/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060328.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 28, 2006, Vol. 10, No. 74 Headlines A&E SNAPFINGER: Case Summary & 13 Largest Unsecured Creditors AIS ACQUISITION: Larger Term Loan Cues Moody's to Hold B2 Ratings ALLEGHENY ENERGY: Board Assails Move on Mandatory Stock Retention ALLIED HOLDINGS: U.S. Trustee Questions Gowling's Retention ALLIED HOLDINGS: Inks Forbearance Agreement with DIP Lenders AMCAST INDUSTRIAL: Committee Calls for Shutdown of Operations AMCAST INDUSTRIAL: Wants Plan-Filing Deadline Moved to Sept. 27 AMERICAN CELLULAR: Posts $4.6M Net Loss for the Year Ended Dec. 31 ANCHOR GLASS: Wants to Assume Amended Temple-Inland Agreement ANCHOR GLASS: Wants Open-Ended Deadline to Decide on Arkema Lease ASSET BACKED: DBRS Rates $7.5MM Class M11 Certificate at BB(High) ATA AIRLINES: Court Expands Scope of Ernst & Young's Engagement ATA AIRLINES: U.S. Bankcorp Wants $3.9MM Administrative Claim Paid AUSAM BIOTECH: Gets Final Order on DIP Loans & Cash Collateral AUSAM BIOTECH: Creditors Must File Proofs of Claim by April 26 AVERY STREET: Moody's Puts Ba2 Rating on $8 Mil. Class E Notes BALLY TOTAL: Wants Bondholders to Waive Reporting Defaults BELHURST CLO: Moody's Rates $12.5 Million Class E Notes at Ba2 BLOUNT INC: Moody's Rates New Loans at Ba3 & Holds B2 Bond Rating BLOUNT INC: S&P Affirms B Sub. Debt Rating with Stable Outlook CALPINE CORP: Canadian Affiliates Can Implement Employee Program CALPINE CORP: Wants Open-Ended Time to File Notices of Removal CATHOLIC CHURCH: Marist Parties Wants Claims Allowed in Portland CATHOLIC CHURCH: Court Amends GVA's Retention Order in Spokane CEDAR CBO: Moody's Lifts $46MM Class II Notes' Rating to Baa3 CITIZENS COMMS: Donald R. Shassian Replaces Jerry Elliott as CFO COLLINS & AIKMAN: Lear Settles Dispute with GE Capital COLLINS & AIKMAN: Active Mould Asserts Lien on Molds COMMUNITY HEALTH: Voluntary Chapter 11 Case Summary COMPTON PETROLEUM: S&P Rates $150 Million Sr. Unsec. Notes at B CONMED CORP: Moody's Rates Proposed $250MM Credit Facility at Ba2 CONMED CORP: S&P Rates Proposed $250 Mil. Credit Facility at BB- COVAD COMMS: Inks $50MM Stock & Note Purchase Pact with Earthlink CURATIVE HEALTH: Case Summary & 41 Largest Unsecured Creditors DANA CORP: Asks Court to Establish Interim Compensation Procedures DANA CORP: Undisputed Supplier Obligations Gets Priority Status DELTA AIR: Gets Lenders Nod for Changes to $1.9 Billion DIP Loan DENALI CAPITAL: Moody's Rates $14 Million Class B-2L Notes at Ba2 DIRECTVIEW INC: Withdraws June 2005 Registration Statement DOBSON COMMS: $11.1MM of 1.5% Sr. Convertible Notes Up for Resale DOLE FOOD: S&P Puts B+ Rating on Proposed $975 Million Facility EASTMAN KODAK: $17 Mil. Revenue Bonds Paid & S&P Withdraws Rating EPIXTAR CORP: Has Until April 4 to File Reorganization Plan FDL INC: Case Summary & 20 Largest Unsecured Creditors FEDDERS CORP: Delays Filing Annual Financial Reports for 2005 FIRSTLINE CORP: Hires Glassratner Advisory as Financial Advisor FOAMEX INT'L: Court Okays Lorro Inc. and Foamex L.P. Stipulation FREEDOM RINGS: Court Approves Amended Disclosure Statement G+G RETAIL: Court Approves Davis & Gilbert as Corporate Counsel GALVEX CAPITAL: Wants DiConza Law as Bankruptcy Co-Counsel GENERAL MOTORS: PBGC Looks to Private Lawyers for Advice about GM GLAZED INVESTMENTS: Pachulski Stang Okayed as Panel's Lead Counsel GLAZED INVESTMENTS: Robert Coleman Okayed as Panel's Local Counsel GOODYEAR TIRE: Files Prospectus for Resale of Conv. Senior Notes HANOVER COMPRESSOR: S&P Puts B Rating on $150 Million Sr. Notes HANOVER COMPRESSOR: To Publicly Offer $150 Million of Senior Notes HANOVER COMPRESSOR: Moody's Holds Junked Preferred Stock Rating HIGH VOLTAGE: Court Agrees to $1.3 Mil. Preconfirmation Payment HSI ASSET: Moody's Puts Low-B Ratings on Two Certificate Classes ICOS CORPORATION: Dec. 31 Balance Sheet Upside Down By $59 Million ICOS CORPORATION: Will Hold Annual Stockholders Meeting on May 11 IMPERO INC: Wants Chapter 11 Bankruptcy Case Dismissed INTEGRATED DISABILITY: Files Schedules of Assets and Liabilities INTELSAT LTD: Names Jeffrey P. Freimark as Executive VP & CFO ISLES CBO: Moody's Places Ba2 Note Ratings on Watch & May Upgrade ITC HOMES: Court Denies M&S Unlimited's Pitch to Dismiss Case LAGUARDIA ASSOCIATES: Taps Robert Price as Special Counsel LUCENT TECH: Alcatel Deal Cues Moody's to Hold Low-B Ratings LUNN 119TH: Court Okays Plante & Moran's Retention as Accountants MEDCO HEALTH: Lockout Looms for United Steelworker Members MESA TRUST: Low Debt Enhancement Level Cues Moody's Rating Review METABOLIFE INT'L: Court Threatens Chapter 7 Conversion MILE HIGH: U.S. Trustee Appoints Eight-Member Creditors Committee MILE HIGH: Chap. 11 Trustee has Until Aug. 12 to Decide on Leases MUSICLAND HOLDING: Verizon Wants Service Contract Decision Now NAVISTAR INT'L: Gets Consents from 4.75% Subordinated Noteholders NEW CENTURY: S&P Affirms BB Rating & Changes Outlook to Negative OBSIDIAN ENT: Losses & Equity Deficit Prompt Going Concern Doubt OCEANVIEW CBO: Poor Credit Quality Prompts Moody's Rating Review ON TOP COMMS: Wants Until April 19 to Decide on La. Studio Lease OVERWATCH SYSTEMS: S&P Affirms B+ Ratings with Stable Outlook OWENS CORNING: 8 Parties Say Disclosure Statement is Inadequate OWENS CORNING: Wants Court to Okay Revised Plan Voting Protocol PENNSYLVANIA REAL: Inks $150 Mil. Interest Rate Swap Agreements PETROLEUM HELICOPTERS: Launches Cash Offer for 9-3/8% Senior Notes PINNACLE CBO: Credit Quality Decline Cues Moody's Ratings Review QUEEN'S SEAPORT: Disclosure Hearing Scheduled for March 30 QUEEN'S SEAPORT: Has Until April 20 to Decide on Long Beach Lease RAPID LINK: January 31 Balance Sheet Upside-Down by $49.8 Million REAL ESTATE: Moody's Rates $500,000 Class L Certificates at (P) B3 SABRELINER CORP: Debt Retired & Moody's Withdraws All Ratings SAINT VINCENTS: Assumes University Place Lease SAINT VINCENTS: Court Directs Former Broker to Produce Documents SEA CONTAINERS: S&P Downgrades Corporate Credit Rating to CCC+ SEQUA CORP: S&P Affirms BB- Rating & Revises Outlook to Stable SOLUTIA INC: Court Approves DIP Loan Increase & Term Extension SOLUTIA INC: Water Works Won't Assert $30 Million Claim SOLUTIA INC: Equity Panel's Report on Monsanto Case Draws Fire SOUTHERN UNION: Board Declares Cash Dividend on Common Stock SPEEDY TRACK: Case Summary & 9 Largest Unsecured Creditors STELCO INC: Posts $120 Million Net Loss in 2005 Fourth Quarter STILLMAN LOFTS: Case Summary & 4 Largest Unsecured Creditors TKO SPORTS: Hires Paul Keul of Deloitte & Touche as Accountant TRM CORP: Jeffrey F. Brotman Elected as Interim President & CEO US MICROBICS: Posts $6.4MM Total Shareholders' Deficit in FY 2005 VALENTINE PAPER: Disclosure Hearing Scheduled for April 25 VERTIS INC: Increasing Debt Burden Cues Moody's to Junk Ratings VERTIS INC: Earns $10.3 Million in 4th Quarter 2005 WASTE SERVICES: $39 Mil. Liberty Deal Cues Moody's to Hold Ratings WESTAR ENERGY: Fitch Raises Issuer Default Rating to BB+ from BB WHITEHORSE III: Moody's Puts Ba2 Rating on $12MM Class B-2L Notes WILLIAM KENTER: Case Summary & 10 Largest Unsecured Creditors WOOD RESOURCES: Narrow Product Line Prompts Moody's B3 Ratings XTO ENERGY: Moody's Puts (P)Ba2 Preferred Stock Rating on Watch * Large Companies with Insolvent Balance Sheets ********* A&E SNAPFINGER: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: A & E Snapfinger Woods, LLC 4438 Thurgood Estate Drive Ellenwood, Georgia 30294 Bankruptcy Case No.: 06-63264 Chapter 11 Petition Date: March 24, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Ralph Goldberg, Esq. Ralph Goldberg, P.C. 1766 Lawrenceville Highway Decatur, Georgia 30033 Tel: (404) 636-0331 Fax: (404) 320-1922 Total Assets: $2,545,700 Total Debts: $1,991,650 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ J.P. Petroleum, LLC Trade Debt - Gas $50,000 8255 Dunwoody Place Building 17, Suite 100 Atlanta, GA 30350 U.S. Money Order $9,000 Lithonia, GA 30058 MBNA Credit Card $6,300 Platinum Plus for Business P.O. Box 15469 Wilmington, DE 19886-5469 Internal Revenue Service Employee Taxes $6,000 Battle Law Group Attorney Fees $4,500 DeKalb County Sanitation Sanitation $4,500 Georgia Department of Revenue Sales Tax $3,000 ADT Security Security $3,000 Georgia Department of Labor Employee Taxes $1,500 Petry $1,300 Atlanta Coffee Services Coffee $800 National Welders Trade Debt - Gas $300 Coke Fountain Trade Debt - $150 Softdrinks AIS ACQUISITION: Larger Term Loan Cues Moody's to Hold B2 Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings AIS Acquisition Corporation, a subsidiary of Overwatch Systems, LLC, Corporate Family Rating and senior credit facility of B2, on the company's announcement that it will amend and increase the size of its term loan facility to fund a planned acquisition. The rating outlook is stable. The ratings continue to reflect Overwatch's high debt levels relative to a small revenue base, reliance on a limited number of products concentrated predominantly in programs at the Department of Defense and intelligence agencies, a short history under current management, and integration risk associated with acquisitions. Ratings positively consider the company's ability to grow its revenue base from acquisitions, the strength of the current environment related to intelligence technology, adequate liquidity, and capital support from equity sponsors. The stable outlook reflects Moody's expectations that the company will successfully integrate recently-acquired business units, while continuing to renew and expand its government contract software services business under approximately the same pricing and terms as are currently enjoyed. If accomplished this should allow for a modest amount of debt reduction over the near-term. The ratings or their outlook may be subject to downward revision if the company were to increase debt for unexpected working capital or CAPEX purposes, for large levered acquisitions of other companies or assets, or to finance any distribution of capital to shareholders. Ratings could also be negatively impacted if a change in the competitive structure of the markets in which Overwatch operates were to result in lower pricing