated labor charges at $1.75 to $2.25 per voting package; * A minimum charge of $2,000 to take up to 250 telephone calls from creditors within a 30-day solicitation period. If more than 250 calls are received within the period, those additional calls will be charged at $8 per call. Any calls to creditors or security holders will be charged at $8 per call; * If a Web site is requested for the posting of documents, a charge of $1,000 for the basic Web site, plus hourly programming charges to customize the site for the case in question, and a monthly hosting charge of $100 to $150, depending on the complexity of the site; * A charge of $100 per hour for the tabulation of ballots and master ballots, plus set-up charges of $1,000 for each tabulation element. Standard hourly rates will apply for any time spent by senior executives reviewing and certifying the tabulation and dealing with special issues that may develop; * Mailings to any registered holders of bonds or stock, and other individual parties would be charged at $0.50 to $0.65 per holder, for up to two paper notices included in the same envelope, with a $250 minimum per file; * A fee for a notice mailing to all securities held in Street name, including bonds and stock, would be $7,500; The professionals' consulting time will be paid at these standard hourly rates: Category Hourly Rate -------- ----------- Executive Director $375 Director $325 Senior Case Manager $275 Case Manager $200 Programmer II $195 Programmer I $165 Curt L. Warnock, senior vice president of Integrated Electrical Services, Inc., discloses that prior to the Petition Date, the Solicitation and Noticing Agent received a $15,000 retainer, which it will hold pending further Court order. In the year prior to the Petition Date, the Debtors paid nothing to the Solicitation and Noticing Agent in fees and expenses for services rendered. Jane Sullivan, Executive Director of Financial Balloting Group, assures the Court that the Solicitation and Noticing Agent does not hold or represent any interest adverse to the Debtors' estates. Accordingly, the Debtors seek the U.S. Bankruptcy Court for the Northern District of Texas' authority to employ Financial Balloting Group as their Solicitation and Noticing Agent. 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. 3; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTEGRATED ELECTRICAL: Still Needs Ordinary Course Professionals ---------------------------------------------------------------- Integrated Electrical Services, Inc., and its debtor-affiliates customarily retain the services of professionals to represent them in matters arising in the ordinary course of their businesses, unrelated to their Chapter 11 cases, including labor and litigation matters. In connection with many of these activities, the Debtors also require assistance from professional consultants, including engineers and other project analysis service providers, particularly in addressing the Debtors' ongoing efforts to unwind problematic projects and resolve disputed claims both on behalf and in defense of the Debtors. The consultants provide scheduling, cost, and other engineering issue analyses in support of collection efforts involving large projects and claims for payment to the Debtors involving amounts in excess of $1,000,000, as well as analyses of issues relevant to either back charges or other damage claims against the Debtors for ongoing or recently completed projects that have not progressed to litigation. A list of Integrated Electrical Services' ordinary course professionals is available for free at: http://bankrupt.com/misc/IntegratedElectrical_OCPs.pdf By this motion, the Debtors seek the U.S. Bankruptcy Court for the Northern District of Texas's authority to: (1) retain the OCPs; (2) pay the OCPs for postpetition services rendered and expenses incurred, subject to certain limits; and (3) pay the prepetition claims of the retained OCPs in the ordinary course of business as these become due. The Debtors also ask the Court to approve these procedures for the retention and compensation of the OCPs: (a) The Debtors will be authorized to pay all prepetition claims of Ordinary Course Professionals as they come due in the ordinary course and to pay 100% of their interim fees and disbursements upon timely submission to the Debtors of an appropriate invoice detailing the nature of the services rendered after the Petition Date, without need of formal application to the Court. The Debtors expect that the fees and disbursements with respect to 90 individual OCPs for services rendered after the Petition Date will not exceed $25,000 per month per OCP. For seven of the OCPs, the fees and disbursements for services rendered after the Petition Date will not exceed $50,000 per month. (b) Any payments made in excess of the fee cap to any OCP will be subject to prior Court approval. (c) If the Debtors utilize additional OCPs, including OCPs that have not previously represented the Debtors, the Debtors will supplement the list it submits to the Court. If no objections are filed within 10 days, the supplemental list, and any proposed retainer, will be deemed Court-approved. If an objection is filed the Debtors will set the objection for hearing with respect to the professional. 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. 3; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTERSTATE BAKERIES: Wants to Consolidate Upper Midwest Operations ------------------------------------------------------------------ As previously reported, Interstate Bakeries Corporation sought and obtained permission from the U.S. Bankruptcy Court for the Western District of Missouri to consolidate operations in nine of their profit centers: (1) Florida/Georgia, (2) Mid-Atlantic, (3) Northeast, (4) Northern California, (5) Southern California, (6) Northwest, (7) North Central, (8) South Central, and (9) Southeast. J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, reports that since the filing of the Consolidation Motions, the Debtors have continued the analysis of one remaining profit center, the Upper Midwest Profit Center. Accordingly, the Debtors have determined that certain depots and thrift stores should be closed and the remaining depots must service remapped delivery routes. The Debtors expect to complete these actions by March 13, 2006. The consolidation is expected to affect 230 employees in the Upper Midwest Profit Center, Mr. Ivester tells the Court. The preliminary estimate of charges to be incurred in connection with the consolidation is $700,000: -- $400,000 in severance charges, -- $100,000 in asset impairment charges, and -- $200,000 in other charges. The Debtors estimate that $600,000 of the costs will result in future cash expenditures. The Debtors also estimate that the payment of $300,000 in capital expenditures and accrued expenses will be required to effect the consolidation. The Debtors' analysis indicates that consolidation of the Upper Midwest Profit Center will result in reduced costs, more efficiencies and an improvement in their financial performance. Mr. Ivester asserts that this improvement will be a significant component of the Debtors' long-term business plan and ultimately, a plan of reorganization. Rejection and Abandonment Mr. Ivester relates that during the course of closing facilities and reducing routes, certain of the Debtors' executory contracts and unexpired leases will no longer be required for their operations. Similarly, certain of the Debtors' property will become burdensome to the estates and of inconsequential value and benefit to the estates. Because the consolidation activities will occur over time, the appropriate times to reject the Contracts or to abandon property will not occur contemporaneously. Moreover, during these activities, issues may arise for which the appropriate resolution is the rejection of a Contract or abandonment of property. To address these circumstances, the Debtors propose similar processes for Contracts rejection and property abandonment with the previous Consolidation Motions. Accordingly, the Debtors seek the Court's authority to: (a) consolidate operations, including the closure of certain facilities and the reduction of routes in the Upper Midwest Profit Center; (b) implement a process for rejecting additional executory contracts and unexpired leases associated with the consolidation within the Upper Midwest Profit Center; and (c) implement a process for abandoning certain property associated with the consolidation within the Upper Midwest Profit Center. The Debtors recognize that the consolidation within the Upper Midwest Profit Center poses certain implementation risks. Thus, they anticipate that there will be a period of transition before the true impact of the projected efficiencies can be realized. Mr. Ivester relates that the Debtors currently contribute to more than 40 multi-employer pension plans as required under various collective bargaining agreements, many of which are under-funded. Certain of the plans have filed proofs of claim against the Debtors alleging that partial withdrawals have already occurred. The Debtors are conducting the consolidation of the Upper Midwest Profit Center in a manner that they believe will not constitute a total or partial withdrawal from the relevant multi-employer pension plans resulting in material potential withdrawal liability, Mr. Ivester assures the Court. The Debtors will seek to maximize the value of the facilities to be closed, as well as the related equipment that may no longer be needed in their operations, Mr. Ivester notes. The Debtors will attempt to achieve this while also retaining sufficient capacity to service anticipated growth from their new revenue enhancement initiatives. The Debtors anticipate that upon completion of the consolidation activities, the second stage of their operational turnaround -- the Profit Center Analysis Process -- will be complete. Judge Venters grants the Debtors' request, on an interim basis. The hearing on the Debtors' request, as it pertains to additional consolidation activities in the Upper Midwest Profit Center that remain under consideration by the Debtors, is continued to April 12, 2006. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Kenneth A. Rosen, Esq., at Lowenstein Sandler, PC, represents the Official Committee of Unsecured Creditors. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal, LLP, represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) J.L. FRENCH: To Pay $529,487 to Two Electric Utility Companies -------------------------------------------------------------- In a stipulation approved by the U.S. bankruptcy Court for the District of Delaware, J.L. French Automotive Castings, Inc., and its debtor-affiliates, Farmers Rural Electric Cooperative, and Electric Plant Board of Glasgow, Kentucky resolved their disputes under Sec. 366 of the Bankruptcy Code about what constitutes adequate assurance of future payment for the Debtors' postpetition utility usage. Farmers provides electricity to the Debtors in the rural area outside of Glasgow, Kentucky, while Glasgow provides electricity to the Debtors within the city limits of Glasgow, Kentucky. The Parties agreed that Farmers will have $411,148 and Glasgow will have $118,339 of allowed general unsecured claim for unpaid, prepetition electricity charges. In addition, effective March 2, 2006, Farmers and Glasgow are authorized to apply the $96,300 and $26,300 of postpetition security deposits delivered to them on February 22, 2005. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. J.L. FRENCH: Wants Court to Establish May 1 as Claims Bar Date -------------------------------------------------------------- J.L. French Automotive Castings, Inc., and its debtor-affiliates ask the U.S. bankruptcy Court for the District of Delaware to establish: a) May 1, 2006, as the general deadline for filing proofs of claim; and b) August 10, 2006, as the claims bar date for all governmental units. The Debtors intend to exit from bankruptcy by May 31, and anticipate filing a prearranged reorganization plan and associated disclosure statement this month. To estimate how much they owe creditors, the Debtors tell the Court that they will need complete and accurate information regarding the nature, amount and status of all claims that may be asserted in their Chapter 11 Cases. The Debtors propose six exceptions to the bar date: a) claims listed in the Schedules filed with the Court; b) claims on account of which a proof of claim has already been properly filed with the Court; c) claims previously allowed by, or paid pursuant to, a Court order; d) administrative expenses claims; e) claims made by any of the Debtors or any direct or indirect subsidiary of any of the Debtors against one or more of the other Debtors; and f) claims for which specific deadlines have previously been fixed by the Court. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. J.L. FRENCH: Seeks Court's Nod to Pay Ordinary Trade Creditors -------------------------------------------------------------- J.L. French Automotive Castings, Inc., and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the District of Delaware to pay unaffiliated, third-party vendors for goods and services. The Debtors need the goods and services of the Ordinary Course Trade Creditors to be able to continue producing and supplying aluminum die-case engine components to: -- automobile original equipment manufacturers including Ford Motor Company and General Motors Corporation; and -- a number of automotive parts suppliers. According to the Debtors, both the original equipment manufacturers and the automotive parts suppliers depend upon them for a constant and steady supply of Components, and would be severely impacted if their operations will suddenly cease for any reason. The Debtors estimate that as of their bankruptcy petition date, they owe roughly $14.4 million to the Ordinary Course Trade Creditors. The Debtors tell the Court that after a diligent market examination, they have found no other source where they can obtain the same goods and services the Ordinary Course Trade Creditors currently provide. Where other sources do exist, the Debtors believe that these sources would charge more for their goods and services than what the Ordinary Course Trade Creditors currently charge. Furthermore, the Debtors have identified certain other Ordinary Course Trade Creditors who rely on their continued payments for goods and services to stay in business. In these cases, the Debtors explains that even if these vendors wished to continue supplying them on a postpetition basis, they would be unable to do so unless all or part of their prepetition invoices is satisfied. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. J.P. MORGAN: Moody's Rates Cert. Classes M-10 & M-11 at Low-B ------------------------------------------------------------- Moody's Investors Service has assigned a Aaa rating to the senior certificates issued by J.P. Morgan Acquisition Corp. 2006-HE1 and ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate certificates in the deal. The securitization is backed by ResMAE Mortgage Corporation and Accredited Home Lenders, Inc. originated one- to four-family, adjustable-rate and fixed-rate subprime mortgage loans secured by first liens and second liens on residential real properties. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and an interest-rate swap agreement. Moody's expected loss is approximately 5.0 - 5.5%. JPMorgan Chase Bank, National Association will service the loans. The complete rating actions are: J.P. Morgan Acquisition Corp. 2006-HE1 Asset-Backed Pass-Through Certificates, Series 2006-HE1 * Class A-1, rated Aaa * Class A-2, rated Aaa * Class A-3, rated Aaa * Class A-4, rated Aaa * Class M-1, rated Aa1 * Class M-2, rated Aa2 * Class M-3, rated Aa3 * Class M-4, rated A1 * Class M-5, rated A2 * Class M-6, rated A3 * Class M-7, rated Baa1 * Class M-8, rated Baa2 * Class M-9, rated Baa3 * Class M-10, rated Ba1 * Class M-11, rated Ba2 J.P. MORGAN: S&P Affirms Low-B Ratings on 14 Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 121 classes of asset-backed certificates from seven J.P. Morgan Mortgage Trust transactions. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. Credit support for these transactions is provided by subordination. As of the February 2006 remittance date, total delinquencies ranged from 0.49% (series 2004-A4) to 3.40% (series 2004-A3, group 2). None of the pools have experienced any losses. The outstanding pool balances ranged from 65.43% (series 2004-A2) to 78.37% (series 2004-S1) of their original sizes. The collateral for these transactions consists of prime, adjustable-rate, conventional mortgage loans secured by first liens on primarily one- to four-family residential properties. Ratings affirmed: Series Class Rating ------ ----- ------ 2003-A1 1A1,2A1,3A1,4A1,4A2,4A3,4A4,4A5,4A6 AAA 2003-A1 B1 AA 2003-A1 B2 A 2003-A1 B3 BBB 2003-A1 B4 BB 2003-A1 B5 B 2003-A2 1A1,1A2,2A1,2A2,2A3,2A4,2A5,3A1,4A1,4A2,5A1 AAA 2003-A2 B1 AA 2003-A2 B2 A 2003-A2 B3 BBB 2003-A2 B4 BB 2003-A2 B5 B 2004-A1 1A1,2A1,2A2,3A1,3A2,4A1,4A2,5A1,5A2 AAA 2004-A1 B1 AA 2004-A1 B2 A 2004-A1 B3 BBB 2004-A1 B4 BB 2004-A1 B5 B 2004-A2 1A1,1A2,1A3,2A1,2A2,2A3,2A4,3A1,4A1,4A2 AAA 2004-A2 B1 AA 2004-A2 B2 A 2004-A2 B3 BBB 2004-A2 B4 BB 2004-A2 B5 B 2004-A3 IA1,2A1,3A1,3A2,3A3,4A1,4A2,SF1,SF2,SF3 AAA 2004-A3 IB1,SB1 AA 2004-A3 IB2,SB2 A 2004-A3 IB3,SB3 BBB 2004-A3 IB4,SB4 BB 2004-A3 IB5,SB5 B 2004-A4 IA1,1A2,1A3,1A4,2A1,2A2,2A3,3A1 AAA 2004-A4 B1 AA 2004-A4 B2 A 2004-A4 B3 BBB 2004-A4 B4 BB 2004-A4 B5 B 2004-S1 1A1,1A2,1A3,1A4,1A5,1A6,1A7,1A8,1A9,1AP AAA 2004-S1 2A1,2AP,2AX,3A1,3AP,3AX,4A1,4AP,4AX AAA 2004-S1 1B1,CB1 AA 2004-S1 1B2,CB2 A 2004-S1 1B3,CB3 BBB 2004-S1 1B4,CB4 BB 2004-S1 1B5,CB5 B JAMES RIVER: S&P Lowers Unsecured Debt Rating to CCC from CCC+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on James River Coal Co. to 'B-' from 'B'. At the same time, the secured debt rating was lowered to 'B' from 'B+' and unsecured debt rating to 'CCC' from 'CCC+'. The outlook is developing. "The ratings downgrade reflects the company's weaker-than-expected performance and heightened concerns that its efforts to contain escalating costs may be insufficient and result in continued contraction of its margins and further erosion of its limited liquidity," said Standard & Poor's credit analyst Paul Vastola. Moreover, should negative free cash flows persist, the company may have to scale back on its 2006 capital expenditure budget, delaying spending needed to increase production and lower costs in future years. In addition, pressure from aggressive shareholders and the exploration of strategic alternatives to maximize shareholder value are likely to be an additional distraction to management. The ratings on Richmond, Virginia-based James River reflects its: * small size, * high operating costs, * aggressive capital spending plan, and * capital-intensive operations. The ratings also take into account the company's: * aggressive financial profile, * negative free cash flows despite strong coal prices, and * tightening liquidity. With expected 2006 production of 14 million tons, James River is a relatively small coal producer with about three quarters of production located in the difficult operating environment of Central Appalachia. James River emerged from bankruptcy in May 2004 with its Central Appalachian assets. Subsequently, the company acquired mining assets located in the Illinois coal basin on May 31, 2005, that account for approximately one quarter of production. However, the amount of coal reserves associated with the Illinois basin mine was low and only expected to last five years. To increase the life of these mines, James River entered into a definitive agreement on March 1, 2006, to purchase 16 million tons for approximately $9 million. The developing outlook indicates that ratings could be raised, affirmed, or lowered. The company has engaged an investment bank as a financial advisor to explore strategic alternatives to maximize shareholder value, including: * a sale of the company; * a merger with a company of equal size; or * an acquisition of smaller companies. Given James River's tight liquidity and significant challenges, ratings on the company may soon be lowered if operating performance does not improve and the financial profile continues to deteriorate. Ratings could be raised if the company's credit profile were to improve as a result of its being acquired by a stronger entity. LONG BEACH: Moody's Reviewing Ba3 Ratings on Two Cert. Classes -------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade six certificates from three deals from Long Beach Mortgage Company deals, issued in 2002. The transactions are backed by primarily first lien adjustable and fixed rate subprime mortgage loans originated by Long Beach. The master servicer on the deals is Long Beach Mortgage Company. The six subordinate classes are placed on review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pools. The transactions have taken significant losses causing gradual erosion of the overcollateralization. In addition, the severity of loss on the liquidated loans has begun to increase due among other factors to a higher concentration of manufactured housing loans. Moody's will also focus on the various triggers available to the transactions and how they have helped protect investors. Review for downgrade: Long Beach Mortgage Loan Trust Asset Backed Certificates * Series 2002-1; Class M-3, current rating Baa3, under review for possible downgrade * Series 2002-2; Class M4A, current rating Ba3, under review for possible downgrade * Series 2002-2; Class M4B, current rating Ba3, under review for possible downgrade * Series 2002-5; Class M-3, current rating Baa2, under review for possible downgrade * Series 2002-5; Class M-4A, current rating Baa3, under review for possible downgrade * Series 2002-5; Class M-4B, current rating Baa3, under review for possible downgrade MILLAR WESTERN: S&P Downgrades Sr. Unsecured Debt Rating to B- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on pulp and lumber producer Millar Western Forest Products Ltd. to 'B-' from 'B+'. The company has about CDN$220 million in debt outstanding. The outlook remains negative. "Assuming the Canadian dollar remains at 86 U.S. cents, and pulp and lumber prices do not materially improve, we believe the company's cash generation (estimated EBITDA of CDN$20 million) will not be sufficient to cover its interest obligations and capital spending in 2006," said Standard & Poor's credit analyst Dan Parker. "We believe its cash balance and credit line availability will provide adequate liquidity to cover the potential shortfall from operations this year, but cash generation will need to significantly improve in 2007," Mr. Parker added. The ratings on Edmonton, Alta.-based Millar Western, a privately held pulp and lumber producer, reflect: * the company's exposure to volatile prices; * an aggressive capital structure; and * limited geographic and operating diversity. These risks are partially offset by low energy and fiber costs and a high degree of fiber self-sufficiency. The sharp appreciation of the Canadian dollar and weak pulp prices will hurt Millar Western's earnings and cash flow. EBITDA is negatively affected by about CDN$2.5 million for every one cent appreciation in the Canadian-to-U.S. dollar exchange rate. The Canadian dollar (currently at about 86 U.S. cents) has appreciated by more than 6 U.S. cents since the end of June 2005. The currency situation will depress cash flow generation as the company's remaining hedges roll off at the end of the third quarter, and the company will be hard pressed to sustain or improve its credit metrics. Millar Western owns and operates a pulp mill and two sawmills in Alberta, in addition to receiving management fees and sales commissions for operating the Meadow Lake pulp mill in Saskatchewan. Pulp accounts for about 55% of sales, with lumber accounting for the remaining 45%. The outlook is negative. The higher average Canadian dollar and cost pressures will have a negative effect on the company's cash generation, and Millar Western's credit metrics will come under further pressure. Nevertheless, the company's cash balance provides sufficient liquidity to deal with the current difficult conditions. If pulp and lumber prices do not improve sufficiently to offset the currency situation, the company will have to examine strategic options to reduce debt as the company's weak earnings might be insufficient to support the debt load over the longer term. MOVIE GALLERY: Moody's Junks $920-Mil. Facility & $325-Mil. Notes ----------------------------------------------------------------- Moody's Investors Services downgraded the long term debt ratings of Movie Gallery, Inc., and affirmed the company's speculative grade liquidity rating of SGL-4. The outlook remains negative. The downgrade reflects Moody's expectation that the company's performance will deteriorate during 2006 resulting in significantly weakened liquidity, further erosion in credit metrics, and negative free cash flow. The downgrade of the senior notes to Caa3 reflects Moody's expectations of recovery in a distressed scenario, should it occur, given the large amount of secured bank debt ahead of this class of bondholders. These ratings are downgraded: * Corporate family rating to Caa1 from B2; * $920 million of senior secured credit facilities to Caa1 from B2; * $325 million of guaranteed senior notes to Caa3 from B3. This rating is affirmed: * Speculative grade liquidity rating of SGL-4. The rating outlook remains negative. The downgrade to Caa1 reflects Moody's concern that Movie Gallery's liquidity profile will erode further given the company's expected negative free cash flow, the reduction of on-balance sheet cash levels during the first two quarters, and lower levels of revolver availability. Given the degree to which Movie Gallery will need to further utilize its $75 million revolver in order to be able to meet all of its cash requirements during 2006, the company's liquidity cushion is likely to be tight. Additionally, Movie Gallery expects to violate its covenants for the first quarter of 2006 unless the bank group approves a second amendment. The Caa1 rating reflects the increased risk of a potential restructuring given the level of debt relative to cash flow from operations, the company's weakened liquidity, and its constrained operating performance. Negative industry pressures have worsened given the increased probability that the movie studios plan to test bringing forward the window for video-on-demand services. Other negative industry trends show no sign of improvement: 1) the pricing war resulting from on-line competition and Blockbuster's no-late-fee program continues; 2) the new release schedule continues to be lackluster; and 3) consumers continue to trend towards buying rather than renting given the low pricing by retailers such as Wal-Mart. Over the longer term, the roll-out of high definition DVD and the highly fragmented nature of the video/DVD market will benefit Movie Gallery; however, these benefits are unlikely to cause any improvement in the company's performance anytime soon. Moody's expects Movie Gallery to actively pursue a reduction in capital expenditures, expense savings, and non core asset sales. The negative outlook reflects Moody's expectation that industry trends could place additional downward pressure on operating performance, thereby further eroding enterprise value and likely recoveries in a distressed situation. Ratings could be downgraded should likely recovery values decline further. The outlook could stabilize if the company's performance and the home rental industry show strong signs of stabilization. While an upgrade is currently unlikely, upward rating momentum would require an improvement in Movie gallery's liquidity and reasonable prospects of a reduction in leverage to a manageable level. The SGL-4 represents a further weakening in liquidity. The company currently expects to violate its first quarter financial covenants unless the bank group approves a second amendment. While Moody's had previously expected the company to violate covenants, it now also seems likely that the company will need to borrow on a sustained basis in order to support its cash needs over the next twelve months. The company's available on balance sheet cash, along with operating cash flow, is unlikely to be sufficient to fund the excess cash flow sweep of cash generated in 2005, debt amortization, working capital, and capital expenditures levels, thereby resulting in sustained borrowings under its revolver credit facility. All assets are pledged to the secured banking facilities providing the company with limited alternative sources of liquidity. The company could potentially sell Game Crazy, its limited portfolio of owned real estate, and non core assets. Movie Gallery, headquartered in Dothan, Alabama is a leading provider of in-home movie and game entertainment in the United States. It operates approximately 4,800 stores in the U.S. and Canada under the banners of Movie Gallery for the LTM period ended Sept. 30, 2005 were approximately $2.6 billion. NATIONAL CENTURY: JPMorgan Settles Creditor Dispute for $425MM -------------------------------------------------------------- JPMorgan Chase & Co. reached a $425 million settlement deal with creditors of National Century Financial Corp., The Denver Post reports. The creditors accused JPMorgan, along with other financial institutions, of allowing the Company to violate applicable indentures and securities law. National Century sought bankruptcy protection in November 2002 after defaulting on over $3 billion of debt. A group of creditors known as the Arizona Noteholders will receive $375 million of the Settlement Proceeds and the remaining $50 million will be paid to National Century's unsecured creditors. Rhonda L. Lipschutz at The Deal reports that the $375 million payment to the noteholders is far below the $1.6 billion owed to them. The Deal adds that National Century's former chief executive Lance Poulsen currently faces a lawsuit filed by the Securities and Exchange Commission. Donald S. Ayers, the former chief operating officer; Rebecca S. Parrett, the former director in the accounts receivable servicer department; and former chief financial officer Randolph Speer are also named as defendants. The SEC accuses the executives of defrauding investors, leading to losses of more than $2.6 billion. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents the Debtors. When it filed for bankruptcy, National Century listed $3,800,000,000 in assets and $3,600,000,000 in debts. NATIONAL ENERGY: Steering Panel Wants Reserve for Some Claims ------------------------------------------------------------- Patricia A. Borenstein, Esq., at Miles & Stockbridge P.C., in Baltimore, Maryland, recounts that on November 14, 2005, lenders to the Lake Road and La Paloma power projects formally asserted additional Class 3 Lake Road and La Paloma Project Guarantee Claims against National Energy & Gas Transmission, Inc., consisting of: (i) an aggregate of $90,872,297 in Tranche A loan interest accrued by the non-debtor Project companies from July 8, 2003, through the dates of transfer of the Projects; and (ii) $10,616,672 in expenses incurred by the Project companies after July 8, 2003. The Lenders asserted that both claims constitute obligations guaranteed by NEGT under the Lake Road and La Paloma Project Guarantees. At NEGT's request, the Court disallowed the Additional Claim Amounts. Consequently, the Lenders took an appeal of Judge Mannes' decision to the U.S. District Court for the District of Maryland. The appeal remains pending. The Steering Committees for the Lake Road and La Paloma project credit facilities -- on behalf of the Lake Road and La Paloma Lenders -- ask the Court to compel NEGT to include the Additional Claim Amounts in the Disputed Claims Reserve established under NEGT's confirmed Third Amended Plan of Reorganization until the allowance or disallowance of the Additional Claim Amounts is resolved by Final Order. Ms. Borenstein contends that NEGT should be compelled to comply with the terms of its Plan and to include the Additional Claim Amounts in the Disputed Claims Reserve going forward because: -- the Additional Claim Amounts were not known on the Plan Effective Date when the Disputed Claims Reserve was originally established; -- no Class 3 creditor will be prejudiced if NEGT is compelled to comply with the express terms of its Plan because no creditor has a right to receive more than its pro rata share of the Cash and Non-cash Consideration. Hence, if the Additional Claim Amounts are ultimately Allowed, the Class 3 Claims pool should fall within the range set forth by NEGT in its Liquidation Status Report, so no Class 3 creditor is being prejudiced; and -- the existing Disputed Claims Reserve is reportedly sufficient to encompass the Additional Claim Amounts without requiring NEGT to recover any Distributions already paid out to Class 3 creditors. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) NAVISITE INC: Atlantic Investors Extends Loan Payment Deadline -------------------------------------------------------------- Atlantic Investors, LLC, gave NaviSite, Inc., more time to pay the Company's obligations under January 29, 2003, Loan and Security Agreement. NaviSite has until the earlier of: * April 3, 2006; or * five business days following the closing of a financing transaction or disposition pursuant to which NaviSite will receive net proceeds of $13.0 million after satisfying the mandatory prepayment obligation under those certain promissory notes issued to Waythere, Inc. (formerly known as Surebridge, Inc.). Drawings under the $10.0-Mil. Loan and Security Agreement bears an interest rate of 8% per annum. Interest is payable upon demand or, at Atlantic's option, interest may be added to the outstanding balance. At October 31, 2005, NaviSite had $3.0 million outstanding under the Atlantic Loan. The Atlantic Loan is secured by all of our receivables and is subordinated to the borrowings from Silicon Valley Bank. At October 31, 2005, NaviSite had approximately $0.6 million in accrued interest related to this note. Atlantic Investors owns majority of NaviSite. As of Feb. 23, 2006, Atlantic Investors owned approximately 60% of the issued and outstanding shares of NaviSite's common stock. In addition, Andrew Ruhan, NaviSite's Chairman of the Board, holds a 10% equity interest in Unicorn Worldwide Holdings Limited, a managing member of Lender. Arthur Becker, NaviSite's President and Chief Executive Officer, is the managing member of Madison Technology LLC, a managing member of Lender. NaviSite Inc. -- http://www.navisite.com/-- provides IT hosting, outsourcing and professional services for mid- to large-sized organizations. Leveraging a proven set of technologies and extensive subject matter expertise, the Company delivers cost- effective, flexible solutions that provide responsive and predictable levels of service for our clients' businesses. Over 900 companies across a variety of industries rely on NaviSite to build, implement and manage their mission-critical systems and applications. NaviSite is a trusted advisor committed to ensuring the long-term success of our customers' business applications and technology strategies. NaviSite has 15 state-of-the-art data centers and eight major office locations across the U.S., U.K. and India. As of October 31, 2005, Navisite's equity deficit almost doubles to $5,052,000 from a $2,672,000 deficit at July 31, 2005. NEIMAN MARCUS: Earns $3 Million in Second Qtr. of Fiscal Year 2006 ------------------------------------------------------------------ The Neiman Marcus Group, Inc., delivered its financial results for the second quarter of fiscal year 2006, to the Securities and Exchange Commission on Mar. 9, 2006. On October 6, 2005, the Company announced the completion of the acquisition of Neiman Marcus by an investor group led by Texas Pacific Group and Warburg Pincus LLC. The accompanying consolidated statements of earnings and related information present the Company's results of operations for the period preceding the acquisition (Predecessor) and the period succeeding the acquisition (Successor). The results of operations for the fiscal year to date period has been prepared by comparing the mathematical combination of the Successor and Predecessor periods in the 26 weeks ended January 28, 2006 to the results of the Predecessor for the 26 weeks ended January 29, 2005. The presentation does not comply with generally accepted accounting principles, but the Company believes that it provides a more meaningful method of comparison. For the 13 weeks ended January 28, 2006, the Company reported $3.04 of net income on total revenues of $1.23 billion compared to $70.59 million of net income on $1.13 billion of total revenues in the prior year. Comparable revenues increased 6.4 percent. Operating earnings for the second quarter of fiscal 2006 were $73 million compared to $120 million for the second quarter of fiscal year 2005. Adjusted operating earnings were $122 million in the second quarter of fiscal year 2006 compared to $120 million in the second quarter of fiscal year 2005. For the 26 weeks ended January 28, 2006, the Company reported total revenues of $2.21 billion compared to $2.04 billion in the prior year. Comparable revenues increased 7.3 percent. Operating earnings for the 26 weeks ended January 28, 2006 were $177 million compared to $230 million for the comparable period a year ago. Adjusted operating earnings for the 26 weeks ended Jan. 28, 2006, were $262 million compared to $245 million for the comparable period a year ago. Other Items As a result of the acquisition, the Company recorded costs related to the amortization of customer lists and favorable lease commitments of approximately $18.9 million and $4.9 million in the second and first quarters of fiscal year 2006. The Company recorded non-cash charges included in cost of goods sold related to various valuation adjustments of approximately $30.6 million and $7.8 million in the second and first quarters of fiscal year 2006, respectively. Also, prior to consummation of the acquisition, the Company recorded in the first quarter of fiscal year 2006 transaction and other costs of approximately $23.5 million. The Company sold its Chef's Catalog direct marketing business in November 2004 and recorded a loss in connection with the sale of approximately $15.3 million in the first quarter of fiscal year 2005. Comparable revenues have been adjusted to exclude the sales of Chef's Catalog prior to its disposition. Headquartered in Dallas, The Neiman Marcus Group, Inc. -- http://www.neimanmarcusgroup.com/-- operates Neiman Marcus and Bergdorf Goodman stores, in addition to both print and online retail businesses. * * * As reported in the Troubled Company Reporter on Feb. 7, 2006, Moody's Investors Service confirmed the B1 rating on Neiman Marcus Group, Inc.'s legacy $125 million 7.125% debentures due in 2028, concluding the review for possible downgrade of this debt issue. The rating on this debt was lowered on Sept. 20, 2005, but kept on review for possible downgrade to cover the unlikely event that expected security would not be forthcoming. This rating action is based on the fact that the debentures do share in the first lien on certain of the real property that secures Neiman's senior secured term loan, as anticipated. Rating confirmed: * 7.125% debentures due 2028 at B1 Ratings affirmed: * Corporate Family Rating at B1 * $1.975 billion senior secured guaranteed term loan at B1 * $700 million senior unsecured guaranteed PIK/cash notes issued under Rule 144A at B2 * $500 million senior subordinated unsecured guaranteed notes issued under Rule 144A at B3 * Speculative Grade Liquidity Rating at SGL-2 NEW CENTURY: Moody's Puts Low-B Ratings on Cert. Classes M-& & M-8 ------------------------------------------------------------------ Moody's Investors Service assigned Aaa rating to the senior certificates issued by New Century Home Equity Loan Trust 2006-S1, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by New Century Mortgage Corporation originated, fixed-rate, closed-end second-lien mortgage loans acquired by New Century Credit Corporation. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, prepayment charges, and an interest-rate swap agreement provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 9.60% to 10.10%. New Century Mortgage Corporation will service the loans. New Century Financial Corporation will act as master servicer. The complete rating actions are: New Century Home Equity Loan Trust, Asset Backed Notes, Series 2006-S1 * Class A-1, Assigned Aaa * Class A-2a, Assigned Aaa * Class A-2b, Assigned Aaa * Class M-1, Assigned Aa2 * Class M-2, Assigned A2 * Class M-3, Assigned A3 * Class M-4, Assigned Baa1 * Class M-5, Assigned Baa2 * Class M-6, Assigned Baa3 * Class M-7, Assigned Ba1 * Class M-8, Assigned Ba2 NORTEK INC: Moody's Holds Junk Rating on $625 Mil. Senior Notes --------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of NTK Holdings, Inc. and Nortek, Inc., but has changed the company's ratings outlook to negative. The change to a negative ratings outlook primarily reflects a number of expected changes to be completed under a proposed amendment to the company's senior secured credit agreement that Moody's views to be credit negative. The amendment is being prompted by the company's desire to acquire a commercial HVAC business for approximately $50 million. Moody's notes that the acquisition seems to fit well with Nortek's ongoing business and its strategy to supplement its organic growth with periodic strategic acquisitions; however, the amendment also appears to be providing Nortek with additional flexibility to pursue prospective acquisitions although the existing financial covenants, i.e. leverage, coverage, etc., are expected to remain unchanged. Nevertheless, given the company's acquisition track record -- 12 acquisitions in the last 3 years -- future acquisitions are likely to continue. The amendment will also include an upsizing of the $100 million revolving credit facility to $200 million. These ratings for NTK Holdings, Inc. have been affirmed: * $403 million senior discount notes, due 2014, affirmed at Caa2; * Corporate Family Rating, affirmed at B2. These ratings for Nortek, Inc. have been affirmed: * $200 million senior secured revolving credit facility, due 2010, affirmed at B2; * $691.25 million senior secured term loan, due 2011, affirmed at B2; * $625 million 8 1/2% senior subordinated notes, due 2014, affirmed at Caa1. The ratings outlook has been changed to negative from stable. In recent years, Nortek has opted to pursue an acquisition driven growth strategy to build new business areas where it sees greater potential. This strategy has also led the company to pursue acquisitions in faster growing market segments, such as the home technology segment which has altered the company's product mix to some degree as the company's Home Technology Products segment has grown to represent approximately 18% of sales in 2005 versus 8% in 2003. While this shift in the company's product mix may offer greater longer term benefits, Moody's remains concerned with the company's continued focus on acquisition driven growth in light of its aggressive dividend policy which clearly appears to have taken precedence over improving the company's balance sheet. Moody's notes that substantial improvements in the company's balance sheet may have been visible were it not for the company's use of debt and its excess cash to acquire new businesses and to make dividend and deferred income payments. Although Nortek has been successful in finding a number of small strategic acquisitions that appear to have been successfully integrated into the company's operations, the existing leverage levels in Moody's view leave little room for any missteps. A further change in the company's product lines or an acceleration of the company's acquisition strategy would be less of a concern, were it not for the company's current high leverage and aggressive dividend policy. The affirmed ratings take into consideration existing high leverage and low free cash flow generation relative to debt levels. The company's total debt to EBITDA using Moody's standard analytic adjustments at FYE 2005 was approximately 6 times, principally due to a $187 million dividend payment to THL-Nortek Investors, LLC which has left the company with little cushion at the current rating level. At the same time, the ratings are supported by the company's improved operating margins as a result of more effective cost management and strong brand names. As a result, the EBITDA margin in FY 2005 improved to 14.5% from 12.4% a year ago as Nortek was able to reduce its cost of goods sold as a percentage of sales to 69.5% from 71.6%. Reported EBITDA for 2005 increased by over 25% to $283 million. The company produces its products under many well-known brand names including Broan, Newtone, Westinghouse, Maytag, and SpeakerCraft. The ratings could be pressured if the company's balance sheet quality were to weaken further due to additional acquisitions that result in higher leverage or further dividend payments in excess of the company's free cash flow generation. Specifically, ratings could be downgraded if the company's free cash flow to total debt falls below 3% or if the company's leverage increases to over 6 times for an extended period of time. While an upgrade is highly unlikely over the near term, the outlook could stabilize if free cash flow to debt were to increase to 5-6% and debt to EBITDA were to decline to around 5.5x on a sustainable basis. An upgrade in ratings could only be achieved if the company's debt to EBITDA were to become less than 5 times or if the company's free cash flow to total debt increased to above 9% on a sustainable basis. Headquartered in Providence, Rhode Island, Nortek, Inc., is a leading international manufacturer and distributor of building, remodeling, and indoor environmental control products for the residential and commercial markets. Its products include range hoods and other spot ventilation products, heating and air conditioning systems, indoor air quality systems, and specialty electronic products. NORTEK INC: S&P Assigns B Rating to $900 Million Credit Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' senior secured bank loan rating with a recovery rating of '2' to Nortek Inc.'s $900 million amended and restated credit facility based on preliminary terms and conditions. The 'B' long-term corporate credit rating and all other ratings on the building products manufacturer were affirmed. The outlook is stable. Nortek is seeking to increase its revolving credit facility to $200 million from $100 million and modify certain covenants to accommodate a potential $50 million acquisition and provide additional liquidity to support its growth objectives. "The ratings on Nortek reflect its very aggressive financial policy, heavy debt burden, competitive, cyclical markets, and cost pressures," said Standard & Poor's credit analyst Pamela Rice. Nortek's somewhat diversified portfolio of building products, relatively stable cash flows, and a manageable debt maturity schedule partially mitigate these factors. Providence, Rhode Island-based Nortek's key product lines include: * kitchen range hoods and bath fans; * heating, ventilating, and air conditioning systems for site-built residential, custom-designed commercial, and manufactured housing applications; and * audio/visual distribution and control systems and security and access control products. Standard & Poor's expects: * good brand names; * well-established positions in the major channels of distribution; * new product introductions; and * a focus on low-cost operations to help sustain Nortek's solid market shares. Nortek's cost structure is benefiting from facilities rationalization and the leveraging of direct and indirect sourcing with foreign and domestic suppliers. In addition, branding efforts are driving residential sales in air conditioning and heating products. The company also has some geographic diversity, generating close to 20% of sales outside the U.S. Still, markets are mature and subject to the cyclicality of new residential (including manufactured housing) and commercial construction although more stable replacement and remodeling activity accounts for just over 50% of sales. Earnings diversity provided by Nortek's business mix and the likely continuation of improvement in the company's cost position through strategic sourcing and plant rationalization are positives for stable internal cash generation. Aggressive shareholder actions or a step-up in more sizable debt-financed acquisitions could lead to a negative outlook. Upside ratings potential is limited in the near term by the company's very aggressive financial policy, despite a business position that could support a higher rating. NORTEL NETWORKS: S&P Places B- Corporate Credit Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Nortel Networks Ltd., including the 'B-' long-term corporate credit rating, on CreditWatch with negative implications, after: * Nortel's announced restatement of financial results for: -- 2003, -- 2004, and -- first nine months of 2005; and * a delay in meeting its filing requirements for 2005. The financial restatements are limited in scope and are expected to be modest in comparison with Nortel's previous restatement activities. In addition, Nortel expects to complete its restatements, as well as file its 2005 annual report by the end of April 2006. Nevertheless, Nortel will not be in compliance with its various regulatory filing requirements as of March 16, 2006, and as a result will be in breach of covenants under its recently completed US$1.3 billion credit facility, as well as the EDC support facility. It will subsequently (as of April 1) be in breach of covenants under its public indentures. "Given the limited scope of the restatements and expected short-term resolution of the issue, Nortel should be able to obtain necessary waivers and manage through this period," said Standard & Poor's credit analyst Joe Morin. "Inability to do so, however, could lead to a series of events that would potentially severely strain Nortel's liquidity," he added. Should Nortel complete its filings by the end of April as expected, and there are no further negative consequences arising from this matter, Standard & Poor's will likely affirm the 'B-' rating and assign a positive outlook. OCA Inc: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: OCA, Inc. fdba Orthodontic Centers of America, Inc. 3850 North Causeway Boulevard, Suite 800 Metairie, Louisiana 70002 Tel: (504) 834-4392 Bankruptcy Case No.: 06-10179 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Orthodontic Centers of Alabama, Inc. 06-10180 Orthodontic Centers of Arizona, Inc. 06-10181 Orthodontic Centers of Arkansas, Inc. 06-10182 Orthodontic Centers of California, Inc. 06-10183 Orthodontic Centers of Colorado, Inc. 06-10184 Type of Business: The Debtors specialize in orthopedic surgery. Chapter 11 Petition Date: March 14, 2006 Court: Eastern District of Louisiana (New Orleans) Debtors' Counsel: William H. Patrick, III, Esq. Heller Draper Hayden Patrick & Horn, LLC 650 Poydras Street, Suite 2500 New Orleans, Louisiana 70130 Tel: (504) 568-1888 Fax: (504) 522-0949 Debtors' financial condition as of December 31, 2005: Total Assets: $545,220,000 Total Debts: $196,337,000 The Debtors did not file a list of their 20 largest unsecured creditors. PINNACLE ENTERTAINMENT: Plans to Acquire Aztar for $2.1 Billion --------------------------------------------------------------- Pinnacle Entertainment, Inc.'s (NYSE: PNK) and Aztar Corporation's (NYSE: AZR) Boards of Directors have unanimously approved a definitive merger agreement under which Pinnacle will acquire all of the outstanding shares of Aztar for $38.00 per share in cash. This represents a premium of approximately 24% over Aztar's closing stock price on March 10, 2006. The fully financed transaction is valued at approximately $2.1 billion, including approximately $1.45 billion of equity on a fully diluted basis and approximately $723 million in indebtedness. Together, Pinnacle and Aztar will have assets in most of the largest gaming markets in the U.S., with a strong presence in Nevada, New Jersey, Louisiana, Missouri and Indiana. Including current development projects, the combined company will have an expansive footprint with 12 major gaming properties in the U.S., and more than 8,800 hotel rooms and approximately 22,000 slot machines system-wide. "Combining Pinnacle and Aztar makes tremendous sense," Daniel R. Lee, Pinnacle's Chairman and Chief Executive Officer, said. "This transaction will enable Pinnacle to further broaden and diversify its geographic presence and cash flows, as well as generate cross- marketing synergies. We intend to create a nationwide casino network, not unlike that of some of our larger competitors. We believe that we will be able to leverage the combined company's extensive network to increase customer loyalty across the system and attract additional customers to the company's destination resort/hotel properties in Las Vegas and Atlantic City. The transaction is subject to approval by Aztar shareholders and the satisfaction of customary closing conditions, including the receipt of necessary regulatory and governmental approvals. The transaction is not subject to financing and is expected to close by the end of the year. Pinnacle has received a financing commitment from Bear, Stearns & Co. Inc. and Lehman Brothers Inc. to complete the transaction. Lehman Brothers Inc. and Bear, Stearns & Co. Inc. served as financial advisors to Pinnacle and Wachtell, Lipton, Rosen & Katz and Irell & Manella LLP acted as legal advisors. Goldman Sachs served as financial advisor to Aztar and Skadden, Arps, Slate, Meagher & Flom, LLP acted as legal advisor. About Aztar Corporation Aztar Corp. http://www.aztarcorp.com/-- is a publicly traded company that operates 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. About Pinnacle Entertainment Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc. -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. * * * As reported in today's Troubled Company Reporter, Standard & Poor's Ratings Services revised its CreditWatch implications on Pinnacle Entertainment Inc. (B+/Watch Neg/--) to negative from positive, after Pinnacle signed a definitive merger agreement to acquire the outstanding shares of Aztar Corp. (BB/Watch Neg/--). "The CreditWatch listing on Pinnacle reflects the potential for a substantial weakening in the company's credit profile following the acquisition announcement," Standard & Poor's credit analyst Michael Scerbo said. Also, as reported in the today's Troubled Company Reporter, Fitch Ratings has placed the ratings of Pinnacle Entertainment (NYSE: PNK) on Rating Watch Negative. The ratings affected include: -- Issuer default rating 'B'; -- Senior secured credit facility rating 'BB/RR1'; -- Senior subordinated note rating 'CCC+/RR6'. The Negative Watch reflects Pinnacle's announced merger agreement, under which Pinnacle will acquire all of the outstanding shares of Aztar Corporation for approximately $1.45 billion in cash and assume approximately $723 million of debt. According to Pinnacle management, the transaction is expected to close late in 2006. PINNACLE ENT: Aztar Merger Deal Prompts Fitch's Negative Watch -------------------------------------------------------------- Fitch Ratings has placed the ratings of Pinnacle Entertainment (NYSE: PNK) on Rating Watch Negative. The ratings affected include: -- Issuer default rating 'B'; -- Senior secured credit facility rating 'BB/RR1'; -- Senior subordinated note rating 'CCC+/RR6'. The Negative Watch reflects Pinnacle's announced merger agreement, under which Pinnacle will acquire all of the outstanding shares of Aztar Corporation for approximately $1.45 billion in cash and assume approximately $723 million of debt. According to Pinnacle management, the transaction is expected to close late in 2006. Pinnacle will acquire five casinos that generated $217 million of EBITDA in 2005. Pro forma, the combined entity's cash flow will likely be between $400 million and $425 million, and debt could exceed $3 billion, which would result in debt to EBITDA of more than 7x and EBITDA to interest below 2x. Additionally, the capital needed for several projects makes the opportunity to delever through internally generated cash flow increasingly unlikely in the near to intermediate term. These projects include: * the two St. Louis projects, * the expansions at Belterra and L'Auberge du Lac, * the new hotel at Boomtown New Orleans and * the potential redevelopment of the Las Vegas Tropicana property. Fitch does have a positive view of the transaction from an operational viewpoint. Most importantly, the transaction provides an entry into the desirable Las Vegas and Atlantic City markets. Fitch believes that subsequent to the closing of the transaction, more than a third of Pinnacle's cash flow will be derived from Atlantic City and Las Vegas. Additionally, the transaction will provide further diversification, as the new company will have gaming operations in more than a dozen distinct markets. Fitch will resolve the Negative Watch following clarification of key issues tied to Pinnacle's financing and property development plans. While it is clear that the transaction will be debt- funded, the allocation between secured and unsecured debt has not been disclosed. In addition, any future rating action will incorporate analysis of potential regulatory responses to the proposed transaction and will be influenced by the company's identification of potential revenue and cost synergies. PLIANT CORP: Releases Schedules of Assets and Liabilities --------------------------------------------------------- Pliant Corporation and its debtor-affiliates reported that they have $456,335,995 in total assets to pay for $1,044,146,460 in debts. The Debtors disclosed to the U.S. Bankruptcy Court for the District of Delaware what assets own and what liabilities they owe in their schedules of assets and liabilities. The Schedules of Assets and Liabilities are required filings with the Bankruptcy Court. A. Real Property Industrial Facility - Calhoun, GA $1,200,000 Industrial Facility - Chippewa Falls, WI 1,500,000 Industrial Facility - Dalton, GA 2,200,000 Industrial Facility - (1330) Danville, KY 1,000,000 Industrial Facility - (1360) Danville, KY 2,000,000 Industrial Facility - Harrington, DE 2,850,000 Industrial Facility - Lewisburg, TN 1,300,000 Industrial Facility - Macedon, NY 6,900,000 Industrial Facility - McAlister, OK 2,100,000 Manufacturing Bldg. - Merced, CA 2,150,000 Industrial Facility - Newport News, VA 3,550,000 Industrial Facility - Odon, IN 1,000,000 Pliant Corp. - Deerfield, MA 6,800,000 Pliant Corp. - Kent, WA 8,100,000 Pliant Industrial Facility - GA 1,700,000 B. Personal Property B.1 Cash on hand Petty Cash Funds 6,400 B.2 Bank Accounts LaSalle Bank N.A. - Concentration 2,929,434 LaSalle Bank N.A. - GECC Collections 4,008,594 Wachovia - Concentration 298,738 B.3 Security Deposits Dominion Virginia Power 71,137 GE Commercial Finance Capital Solutions 6,823,248 Mackinac, LLC 68,718 Winthrop Resources 35,221 Other 2,500 B.4 Household goods and furnishings 0 B.5 Collectibles 0 B.6 Wearing apparel 0 B.7 Furs and jewelry 0 B.8 Hobby equipment 0 B.9 Interests in insurance policies Canadian Insurance Policies unknown U.S. Insurance Policies unknown B.10 Annuities 0 B.11 Interest in an education IRA 0 B.12 Interest in pension plans 0 B.13 Stock and interests in businesses ASPEN Industrial, S.A. de C.V. - 99% unknown Jacinto Mexico, S.A. de C.V. - .008% unknown Pliant Corp. Intrn'l. - 100% unknown Pliant Corp. of Canada Ltd. - 100% unknown Pliant Corp. Pty. Ltd. - 99% unknown Pliant de Mexico, S.A. de C.V. - .00002% unknown Pliant Film Products GmbH - 100% unknown Pliant Film Products of Mexico - 100% unknown Pliant Investment, Inc. - 100% unknown Pliant Packaging of Canada, LLC - 100% unknown Pliant Solutions Corp. - 100% unknown Uniplast Holdings, Inc. - 100% unknown B.14 Interests in partnerships or joint ventures 0 B.15 Government and Corporate Bonds 0 B.16 Accounts Receivable 3M - St. Paul 201,199 3M de Pliant Corp. 236,505 3M Mexico SA de CV 394,222 Admiral Packaging, Inc. 430,828 Alcan Packaging - Bellwood 375,615 Alcan Packaging - Shelbyville 6,058,068 Alcan Packaging Canad Ltd. - Weston 137,927 Alcan Packaging Mexico SA de CV 214,353 Allied Packaging Corp. - Sourthern CA 182,555 Allpak, Inc. 261,290 Alpha Group 225,168 American Baker Coop 139,172 American Biltrite 277,626 American Packaging Corp. 491,869 Apex Packaging & Industrial Supply, LLC 178,048 Applied Composites Corp. 109,811 Aqua Terra Biochemical 280,354 Arquest 186,430 Associated Hygienic Products 233,674 