and reduced margins, or if revenue growth implied in Overwatch's backlog, which is dominated by Future Combat Systems related work, were to fail to materialize as expected, resulting in free cash flow of less than 5% of total debt or debt/EBITDA of over 5 times over a prolonged period. Conversely, ratings or their outlook may be positively impacted if the company demonstrates the ability to substantially increase both the size and breadth of its customer base, diversifying its backlog , while maintaining current levels of free cash flow and reducing leverage to below 3.5 times on a sustained basis. These ratings have been affirmed: Issuer: AIS Acquisition Corp. * $120 million senior secured credit facilities, amended to consisting of a $10 million revolving credit facility due 2011 and a $110 million term loan B due 2011, at B2; * Corporate Family Rating of B2 Overwatch Systems, LLC, headquartered in Morristown, New Jersey, is a leading information technology service provider to the defense and intelligence communities. Its first acquisition, Austin Info Systems, is a leading software developer of multi- source intelligence analysis products primarily for the US armed forces. Thorough its subsidiary Overwatch Systems of Virginia, Inc., the company is also a leader in developing Image Exploitation and Analysis software primarily for the Intelligence Community. ALLEGHENY ENERGY: Board Assails Move on Mandatory Stock Retention ----------------------------------------------------------------- Allegheny Energy, Inc.'s Board of Directors says a proposal to adopt a policy for senior executives and directors to commit to hold throughout their tenure at least 50% of all Allegheny Energy shares that they obtain by exercising stock options is "unnecessary". The move is one of seven proposals by some of the Company's shareholders that will be up for a vote during the Company's Annual Meeting of Shareholders on May 11, 2006. The Board is recommending a rejection of these moves. The Shareholder Resolution The resolution submitted to the Board on the proposal cites the accounting scandals at Enron, Worldcom and other companies as basis for the move. The granting of stock options to executives has become more controversial. Stock options are said to provide incentives to senior executives which conflict with the interests of regular stockholders. Stock options promise executives all the gain of stock price increases yet none of the risk of stock price declines. For this reason, stock options can encourage action to boost short-term stock price at the expense of long-term shareholder value. Furthermore, the Company's management allegedly does not provide information to shareholders on potential short-term stock spikes that the management knows about. Unlike direct stock ownership, stock options can also discourage executives from increasing dividends because option holders are not entitled to dividends. This is particularly important to shareholders since dividends were altogether eliminated. This proposal can align director and executive interests with those of regular shareholders. This policy seeks to decouple executive and director compensation from short-term price movements. This is designed to encourage emphasis on long-term gain while giving directors and executives the flexibility to sell up to 50% of such holdings. Adopting this policy is said to be a good way to assure shareholders that the Company's directors and senior executives are committed to the long-term growth of Allegheny Energy and the restoration of our dividend. This would be in contrast to a tendency toward market-timing and short-term gains. The Board's Contention At the 2005 Annual Meeting of Stockholders, the Company's stockholders rejected a substantially identical proposal and should continue to do so. In 2005, the Company adopted stock ownership guidelines to more closely align the interests of the Board and senior executive officers with its stockholders. Members of the Board and senior executive officers are expected to own a significant equity interest in the Company, in the form of common stock, vested common stock units or deferred cash compensation allocated to the Company's phantom stock fund. Allegheny Energy's stock ownership guidelines are available at http://ResearchArchives.com/t/s?6f8at no charge Under the Company's guidelines, senior executive officers are required to hold stock in amounts ranging from one to three times their annual salary, depending on their position with the Company. Directors must hold six times their annual cash retainer in Common Stock. The Board believes that this policy provides an appropriate framework that encourages stock ownership and a focus on long-range strategic management of the business. Additionally, the Board does not believe that adopting this proposal would serve stockholder interests. The stock retention policy advocated in this proposal would diminish the value of the Company's equity compensation programs and would make the Company less competitive in its ability to hire key talent. The high stock ownership threshold suggested by this proposal is likely to limit the ability of the Company's executives to diversify their assets, thus diminishing the Company's ability to attract executive talent. Therefore, the Board believes that this stockholder proposal is unnecessary. The Board believes that the concerns this stockholder proposal raises have been addressed more appropriately by the Company's stock ownership guidelines, which the Board has the ability to adjust as it deems appropriate. Annual Shareholders Meeting The Company will hold its Annual Meeting of Stockholders at the Hilton New York, 1335 Avenue of the Americas, New York, New York, on May 11, 2006, at 9:30 a.m., Eastern Daylight Savings Time. Other items in the agenda include: (1) election of nine directors to hold office until the 2007 annual meeting and until their successors are duly elected and qualified; and (2) ratification of the appointment of the Company's independent registered public accounting firm; Other shareholder proposals up for a vote are: (1) requiring the Chairman of the Board to have no other management duties, titles, or responsibilities; (2) requiring that key board committees of audit, nomination and compensation be chaired by highly-qualified independent directors who are not over-committed; (3) adopting a policy that a significant portion of future stock option grants to senior executives shall be performance-based; (4) adopting a policy that any merger, which includes "golden parachutes or golden hellos", be required to allow shareholders to vote on the dollar amount of such golden pay as a separate item on the same ballot; (5) adopting a policy whereby, in the event of a restatement of financial results, the board will review all bonuses and other awards that were made to senior executives on the basis of having met or exceeded performance targets during the period of the restatement and will recoup for the benefit of the Company all such bonuses or awards to the extent that these performance targets were not achieved; and (6) asking the Board to redeem any future or current poison pill, unless the poison pill is subject to a shareholder vote as a separate ballot item, to be held as soon as may be practicable. Holders of record of the Company's common stock at the close of business on March 16, 2006 will be entitled to vote at the meeting. A full-text copy of the Proxy Statement for this Annual Meeting is available for free at http://ResearchArchives.com/t/s?6f9 Headquartered in Greensburg, Pa., Allegheny Energy -- http://www.alleghenyenergy.com/-- is an investor-owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland, Virginia and Ohio. * * * As reported in the Troubled Company Reporter on Jan. 20, 2006, Standard & Poor's Ratings Services raised its corporate credit ratings on diversified energy company Allegheny Energy Inc. and its subsidiaries to 'BB+' from 'BB-'. S&P said the outlook is positive. As reported in the Troubled Company Reporter on June 15, 2005, Moody's Investors Service assigned a Senior Implied rating of Ba1 to Allegheny Energy, Inc. and also assigned a Speculative Grade Liquidity Rating of SGL-2. This is the first time that Moody's has assigned both such ratings to AYE. The company's other ratings, including the Ba2 senior unsecured rating, remain unaffected. ALLIED HOLDINGS: U.S. Trustee Questions Gowling's Retention ----------------------------------------------------------- William T. Neary, the U.S. Trustee for Region 6, objects to Allied Holdings, Inc., and its debtor-affiliates' employment of Gowling LaFleur Henderson LLP as their Canadian counsel. The Trustee says that the Debtors have not complied with the disclosure requirements of Rule 2014 of the Federal Rules of Bankruptcy Procedure in their request to employ Gowling. As reported in the Troubled Company Reporter on March 6, 2006, the U.S. Bankruptcy Court for the Northern District of Georgia authorized the Debtors to employ Gowling. Gowling has served as the Debtors' counsel in Canadian legal matters since November 1999. According to Jeneane Treace, Esq., in Atlanta, Georgia, the Debtors' Application and Gowling's Affidavit failed to disclose Gowling's connections with the Debtors, creditors, other parties- in-interest, their attorneys and accountants, the U.S. Trustee, or any person employed in the U.S. Trustee's office. Ms. Treace says that Gowling merely prepared lists of parties involved in the Debtors' case who are clients of the firm and the area of law in which the firm represented them. "Neither the application nor the affidavit disclose substantive facts which would enable the Court and other parties to determine if disqualifying connections are present." Gowling stated in its affidavit that the delay in seeking approval of its employment was attributable to carrying out the search of the numerous Interested Parties, Ms. Treace notes. Ms. Treace argues that retroactive approval of the employment of a professional person is appropriate only if the applicant shows and the Court finds extraordinary or exceptional circumstances warrant that relief. The U.S. Trustee maintains that Gowling's explanation for the delay in filing the Application does not show "excusable neglect". Accordingly, the U.S. Trustee asks the Court to address the issue of retroactive approval of Gowling's employment when it considers the firm's final fee application. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Inks Forbearance Agreement with DIP Lenders ------------------------------------------------------------ On March 9, 2006, Allied Holdings, Inc., and its subsidiaries entered into a Forbearance Agreement, with respect to their amended DIP Credit Agreement, with General Electric Capital Corporation, Morgan Stanley Senior Funding, Inc., Marathon Structured Financing Fund, L.P., GECC Capital Markets Group, Inc., and other lenders. The Agreement was in connection with the delivery of certain financial information for the last 12 months ending January 31, 2006, and the communication of the Company's preliminary results for the twelve-month period ending December 31, 2005, to the Lenders. Allied Holdings determined that it was not in compliance with certain of the DIP Facility's financial covenants related to their EBITDA and Maximum Leverage Ratio. Failure to comply with those financial covenants constitutes a Default or an Event of Default. Pursuant to the Forbearance Agreement, during the forbearance period, the Lenders would agree that the financial covenants violations do not constitute a Default or an Event of Default. In addition, the Lenders agree to temporarily refrain from exercising certain of their remedies under the DIP Facility. That forbearance is conditioned upon, among other things: (i) the EBITDA for the rolling twelve-month periods ending on each of December 31, 2005, and January 30, 2006, in each case as reflected in financial information to be provided to the Lenders being equal to or greater than the applicable amounts reflected in the Forbearance Agreement; and (ii) the Leverage Ratio as of the last day last day of each of January 31, 2006, and December 31, 2005, in each case as reflected in the financial information to be delivered to the Lenders being equal to or less than the applicable ratios specified in the Forbearance Agreement. The forbearance period will run from March 9, 2006, until the earlier of: a. April 3, 2006; b. the occurrence of any other Event of Default under the DIP Facility; and c. the Company's failure to comply with any of the conditions of the Forbearance Agreement. After the expiration of the forbearance period, the Lenders will have the right to exercise all remedies under the DIP Facility. According to Thomas H. King, executive vice president and chief financial officer of Allied Holdings, although the Lenders have agreed to forbear from deeming the financial covenant violations from being a default or an event of default under the DIP Facility, the Lenders have reserved the right to cease making any additional advances of funds to the Company under the DIP Facility. Mr. King notes that no assurances can be provided that the Lenders will continue to allow the Company to obtain advances of funds on the DIP Facility. Any cessation or material limitation on advances to the Company would have a material adverse effect on the ability of the Company to continue operations. The Company is currently negotiating with the Lenders to amend the DIP Facility to waive the Default or Event of Default with respect to the financial covenant violations and to prospectively modify the financial covenants in the DIP Facility. The Company provides no assurance that it will be able to amend the DIP Facility or that, if amended, it will be able to remain in compliance with the terms of the DIP Facility. All other terms of the DIP Facility remain in full force and effect. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMCAST INDUSTRIAL: Committee Calls for Shutdown of Operations ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Amcast Industrial Corporation and its debtor-affiliates' bankruptcy cases wants the Debtors' wheel manufacturing operations at their Fremont and Gas City, Indiana facilities shut down. The Committee asks the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis to order the shut down of the Debtors operations to prevent their estates from becoming administratively insolvent. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, tells the Bankruptcy Court that the Debtors' current pricing and volume agreement with General Motors Corporation -- their largest customer and revenue source -- does not generate a reasonable profit. The lawyers say that, based on the Debtors' own projections, the standing pricing scheme with GM will result in negative cash flow through June 2006. The Debtors are currently negotiating the terms of their contractual pricing with GM. The Debtors are asking for certain pricing concessions from GM so that they can continue to operate profitably. Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33323). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. Amcast Industrial's chapter 11 case is jointly administered with Amcast Automotive of Indiana, Inc.'s chapter 11 proceeding. AMCAST INDUSTRIAL: Wants Plan-Filing Deadline Moved to Sept. 27 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District Of Indiana in Indianapolis will convene a hearing at 1:30 p.m. tomorrow, March 29, 2006, to consider Amcast Industrial Corporation and its debtor-affiliates' request to extend their exclusive periods to file a chapter 11 plan of reorganization and solicit acceptances of that plan. The Debtors ask the Bankruptcy Court to extend their exclusive plan filing period through Sept. 27, 2006 and their period to obtain acceptance of the plan through Nov. 26, 2006. James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, PC, tells the Bankruptcy Court that extending the plan filing period will give the Debtors more time to resolved their dispute with General Motors Corporation. The Debtors are currently negotiating the terms of their contractual pricing with GM, their largest customer and revenue source. The Debtors are asking for certain pricing concessions from GM so that they can continue to operate profitably. Mr. Moloy explains that the result of the pricing negotiations with GM will impact the details and very core of any plan of reorganization to be proposed by the Debtors. Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33323). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. Amcast Industrial's chapter 11 case is jointly administered with Amcast Automotive of Indiana, Inc.'s chapter 11 proceeding. AMERICAN CELLULAR: Posts $4.6M Net Loss for the Year Ended Dec. 31 ------------------------------------------------------------------ American Cellular Corp. delivered its annual financial results for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 16, 2006. Financials The company reported a $4,666,095 net loss on $489,562,163 of total operating revenue for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's solvent balance sheet showed $1,606,483,925 in total assets, $1,181,552,373 in total liabilities. Acquisition of Pennsylvania 4 RSA On Sept. 13, 2005, the company acquired the non-license wireless assets of Endless Mountains Wireless, LLC, in Pennsylvania 4 RSA. The company is operating Endless Mountains' licensed 850 MHz spectrum under a spectrum manager lease. In March 2006, the company has the right to acquire Endless Mountains' Pennsylvania 4 RSA 850 MHz license, subject to FCC approval. The acquisition of the license covering the leased spectrum is expected to close in mid-to-late 2006. The total purchase price for all acquired assets, including the FCC license, is approximately $12.2 million. The company plans to upgrade Endless Mountains' network with GPRS/EDGE data capability. The company offers products and services in Pennsylvania 4 RSA under the CELLULARONEr service mark. As a result of the completion of this transaction, the company's consolidated financial statements only include the operating results from Pennsylvania 4 RSA beginning Sept. 13, 2005. New Roaming Agreement With Cingular Wireless On Aug. 12, 2005, the company entered into a new, multi-year operating agreement with Cingular Wireless, the company's primary wireless roaming partner, and amended the existing GSM operating agreements with the former AT&T Wireless entity. The new roaming agreement establishes a new roaming rate structure that is effective as of April 9, 2005. The new roaming agreement's key provisions includes: -- mutual agreement to lower roaming rates, with the company paying Cingular a flat incollect rate through mid-2009 that is approximately half the blended rate in previous roaming agreements; -- agreement to continue to mutually prefer one another for roaming through the term of the new roaming agreement, which has been extended approximately one year through mid-2009; -- the company received approximately $800,000 from Cingular as a settlement for prior claims under various agreements and have and will continue to receive certain formula-based residual payments in connection with those settlement through mid-2008 at the latest; and -- the new roaming agreement provides for "home-on-home" roaming in areas where both carriers operate. Full-text copies of American Cellular Corp.'s annual financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?6fa About American Cellular Corp. American Cellular Corp. -- http://www.americancellular.net/-- is a rural and suburban provider of wireless communications services in the United States. At Dec. 31, 2005, the company's wireless telephone systems covered a total population of 5.2 million and had approximately 669,700 subscribers with an aggregate market penetration of 13.0%. The company provides wireless telephone service in portions of Illinois, Kansas, Kentucky, Michigan, Minnesota, New York, Ohio, Oklahoma, Pennsylvania, West Virginia and Wisconsin. The company offers digital voice, data and other feature services to subscribers through Global System for Mobile Communications, General Packet Radio Service, Enhanced Data for GSM Evolution, and Time Division Multiple Access, digital networks. * * * Standard & Poor's Rating Services rated the company's 10% Senior Notes due 2011 at B-. ANCHOR GLASS: Wants to Assume Amended Temple-Inland Agreement ------------------------------------------------------------- Pursuant to an Agreement dated Jan. 1, 2004, Anchor Glass Container Corporation purchases paperboard packaging from TIN, Inc., doing business as Temple-Inland. Temple-Inland has a prepetition claim for $1,777,620 arising under the Agreement. Anchor Glass and Temple-Inland have agreed to settle the claim. Temple-Inland will apply the $300,000 deposit it currently holds to its claim. Anchor Glass will pay $944,344 to Temple-Inland without further delay. Temple-Inland will have an allowed unsecured claim for $533,286. The parties also agreed to extend the term of the Agreement until December 31, 2008. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the Middle District of Florida to approve the Amended Agreement and authorize it to assume the Amended Agreement. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Wants Open-Ended Deadline to Decide on Arkema Lease ----------------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to further extend the time within which it may assume or reject its Certincoat System Agreement with Arkema, Inc., until confirmation of its Plan of Reorganization. Robert A. Soriano, Esq., at Carlton Fields PA, in Tampa, Florida, tells the Court that the Debtor has made significant progress with various business issues in its Chapter 11 case and is proceeding to confirmation expeditiously. However, the Debtor has not yet completed its analysis of its executory contracts. The requested extension will assist the Debtor in its reorganization, Mr. Soriano asserts. Absent an extension, the Debtor might be exposed to unnecessary administrative claims if contracts and leases are hastily assumed, he says. As reported in the Troubled Company Reporter on Jan. 16, 2006, Arkema and the Debtor are parties to a contract wherein Arkema agreed to impart on the Debtor the handling, processing and manufacturing techniques, abilities and capacities needed to utilize the CERTINCOAT System to apply a coating composition to glass containers. Arkema also agreed to sell to the Debtor the "Formulation" -- organotin chemicals used in the process of depositing a hot tin oxide on glass. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASSET BACKED: DBRS Rates $7.5MM Class M11 Certificate at BB(High) ----------------------------------------------------------------- Dominion Bond Rating Service assigned these ratings to the Asset Backed Pass-Through Certificates, Series NC 2006-HE2 issued by Asset Backed Securities Corporation: Asset Backed Securities Corporation Home Equity Loan Trust, Series NC 2006-HE2 * $298.1 million, Class A1 -- New Rating AAA * $33.1 million, Class A1A -- New Rating AAA * $124.6 million, Class A2 -- New Rating AAA * $118.3 million, Class A3 -- New Rating AAA * $15.4 million, Class A4 -- New Rating AAA * $36.2 million, Class M1 -- New Rating AA (high) * $23.9 million, Class M2 -- New Rating AA * $14.2 million, Class M3 -- New Rating AA * $13.1 million, Class M4 -- New Rating A (high) * $12.7 million, Class M5 -- New Rating A * $11.6 million, Class M6 -- New Rating A (low) * $10.8 million, Class M7 -- New Rating BBB (high) * $5.6 million, Class M8 -- New Rating BBB (high) * $5.6 million, Class M9 -- New Rating BBB * $6.0 million, Class M10 -- New Rating BBB (low) * $7.5 million, Class M11 -- New Rating BB (high) The AAA ratings on the Class A certificates reflect 21.00% of credit enhancement provided by the subordinate classes, targeted overcollateralization, and monthly excess spread. The AA (high) rating on Class M1 reflects 16.15% of credit enhancement. The AA rating on Class M2 reflects 12.95% of credit enhancement. The AA rating on Class M3 reflects 11.05% of credit enhancement. The A (high) rating on Class M4 reflects 9.30% of credit enhancement. The "A" rating on Class M5 reflects 7.60% of credit enhancement. The A (low) rating on Class M6 reflects 6.05% of credit enhancement. The BBB (high) rating on Class M7 reflects 4.60% of credit enhancement. The BBB (high) rating on Class M8 reflects 3.85% of credit enhancement. The BBB rating on Class M9 reflects 3.10% of credit enhancement. The BBB (low) rating on Class M10 reflects 2.30% of credit enhancement. The BB (high) rating on Class M11 reflects 1.30% of credit enhancement. The ratings of the certificates also reflect the quality of the underlying assets and the capabilities of HomEq Servicing Corporation. U.S. Bank National Association will act as the Trustee. The trust will enter into an interest rate swap agreement with Credit Suisse First Boston International. The trust will pay to the Swap Provider a fixed payment of 4.98% per annum and receive a floating payment at LIBOR from the Swap Provider. Interest and principal payments collected from the mortgage loans will be distributed on the 25th day of each month commencing in April 2006. Interest will first be paid to the Senior Certificates on a pro rata basis and then sequentially to the subordinate classes. Until the step-down date, principal collected will be paid exclusively to the Senior Certificates unless they are paid down to zero. After the step-down date, and provided that certain performance tests have been met, principal payments will be distributed among the certificates of all classes on a pro rata basis. Additionally, provided that certain performance tests have been met, the level of overcollateralization may be allowed to step down to 2.60% of the then-current balance of the mortgage loans. All of the mortgage loans were originated or acquired by New Century Mortgage Corporation. As of the cut-off date, March 1, 2006, aggregate principal balance of the mortgage loans is $746,271,329. The weighted-average mortgage rate is 8.20%, the weighted-average FICO is 625, and the weighted-average original loan-to-value ratio is 80.74%. For more information on this credit or on this industry, please visit http://www.dbrs.com/ ATA AIRLINES: Court Expands Scope of Ernst & Young's Engagement --------------------------------------------------------------- ATA Airlines, Inc., and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Indiana to expand the scope of Ernst & Young LLP's employment, nunc pro tunc to the chapter 11 filing, to include: (a) certain review procedures with respect to the U.S. federal income tax return of ATA Holdings Corp. and certain of the other Debtors for the taxable year ended December 31, 2004, and (b) complete certain changes in the Companies' accounting methods; and E&Y will also provide, through a subcontract with Ernst & Young Puerto Rico LLP, tax compliance services for ATA Airlines, Inc., with respect to certain Puerto Rico tax matters. A full-text copy of the parties' Engagement Letter describing the auditing services to be provided by E&Y is available for free at: http://researcharchives.com/t/s?701 E&Y will charge these flat fees, plus expenses, for the Supplemental Services: Supplemental Services Flat Fee --------------------- -------- review of the Company's federal income tax return $10,000 change in accounting methods $9,500 preparation of the Puerto Rico tax returns $7,100 Fees for tax services to be provided subsequent to the Debtors' filing of the Chapter 11 petition for addressing other tax return review services or advising the Debtors' regarding specific tax problems it may encounter will be billed separately from the flat fees and will be billed based on hours incurred by E&Y professionals at E&Y's standard hourly consulting rates. 2005 Audit Services At the Debtors' request, the Court further allowed the Debtors to employ E&Y LLP to provide various additional audit services, including to audit and report on Debtors' consolidated financial statements for the year ended December 31, 2005. Jeffrey C. Nelson, Esq., at Baker & Daniels LLP, in Indianapolis, Indiana, relates that E&Y LLP will charge for the certain components of the 2005 Audit Services at these flat rates (excluding reimbursement of actual expenses, which will be in addition to these amounts): Description Fees ----------- ---- Audit of the consolidated financial statements of ATA Holdings Corp., included in its Annual Report on Form 10-K, as of and for the year ending December 31, 2005, including participation in scheduled meetings of the audit committee of ATA Holdings Corp $306,000 Quarterly review for the quarters ending March 31, 2006, June 30, 2006, and September 30, 2006 105,000 Annual audit of the ATA Airlines, Inc., Schedules of Passenger Facility Charges Collected, Withheld, Refunded/Exchanged, and Remitted for the year and each quarter during the year ending December 31, 2005, and related internal control report for the year ending December 31, 2005 15,000 Agreed-upon procedures related to INS User Fees for the year ending December 31, 2005 10,000 ---------- TOTAL $436,000 ========== In addition, E&Y LLP's fees for: (a) addressing financial accounting and reporting matters resulting from the Debtors' filing of their Chapter 11 petitions in the Bankruptcy Court and related reorganization efforts, including consultation with the Debtors and analysis of "fresh-start reporting" as defined in AICPA Statement of Position No. 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code"; (b) consents and/or comfort letters related to filings with the Securities and Exchange Commission or other transactions; (c) research and consultations with management of the Debtors regarding financial accounting and reporting matters; and (d) review of new, or modifications to existing lease agreements, credit agreements, collective bargaining agreements, airport authority and land development agreements, will be based on actual time incurred at E&Y LLP's hourly rates currently in effect for the E&Y LLP professionals assigned to provide these services, plus reimbursement of actual expenses. According to Mr. Nelson, E&Y LLP will provide professional services pertaining to the Debtors' analysis and application of "fresh-start reporting" as defined in AICPA Statement of Position No. 