Atlantic Packaging - Charlotte 377,058 Atlantic Packaging - Dun 133,135 Atlantic Packaging - Green 384,961 Atlantic Packaging - Tabor 125,188 Atlantic Packaging - Wilmington 102,266 Atlantic Packaging (Donae Pet Care) 266,876 Aunt Millies Bakeries 164,042 Avent Inc. 212,687 Bakery Chief LLC 161,375 Baxter Healthcare Corp. 595,523 Becton Dickinson - Rantoul, IL 1,075,614 Becton Dickinson - Singapore 221,643 Bemis Shelbyville, Inc. 833,347 Birds Eye Foods 611,152 Bismarck Trading Co. 187,932 Bi-State Packaging - Kraft 518 162,454 Bonnie Baking Co. 108,005 Bremner - Poteau Facility 291,628 Bremner - Princeton 186,137 Bryce Company LLC 544,229 Bunzl Houston 103,484 Bunzl Papercraft Philadelphia 141,365 BW Cooney 123,100 C & H Packaging 442,742 Cadillac Products Packaging 586,708 Caleco Soil Services Inc. 936,355 Campbell Soup Co. - Maxton Plant 247,841 Campbell Soup Co. - Napoleon Plant 117,184 Campbell Soup Co. - Sacramento Plant 207,351 Cardinal Health 513,622 Cello Foil 466,335 CIMS 140,126 Clear Cast Technologies 121,097 Clear Lam Packaging 1,043,485 Cold Pack Systems, Inc. 185,994 Consolidated Procurement 160,876 Converting Machinery Technologies 149,684 Costco Wholesale 772,527 Courier Packaging 124,008 CPS Inc. 346,590 Crosstex 160,869 CTI Industries Corp. 244,807 Dake Packaging Products 110,441 Dex Del Noroeste 154,204 El DuPont de Nemours & Co. 324,315 Eternal Chemical Co. 444,245 Eternal Electronic Material Co. Ltd. 110,119 Eternal Technology Corp. 144,190 First Quality Products 740,956 Food Lion Inc. - 443 200,017 Fox Packaging, Inc. 101,814 Freedom Packaging 416,134 Fulton Paper Company 114,819 GE Polymershapes 114,305 Genpak 201,571 George Weston Bakeries - Greenwich 365,986 Gilster - Mary Lee Corp. 231,040 Global Packaging 2,063,987 Gold Medal Bakery Inc. 116,651 Gourmet Express 112,471 Haywood VOC Opps 192,184 Hi Films 434,139 Hollingsworth & Vose Co. 172,969 Hospital Specialty Co. 277,678 Huhtamaki Flexibles - Malvern 171,367 IGA, Inc. 120,911 Imperial Sugar - Savannah 218,725 Industrial Packaging Corp. 362,269 Inland Paper Products 682,380 J R Simplot - Boise 112,525 J&J Converting LLC 272,245 Jesco Industrial Supply 196,682 Johnson & Johnson - Montreal 1,301,662 Johson Bryce Inc. 135,700 JRJ Tomato Inc. 106,150 Kagima Representaciones SA de CV 302,722 Kimberly-Clark de Mexico SA CV 167,824 Kimberly-Clark Global Sales Inc. 1,512,869 Kiss Baking 163,297 Knauf Fiberglass 310,351 Kraft Canada 458,666 Kraft Foods - Naperville 242,552 Kraft Foods Inc. (SA-5371) 310,387 Kraft Foods Inc. (SA 5375) 533,132 Kraft Foods Inc. (SA 5334) 161,775 Kraft Foods Inc. (SA 5338) 261,518 Kraft Foods Inc. (SA-5385) 398,023 Kroger - Indianapolis 107,545 Kroger - Peytons Mid South 348,709 Kroger - Ralphs Grocery Company (Dist) 125,640 Lakeside Foods 117,860 Little Rapids Corp. 134,475 LPS Industries 218,006 Ludlow Coated Products - Homer 106,546 Martins Famous Pastry 136,086 Master & Frank Enr. Co., Ltd. 462,882 Master Packaging 184,960 MCA Empaquess SA de CV 785,920 Meridian - Grabill SMC 213,120 Mission Foods - Dallas 166,884 Mission Foods - Fife 147,802 Mission Foods - Fresno 222,250 Mission Foods - Goldsboro 181,511 Mission Foods - Houston 150,663 Mission Foods - Jefferson 217,268 Mission Foods - Olympic 489,947 Mission Foods - Penn 141,475 Mission Foods - Pueblo 126,373 Mission Foods - Rancho 535,615 Mission Foods - Tempe 144,526 MJB Plastics, Inc. - 336 101,263 Molnlycke Health Care, SA de CV 257,464 Monte Package Co. 282,021 Multipak Ltd. 106,209 Nan Ya Plastics 244,873 New Bakery of Ohio 110,633 New World Pasta - St. Louis 100,895 Nickles Alfred Bakery 244,636 NORPAC Foods 158,337 North American Corp. 351,293 North States Flexible 644,063 Northeast Foods Inc. - Parent 306,675 NPS - GA 806,810 NPS - NJ 441,913 Nutrigo SA de CV 224,274 Oracle Flexible Packaging, Inc. 124,503 Outlook Label Systems Inc. 126,150 Overwraps Inc. 148,796 Packaging Specialties Inc. 700,234 Pakwest Paper & Packaging 118,243 Paper-pak Industries 487,383 Paper-Pak Products 1,995,318 Patterson Frozen Food 119,652 Pechiney Plastic Pkg. Inc. - Joplin 225,253 Pechiney Plastic Pkg. Inc. - Menasha 1,835,833 Pepperidge Farms - Aiken 107,249 Pepperidge Farms - Denver 162,211 Pepperidge Farms - Downers Grv 353,449 Pepperidge Farms - Lakeland 409,026 Pepperidge Farms - Norwalk 281,460 Pepsico Supplier Financial Services 426,593 Pictsweet Frozen Foods 737,800 Pinnacle Foods Group Inc. - NJ 116,204 Pinnacle Foods Group Inc. - TN 157,756 Plastic Packaging Inc. - NC 128,593 Premix Inc. 112,317 Presto Absorbent Products Inc. 258,214 Presto Tape 290,196 Printpack Inc. - Greensburg 138,665 Printpack Packaging de Mexico SA de CV 121,504 PSI - (IND) 114,794 Publix Super Markets 468,944 Publix Super Markets, Inc. - Expense 195,960 Publix Super Markets, Inc. - Merchandising 201,171 Quality Polymers Inc. 151,300 R. Sabee Company LLC 102,755 Rainier Plastics Inc. 114,294 Ralston Foods - Battle Creek 107,978 Ralston Foods - Lancaster 128,296 Reflectix 293,134 Regal Poly-pak 461,538 Riceland Foods Inc. 215,480 Rollprint Packaging 179,634 RWE SCHOTT Solar 170,701 Sara Lee Bakery Group Inc. 172,659 Schlegel Manufacturing 713,873 Schmidt Baking Co. 203,847 Selig Sealing Products Inc. 163,114 Seville Flexpack Corp. 392,889 Seville Packaging Inc. 144,793 Sierra Coverting Corp. 206,229 Smurfit Stone Flexible Pkg. - WI 193,003 Sobeys Inc. - Quebec - Hudon 351,296 Sonoco Flexible Pkg. - Charlotte 200,693 Sonoco Flexible Pkg. - Edinburgh 449,509 Sonoco Flexible Pkg. - Franklin 102,646 Sonoco Flexible Pkg. - Morristown 367,014 Spartech Plastics 284,667 Specialty Packaging Inc. 147,836 Star Packaging Inc. 238,036 Supervalu Bakery Dept. 283,320 Tape Products Co. - 516 224,602 Tape Products Co. - 518 164,547 Taylor & Fulton Inc. 123,394 The Coca-cola Company 397,263 Townsend Farms 165,185 Trinity Plastics 351,296 Twin City Foods 132,077 Tyco Healthcare Group LP 4,181,453 Tyco Healthcare Retail - San Ysidro 1,016,398 Tyco Healthcare Retail GRP - Macon 1,649,804 Tyco Healthcare Retail - KOP 2,187,168 Tyco Plastics 116,195 Ultra-Pak Inc. 125,481 Walmart DC 6008 529,943 Web Converting Inc. (Holliston) 157,528 Web Converting of Fort Wayne, Inc. 465,330 Western Plastics Calhoun 419,869 Weston Bakeris Ltd. - Mississauga 252,684 William-Allen Co. Inc. 162,873 XPEDX - Cincinnati-30 372,104 XPEDX - Denver 132,600 XPEDX - Glendale Heights 196,959 XPEDX - Greenville 103,250 XPEDX - Harrisburg 101,430 XPEDX - Hayward 281,585 XPEDX - Pewaukee 223,249 Others 26,191,471 B.17 Alimony 0 B.18 Other liquidated debts owing debtor 0 B.19 Equitable or future interests 0 B.20 Interests in estate of a decedent 0 B.21 Other Contingent & Unliquidated Claims 0 B.22 Intellectual property unknown See http://bankrupt.com/misc/PCExB22.pdf B.23 General intangibles 0 B.24 Customer lists or compilations 2,648,052 B.25 Vehicles 48,071 See http://bankrupt.com/misc/PCExB25.pdf B.26 Boats, motors and accessories 0 B.27 Aircraft and accessories 0 B.28 Office Equipment Chippewa Falls, WI 62,132 Danville, KY 70,293 Kent, WA 47,851 Macedon, NY 428,776 Newport News, VA 282,236 Schaumburg, IL 1,421,153 Others 173,001 B.29 Machinery, fixtures, equipment and supplies Bloomington, IN 13,001,742 Chippewa Falls, WI 13,329,644 Dalton, GA 14,683,920 Danville, KY 10,419,909 Georgia, WA 26,718,431 Harrington, DE 11,715,372 Kent, WA 10,585,409 Lewisburg, TN 13,183,722 Macedon, NY 19,988,360 McAlester, OK 20,701,875 Others 33,736,012 B.30 Inventory Chippewa Falls, WI 7,272,268 Danville, KY 4,298,641 Georgia, WA 10,220,873 Harrington, DE 4,820,272 Kent, WA 8,828,992 Lewisburg, TN 6,807,200 Macedon, NY 15,101,488 McAlester, OK 7,660,418 South Deerfield, MA 7,042,873 Others 16,918,035 B.31 Animals 0 B.32 Crops 0 B.33 Farming equipment and implements 0 B.34 Farm supplies, chemicals and feed 0 B.35 Other Personal Property Major Spare Parts - Macedon, NY 2,243,559 Other receivables - La Mirada, CA 1,100,000 Phenix Note AR - Winston-Salem, NC 864,374 Other Prepaid - Schaumburg, IL 492,605 Major Spare Parts - Kent, WA 446,059 Miscellaneous AR - Schaumburg, IL 419,178 Resin Vendor Rebate - Houston, TX 406,612 Alliant Escrow Account - Chicago, IL 390,950 Prepaid Legal - Kansas City, MO 155,833 Others 1,184,566 TOTAL SCHEDULED ASSETS $456,335,995 ===================================================== C. Property Claimed as Exempt $0 D. Secured Claim General Electric Capital Corp. 132,066,322 Wilmington Trust Co. 11-5/8% Sr. Secured Notes due 2009 269,755,013 11-1/8% Sr. Secured Notes due 2009 266,453,036 Others 246,303 E. Unsecured Priority Claims City of Chippewa Falls - City Treasurer 31,076 City of Kent 4,693 County of Merced 11,840 Monroe County Treasurer 151,364 Pittsburgh County Treasurer 88,512 Treasurer of Davies County 47,592 Others unknown F. Unsecured Non-priority Claims Allen Lev 1,047,124 Ampacet Corporation 840,897 BASF USA 980,470 Chevron Philips Chemical 1,049,625 Clearfield Closure 1,101,537 DuPont - Chicago 961,934 Equistar 2,333,854 GE Capital 811,673 Huntsman Polymers 818,560 Judy Bartolini - BoNY Midwest Trust Co. Account No. 447013AH6 228,383,712 Account No. 729136AC5 110,248,107 Oxyvinyls 1,013,736 Paper Converting 1,280,181 Paper Converting Machine Co. 1,213,624 Sun Chemical Corporation (NJ) 997,930 Total Petrochemicas (f/k/a Atofina) 1,847,055 Litigation Claimants unknown See http://ResearchArchives.com/t/s?681 for list of litigation claimants Others 20,360,690 TOTAL SCHEDULED LIABILITIES $1,044,146,460 ===================================================== Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) RECYCLED PAPERBOARD: Files Disclosure Statement in New Jersey ------------------------------------------------------------- Recycled Paperboard, Inc., of Clifton delivered a Disclosure Statement explaining its Chapter 11 Plan of Orderly Liquidation to the U.S. Bankruptcy Court for the District of New Jersey. Overview of the Plan The Debtor tells the Court that the plan will be funded using proceeds of the sale of its assets and proceeds from the pursuit of avoidance actions and collection of accounts receivables. Treatment of Claims Under the Plan, Administrative Expenses, Priority Tax Claims and Priority Non-Tax Claims will be paid in full. The Secured Claim of the City of Clifton, totaling $683,000, will be paid in full. The Secured Claim of Ackerman Realty Associates LLC, totaling $2.8 million, will be paid in full using available cash remaining from the proceeds of the liquidation of the Debtor's assets. The Secured Claim of V. Ponte & Sons, totaling $1 million, will be paid to extent of available cash remaining after payment of administrative claims, priority claims and the secured claims of Clifton and Ackerman. General Unsecured Claims will receive: (a) an initial pro-rata distribution of funds remaining in the estate after payment of all other claims; and (b) a pro-rata distribution from the collection of accounts receivable and after all Avoidance Actions have been completed. Equity Interest Holders will receive nothing under the Plan and their interests will be extinguished. Headquartered in Clifton, New Jersey, Recycled Paperboard Inc., manufactures recycled mixed paper and newspaper to make index, tag and bristol, and blanks. The Company filed for chapter 11 protection on November 29, 2004 (Bankr. D.N.J. Case No. 04-47475). David L. Bruck, Esq., at Greenbaum, Rowe, Smith & Davis LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $17,800,000 and total debts of $41,316,455. RIDDELL BELL: Moody's Rates $70 Million Credit Facility at B1 ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Riddell Bell Holdings, Inc.'s proposed $415 million senior secured credit facilities, which will fund its acquisition of Easton Sports, Inc., and refinance its existing senior secured bank debt. In February 2006, Riddell announced that it reached an agreement to acquire 100% of the outstanding capital stock of Easton for approximately $385 million. The ratings confirmation primarily reflects the sensible strategic rationale of the acquisition and Moody's belief that credit metrics are still appropriate for the B1 ratings category when considering the significant $190 million equity contribution from sponsors Fenway Partners, Inc. and Teachers' Private Capital. As part of this action, Moody's also affirmed Riddell's SGL-2 speculative grade liquidity rating. Upon completion of the acquisition, Riddell Bell Holdings, Inc. will be renamed Easton-Bell Sports, Inc. The ratings outlook is stable. The ratings are subject to review of final documentation. This action completes a review that was initiated on Feb. 8, 2006. These ratings were assigned: Issuer: Riddell Bell Holdings, Inc. * B1 rating for $70 million guaranteed senior secured revolving credit facility due 2012; * B1 rating for $335 million guaranteed senior secured term loan B due 2012; Issuer: Easton Sports Canada, Inc. * B1 rating for CDN$12 million guaranteed senior secured revolving credit facility due 2012; These ratings were confirmed: Issuer: Riddell Bell Holdings, Inc. * B1 corporate family rating; * B3 for $140 million 8.375% guaranteed senior subordinated notes due 2012; * B1 rating for $50 million guaranteed senior secured revolving credit facility due 2010; * B1 rating for $109 million guaranteed senior secured term loan due 2011. The ratings confirmation recognizes that the Riddell and Easton combination creates a portfolio of strong proprietary brand names with stable and leading market positions in multiple product categories, increases the combined organization's scale and purchasing power, accommodates greater product breadth and depth for its retail customers, allows both companies to leverage each other's technology and unique product development capabilities, diversifies Riddell's customer channels, and increases the proportion of revenues it derives from specialty and big box sporting goods retailers that place greater emphasis on premium products relative to mass merchandisers. Additionally, Easton and Riddell share similar strategies of developing innovative sports equipment that elevates premium price points. The ratings also consider Easton's long operating history and its strong reported operating margins of 14.4% for FY2005, Riddell's substantial NOL's, the combined entity's relatively modest capital expenditure requirements, and the opportunity to realize cost savings through the streamlining of redundant facilities and administrative costs. Notwithstanding these positives, the ratings also reflect Moody's concerns over the large purchase price multiple, still meaningful pro forma leverage with debt to EBITDA over 5.0 times, and the fact that Easton's operating income has remained relatively flat the last couple of years despite strong sales growth. The ratings also reflect the concern that the acquisition will further protract the expected improvements in Riddell's free cash flow to debt metric, which Moody's anticipated following the completion of the Bell Sports integration. Specifically, Moody's believes that increased interest expense and integration spending levels will continue to constrain Riddell Bell's free cash flow to debt metric to the low-single digit range for 2006, although recognizing that free cash flow should be stronger in 2007 as anticipated spending for integration declines. Other ongoing rating restraints include the potential for additional acquisitions, low-growth product categories, the potential for unforeseen integration challenges, product liability risks, and the fact that some of the company's products are subject to discretionary spending trends. The stable outlook reflects Moody's expectation that, despite the magnitude of the transaction, Riddell will not encounter any material challenges as it integrates Easton, particularly when considering Riddell's success integrating Bell Sports and its limited product overlap with Easton. The stable outlook also reflects Moody's expectation that the combined company will compensate for potentially weaker near-term free cash flow metrics by expanding EBITDA levels through innovative product introductions and to a lesser extent cross-selling product through channels. Specifically, Moody's expects that the company's debt to EBITDA will slightly decline below 5.0 times by the end of 2006 and that, despite integration spending, it will sustain a free cash flow to debt in the low-single digits for 2006 and in the high-single digits for 2007. Negative pressure could be applied to the outlook or ratings if the company's debt to EBITDA exceeds 5.5 times, if free cash flow falls to negative levels in 2006, or if free cash flow to debt fails to reach the high single digit levels in 2007. Moody's does not anticipate positive rating pressures over the coming twelve months given limited debt repayment prospects, but could consider favorable actions over the longer- term if leverage declines below 4.5 times or free cash flow to debt increases above 10% on a sustainable basis. As part of this action, Moody's affirmed Riddell's SGL-2 speculative grade liquidity rating. The rating affirmation considers Moody's expectation that a combined Riddell and Easton will generate roughly $10 to $15 million of free cash flow in 2006, which more than adequately covers $3.5 million of term loan amortization. Moody's notes that cash flow variability is highly dependent on actual levels of restructuring spending, the realization of synergies/cost savings as well as the potential for working capital volatility in light of elevated raw material and energy costs. Moody's also expects that the proposed $70 million revolving credit facility will adequately meet the company's seasonal working capital needs, particularly as it builds football inventories through the first half of the year, culminating in an estimated peak usage ranging from $40 million to $45 million in the June quarter. Nevertheless, Moody's anticipates that the company will repay most of this balance by year-end 2006 as receivables from the company's institutional customers are collected and baseball inventories begin to decline. A CDN$12 million revolving credit facility also supplements the company's liquidity. The proposed credit agreement will likely include an interest coverage ratio, maximum leverage ratio, and maximum consolidated capital expenditures. However, the speculative grade liquidity rating is restrained by the fact that substantially all of the company's assets, including the Canadian assets, will be pledged under the proposed senior secured credit facilities. The B1 rating on the senior secured credit facilities reflects their priority position in the capital structure. Parent RBG Holding Corp. and domestic subsidiaries will guarantee the debt and pledge substantially all of their assets and capital stock to the facilities. Material foreign subsidiaries will pledge 65% of their capital stock to the facilities, but will not be guarantors. The Canadian revolving credit facility will be secured by Canadian assets and will benefit from guarantees from U.S. and Canadian subsidiaries. Notching above the corporate family rating is precluded by the predominant position of these facilities in the capital structure. The notching of the senior subordinated notes reflects their contractual subordination and Moody's expectation that the company will file a supplemental indenture adding Easton Sports as a guarantor for these notes. Headquartered in Irving, Texas, Riddell Bell Holdings, Inc., is a leading developer and marketer of head protection equipment and related accessories for numerous athletic and recreational activities. Easton Sports, Inc. is primarily a manufacturer and distributor of sporting goods for team sports, such as baseball, softball, and hockey. Additionally, the company sells bike products on an original equipment manufacturer and aftermarket basis. Both companies have combined revenues of about $600 million. RIVERSTONE NETWORKS: Panel Wants Landis Rath as Local Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Riverstone Networks, Inc., and its debtor-affiliates' bankruptcy cases asks the Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware for permission to retain Landis Rath & Cobb LLP as its local bankruptcy counsel, nunc pro tunc to Feb. 17, 2006. To minimize duplication of efforts, Landis Rath will coordinate its work with Schulte Roth & Zabel LLP, the Committee's lead counsel. Landis Rath will: (a) render legal advice with respect to