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code" up to 225 hours of professional time, for a flat fee of $89,000, plus reimbursement of actual expenses. All professional time in excess of 225 hours pertaining fresh- start reporting will be billed at the firm's hourly rates. E&Y LLP's current applicable hourly rates for the 2005 Audit Services are: Partners and Principals $575 - $695 Senior Manager $470 - $555 Manager $380 - $425 Senior $265 - $310 Staff $185 - $220 The Debtors sought and obtained Court approval of the fee structure for the 2005 Audit Services, nunc pro tunc to Oct. 10, 2005, the date the parties entered into an engagement letter relating to the 2005 Audit Services. A full-text copy of the Engagement Letter relating to the 2005 Audit Services is available for free at: http://researcharchives.com/t/s?702 E&Y LLP Partner James A. Pease assures the Court that the firm: (i) has no connection with the Debtors, their creditors or other parties in interest in the Debtors' cases, (ii) does not hold any interest adverse to the Debtors' estates, and (iii) believes it is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Pease discloses that E&Y LLP has provided in the past and continues to provide tax compliance services, tax advisory services, audit services and transaction support services to Matlin Patterson Global Advisors LLC and to Matlin Patterson Advisors (Europe) LLC. "E&Y LLP's work for MatlinPatterson is entirely unrelated to the Debtors or these chapter 11 cases, except that E&Y provided a minimal amount of tax advisory services to MatlinPatterson in December 2005 assisting MatlinPatterson solely in its evaluation of the tax implications of the receipt by MatlinPatterson or [its] affiliates of a debtor-in-possession financing fee and/or a break- up fee from the Debtors. E&Y LLP's services to MatlinPatterson did not otherwise involve the Debtors or these chapter 11 cases, and E&Y LLP did not otherwise advise MatlinPatterson with regard to its transactions with the Debtors." According to Mr. Pease, E&Y LLP will conduct an ongoing review of its files to ensure that no conflicts or other disqualifying circumstances exist or arise. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: U.S. Bankcorp Wants $3.9MM Administrative Claim Paid ------------------------------------------------------------------ U.S. Bancorp Equipment Finance, Inc., seeks allowance and payment of administrative expense claims arising in connection with its six aircraft leases with ATA Airlines, Inc. ATA Airlines leased six Saab Model 340B aircraft, associated engines and propellers from U.S. Bancorp. ATA Airlines, Inc., and its debtor-affiliates rejected the leases and surrendered the Aircraft to U.S. Bancorp in February 2005. According to U.S. Bancorp, ATA Airlines failed to pay the annual rental payments that were due and payable under the Lease Agreements. Thus, U.S. Bancorp has an administrative expense claim for postpetition rents totaling $2,265,305. Following ATA Airlines' surrender of the Aircraft, U.S. Bancorp discovered that two engines were subject to mechanics' liens filed by GE Engine Services, Inc., in September 2004, in the amounts of $355,290 and $180,064. U.S. Bancorp was subsequently able to secure the release of the liens after paying $53,567. Accordingly, U.S. Bancorp asserts an additional administrative expense claim for $53,567. U.S. Bancorp further asserts an administrative expense claim for $1,625,554 attributable to ATA Airlines' failure to comply with maintenance and return obligations under the Lease Agreements. The $1,625,554 reflects the aggregate cost of bringing the aircraft in to compliance with the maintenance conditions contained in the Leases. Thus, U.S. Bancorp asks the U.S. Bankruptcy Court for the Southern District of Indiana to allow its $3,944,426 administrative expense claim and compel ATA Airlines to pay that claim without further delay. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) AUSAM BIOTECH: Gets Final Order on DIP Loans & Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave AusAm Biotechnologies, Inc., permission on a final basis to: a) obtain loans and advances from Accumin Diagnostics Inc. pursuant to the Post-Filing Date Financing Agreements between the Debtor and Accumin; b) authorize the Debtor execute and perform the terms and conditions of Post-Filing Date Financing Agreements and other agreements, instruments, documents and statements necessary to implement the DIP financing; and c) to use Cash Collateral securing repayment of prepetition obligations to Northshore Asset Management and Trident Growth Fund and grant adequate protection to those prepetition lenders. Prepetition Debt, Use of DIP Loans and Cash Collateral Under various Credit & Loan Agreements, the Debtor owes: Prepetition Lender Amount Owed ------------------ ----------- Trident Growth $2,105,000 Northshore Asset $5,200,000 ---------- $7,305,000 ========== The Debtor will use the proceeds from Northshore and Trident's Cash Collateral and Accumin's DIP loans as working capital for the continued operation of its business, pay its employees and preserve the going concern value of its business. DIP Financing and Adequate Protection The Court authorizes the Debtor to obtain up to $425,000 of postpetition financing from Accumin Diagnostics in accordance with the terms and conditions of the Post-Filing Date Agreements. The Debtor's use of the proceeds from the DIP loans and Cash Collateral will be in accordance with the terms of a 11-week Cash Flow Forecast covering the period from February 6 to April 24, 2006. A full-text copy of the Cash Flow Forecast is available for free at http://researcharchives.com/t/s?703 To adequately protect their interests for any diminution in value of the Prepetition Collateral, Northshore and Trident are granted replacement liens and security interests in the Prepetition Collateral subordinate only to the liens and security interests granted to Accumin Diagnostics under the Court's final DIP and Cash Collateral Order. About AusAm Biotechnologies Headquartered in New York City, AusAm Biotechnologies, Inc. -- http://www.ausambiotech.com/-- is a biopharmaceutical company that manufactures drugs. The Company filed for chapter 11 protection on Feb. 7, 2006 (Bankr. S.D.N.Y. Case No. 06-10214). Fred B. Ringel, Esq. and Robert R. Leinwand, Esq., at Robinson, Brog, Leinwand, Greene, Genovese & Gluck P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $3,660,663 and total debts of $13,478,418. AUSAM BIOTECH: Creditors Must File Proofs of Claim by April 26 -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York set April 26, 2006, at 5:00 p.m., as the deadline for all creditors owed money by AusAm Biotechnologies, Inc., on account of claims arising prior to Feb. 7, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the April 26 Claims Bar Date, and those forms must be delivered either: By mail to: The United States Bankruptcy Court Southern District of New York Alexander Hamilton Custom House One Bowling Green, Room 534 New York, NY 10004 - or - By hand or overnight courier to: The United States Bankruptcy Court, Southern District of New York Alexander Hamilton Custom House One Bowling Green, Room 533 New York, NY 10004-1408; Headquartered in New York City, AusAm Biotechnologies, Inc. -- http://www.ausambiotech.com/-- is a biopharmaceutical company that manufactures drugs. The Company filed for chapter 11 protection on Feb. 7, 2006 (Bankr. S.D.N.Y. Case No. 06-10214). Fred B. Ringel, Esq. and Robert R. Leinwand, Esq., at Robinson, Brog, Leinwand, Greene, Genovese & Gluck P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $3,660,663 and total debts of $13,478,418. AVERY STREET: Moody's Puts Ba2 Rating on $8 Mil. Class E Notes -------------------------------------------------------------- Moody's Investors Service assigned these ratings to classes of notes issued by Avery Street CLO, Ltd.: * Aaa to $163,500,00 Class A Senior Floating Rate Notes Due 2018, * Aaa to $50,000,000 Class A-2 Senior Delayed Draw Floating Rate Notes Due 2018, * Aa2 to $22,000,000 Class B Senior Floating Rate Notes Due 2018, * Aa2 to $7,000,000 Class B Senior Fixed Rate Notes Due 2018, * A2 to $14,000,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2018, * Baa2 to $12,500,000 Class D Deferrable Mezzanine Floating Rate Notes Due 2018, * Ba2 to $8,000,000 Class E Deferrable Junior Floating Rate Notes Due 2018. Avery Street CLO, Ltd, a collateralized debt obligation, is managed by Feingold, O'Keeffe Capital LLC. Moody's noted that its ratings of the notes issued by this cash flow CDO reflect the credit quality of the collateral pool, the credit enhancement for the notes inherent in the capital structure, and the transaction's legal structure. BALLY TOTAL: Wants Bondholders to Waive Reporting Defaults ---------------------------------------------------------- Bally Total Fitness (NYSE: BFT) is seeking waivers of defaults from holders of its 10-1/2% Senior Notes due 2011 and 9-7/8% Senior Subordinated Notes due 2007 under the indentures governing the notes through a consent solicitation process. These defaults result from the Company's recently announced failure to file its financial statements for the year ended December 31, 2005, with the Securities and Exchange Commission. Bally will also seek a waiver to extend the time for filing its financial statements for the quarters ended March 31 and June 30, 2006. Holders of approximately 53% of the senior subordinated notes have already entered into agreements with Bally to consent to the requested waivers. These holders include Tennenbaum Capital Partners, LLC, the largest holder of senior subordinated notes, and entities affiliated with Pardus Capital Management, LLC and Everest Capital Limited, large Bally shareholders that also own senior subordinated notes. These noteholders have also agreed, subject to certain exceptions, to vote unregistered Bally shares received in the consent solicitation in favor of a transaction that may result from Bally's strategic process and approved by Bally's Board of Directors. Bally also announced it will seek a waiver from the lenders under its $275 million senior secured credit facility of the requirement to deliver audited financial statements by March 31, 2006. "We are pleased to have been able to reach a quick and amicable solution with holders of a majority of our senior subordinated notes and look forward to getting similar waivers from our senior noteholders and our senior secured lenders," said Paul Toback, Chairman, President and CEO of Bally Total Fitness. "Resolving these covenant issues will allow us to focus our attention on completing our financial statements and moving forward with our strategic process." The form of consideration to be paid to consenting noteholders will be $10.00 in cash or 4.4444 unregistered shares of Bally common stock, in each case per $1,000 principal amount of notes, at the consenting party's option and subject to compliance with applicable securities laws. The senior subordinated noteholders that have already agreed to consent have elected to receive their consent fee in stock. If all noteholders were to elect to receive unregistered common stock, the Company would issue a maximum of 2,377,754 unregistered shares of common stock. The Company currently has approximately 38.5 million common shares outstanding. Consenting lenders under the senior secured credit facility will receive consent fees in cash. Bally currently anticipates selling common stock to certain institutional holders to finance the payment of cash consent fees and related expenses. Bally anticipates that the senior secured credit facility default waivers will be completed by March 31, 2006, and the indenture default waivers will be completed on or before April 14, 2006. As previously disclosed, Bally's failure to file its financial reports with the SEC is due principally to the delay until November 30, 2005, in completing the audit of the 2004 financial statements and the restatements of prior periods. This contributed to difficulties in updating legacy systems and delays in the Company completing the required testing and management's assessment of the Company's internal controls as required by Section 404 of the Sarbanes-Oxley Act of 2002. Under the proposed lender and bondholder default waivers, Bally's 2005 10-K would be required to be filed no later than July 10, 2006, though the Company anticipates completing the audit process and filing before that time. The waivers would also permit a delay in filing Bally's 10-Q reports for the quarters ended March 31 and June 30, 2006, for up to 60 days. Although the filing and delivery delay constitutes a default under the indentures, it does not result in an event of default or acceleration without the delivery to Bally of a default notice from the trustee or holders of at least 25% in the aggregate principal amount of either series of notes and the expiration of a 30-day cure period thereafter. No such notices have been received to date. Bally's senior secured credit facility provides for a cross-default 10 days after delivery to Bally of a default notice under either of the indentures, a provision that Bally is asking the lenders to extend. Notwithstanding Bally's intention to seek waivers, no assurance can be given that an event of default under the indentures or senior credit facility will not occur in the future. Bally Total Fitness -- http://www.ballyfitness.com/-- is the largest and only U.S. commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's Ratings Services held its ratings on Chicago-based Bally Total Fitness Holding Corp., including the 'CCC' corporate credit rating, on CreditWatch with developing implications, where they were placed on Dec. 2, 2005. The CreditWatch update follows Bally's announcement that it will not meet the March 16, 2006, deadline for filing its annual report on SEC Form 10-K for the year ending Dec. 31, 2005. Bally currently anticipates filing its 2005 10-K in April 2006. Bally's ratings were originally placed on CreditWatch on Aug. 8, 2005, following the commencement of a 10-day period after which an event of default would have occurred under the Company's $275 million secured credit agreement's cross-default provision and the debt would have become immediately due and payable. Subsequently, Bally entered into a consent with lenders to extend the 10-day period until Aug. 31, 2005. Prior to Aug. 31, the company received consents from its bondholders extending its waiver of default to Nov. 30, 2005. BELHURST CLO: Moody's Rates $12.5 Million Class E Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Belhurst CLO Ltd. These ratings were assigned: * Aaa to $310,000,000 Class A-1 Senior Floating Rate Notes Due 2020; * Aaa to Class A-2 Senior Variable Funding Floating Rate Notes Due 2020; * Aaa to $45,000,000 Class A-3 Senior Floating Rate Notes Due 2020; * Aa2 to $15,000,000 Class B Floating Rate Notes Due 2020; * A2 to $35,000,000 Class C Floating Rate Deferrable Notes Due 2020; * Baa2 to $12,500,000 Class D Floating Rate Deferrable Notes Due 2020; and * Ba2 to $12,500,000 Class E Floating Rate Deferrable Notes Due 2020. The ratings of the classes of notes are based on expected losses posed to the noteholders relative to the promise of receiving the present value of all required interest and principal payments. The ratings take into account the risk of diminishment of cashflows due to defaults in the underlying pool of assets, which consist primarily of senior secured loans. The transaction is managed by INVESCO Senior Secured Management, Inc. BLOUNT INC: Moody's Rates New Loans at Ba3 & Holds B2 Bond Rating ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Blount, Inc.'s new senior secured credit facilities: * $150 million senior secured revolving credit facility, due 2009, rated at Ba3; * $150 million senior secured term loan B, due 2010, rated at Ba3; Moody's affirmed these ratings: * Corporate Family Rating, rated at Ba3; * $175 million senior subordinated notes, due 2012, rated at B2. Outlook stable. On March 23, 2006, Blount restructured its senior secured credit facilities by: -- replacing its $100 million revolving credit facility with a new $150 million revolving credit facility; -- replacing its existing $228 million term loan B with a new $150 million term loan B; -- resetting pricing at a lower spread; -- modifying financial covenants; and -- making several other modifications, the most noteworthy being an increase in its permitted acquisition and restricted payment baskets. Maturities for both the revolver and term loan B remain unchanged. Moody's notes that the restructuring has increased Blount's effective debt capacity though under the constraint of lower total and senior leverage covenants, reset at 4.25x and 2.75x, respectively. Moody's notes further that the modifications significantly increased Blount's flexibility for shareholder friendly action by permitting up to $25 million per year in dividends or stock repurchases subject to compliance with the senior leverage covenant. Moody's estimate that Blount has sufficient room under the restricted payments basket in its indenture to utilize this full $25 million in both 2006 and 2007. Additionally, the amendment permits Blount to make acquisitions, up to $50 million per acquisition and up to $100 million in aggregate, subject to pro forma covenant compliance. Notwithstanding this increased flexibility, Moody's expects Blount to pursue a financial policy that emphasizes continued debt reduction and further reinvestment in the business. The Ba3 rating on the senior secured credit facilities reflects their seniority in the capital structure as well as the benefits of the collateral package, which consists of: -- a first priority interest in substantially all of the assets of Blount and its domestic subsidiaries; and -- upstream guarantees from these subsidiaries. The ratings also reflect the strong earnings growth and resulting de-leveraging that Blount has accomplished since the end of fiscal 2004. The rating action also credits Blount for its ability to successfully offset the adverse impact of rising steel costs through a continued reduction in SG&A expense, which has declined as a percentage of sales from approximately 18.9% in 2003 to 15.7% in 2005. The ratings further consider: a) the company's leading position in its Outdoor Products segment; b) the company's track record of stable cash flow generation owing in great part to the Outdoor Products business model in which approximately 75% of sales are replacement in nature; c) the distribution and counter-cyclical benefits accruing to the Industrial & Power Equipment segment as a result of the marketing, trademark and supply agreements with Caterpillar, Inc.; and d) management's continued capital investment in projects aimed at maintaining its low cost manufacturing position. Blount's ratings are constrained, on the other hand, by: a) the cyclicality inherent in its key end markets, particularly in its Industrial & Power Equipment segment; b) the increasing likelihood of Blount either initiating a dividend or stock buy-back policy or pursuing a more aggressive acquisition program; c) significant cash outlays associated with under funded pension obligations and growth capital expenditures; and d) the pending exhaustion of the company's carry-forwards after which the company's cash tax rate will more closely match its effective tax rate. The stable outlook reflects Moody's anticipation that, over the next twelve to eighteen months, Blount will continue to benefit from strong demand in its key end-markets and from continued strong international growth, which should translate into continued strong free cash flow generation. Over the next twelve to eighteen months, factors that could have favorable rating implications include sustained revenue growth and free cash flow generation resulting in further debt reduction such that free cash flow as a percentage of debt increases to over 15% on a sustainable basis. Factors that could have negative rating implications include an unexpected cyclical downturn in the North American forestry industry resulting in a sharp reduction in net income or an unexpected build in working capital; a sharp increase in steel prices; the loss of any portion of the company's business with its largest customers, as well as an abrupt appreciation of the U.S. dollar that may negatively impact its international sales. Additionally, the initiation of a dividend or stock buyback program that would result in a material reduction in free cash flow as a