the powers and duties of the Committee and other participants in the Debtors' cases; (b) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtors' cases and to the extent those matters may affect the Debtors' creditors; (c) participate in negotiations with parties-in-interest with respect to any disposition of the Debtors' assets, plan of reorganization and disclosure statement in connection with that plan, and otherwise protect and promote the interests of the Debtors' creditors; (d) prepare all necessary applications, motions, answers, orders, reports and papers on behalf of the Committee, and appear on behalf of the Committee at Court hearings as necessary and appropriate in connection with the Debtors' cases; (e) render legal advice and perform legal services in connection with those services; and (f) perform all other necessary legal services in connection with the Debtors' chapter 11 cases, as may be requested by the Committee. Adam G. Landis, Esq., a partner at Landis Rath & Cobb LLP, discloses that the Firm's hourly rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Adam G. Landis, Esq. Partner $480 Kerri K. Mumford, Esq. Associate $250 Mr. Landis assures the Court that Landis Rath & Cobb LLP is "disinterested" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code and that the Firm does not have an interest materially adverse to the interest of the estates. Objections to Landis Rath's retention, if any, must be submitted at 4:00 p.m. on Mar. 16, 2006. Judge Sontchi will convene a hearing at 2:30 p.m. on Mar. 23, 2006, to consider the Committee's request. Landis Rath & Cobb LLP -- http://www.lrclaw.com/-- specializes bankruptcy and commercial litigation services. Mr. Landis can be reached at: Adam G. Landis, Esq. Landis Rath & Cobb LLP P.O. Box 2087 919 Market Street, Suite 600 Wilmington, DE 19899 Tel: (302) 467-4400 Fax: (302) 467-4450 Headquartered in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. RIVERSTONE NETWORKS: Trustee Names Equity Security Holders Panel ---------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Court, the United States Trustee for Region 3 appointed five shareholders to serve on an Equity Security Holders Committee in Riverstone Networks, Inc., and its debtor-affiliates' Chapter 11 cases: 1. S-Squared Tech, LLC Attn: Don Rode 515 Madison Avenue New York, New York 10022 Tel: (212) 297-2555 Fax: (212) 297-2550 2. S. Muoio & Co., LLC Attn: Salvatore Muoio 509 Madison Avenue New York, New York 10022 Tel: (212) 297-2555 Fax: (212) 297-2550 3. Portfolio Logic, LLC, Attn: Michael H. McKay 600 New Hampshire Avenue Washington, DC 20037 Tel: (202) 266-7900 Fax: (202) 339-6570 4. Xerion Partners II Master Fund, Ltd. Attn: Daniel Arbess 450 Park Avenue New York, New York 10022 Tel: (212) 940-9828 Fax: (212) 940-9858 5. Lonestar Capital Management, LLC Attn: Yedi Wong One Maritime Plaza, Suite 750 San Francisco, California 94111 Tel: (415) 326-7677 Fax: (415) 362-7977 The Equity Security Holders Committee represents the interests of shareholders in this bankruptcy proceeding. Headquartered in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. ROTECH HEALTHCARE: Reports 4th Quarter & Annual Financial Results ----------------------------------------------------------------- Rotech Healthcare Inc. (NASDAQ: ROHI) reported net revenues for the year ended December 31, 2005 were $533.2 million versus net revenues of $535.3 million for the year ended December 31, 2004. The Company reported net earnings of $5.5 million for the year ended December 31, 2005 as compared to $36.0 million for the year ended December 31, 2004. For the fourth quarter ended December 31, 2005, net revenues were $139.9 million versus $139.7 million as restated for the same period ended December 31, 2004. The Company reported net earnings of $4.3 million for the fourth quarter ended Dec. 31, 2005 as compared to net earnings of $8.9 million as restated for the comparable period last year. The financial results for the current year and quarter were negatively impacted by Medicare reimbursement reductions for respiratory medications and certain items of durable medical equipment effective January 1, 2005 and Medicare reimbursement reductions for the rental of oxygen equipment effective April 1, 2005. Respiratory therapy equipment and services revenues represented 87.8% and 87.6% of total revenue for the year and quarter ended December 31, 2005, respectively, versus 86.6% and 85.6% for the year and quarter ended December 31, 2004, respectively. Durable medical equipment revenues represented 11.2% and 11.6% of total revenue for the year and quarter ended December 31, 2005, respectively, versus 12.4% and 13.4% for the same periods last year, respectively. Consistent with a recent change in industry practice, the Company has modified their statements of operations for the years and fourth quarters of 2005 and 2004 to reflect a change in presentation of certain clinical expenses. Certain respiratory therapy and pharmacy expenses, which were previously classified as selling, general and administrative expenses, are now included in cost of revenues. EBITDA was $106.2 million for the year ended December 31, 2005 as compared to $173.8 million for the year ended Dec. 31, 2004. EBITDA was $30.1 million for the quarter ended Dec. 31, 2005, versus $42.8 million as restated for the quarter ended Dec. 31, 2004. The Company views earnings before interest, income taxes, depreciation and amortization as a commonly used analytic indicator within the health care industry, which serves as a measure of leverage capacity and debt service ability. EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. EBITDA is not determined in accordance with generally accepted accounting principles and thus susceptible to varying calculations, the benchmarks as presented may not be comparable to other similarly titled measures of other companies. Philip L. Carter, President and Chief Executive Officer, commented, "We are pleased to report a solid fourth quarter characterized by solid revenue and EPS growth. Patient counts for the quarter showed respectable increases in both the medicare and managed care parts of the business. During the quarter we recognized other income of approximately $1.5 million related to a legal settlement, and streamlined our field organization which resulted in a severance charge of approximately $1.0 million. Neither of these items are expected to reoccur in the first quarter of 2006." Rotech Healthcare, Inc., is a provider of home respiratory care and durable medical equipment and services to patients with breathing disorders such as chronic obstructive pulmonary diseases. The Company provides its equipment and services in 48 states through approximately 485 operating centers, located principally in non-urban markets. The Company's local operating centers ensure that patients receive individualized care, while its nationwide coverage allows the Company to benefit from significant operating efficiencies. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 2, 2006, Moody's Investors Service downgraded Rotech Healthcare, Inc.'S credit ratings: * $75 Million Revolving Credit Facility, due 2007 to Ba3 from Ba2; * $42 million Senior Term Loan, due 2008 to Ba3 from Ba2; * $300 million face amount Senior Subordinated Notes, due 2012 to B3 from B2; and * Corporate Family Rating to B2 from Ba3. Moody's said the ratings outlook is stable. S-TRAN HOLDINGS: Wants Plan-Filing Period Extended to June 6 ------------------------------------------------------------ S-Tran Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend, until June 6, 2006, the time within which they have the exclusive right to file a reorganization plan and to extend, until Aug. 7, 2006, the time within which they have the exclusive right to solicit acceptances of that plan. The Debtors tell the Court that they are devoting a significant amount of time to addressing: * numerous freight claims filed against them, * cash collateral usage, and * insurance collateral issues. Furthermore, the Debtors are analyzing potential asset recoveries to maximize the value of their estates to the benefit of all creditors. The Debtors argue they should be given a reasonable opportunity to negotiate an acceptable plan with creditors and to prepare adequate financial and nonfinancial information concerning the ramifications of any proposed plan for disclosure to creditors. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. Donald A. Workman, Esq., at Foley & Lardner LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. S-TRAN HOLDINGS: Has Until May 8 to Remove Civil Actions -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave S-Tran Holdings, Inc., and its debtor-affiliates further time, until May 8, 2006, to remove civil actions under Section 1452 of the Judiciary Procedures Code. The Debtors remind the Court that since the bankruptcy filing, they have been occupied with matters of immediate importance to their chapter 11 cases. The Debtors tell the Court that they have devoted their time to address the issue of the numerous freight claims filed against the Debtors and are actively analyzing information relevant to potential asset recoveries for the Debtors' estates. The Debtors say that these matters have taken precedence over analysis of the actions. The Debtors believe that the extension will afford them the opportunity to make fully informed decisions concerning removal of each action and will assure that their rights are not forfeited. The Debtors tell the Court that the rights of their adversaries will not be prejudiced by the extension since any party to an action that is removed may seek to have it remanded by the state court. Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc., provides common carrier services and specialized in less-than- truckload shipments and also supplies overnight and second day service to shippers in 11 states in the Southeast and Midwestern United States. The Company and its debtor-affiliates filed for chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No. 05-11391). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Debtors in their restructuring efforts. Donald A. Workman, Esq., at Foley & Lardner LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $22,508,000 and total debts of $30,891,000. SAINT VINCENTS: Has Until May 31 to Decide on Primary Care Lease ---------------------------------------------------------------- Primary Care Development Corporation, Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates agree to extend the time within which the Debtors must assume or reject the operating lease agreement in connection with the St. Dominic Facility, through and including May 31, 2006. The parties also agree that the Stipulation does not constitute an acknowledgment by the Debtors that the Operating Agreement is a non-residential real property lease. As reported in the Troubled Company Reporter on Jan. 3, 2006, the U.S. Bankruptcy Court for the Southern District of New York extends the time within which the Debtors Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates may assume or reject non-residential real property leases to and including the date confirming a plan of reorganization for the Debtors, subject to these exceptions: (1) With respect to Primary Care Development Corporation and the lease in connection with the St. Dominic Facility, the Debtors' time to assume or reject the lease is extended through and including February 28, 2006; and (2) With respect to the RJ Archer Realty LLC Lease, the Debtors will inform RJ Archer of their intentions with respect to the renewal, assumption or rejection of the Lease on or before April 30, 2006. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Two Prospective Purchasers Hire Proskauer Rose -------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 15, 2006, the U.S. Bankruptcy Court for the Southern District of New York allowed Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to employ Proskauer Rose LLP as their special labor counsel. Proskauer will provide services with respect to issues relating to federal labor law, including, without limitation, representation of the Debtors on issues relating to labor relations, collective bargaining agreements, negotiations, and arbitrations flowing from discharges and contracts interpretation. Proskauer will also act as counsel with respect to other labor related issues as may be requested by the Debtors. David H. Diamond, Esq., a partner at Proskauer, discloses that since Dec. 12, 2005, two prospective purchasers of the Debtors' hospital assets have engaged the firm. The two potential Asset purchasers have executed non-disclosure agreements to receive additional information about the Assets. Mr. Diamond informs the Court that Proskauer will be representing: * Potential Purchaser One in connection with its potential acquisition of St. Vincents Hospital, Staten Island; and * Potential Purchaser Two in connection with its potential acquisition of St. John's Queens Hospital. According to Mr. Diamond, Proskauer has sought and obtained consent and a conflict waiver from the Debtors and each of the Potential Purchasers regarding their concurrent representation. Mr. Diamond assures the Court that the attorneys working on the New Matters and the attorneys working on the Labors Matters are different attorneys, and have been and will remain "screened" from each other. Proskauer holds no interest materially adverse to the Debtors' estates in its capacity as special counsel, Mr. Diamond asserts. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Withdraws Request to Sell Parsons Manor for $12.5M ------------------------------------------------------------------ Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates withdrew their request to sell Parsons Manor, free and clear of all liens, to Kinchung Lam for $12.5 million. Saint Vincents currently owns Parsons Manor, a parcel of real property located at 88-25 153rd Street, Jamaica, New York. Parsons Manor has 21,000 square feet of land, on which sits a 99,144-square foot, six-story building, which was operated by SVCMC partially as clergy housing and as office space for medical and academic chairmen and administrative support. As reported in the Troubled Company Reporter on Oct. 07, 2005, the Debtors intend to use a portion of sale proceeds to reduce amounts due under their postpetition financing agreement with HFG Healthco-4 LLC. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) SCHLOTZSKY'S INC: Court Confirm Joint Liquidating Plan ------------------------------------------------------ Attempts to convert Schlotzsky's, Inc., and its debtor-affiliate's chapter 11 case to a liquidation proceeding under chapter 7 were rendered moot after the U.S. Bankruptcy Court for the Western District of Texas in San Antonio confirmed the Debtors' Joint Plan of Liquidation. As reported in the Troubled Company Reporter on Jan. 24, 2006, Jeffrey and John Wooley, secured creditors holding over $3 million in claims, sought for the Debtors' chapter 7 liquidation. The Wooleys had asserted that a conversion was appropriate because the Debtors had no on-going operations and virtually no revenue. Liquidating Plan The Debtors Plan provides for the orderly liquidation of their remaining properties after the sale of the bulk of their assets to Bobby Cox Companies. Bobby Cox purchased substantially all of the Debtors' assets for $28.5 million in December 2004. The Debtors' chief remaining assets include litigation claims and a parcel of undeveloped real property. Virtually all of the proceeds from the Bobby Cox sale were used to pay secured creditors with liens on the assets sold. As a result, the claims of these creditors have been fully paid: -- Commerce National Bank; -- NS Associates I, LLP; -- Franklin Bank; -- ABC Bank; -- F and M Bank; -- First Volunteer Bank of Tennessee; -- Regions Bank; CIT; and -- GE Capital. Treatment of Remaining Claims The Debtors dispute all remaining secured claims filed against their consolidated estates, including Jeffrey and John Wooley's $3 million claim. The Debtors will reserve funds for probable distribution to the Wooleys pending the final allowance or disallowance of their claims. Pursuant to the Plan, the Debtors may opt to either: a) leave unaltered the legal, equitable, and contractual rights of the holder of any allowed secured claim; b) pay the allowed secured claim in full; c) deliver to secured claimholders the property securing their claims; or d) pay the secured claim holders according to an agreed settlement. Unsecured creditors will receive a pro rata share of the Debtors' remaining available cash after allowed administrative and priority claims are paid in full and the Distribution Reserve is fully funded. All equity interests in the Debtors will be cancelled on the effective date of the Plan. A Plan Administrator will oversee the liquidation of the Debtors' remaining assets as well as pursue causes of action and make distributions to holders of allowed claims. Headquartered in Austin, Texas, Schlotzsky's, Inc., nka SI Restructuring, Inc. -- http://www.schlotzskys.com/-- was a franchisor and operator of restaurants. The Debtors filed for chapter 11 protection on August 3, 2004 (Bankr. W.D. Tex. Case No. 04-54504). Amy Michelle Walters, Esq., and Eric Terry, Esq., at Haynes & Boone, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $111,692,000 in total assets and $71,312,000 in total debts. On Dec. 8, 2004, the Court approved the sale of substantially all of the Debtors' assets to the Bobby Cox Companies for $28 million. SFA CABS: Fitch Shaves Rating on $12MM Class C Notes to CC from C ----------------------------------------------------------------- Fitch Ratings downgrades two classes of notes issued by SFA CABS II CDO, Ltd. These rating actions are effective immediately: -- $77,313,014 class A notes affirmed at 'AAA'; -- $50,000,000 class B notes downgraded to 'B' from 'BB'; -- $12,418,622 class C notes downgraded to 'C' from 'CC'; -- $12,000,000 preference shares remain at 'C'. SFA II is a collateralized debt obligation, which closed May 24, 2001, and is managed by Structured Finance Advisors. SFA II is composed of 41.3% residential mortgage-backed securities, 38.1% asset-backed securities, 15% commercial mortgage-backed securities, and 5.7% CDOs. Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. These downgrades are due to the declining credit quality of the collateral. Since last review, the percentage of the assets 'CCC+' and below has increased to 18.8% as of the Jan. 31, 2006 trustee report from 12.4% as of the Dec. 31, 2004 trustee report, and the weighted average rating factor has increased to 39.4 from 34.3, above its trigger of 16. In addition, all coverage tests are still failing and the class C notes are capitalizing deferred interest. The preference shares are not expected to receive any further distributions. The ratings of the class A and class B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class C notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating on the preference shares addresses the ultimate payment of a 2% dividend and ultimate receipt of the original stated amount. SOUNDVIEW HOME: Fitch Rates Cert. Classes M-10 & M-11 at Low-B -------------------------------------------------------------- Soundview Home Loan Trust 2006-OPT1, asset-backed certificates, series 2006-OPT1, which closed on March 10, 2006 are rated by Fitch Ratings: -- $826,953,000 classes I-A-1 and II-A-1 to II-A-4 (senior certificates) 'AAA' -- $74,844,000 class M-1 'AA' -- $19,366,000 class M-2 'AA' -- $17,272,000 class M-3 'AA-' -- $16,748,000 class M-4 'A+' -- $16,225,000 class M-5 'A-' -- $14,131,000 class M-6 'A-' -- $13,085,000 class M-7 'BBB+' -- $9,421,000 class M-8 'BBB' -- $6,804,000 privately offered class M-9 'BBB-' -- $10,468,000 privately offered class M-10 'BB+' -- $8,374,000 privately offered class M-11 'BB' The 'AAA' rating on the senior certificates reflects: * the 21.00% total credit enhancement provided by the 7.15% class M-1; * the 1.85% class M-2; * the 1.65% class M-3; * the 1.60% class M-4; * the 1.55% class M-5; * the 1.35% class M-6; * the 1.25% class M-7; * the 0.90% class M-8; * the 0.65% privately offered class M-9; * the 1.00% privately offered class M-10; * the 0.80% privately offered class M-11; and * initial and target overcollateralization of 1.25%. All certificates have the benefit of excess interest. In addition, the ratings also reflect: * the quality of the loans; * the soundness of the legal and financial structures; and * the capabilities of Option One Mortgage Corporation as servicer (rated 'RPS1' by Fitch) and Deutsche Bank National Trust Company as trustee. The certificates are supported by two groups of mortgage loans. Group I Mortgage Loans, which totals $588,075,337 as of the cut-off date, consists of 3,374 fixed-rate and adjustable-rate mortgage loans with principal balances that conform to Fannie Mae and Freddie Mac loan limits. Approximately 19.11% of the mortgage loans are fixed-rate mortgage loans, 80.89% are adjustable-rate mortgage loans and 7.25% are interest-only rate mortgage loans. The average outstanding principal balance is $174,296. The weighted average original loan-to-value ratio is 79.24%, the weighted average coupon (WAC) is 8.424%, and the weighted average remaining term to maturity (WAM) is 357 months. The weighted average credit score is 614. The loans are geographically concentrated in: * California (16.50%); * Florida (12.14%); and * New York (10.24%). Group II Mortgage Loans, which totals $458,699,997 as of the cut- off date, consists of 2,075 fixed-rate and adjustable-rate mortgage loans with principal balances that may or may not conform to Fannie Mae and Freddie Mac loan limits. Approximately 17.77% of the mortgage loans are fixed-rate mortgage loans, 82.23% are adjustable-rate mortgage loans and 30.53% are interest-only rate mortgage loans. The average outstanding principal balance is $221,060. The OLTV ratio is 82.03%, the WAC is 8.262%, and the WAM is 357 months. The weighted average credit score is 633. The loans are geographically concentrated in: * California (36.70%); * Florida (12.02%); and * New York (8.14%). All of the mortgage loans were originated by Option One Mortgage Corporation and purchased by Financial Asset Securities Corp., the depositor. Incorporated in 1992, Option One began originating and servicing subprime loans in February 1993. Option One is a subsidiary of Block Financial, which is a subsidiary of H&R Block, Inc. SOUTHWEST GAS: Failed ACC Deal Prompts Moody's to Review Ratings ---------------------------------------------------------------- Moody's Investors Service places under review for possible downgrade the Baa2/negative outlook senior unsecured debt of Southwest Gas Corporation, following the company's recent announcement that the Arizona Corporation Commission issued a final decision not to adopt the company's proposed rate design for balancing accounts, thereby exposing it to continuing earnings risks associated with weather volatility and declining customer use resulting from the effects of gas conservation. At the same time, the company declared that 2005 was one of the 10 warmest years on record and that it lost approximately $17MM in operating margins, primarily as result of lower gas usage. Consolidated net income for 2005 declined 23% from 2004, largely on account of loss in operating margins resulting from warmer than normal weather. Arizona accounts for approximately 55% of SWX's gas distribution business and the ACC decision weighs heavily on the company. In its review, Moody's will consider what other options may be available to the company in terms of mitigating the effects of warmer than normal weather, loss of operating margins on account of gas conservation by customers, the reduction of regulatory lag in dealing with high capital expenditures in a fast-growing service territory and rising operating expenses. Also under review will be the impact of these factors on the company's credit metrics and future financial performance. Ratings of SWX under Review are: * Southwest Gas Corporation - Baa2 senior unsecured * Southwest Gas Capital II - Baa3 preferred trust securities * Southwest Gas Corporation - (P) Ba1 preferred shelf Southwest Gas Corporation is headquartered in Las Vegas, Nevada, and provides natural gas service to over 1.7 million customers in Arizona, Nevada and California. SOYODO GROUP: September 31 Balance Sheet Upside-Down by $35,000 --------------------------------------------------------------- Soyodo Group Holdings, Inc., fka TOP Group Holdings, Inc., delivered an amended quarterly report on Form 10QSB/A for the quarter ending Sept. 30, 2005, to the Securities and Exchange Commission on March 3, 2006. Soyodo Group did not explain the reason for filing an amended quarterly report. For the nine months ended Sept 30, 2005, Soyodo Group reported a $202,546 net loss on $327,541 in net revenues. This compares to a $9,023 net loss on zero revenues for the same period in 2004. At Sept. 30, 2005, Soyodo Group's balance sheet showed $1,123,671 in total assets and $1,159,005 in total liabilities. The Company reports a $421,127 accumulated deficit as of Sept. 30, 2005. As of Sept. 30, 2005, Soyodo Group's stockholders' equity deficit decreased to $35,334 from a $65,295 deficit at Sept. 30, 2004. Going Concern Doubt Michael Johnson & Co., LLC, Soyodo's previous auditing firm, expressed substantial doubt about the Company's ability to continue as a going concern after it audited Soyodo's financial statements for the years ended Dec. 31, 2004, and 2003. The auditing firm pointed to the Company's zero revenues from operations and its $82,788 working capital deficiency as of Dec. 31, 2004. On Feb. 17, 2006, Soyodo retained Jaspers + Hall, PC, as its new independent public accountant. A full-text copy of Soyodo Group's Form 10QSB/A report is available for free at http://ResearchArchives.com/t/s?67b Soyodo Group Holdings, Inc., fka TOP Group Holdings, Inc., was previously involved in investigating opportunities to be acquired by a company that desired to be registered under the Securities Exchange Act of 1934, as amended. STILLWATER MINING: Posts $2.9 Million Net Loss in Fourth Quarter ---------------------------------------------------------------- Stillwater Mining Company reported its financial results for the fourth quarter of 2005 and for the year ended Dec. 31, 2005. For the fourth quarter of 2005, the Company reported a net loss of $2.9 million on revenue of $133.7 million, compared to net income of $3.4 million for the fourth quarter of 2004 on revenue of $118.1 million. The weaker 2005 fourth quarter reflected $5.6 million of increased depreciation and amortization expense attributable to the additional capital placed in service during 2005, and a previously disclosed $1.8 million loss on miscellaneous metals. For the full year 2005, the Company reported a net loss of $13.9 million on revenue of $507.5 million, compared to net income of $29.8 million on revenue of $447.5 million for the year 2004. The 2005 net loss reflects a $21.7 million increase in non-cash depreciation and amortization expense primarily due to capital development placed in service during 2005, $14.2 million in higher operating costs largely attributable to increased material costs, particularly for fuel and steel, and $7.1 million of lower income due to lower prices realized on sales of palladium from the inventory received in the 2003 Norilsk Nickel transaction. Announcing the Company's results, Stillwater Chairman and Chief Executive Officer, Francis R. McAllister said, "During the fourth quarter and full year of 2005, we continued to generate positive operating cash flow, even as our reported earnings were lower due to, among other things, increases in our non-cash depreciation and amortization expense and lower realized metal prices. As a result, cash, cash equivalents and highly liquid short-term investments were $135.9 million at Dec. 31, 2005, up from $109.2 million as of Dec. 31, 2004." Mr. McAllister continued, "Recent strengthening in the palladium price suggests the market is now recognizing the growing role of palladium as a primary jewelry metal and that sales from above ground palladium stocks will be reduced in February 2006, when we complete the two year sales program liquidating our palladium inventory received in the 2003 Norilsk Nickel transaction. Nevertheless, while the recent palladium price increase may be gratifying, Stillwater continues to focus on three key initiatives considered strategic to the Company's long-term sustainability and growth irrespective of PGM prices: transforming our mines, marketing palladium, and diversifying operations." "With respect to transforming our mines, during 2005, we embarked upon long-term changes which, when realized, are expected to change the way we operate our mines, increase production levels and reduce operating costs. They include: * Continuing to advance our safety systems, * Increasing the developed state of both mines, * Expanding the use of selective mining methods, * Increasing production levels, and * Reducing operating costs. These changes were undertaken and progressed well in 2005. We achieved our production goals during the year, which includes growing our PGM recycling activity 27%, exceeded our development efforts, and increased the contained ounces in our proven ore reserves 33%, while spending less than projected. The transition to selective mining now underway will take 3 to 4 years to fully implement, and will enable our people to access ore reserves cost effectively that we now by-pass and increase our realized ore grades. This should add to proven ore reserves, increase production, reduce the amount of secondary development associated with bulk mining methods and reduce the longer-term development needed to sustain targeted production levels." "The production opportunity remains over time to gradually expand the Stillwater Mine from the current 1,944 ton per day rate of production to approximately 2,750 tons per day and the East Boulder Mine from the current 1,359 ton per day rate of production to approximately 2,000 tons per day, rates for which their basic infrastructures were designed. We expect overall costs to be reduced and cost per ounce of production to likewise benefit from this cost reduction as well as from economies of scale as production is increased." "Production at the Stillwater Mine averaged 1,902 tons of ore per day during the fourth quarter and 1,944 tons of ore per day during 2005, a 4% decrease and 2.5% decrease, respectively, from the 1,995 tons of ore per day averaged during 2004. The rate of ore production at the East Boulder Mine averaged 1,527 tons of ore per day and 1,358 tons of ore per day during the fourth quarter and 2005, respectively, an increase of 15% and 2.5% from the 1,326 tons of ore per day averaged during 2004. Although six to nine months behind schedule, the first of two new 1,800-foot ventilation raises at East Boulder was completed in 2005 and the second raise is now well underway." During the fourth quarter of 2005, the Company made $7.4 million in principal payments against the Company's term debt facility. In accordance with the terms of the credit facility, the Company is required to remit 25% of the net proceeds from sales of palladium received in the Norilsk Nickel transaction to prepay its term loan facility. Accordingly, $7.3 million of the long-term debt has been classified as a current liability at Dec. 31, 2005, representing that portion of long-term debt expected to be prepaid under this arrangement during the next three months. At Dec. 31, 2005, the Company has $109.4 million outstanding under its term loan facilities bearing interest at approximately 7.69% and $14.1 million in letters of credit issued under the revolving credit facility, posted as collateral in support of the Company's long-term reclamation obligations. The outstanding letters of credit reduced the amount available under the revolving credit facility to $25.9 million at Dec. 31, 2005. The letters of credit carried an annual fee of 2.375% as of Dec. 31, 2005. The remaining unused portion of the revolving credit facility bears an annual commitment fee of 0.75%. Subsequent to year-end 2005, on January 31, 2006, the Company amended the credit facility to reduce the effective interest rate spread on the original $140 million Term Loan by 100 basis points. A previous provision that required the Company to fix the interest rate on 50% of the outstanding Term Loan balance through Dec. 31, 2007, if and when the underlying three-month LIBOR rate reached 4.50% was also amended, increasing the hedging threshold to 5.50%. Under the terms of the amendment, the Company would incur a 1% penalty on certain re-pricing or voluntary prepayment transactions that take place within one year of the amendment date. Stillwater Mining Company -- http://www.stillwatermining.com/-- is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of South Africa and Russia. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Standard & Poor's Ratings Services revised its outlook on Stillwater Mining Co. to negative from stable. At the same time Standard & Poor's affirmed its 'BB-' corporate credit and its other ratings on the company. "The outlook revision reflects the company's inability thus far to increase its production levels and lower its mining costs," said Standard & Poor's credit analyst Dominick D'Ascoli, "despite heavy capital spending directed toward this goal, which together with the depletion of its equity palladium inventories expected in early 2006 is likely to result in negative free cash flows and a weakened financial profile over the next couple of years. Ratings could be lowered if the company is unable to improve its level of sustainable production and mining costs or if operating disruptions occur that result in a meaningful decline to its liquidity. STRUCTURED ASSET: Moody's Puts Low-B Ratings on Classes B1 & B2 --------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Structured Asset Securities Corporation, Mortgage Pass-Through Certificates, Series 2006-S1, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Lehman Brothers Bank, FSB and various others originated fixed-rate second lien mortgage loans acquired by Lehman Brothers Holdings Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, an interest rate swap agreement, and an interest rate cap agreement. Moody's expects collateral losses to range from 6.75% to 7.75%. Aurora Loan Services LLC and GMAC Mortgage Corporation will service the loans. Aurora Loan Services LLC will also act as master servicer. Moody's has assigned Aurora its SQ2+ servicer quality rating as a master servicer. The complete rating actions are: Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-S1 * Class A1, Assigned Aaa * Class A2, Assigned Aaa * Class M1, Assigned Aa2 * Class M2, Assigned Aa3 * Class M3, Assigned A1 * Class M4, Assigned A2 * Class M5, Assigned A3 * Class M6, Assigned Baa1 * Class M7, Assigned Baa2 * Class M8, Assigned Baa3 * Class B1, Assigned Ba1 * Class B2, Assigned Ba2 SYNAGRO TECHNOLOGIES: Moody's Withdraws B2 Rating on $305MM Loan ---------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Synagro Technologies, Inc., for business reasons. On March 6, 2006, the company announced that it entered into an agreement with its lenders to amend the financial covenants under its credit agreement by increasing the maximum leverage ratio from 4.5 times to 4.9 times, and decreasing the minimum interest coverage ratio from 3.5 times to 2.75 times for 2006. Covenant requirements for fiscal 2007 and 2008 were also modified. Moody's did not rate the amended credit facility. These ratings were affected: * The B2 rated $305 million guaranteed senior secured credit facility, which consists of: -- a $95 million revolver due 2010; -- a $180 million term loan B due 2012; and -- a delayed draw $30 million term B facility due 2012; * The B2 Corporate Family Rating. Synagro Technologies, Inc., based in Houston, Texas is the largest recycler of biosolids and other organic residuals in the United States. The company serves close to 600 municipal and industrial water and water treatment accounts in over 37 states, and is the only organic residual disposal company with national coverage. The company had revenues of $333 million for the twelve months ended Sept. 30, 2005. T&W FUNDING: Portfolio Decline Prompts Fitch to Hold Junk Ratings ----------------------------------------------------------------- Fitch Ratings has withdrawn 8 classes of notes in 4 transactions totaling $41 million in current outstanding securities as of the January 2006 payment date from T&W Funding Company. Many of these classes were previously downgraded by Fitch due to significant portfolio deterioration as a result of higher than expected delinquencies and defaults. These notes rated by Fitch remain at 'C' and the ratings withdrawn: T&W Funding Company VII L.L.C 1997-A -- Class A notes; -- Class B notes. T&W Funding Company IX L.L.C 1998-A -- Class A notes; -- Class B notes. T&W Funding Company X L.L.C 1998-B -- Class A notes; -- Class B notes. T&W Funding Company XII L.L.C 1999-A -- Class A notes; -- Class B notes. Fitch's actions are based on prior loan performance deterioration, which has subsequently reduced the collateral supporting these notes to zero in 3 of the 4 transactions. The T&W Funding Company 1997-A, 1998-A, and 1999-A have no collateral supporting the outstanding notes. As of the January 2006 payment date, the 1997-A, 1998-A, and 1999-A have $8.5 million, $6.9 million, and $19.3 million in outstanding notes. As a result, all 3 transactions are significantly under-collateralized. The T&W 1998-B transaction has $255,167 in collateral supporting $5.9 million in notes, which also results in significant under-collateralization. Based on discussions with the servicer (Lease Dimensions) and historical transaction specific recovery experience, Fitch does not anticipate significant future recoveries. Furthermore, the timeframe for future recoveries is shortened as the final legal maturity dates on 3 of the transactions are in August, May, and October 2006 for the 1997-A, 1998-A, and 1998-B transactions, respectively. The 1999-A transaction will mature in November 2007. As a result, Fitch withdraws all 8 classes. TECH DATA: Earns $29.5 Million of Net Income in Fourth Quarter -------------------------------------------------------------- Tech Data Corporation (NASDAQ:TECD) disclosed its results for the fourth quarter and fiscal year ended Jan. 31, 2006. Net sales for the fourth quarter ended Jan. 31, 2006, were $5.5 billion, a 1.3% decrease from $5.6 billion in the fourth quarter of fiscal 2005 and a 9% increase from the third quarter of the current fiscal year. Income from continuing operations based upon Generally Accepted Accounting Principles for the fourth quarter ended Jan. 31, 2006, was $28.5 million compared to income from continuing operations of $58.1 million for the prior-year period. Results for the fourth quarter of fiscal 2006 include $6.8 million of restructuring charges and $4.4 million of consulting costs related to the company's restructuring program in the EMEA region (Europe, Middle East and export sales to Africa). The fourth quarter of fiscal 2005 includes a benefit of $11.5 million for the reversal of previously accrued taxes related to the favorable resolution of various tax examinations. On a non-GAAP basis, income from continuing operations for the fourth quarter of fiscal 2006, which excludes restructuring charges and consulting costs, totaled $40.2 million. This compares to income from continuing operations on a non-GAAP basis, which excludes the reversal of previously accrued taxes, of $46.6 million in the prior-year period. "We were pleased to complete the fiscal year with strong operating results - highlighted by our continued progress in better aligning our EMEA cost structure," commented Steven A. Raymund, Tech Data's chairman and chief executive officer. "The focused efforts of our employees worldwide once again made the difference throughout our operations." Discontinued Operations The company has entered into an agreement to sell substantially all of the assets and liabilities of its training business in the EMEA region that is considered a non-core operation. While the sale is not final, the transaction is expected to close in March. The training business generated net income of $1 million and $3.6 million in the fourth quarter and fiscal year ended Jan. 31, 2006, respectively. As of the fourth quarter, the results of this business are being reported as discontinued operations as required by accounting standards. Financial results for the current and prior-year periods reported in this press release have been reclassified to reflect this change. Including income from discontinued operations of $1 million net income on a GAAP basis for the fourth quarter of fiscal 2006 was $29.5 million compared to $59.3 million. Net income on a non-GAAP basis, for the fourth quarter of fiscal 2006, including discontinued operations, was $41.2 million compared to $47.8 million in the prior-year period. Fourth-Quarter Financial Summary -- Net sales in the Americas were $2.4 billion, or 43% of worldwide net sales, while net sales in EMEA totaled $3.1 billion, or 57% of worldwide net sales. -- Gross margin was 4.84% of net sales, a decrease from 4.95% of net sales in the third quarter of fiscal 2006 and 5.22% of net sales in the fourth quarter of fiscal 2005. The decline in gross margin was primarily attributable to challenges in the company's EMEA operations and changes in customer and product mix in both regions. -- Operating income was $55.3 million, or 1% of net sales compared to $73.4 million, or 1.31% of net sales in the fourth quarter of fiscal 2005. On a non-GAAP basis, excluding the restructuring charges and consulting costs of $11.2 million, operating income for the fourth quarter of fiscal 2006, was $66.5 million, or 1.20% of net sales. -- Total debt to total capital was 12% at Jan. 31, 2006, a decline from 16% in the prior year. -- During the fourth quarter of fiscal 2006, the company purchased approximately 500,000 shares of common stock at a cost of $20 million, bringing its total shares repurchased during fiscal 2006 to 3.3 million shares at a cost of $120 million. EMEA Restructuring Program The company recorded $6.8 million of charges during the fourth quarter of fiscal 2006 related to its EMEA restructuring program which were comprised of $4 million related to workforce reductions and $2.8 million related to the write-off of fixed assets and facility consolidations. Year-to-date, the company has recorded $30.9 million in restructuring charges and anticipates generating annualized savings of approximately the same amount. The program and related actions are designed to better align the EMEA operating cost structure with the current business environment. Excluding consulting costs, the company expects to incur total charges in the range of $40 million to $50 million related to the EMEA restructuring program and generate annualized savings in the same range. Fiscal Year Results Net sales for the year ended Jan. 31, 2006, were $20.5 billion, an increase of 3.8% from $19.7 billion in the year ended Jan. 31, 2005. On a regional basis, net sales in the Americas were $9.5 billion, or 46% of worldwide net sales, an increase of 11.6% from $8.5 billion in the prior-year period. Net sales in the EMEA region were $11.0 billion or 54% of worldwide net sales, a decrease of 2.0% (0.6% decrease on a local currency basis) from $11.2 billion in the year ended Jan. 31, 2005. Operating income, on a GAAP basis, for the year ended Jan. 31, 2006, was $163.3 million, or .80% of net sales, compared with $231.6 million, or 1.17% of net sales, in the prior year. On a non-GAAP basis excluding restructuring charges and consulting costs of $40.6 million, operating income for the year ended Jan. 31, 2006 totaled $203.9 million, or 1.00% of net sales. Income from continuing operations on a GAAP basis for the year ended Jan. 31, 2006, was $23.0 million, or $.39 per diluted share, compared with income from continuing operations of $159.6 million, or $2.69 per diluted share, in the prior year. On a non-GAAP basis, income from continuing operations for the fiscal year ended Jan. 31, 2006, was $118.0 million, or $2.02 per diluted share, compared to income from continuing operations on a non-GAAP basis of $148.1 million, or $2.50 per diluted share in the prior-year period. On a non-GAAP basis, including $3.6 million of income from discontinued operations, net income for year ended Jan. 31, 2006 totaled $121.6 million, or $2.08 per diluted share compared to $150.9 million, or $2.55 per diluted share in the prior-year period. Business Outlook The outlook for the first quarter ending April 30, 2006, excluding any restructuring charges and consulting costs related to the EMEA region, which are estimated to be $10 to $12 million, or other charges are: -- Net sales are expected to be in the range of $4.85 billion to $4.95 billion. -- Net income is expected to be in the range of $16.0 million to $19.0 million. -- Net income per diluted share is expected to be in the range of $.28 to $.34. -- Net income per diluted share includes approximately $.03 for stock-based compensation resulting from the adoption of Financial Accounting Standards No. 123(R) in the first quarter of fiscal 2007. For the 2007 fiscal year, the pre-tax expense is expected to be approximately $10 million. Founded in 1974, Tech Data Corporation -- http://www.techdata.com/ -- distributes IT products, with more than 90,000 customers in over 100 countries. The company's business model enables technology solution providers, manufacturers and publishers to cost-effectively sell to and support end users ranging from small-to-midsize businesses to large enterprises. Tech Data Corp.'s 2% Convertible Subordinated Debentures due 2021 carry Moody's Investors Service's Ba2 rating, Standard & Poor's BB+ rating and Fitch Ratings' BB rating. TRUMAN CAPITAL: Moody's Downgrades Ratings on Poor Credit Levels ---------------------------------------------------------------- Moody's Investors Service downgraded one tranche issued by Truman Capital Mortgage Loan Trust Series 2002-1 and three tranches issued by Truman Capital Mortgage Loan Trust Series 2002-2. Moody's has confirmed the rating of an additional tranche from the 2002-1 securitization. The underlying collateral in both transactions is comprised of subprime and re-performing residential mortgage loans. The certificates are being downgraded based upon high loss severities upon liquidation as well as low and deteriorating levels of credit enhancement relative to projected losses. Complete rating actions are: Issuer: Truman Capital Mortgage Loan Trust Series 2002-1 * Class M-2; Confirmed at Baa3 * Class B; Downgraded to Caa2; previously B2. Issuer: Truman Capital Mortgage Loan Trust Series 2002-2 * Class M-1; Downgraded to A3, previously Aa2 * Class M-2; Downgraded to Ba2, previously A2 * Class B; Downgraded to Caa2; previously Ba3 UAL CORP: Wants to Settle Internal Revenue Claims for $23 Million ----------------------------------------------------------------- On September 19, 2005, The Internal Revenue Service filed 28 separate administrative expense claims against UAL Corporation and its debtor-affiliates seeking payment of: (a) excise taxes under Section 4971 of the Internal Revenue Code; (b) related penalties under Section 6651 of the Internal Revenue Code; and (c) accrued interest for $114,117,967. David R. Seligman, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, explains that these claims are based on excise taxes imposed on the Debtors for missing minimum funding contributions on their defined benefit pension plans. Section 4971(a) imposes an excise tax for 10% of a pension plan's "accumulated funding deficiency." The Debtors dispute their Section 4971(a) liability to the IRS but have decided to settle the Excise Tax Claims through a closing agreement, rather than to engage in litigation, Mr. Seligman relates. Under the Closing Agreement, the Debtors may sell New UAL Common Stock to satisfy the Excise Tax Claims. The Debtors' Court- approved settlement agreement with the Pension Benefit Guaranty Corporation authorizes the Debtors to direct the PBGC's assignment of 45% of its unfunded benefit liability claim. On January 8, 2006, the Debtors provided notice of their intent to direct the PBGC to assign a portion of the PBGC's claim for the benefit of the United States of America to satisfy the IRS's Excise Tax Claims. The Closing Agreement further provides that the Debtors will pay the IRS in cash the net proceeds of the Stock Sale, but in no event more than $23,000,000 in full satisfaction of the Excise Tax Claims. If the Debtors do not fully pay the IRS the $23,000,000 on or before 120 days after the Effective Date of the Debtors' Plan of Reorganization, then UAL Corporation and each of its subsidiaries will remain liable to the IRS of the unpaid portion, plus interest. In addition, the IRS will be allowed an administrative expense claim for any portion of the $23,000,000 that is not satisfied on or before 120 days after the Effective Date. While the PBGC Settlement Agreement and the Debtors' confirmed Plan each already authorize the Stock Sale to satisfy the Excise Tax Claims, the Closing Agreement itself requires separate Court approval. In this regard, the Debtors ask the Court to approve the Closing Agreement. The Debtors believe that final resolution of the Excise Tax Claims under the Closing Agreement is a better use of their resources than prosecution of an objection for which there is no guarantee of success. Mr. Seligman notes that the Debtors can take advantage of their stock distribution rights under the PBGC Settlement Agreement and the Plan without having to use corporate funds to pay off the administrative expense claim asserted by the IRS. In addition, the IRS has taken a significant discount on its administrative expense claim by agreeing to a $23,000,000 cap under the Closing Agreement. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on February 1, 2006. (United Airlines Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) ULTIMATE DESIGN: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Ultimate Design on Marble & Granite, Inc. aka Total Design on Marble & Granite, Inc. 1415 Hutton Drive Carrollton, Texas 75006 Tel: (972) 242-2595 Fax: (972) 242-1849 Bankruptcy Case No.: 06-31106 Type of Business: The Debtor specializes in quality custom fabrication and installation of home furnishings using natural stone. See http://www.totaldesignonmarble.com Chapter 11 Petition Date: March 13, 2006 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Howard Marc Spector, Esq. Howard Marc Spector, P.C. 12770 Coit Road, Suite 1100 Dallas, Texas 75251 Tel: (214) 365-5377 Fax: (214) 237-3380 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. USA MOBILITY: Paid Bank Debt Cues Moody's to Withdraw Ba3 Ratings ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings of USA Mobility and its subsidiary Metrocall. The ratings have been withdrawn as the company fully repaid its rated bank debt in 2005. Outlook Actions: Issuer: Metrocall, Inc. Outlook, Changed To Rating Withdrawn From Stable Issuer: USA Mobility, Inc. Outlook, Changed To Rating Withdrawn From Stable Withdrawals: Issuer: Metrocall, Inc. * Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba3 Issuer: USA Mobility, Inc. * Corporate Family Rating, Withdrawn, previously rated Ba3 * Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2 USA Mobility is a national paging carrier headquartered in Alexandria, Virginia. USGEN NEW ENGLAND: Battles TransCanada Over New Discovery Requests ------------------------------------------------------------------ After the U.S. Bankruptcy Court for the District of Maryland issued its order directing TransCanada Pipelines Ltd., to answer in full USGen New England, Inc.'s requests for documents and interrogatories regarding the multi-million dollar claim TransCanada has filed against the estate, USGen conducted a deposition on January 31, 2006. Gordon A. Coffee, Esq., at Winston & Strawn LLP, in Washington, D.C., relates that of the additional documents, or reformatted copies of documents produced by TransCanada, only a single e-mail addressed "the issue in the case." To determine why so few e-mails where produced, USGen asked TransCanada's in-house lawyer, Jody Johnson, Esq., how documents responsive to USGen's document requests were searched. Consequently, USGen discovered that in lieu of conducting searches of the company computer database, TransCanada asked 20 individual employees to search their files for documents responsive to USGen's document requests. Ms. Johnson acknowledged that no effort was made to conduct company-wide searches for responsive documents. Ms. Johnson also admitted that she did not know how the 20 individuals went about searching for responsive documents in their files, even though that was one of the topics of the deposition. Ms. Johnson also stated that each of the 20 individuals signed certificates regarding his or her search for documents. However, TransCanada's counsel directed Ms. Johnson not to allow USGen to see the certificates, on the basis that they constitute work product. Files Were Erased Mr. Coffee informs the Court that part of the reason why TransCanada evidently made only a desultory search is that it already deleted many of the documents. The deposition revealed that TransCanada has been routinely destroying relevant documents from the inception of the proceeding. TransCanada took no steps to preserve relevant documents until February 2005, because it did not anticipate any controversy over the amount of its claim, Mr. Coffee says. In February 2005, TransCanada told its employees to retain germane documents. However, it did not alter its back-up system to preserve e-mails and other documents. After the deposition, TransCanada produced additional documents, which included several hundred pages of short-term firm transportation contracts, some e-mail transmittals, and scores of internal e-mails discussing credit terms for winning bidders for STFT sales. However, the production did nothing to alleviate USGen's concern that TransCanada had deleted a large number of relevant e-mails. Mr. Coffee believes that TransCanada chose to delete information from the few significant e-mails it produced, including an answer to a question regarding TransCanada's efforts to resell the USGen capacity. On February 10, 2006, USGen asked TransCanada to provide the redacted documents in unredacted form. TransCanada responded by providing a supplemental privilege log invoking privilege on the redacted information. TransCanada claimed privilege on the redaction, alleging that the redacted information was covered by the attorney-client and work product privilege. USGen Wants to Pursue Further Discovery Mr. Coffee argues that TransCanada has no valid justification for its failure to preserve documents relevant to its claim as it could not reasonably assume that there would be no objection of any type to a claim of more than $50,000,000. Given the prospect of an objection, TransCanada had a duty to preserve evidence once it filed its claim. TransCanada should have reasonably anticipated litigation and suspended its routine document retention and destruction policy. For these reasons, USGen asks the Court to: * direct TransCanada to produce for deposition the 20 employees identified during Ms. Johnson's deposition, and a representative of TransCanada's IT department; * direct TransCanada to bear all expenses, including legal fees, associated with the depositions and that the depositions not count against any presumptive limits; * direct TransCanada to provide copies of all certificates supplied by the 20 individuals; * direct TransCanada to refrain from any further assertions of privilege regarding its searches for documents responsive to USGen's discovery requests; and * compel TransCanada to provide in unredacted form documents produced in discovery from which information was redacted. TransCanada Objects "The Court should put an end to USGen's misguided attempts to divert attention from the merits of the case," David W. Elrod, Esq., in Dallas, Texas, tells Judge Mannes. Mr. Elrod argues that contrary to USGen's depiction of TransCanada as an intransigent and non-responsive litigant, TransCanada has generated and provided to USGen a tremendous amount of data specifically prepared for the case, tailored to respond to USGen's interrogatories, and containing tens of thousands of answers requested by USGen in great detail. TransCanada has also produced volumes of documents meeting USGen's request or otherwise relevant to its mitigation of contract rejection damages, and has spent a substantial amount of time and money responding to the discovery generated by USGen. By way of comparison, Mr. Elrod continues, TransCanada has produced approximately 16,000 pages of documents, whereas USGen has produced less than 700 pages. Mr. Elrod further notes that USGen knows that TransCanada is required to market and sell capacity under different tariff requirements and regulations. The tariff requirements and Canadian regulations governing TransCanada are by their very nature well defined, require a fixed and non-discounted price, and, as a result, do not generate volumes of e-mail traffic. Mr. Elrod also maintains that TransCanada has provided a knowledgeable corporate representative witness who was properly prepared for the deposition and provided complete and forthright answers to USGen's non-privileged questions. Jody Johnson, Esq., the in-house attorney who directed TransCanada's document search and production efforts, was well aware of her corporate representative duties, undertook substantial preparations for her deposition by reviewing documents and speaking with other corporate employees, and demonstrated her knowledge through her detailed responses to all the questions propounded by USGen's counsel, Mr. Elrod explains. USGen's statement that questions her ability or willingness to take her duties seriously is patently offensive, Mr. Elrod says. Therefore, TransCanada wants to the Court to: * deny USGen's request to compel further discovery; * order USGen to pay TransCanada's costs in responding to USGen's discovery; and * require USGen to pay for any additional discovery efforts that the Court permits, that does not go to the merits of the case. Headquartered in Bethesda, Maryland, USGen New England, Inc., an affiliate of PG&E Generating Energy Group, LLC, owns and operates several electric generating facilities in New England and purchases and sells electricity and other energy-related products at wholesale. The Debtor filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian, Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in its restructuring efforts. When it sought chapter 11 protection, the Debtor reported assets amounting to $2,337,446,332 and debts amounting to $1,249,960,731. The Debtor filed its Second Amended Plan of Liquidation and Disclosure Statement on March 24, 2005 (PG&E National Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.S. LEE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: W.S. Lee & Sons, Inc. Routes 22 & 764 P.O. Box 1631 Altoona, Pennsylvania 16603 Tel: (814) 696-3535 Fax: (814) 696-9350 Bankruptcy Case No.: 06-70148 Debtor affiliate filing separate chapter 11 petitions: Entity Case No. ------ -------- Lee Systems Solutions, LLC 06-70149 Type of Business: The Debtor distributes food and non-food products primarily to schools, restaurants, hospitals and other institutions in the Mid- Atlantic region. See http://www.wslee.com Chapter 11 Petition Date: March 14, 2006 Court: Western District of Pennsylvania (Johnstown) Debtor's Counsel: James R. Walsh, Esq. Spence Custer Saylor Wolfe & Rose LLC 400 U.S. Bank Building P.O. Box 280 Johnstown, Pennsylvania 15907 Tel: (814) 536-0735 Fax: (814) 539-1423 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DOT Foods Trade Debt $629,674 P.O. Box 952589 Saint Louis, MO 63195-2589 Tyson Foods, Inc. Trade Debt $247,689 88029 Exepite Way Chicago, IL 60695-0001 Ryder Transportation Services Services $216,127 P.O. Box 402366 Atlanta, GA 30384-2366 Empire Beef Company Trade Debt $157,193 CH Robinson Company Trade Debt $154,995 Hoss's Fresh Express Trade Debt $152,672 Gallagher Captive Trade Debt $144,685 Services, Inc. Icelandic USA, Inc. Trade Debt $142,409 Frito-Lay Trade Debt $134,400 Mc Cain Food Trade Debt $126,078 General Mills Finance Trade Debt $122,679 Unipro Food Service Trade Debt $119,692 Kellogg FAFH Trade Debt $118,694 Peachtree Transport Services $114,158 Primms Trade Debt $109,116 Health Assurance of PA, Inc. Insurance Services $94,904 Proctor & Gamble Company Trade Debt $94,836 Guttman Oil Company Trade Debt $90,735 Dart Container Corporation Trade Debt $88,864 Mitsui Foods, Inc. Trade Debt $84,660 WEBSTER FINANCIAL: Fitch Affirms BB+ Ratings on Units' Pref. Stock ------------------------------------------------------------------ Fitch Ratings has affirmed the long-term issuer default rating and short-term issuer rating for Webster Financial Corporation at 'BBB' and 'F2'. All other ratings at Webster Bank, Webster Capital Trust I - II, and Webster Preferred Capital Corp have been affirmed. At the same time, Fitch has revised the Rating Outlook to Stable from Negative. The rating affirmation and revision in Rating Outlook reflect WBS' improved and solid capital base, good liquidity position, sound asset quality and improved financial flexibility. Constraining the ratings are its adequate earnings generation and growing yet somewhat limited regional geographic franchise. In May 2004, WBS acquired the Swansea, Massachussetts, based FirstFed America Bancorp, Inc (FAB; $2.6 billion in assets), which layered in a sizeable level of goodwill and required the issuance of additional debt to support the deal. Fitch revised WBS' and its banking subsidiary's Rating Outlook to Negative from Stable, as the FAB deal significantly reduced WBS' tangible equity position and financial flexibility. Since the acquisition, WBS has stayed away from making sizeable acquisitions, which has afforded it the opportunity to re-build its tangible equity position. Contributions to retained earnings have bolstered WBS' tangible equity ratio to 5.5%, up from a low 4.7% at the close of the FAB transaction. Moreover, the company's double leverage has improved and resides at a manageable 112%. Although none is imminent or expected, management has stated that going forward, and after reaching their targeted TE/TA ratio of 5.5%, they will consider acquisition opportunities. It should be noted that a sizeable acquisition, particularly if accompanied by material re-leveraging, could place similar pressures back on the company and possibly impact its ratings. Fitch has affirmed these ratings and revised the Rating Outlook to Stable: Webster Financial Corporation -- Issuer default rating 'BBB'; -- Short-term 'F2'; -- Long-term 'BBB'; -- Individual 'B/C'; -- Support '5'. Webster Bank -- Issuer default rating 'BBB'; -- Short-term 'F2'; -- Short-term deposit 'F2'; -- Long-term 'BBB'; -- Subordinated debt 'BBB-'; -- Long-term deposit 'BBB+'; -- Individual 'B/C'; -- Support '5'. Fitch has affirmed these ratings: Webster Capital Trust I - II -- Preferred stock 'BB+'. Webster Preferred Capital Corp -- Preferred stock 'BB+'. WESTERN OIL: Earns $149.4 Million of Net Income in 2005 ------------------------------------------------------- Western Oil Sands discloses its financial and operating results for the fourth quarter and the year ended Dec. 31, 2005. The company achieved record annual cash flow from operations of $244.2 million in 2005, including hedging losses of $110.4 million, compared to $23 million in 2004, representing an approximate ten-fold increase. Western achieved record crude oil sales revenue in fiscal 2005 totaling $910.3 million, including $777.9 million from proprietary production at an average realized price of $49.91 per barrel. Gross revenue rose 43% primarily as a result of an 18% increase in production during the year, combined with a 44% increase in blended price realizations. Gross revenue includes the effects of risk management activities that reduced revenue by $110.4 million, decreasing the average realized price by $7.11 per barrel during 2005. Western's crude oil sales were subject to an overall quality differential of $12.27 per barrel off of the Edmonton PAR benchmark crude oil price of $69.29 per barrel in 2005. Forced operational outages at the Upgrader in the first quarter of 2005 resulted in a larger percentage of heavy crude in our overall sales mix. Sales price realizations during 2005 were also negatively impacted by a widening of the heavy oil differential since our heavier crude oil stream receives a lower price. The heavy oil differential averaged 39% in 2005 compared to 34% in 2004. Net earnings increased by a factor of seven to $149.4 million in 2005 compared to $19.5 million in 2004. Gross revenue increased 43% to $910.3 million in 2005 compared to $636.9 million in 2004. Western's production averaged 31,994 barrels per day in 2005 compared to 27,108 barrels per day in 2004, representing a year- over-year increase of 18%. 2005 fourth quarter production averaged 35,572 barrels per day, marking three successive quarters of record production rates. These sustained record quarterly production levels are a direct result of the Project's production optimization initiatives. "We are very pleased with our financial and operating results in 2005. We believe reliable, sustainable results are an important measure of performance and our goal is to continue building on this track record," commented Jim Houck, President and CEO. Western Oil is a Canadian oil sands corporation, which holds a 20% undivided interest in the Athabasca Oil Sands Project together with Shell Canada Limited (60%) and Chevron Canada Limited (20%). Western Oil's 8-3/4% Senior Secured Notes due May 1, 2012, carry Moody's Ba2 and Standard & Poor's BB+ Rating. WILLIAMS CONTROLS: To Spend $3MM to Move Some Operations to China ----------------------------------------------------------------- Williams Controls, Inc. (WMCO), disclosed the realignment of its Portland manufacturing operations as part of its ongoing efforts to focus on its core product lines and improve its global competitiveness. As part of this process, Williams Controls plans to outsource all of its die casting and machining operations to high-quality suppliers, primarily in Asia, and to relocate the assembly of its pneumatic products to the company's Suzhou, China facility. These changes will eliminate approximately 52 hourly and five salary positions from Williams Controls' Portland headquarters over the next 18 months. The company plans several programs to assist displaced employees. Die casting and machining operations are not a strategic part of Williams Controls' long-term business model. The company's die casting and machining equipment is dated, and Williams Controls' customers are increasingly moving to plastic injection molded assemblies instead of die cast and machined components for their electronic throttle controls. By using Asian suppliers for these functions, Williams Controls can avoid a significant investment in equipment that's no longer part of its core strategy. As a result, pneumatic assembly is being relocated to be closer to the company's new suppliers. Costs to implement this realignment are estimated to be in the $3 million range and include asset write-downs, costs to move and refurbish tools, purchase new tools, inventory build costs, employee severance and other related costs. Headquartered in Portland, Oregon, Williams Controls, Inc. -- http://www.wmco.com/-- designs and manufactures Electronic Throttle Control Systems for the heavy truck and off-road markets. The Company's balance sheet at Dec. 31, 2005, showed $30,389,000 in total assets and liabilities of $$31,306,000, resulting in a stockholders' deficit of $917,000. WINDOW ROCK: Court Sets Disclosure Statement Hearing for March 22 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will continue the hearing on the adequacy of information contained in the Disclosure Statement explaining the Chapter 11 Plan of Reorganization filed by Window Rock Enterprises, Inc. at 9:30 a.m. on March 22, 2006. Terms of the Plan The Plan classifies claims into seven classes. Allowed priority unsecured claims will be paid in full and in cash, on the latest of: (a) the Effective Date; (b) the 10th business day after the date upon which such priority unsecured claim becomes an allowed priority business claim; or (c) the date upon which such allowed priority unsecured claim becomes due according to its terms. The legal, equitable and contractual rights of interest holders, will not be altered or modified under the Plan. Ventana Group LLC's $500,000 allowed secured claim will be paid in full through six monthly installments commencing on the first day of the full month after the Effective Date. Ventana Group will retain the liens encumbering its collateral and will reconvey the lender liens after full payment of its allowed secured claim. Other allowed secured claims, at the Debtor's discretion, will be paid through three options: Option 1: Class 2 claims shall be paid in full through 24 equal monthly installments equal to their claim, plus interest calculated at the rate of 2.5% over the prime rate of interest as published in the Wall Street Journal on the Effective Date. Creditor's class 2 allowed secured claim will continue to be secured by its existing lien encumbering its collateral. Upon full payment, the creditor's lien shall be released and the Debtor will retain title to such collateral free and clear of the creditor's lien. Any deficiency will be treated as a general unsecured claim. Option 2: Class 2 creditor's collateral will be returned to the creditor on the Effective Date in full satisfaction of the creditor's allowed secured claim. Any deficiency will be treated as a general unsecured claim. Option 3: Holders of class 2 allowed secured claim can demand or receive accelerated payment of such claim after the occurrence of a default. Allowed secured claims for taxes, will receive cash installment payments in equal quarterly installments of principal and interest, and will be in an amount sufficient to fully amortize an allowed secured claim over a period of 5 years from and after the petition date. The outstanding and unpaid amount of each allowed secured claim will bear interest, commencing on the Effective Date and continuing until the allowed secured claim is paid in full, at the lesser of: (a) the interest rate available on ninety-day U.S. treasuries as of the Effective Date; or (b) the rate provided by Section 6621(a) of the Internal Revenue Code on the Effective Date. Allowed general unsecured claims will be paid through two payments: (a) Initial Distribution: Holders of allowed general unsecured claims will receive an amount equal to a pro rata share of a cash fund to be established by the Debtor in an amount equal to the aggregate of: * $8 million; and * any net recoveries received by the Debtor prior to the confirmation date. (b) Final Distribution: Holders of allowed general unsecured claims will receive an amount equal to a pro rata share of a cash fund to be established by the reorganized Debtor in an amount equal to the aggregate of: * any net recoveries received by the reorganized Debtor on or after the confirmation date; * any amount of De Minimis Distributions; * any unclaimed property with respect to class 5 claims released to the reorganized Debtor; and * any cash deposited into the disputed claims reserve with respect to a class 5 disputed claim that is released to the reorganized Debtor. Under the Plan, allowed subordinated unsecured claims, will be paid in full in 20 equal annual installment payments. Headquartered in Brea, California, Window Rock Enterprises Inc. -- http://windowrock.net/-- manufactures and sells all-natural dietary and nutritional supplements. The Debtor is also producing its own TV, radio and print advertising campaigns for nutritional and dietary supplements and has distribution in over 40,000 Food Drug Mass Clubs as well as Health and Fitness Channels. The Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr. C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop Couchot, PC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. YUKOS OIL: Bank Lenders File Bankruptcy Suit in Moscow ------------------------------------------------------ Russian energy-giant Yukos Oil Company faces another bankruptcy proceeding, this time in the Moscow Arbitration Court, roughly a year after the U.S. Bankruptcy Court for the Southern District of Texas dismissed its chapter 11 case in February last year. Catherine Belton, at The Moscow Times, reports that a group of banks, led by Societe Generale of France, filed the bankruptcy petition to attempt to recover $482 million under outstanding loan agreements. Reports say that the latest bankruptcy filing could finally place Yukos under formal government control. The Russian Government asserts Yukos owes more than $33 billion in back taxes. The Company has long denied that it owes the Russian government any back taxes, but that has not deterred the Russian Federation from seizing and selling Yukos' assets. The newspaper reports that some parties have questioned the motive behind the involuntary bankruptcy filing. Under Russian law, foreign banks will only receive distributions after employees, the state and state-owned companies are paid. Yukos will have until June before formal bankruptcy proceedings begin. Ms. Belton says that the lull could give Yukos time to finalize a deal with the Lithuanian government to buy the Mazeikiu Nafta refinery in Butinge. The $1 billion expected proceeds from the deal is enough to repay the banks' claims. Yukos Oil Company is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. On Feb. 24, 2005, Judge Letitia Z. Clark dismissed the Chapter 11 case. (Yukos Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Upcoming Meetings, Conferences and Seminars --------------------------------------------- March 15-17, 2006 STRATEGIC RESEARCH INSTITUTE Mid-Market March Madness: Capitalizing on M&A, Buyouts & Turnaround Opportunities Omni Hotel at CNN Center, Atlanta, GA Contact: 925-825-8738 or http://www.srinstitute.com/ March 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #1 Ernst & Young Tower, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ March 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Morning Meeting with ACG Dallas Country Club, Dallas, Texas Contact: 214-228-9706 or http://www.turnaround.org/ March 16, 2006 NEW YORK SOCIETY OF SECURITY ANALYSTS 2nd Annual Strike up a Network with NYSSA: A Night of Bowling Leisure Time Bowl, New York, New York Contact: http://www.nyssa.org/ March 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Transaction Exchange Luncheon Wiley Rein and Fielding LLP, Washington, DC Contact: 703-912-3309 or http://www.turnaround.org/ March 21, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/ March 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ March 30-31, 2006 PRACTISING LAW INSTITUTE Commercial Real Estate Financing: What Borrowers & Lenders Need to Know Now Chicago, Illinois Contact: http://www.pli.edu/ March 30 - April 1, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 1-4, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute The Flamingo, Las Vegas, Nevada Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ April 5-8, 2006 MEALEYS PUBLICATIONS Insurance Insolvency and Reinsurance Roundtable Fairmont Scottsdale Princess, Scottsdale, Arizona Contact: http://www.mealeys.com/ April 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ April 6-7, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES The Seventh Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ April 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Comedy Night at Governors TBA, Levittown, New York Contact: 631-251-6296 or http://www.turnaround.org/ April 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION The Great Debate ANZ Bank, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ April 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ April 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Monthly Dallas/Ft. Worth meeting CityPlace Center, Dallas, Texas Contact: 214-228-9706 or http://www.turnaround.org/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ April 19, 2006 PRACTISING LAW INSTITUTE Residential Real Estate Contracts & Closings New York, New York Contact: http://www.pli.edu/ April 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, FL Contact: 561-882-1331 or http://www.turnaround.org/ May 2006 TURNAROUND MANAGEMENT ASSOCIATION Regional Golf Event TBD, Austin (tentative), Texas Contact: 214-228-9706 or http://www.turnaround.org/ May 4, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 5, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Alexander Hamilton Custom House, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 7-9, 2006 INTERNATIONAL BAR ASSOCIATION Restructuring Among the Ruins Hotel Bretagne Athens, Greece Contact: harriet.rowland@int-bar.org or http://www.ibanet.org/ May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ May 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Casino Night TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, FL Contact: 561-882-1331 or http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Bergen County, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Eastside Wine & Dine TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Golf 101 TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ May 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION "Toot Your Own Horn" Forum TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 1-2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Southeast Regional Conference Amelia Island, Florida Contact: 410-347-7391 or http://www.turnaround.org/ June 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA NY Golf & Tennis Outing - MEMBERS & SPONSORSHIP REGISTRATION Fresh Meadow Country Club, Lake Success, New York Contact: 646-932-5532 or http://www.turnaround.org/ June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/ June 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #2 Ernst & Young Tower, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ June 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Hedge Fund / Private Equity Round Table CityPlace Center, Dallas, Texas Contact: http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Signature Luncheon, Charity Event Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriot Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ June 14, 2006 (tentative) TURNAROUND MANAGEMENT ASSOCIATION LI TMA Texas Hold'em for Charity Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Morristown, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ July 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Event TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Red Bank, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Golf & Tennis Outing Raritan Valley Country Club, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Summer Social BBQ Colonial Springs Country Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ August 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 3-5, 2006 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ August 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Family Night Baseball with the NJ Jackals (Yogi Berra Autograph Night) Jackals Stadium, Montclair, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ August 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION 4th Annual Alberta Golf Tournament Kananaskis Country Golf Course, Kananaskis, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ September 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Business Mixer TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ September 7-8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Saratoga Regional Conference Gideon Putnam Hotel, Saratoga Springs, New York Contact: http://www.turnaround.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Secaucus, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI Turnaround Formal Event Long Island, New York Contact: http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or www.turnaround.org September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Education Program with NYIC Joint Reception CFA/RMA/IWIRC Woodbridge Hilton, Iselin, NJ Contact: http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION 7th Annual Cross Border Business Restructuring and Turnaround Conference Banff, Alberta Contact: http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Billards Networking Night - Young Professionals TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Australia National Conference Sydney, Australia Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili, Jr., Tara Marie Martin, Marie Therese V. Profetana, Shimero Jainga, 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 ***