percentage of debt could have negative rating implications. Blount has recently benefited from favorable cyclical conditions, particularly in its key timber end-markets, and strong international growth. Volume increases coupled with higher average selling prices and increased overhead absorption resulted in increased operating income and cash flow. Margins, however, continue to decrease reflecting higher product costs. Gross margin in 2005 was 31.7% of sales, compared to 33.7% in 2004. The company's ability to garner operating leverage out of its existing selling and administrative capacity offset this gross margin erosion to a great extent as reflected in the more muted decrease in operating margins to 16.0% in 2005 from 16.5% in 2004. Moody's notes that although Blount's restructuring efforts in recent years contributed importantly to its improved financial performance, cyclical factors remain the primary driving force behind its improved financial performance. As such, its reliance on the cyclical lumber, pulp and paper end markets remains a constraint on its ratings. Additionally, foreign currency fluctuations introduce an element of volatility in Blount's financial performance given both its significant and growing percentage of overseas revenues. However, Moody's notes that as the company steadily moves to a less-leveraged capital structure, it should be in a better position to generate stable cash flow through the cycle and in spite of volatility in foreign exchange rates and raw material costs. Blount Inc., headquartered in Portland, Oregon, is a leading provider of equipment, accessories and replacement parts to the global forestry and construction industries. In 2005, Blount generated $757 million in net sales. BLOUNT INC: S&P Affirms B Sub. Debt Rating with Stable Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and senior secured debt ratings on Blount Inc., as well as the 'B' subordinated debt rating on the company. At the same time, the rating agency withdrew its 'BB+' rating on the company's $4.9 million Canadian term loan. In addition, Standard & Poor's raised its recovery rating on the company's amended secured bank credit facility to '2' from '3'. The outlook remains stable. At Dec. 31, 2005, the Portland, Oregon-based industrial manufacturer had approximately $411 million of total debt outstanding (excluding Standard & Poor's pension adjustments). The recovery rating upgrade follows a recently completed amendment to the company's bank facility, which reduced the total size of the facility (from its amount when the rating was initially assigned). The amendment also increased financial covenant flexibility and lowered pricing on the facility. As a result, Standard & Poor's now believes that secured lenders will fare somewhat better than they did under the initial loan structure in the event of a bankruptcy, and that there is a strong likelihood of substantial recovery, estimated in the 80%-100% range. "The speculative-grade ratings on diversified capital goods manufacturer Blount Inc. reflect the company's financial profile, which is aggressively leveraged, though currently improving," said Standard & Poor's credit analyst Joel Levington. "The ratings also reflect the company's weak business risk profile, which is characterized by Blount's significant share of replacement product sales, its solid market-share positions, and its diversified customer base within highly cyclical end markets." Through its three business segments, Blount manufactures a variety of products mainly serving the: * forest products, * construction, * landscaping, * building materials, and * utility sectors. The company is a specialty manufacturer of saw chains and other products that have leading market shares supported by brand-name equity. The near-term industry outlook is somewhat favorable -- growth in demand should slow to the low-to-mid-single-digit range in the near term. The markets are cyclical, and the company's business units have a fair amount of operating leverage, which leads to earnings variability over the business cycle. Blount's competitive strengths include its leading market shares and brand image, which enable the company to garner a high share of the market for replacement parts. Other business strengths are its good customer mix and fair geographic diversity. Blount's strategy entails building on existing marketing agreements as well as making small, complementary acquisitions. The company has publicly stated that it intends to pursue acquisitions in 2006. This adds some integration risk to the business assessment. The lawnmower operation, however, which generated just $3 million of operating income in 2005, remains a non-core unit and is expected to be divested eventually. CALPINE CORP: Canadian Affiliates Can Implement Employee Program ---------------------------------------------------------------- Calpine's Canadian subsidiaries sought and obtained permission from Madam Justice B.E.C. Romaine of the Court of Queen's Bench of Alberta, Judicial District of Calgary, to implement a Key Employee Retention Program for 17 key employees. Toby Austin, director and secretary of Calpine Canada Energy Limited, relates that Retention of the Key Employees is of vital importance to the continued operations and successful restructuring of the Applicants and the CCAA Parties. The Applicants and the CCAA Parties conducted extensive discussions with Ernst & Young, Inc., the Court-appointed monitor, to formulate a key employee retention program that will address the necessity of continued employment of these Key Employees and adhere to the Applicants' and the CCAA Parties' financial constraints. The general terms of the KERP are: (1) The CN$864,000 is comprised of CN$410,000 in Management Bonuses and CN$454,000 in Retention Bonuses: (2) The CN$410,000 in Management Bonuses represents the contingent component of the Key Employees' existing compensation packages that was in place prior to and at the time of the commencement of the CCAA proceedings; (3) The CN$454,000 in Retention Bonuses constitutes an additional incentive bonus to be paid to retain the Key Employees and maximize value in this restructuring; (4) The Key Employees were identified and their KERP payment amounts were established by the Applicants' senior management based on these factors: -- the nature of the employees' job requirements; -- the employees' relevance to a successful restructuring; and -- the estimation of the cost and risk that without incentives to stay as set out in the KERP, the employee would seek alternate employment; (5) The KERP involves two phases of payments. The Phase 1 payment totals $789,000 with 25% to be paid on June 15, 2006 and the remaining 75% payable upon the earlier of: -- court approval of a restructuring plan; -- one month following the completion of a sale of all or substantially all the assets of CCPL; or -- November 15, 2006; (6) The Phase 2 KERP payment totals $75,000 and relates to one individual covering the period from the completion of Phase 1 until February 15, 2007; and (7) Payments under the KERP will only be made if, at the date of the bonus payment, the Key Employee has not voluntarily resigned, has fulfilled his or her employment obligations and has not been terminated for cause. The cost of the KERP is to be allocated among the Applicants and CCAA Parties based on the percentage of time spent by the Key Employees as supported by weekly time summaries. Based on historical allocation rates, it is anticipated that approximately 50% of the KERP bonus will be allocated to the Calpine Power Income Fund or related entities with the remaining 50% of the KERP bonus being allocated to the Applicants and CCAA Parties. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Wants Open-Ended Time to File Notices of Removal -------------------------------------------------------------- Pursuant to 28 U.S.C. Section l452(a), a party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce the governmental unit's police or regulatory power, to the district court for the district where the civil action is pending, if the district court has jurisdiction of the claim or cause of action under 28 U.S.C. Section 1334. Rule 9027(a)(2) of the Federal Rules of Bankruptcy Procedure provides, in pertinent part, that if the claim or cause of action in a civil action is pending when a case under the Bankruptcy Code is commenced, a notice of removal may be filed in the bankruptcy court only within the longest of: (A) 90 days after the Petition Date; (B) 30 days after entry of an order terminating a stay, if the claim or cause of action in a civil action has been stayed under Section 362 of the Bankruptcy Code; or (C) 30 days after a trustee qualifies in a Chapter 11 reorganization case but not later than 180 days after the Petition Date. Bankruptcy Rule 9006(b) empowers the Bankruptcy Court to enlarge the removal period for cause shown. As of the Petition Date, Calpine Corporation and its debtor- affiliates were parties to more than 100 civil state and federal court actions or proceedings. Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York, tells the Court that the Debtors have begun to determine whether removal is appropriate with respect to the Court Actions. The analysis requires review of the facts and procedural posture of each individual Court Action, and often must involve coordination with separate local counsel who represent the Debtors. The analysis also includes an evaluation of whether the Court Action could be resolved in connection with a plan of reorganization or settlement. Mr. Cantor says the Debtors need more time to complete the analysis. Thus, the Debtors ask the Court to extend the time for them to file notices of removal with respect to civil actions pending as of the Petition Date, until the later to occur of: * July 18, 2006; or * 30 days after the Court terminates the automatic stay with respect to the particular action sought to be removed. Mr. Cantor notes that the rights of the Debtors' adversaries would not be prejudiced by an extension as any party to a Court Action that is removed may seek to have it remanded pursuant to Section l452(a) of the Judiciary and Judicial Procedures Code. If no objections are timely filed, the Debtors' Removal Period will automatically be extended without hearing or further Court order. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Marist Parties Wants Claims Allowed in Portland ---------------------------------------------------------------- Marist High School Foundation and Marist High School Parent and Alumni Service Club ask Judge Elizabeth Perris of the U.S. Bankruptcy Court for the District of Oregon to temporarily allow their claims for purposes of voting and confirmation of the Plan of Reorganization filed in the Archdiocese of Portland in Oregon's Chapter 11 case. The Marist Parties want the Court to temporarily allow their claims in these proposed amounts: Claimant Claim No. Claim Amount -------- ---------- ------------ Marist High School Foundation 648 $1,435,594 Marist HS Parent & Alumni 649 10,000 The Marist Parties assert that actual liquidation of their claims prior to confirmation will unduly delay administration of Portland's Chapter 11 case. Accordingly, the proposed estimation should be approved. Tort Committee Objects Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland, Oregon, argues that temporary allowance of the Marist Parties' Claims is not necessary since the Claims will be adjudicated on their merits in the context of the claims objection process prior to plan confirmation. Furthermore, the Marist Parties cannot demonstrate undue delay in the administration of the Archdiocese's bankruptcy cases. Mr. Kennedy argues that the Marist Parties do not set forth a method for temporary allowance or state the basis on why the Court should estimate the claims in the proposed amount. "The Marist Parties are not likely to have any allowable claim and certainly not an allowable lien on the [Archdiocese's] property," Mr. Kennedy explains. "The Marist Parties claims are based solely on gifts, contributions and donations and therefore should be denied." About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Court Amends GVA's Retention Order in Spokane -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Washington amends the order authorizing the Tort Litigants Committee, the Tort Claimants Committee, and Gayle E. Bush, the Future Claims Representative appointed in the Diocese of Spokane's Chapter 11 case, to retain GVA Kidder Matthews as appraiser and consultants in the Diocese's case. Judge Williams rules that GVA's allowed fee must not exceed $240,000. Upon the completion of its services, GVA will file a fee application and a statement of fees and expenses due without detailing the time rendered by its personnel. Upon the stipulation with the Committees and the FCR, the Diocese, and the objecting Parishes, the parties may, without Court's approval, modify GVA's scope of services by adding or subtracting the properties to be appraised provided that the firm's fee is not increased. As reported in the Troubled Company Reporter on Dec. 14, 2005, Judge Williams authorized the parties to retain GVA Kidder Mathews as their appraiser and consultant subject to these terms and conditions: (a) On or before December 19, 2005, the FCR and the Committees will file with the Court: * a report setting forth the principles they will utilize in selecting the properties that will be appraised by GVA; and * a list of the Properties, if available. If the FCR, the Committees, the Diocese of Spokane and the Parishes have agreed on the Properties, the report need not identify the principles upon which the Properties were selected because the consent of the parties would be sufficient basis for the Court to approve the selection. (b) Pending further Court order, GVA's employment will be limited to: * consulting with the FCR and the Committees to identify the principles to be utilized in selecting the Properties; * assisting the FCR and the Committees in the selection of the Properties; and * assisting the FCR and the Committees in their consultations with the Diocese and the Parishes regarding the selection of the Properties. About Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000) CEDAR CBO: Moody's Lifts $46MM Class II Notes' Rating to Baa3 ------------------------------------------------------------- Moody's Investors Service upgraded these classes of notes issued in 1999 by Cedar CBO, Limited, a collateralized bond obligation issuer: * The $230,000,000 Class I Senior Secured Floating Rate Notes due 2011 Prior Rating: A2 (on watch for possible upgrade) Current Rating: Aaa * The $46,000,000 Class II Senior Secured Fixed Rate Notes due 2011 Prior Rating: B1 (on watch for possible upgrade) Current Rating: Baa3 The rating actions primarily reflect the increase in the senior class overcollateralization ratio which resulted from the pay down of the Class I notes, according to Moody's. CITIZENS COMMS: Donald R. Shassian Replaces Jerry Elliott as CFO ---------------------------------------------------------------- Citizens Communications Company (NYSE: CZN) disclosed that Donald R. Shassian will join the company on April 17, 2006, as Chief Financial Officer. He succeeds Jerry Elliott, who was appointed President of Citizens Communications Company in December 2005. Since 2001, Mr. Shassian has been providing M&A consulting to several communications companies including AT&T Inc. (formerly SBC Communications) and Consolidated Communications Inc., and most recently served as the CFO for the Northeast region of Health Net, Inc., a managed healthcare company. In 1999 and 2000, Mr. Shassian was with RSL Communications, Ltd., a $1.6 billion international voice and data communications provider in 22 countries. He joined RSL in 1999 as the Executive Vice President and Chief Financial Officer and was later promoted to Chief Operating Officer. Prior to 1999, Mr. Shassian was the Senior Vice President and Chief Financial Officer for Southern New England Telecommunications Corp. (SNET), which was a provider of communications, information and entertainment services in southern New England with more than $2 billion in revenues and 10,000 employees. He was responsible for the successful negotiation, sale and integration of SNET into SBC Communications in 1998. Prior to joining SNET in December 1993, Mr. Shassian was with Arthur Andersen for more than 16 years. His last position there was as the Partner-in-Charge of the Telecommunications Industry Practice in North America. A graduate of Bucknell University with a B.S. in Business Administration, Mr. Shassian is also a C.P.A. He will report to Maggie Wilderotter, Chairman and CEO. Ms. Wilderotter remarked, "I am delighted to welcome Don to Citizens. We value his experience in the communications industry, his integrity and his track record as a results-driven decision maker who offers sound business and financial solutions. I look forward to working closely with him and to his joining our Senior Leadership Team." Citizens Communications Corporation is a telecommunications company headquartered in Stamford, Connecticut. * * * As reported in the Troubled Company Reporter on Feb. 10, 2006, Moody's said that Citizens Communications' announced sale of Electric Lightwave to Integra Telecom, for $247 million, does not significantly alter Citizens' credit profile and ratings: Issuer: Citizens Communications Company * Corporate family rating --Ba3 * Senior unsecured revolving credit facility --Ba3 * Senior unsecured notes, debentures, bonds -- Ba3 * Multiple seniority shelf -- (P)Ba3 / (P)B2 Issuer: Citizens Utilities Trust * Preferred Stock (EPPICS) - B2 Moody's said the Outlook for both Issuers is Stable. As reported in the Troubled Company Reporter on Sept. 29, 2005, Fitch Ratings affirmed the 'BB' rating on Citizens Communications Company's senior unsecured debt securities and the 'BB-' rating on Citizens Utilities Trust's 5% company-obligated mandatorily redeemable convertible preferred securities due 2036. Fitch said Citizens' Rating Outlook is Stable. As reported in the Troubled Company Reporter on Sept. 2, 2005, Standard & Poor's Ratings Services affirmed its ratings on Stamford, Connecticut-based Citizens Communications Co., including the 'BB+' corporate credit rating. S&P said the outlook is negative. COLLINS & AIKMAN: Lear Settles Dispute with GE Capital ------------------------------------------------------ In a stipulation approved by the U.S. Bankruptcy Court for the Eastern District of Michigan, Collins & Aikman Corporation, its debtor-affiliates, Lear Corporation and General Electric Capital Corporation agree that: a. Lear may pay to itself $331,899 from the portion of the $4,122,012 that Lear owes to the Debtors; b. Lear will pay $2,697,683 to the Debtors, on account of the portion of the Lear Receivable not assigned to GECC. The amount represents the undisputed prepetition amount owed by Lear, less the Lear Payment Amount and less an $88,209 reserve to cover the portion of disputed amount Lear claims it is owed; c. Lear will pay $1,323,907 to GECC through an account maintained by Carcorp, Inc., for the benefit of GECC without recoupment or set-off; and d. the Debtors, GECC and Lear will continue to seek resolution with respect to certain disputed amounts. Lear may continue its administrative hold on the additional $88,209 that is owed by the Debtors on account of prepetition shipments. To the extent it applies, the automatic stay under Section 362 of the Bankruptcy is lifted to allow Lear to make the payments. As reported in the Troubled Company Reporter on Jan. 13, 2006, GECC is a successor-in-interest to a receivables, related security, collections and proceeds assignment agreement between the Debtors and Carcorp, Inc. The Debtors' estates, through their 100% equity ownership of Carcorp, have a residual interest in the Prepetition Receivables after GECC has been paid in full. Lear Corporation is an account debtor and obligor to the Debtors with respect to certain unpaid Prepetition Receivables. GECC has made demand on the Debtors, to collect the Prepetition Receivables from Lear. Lear has failed and refused to pay the Prepetition Receivables to the Debtors or to GECC. Instead Lear has asked the Bankruptcy Court for permission to set off a $375,858 prepetition payable owed by Collins & Aikman Corp. to the amounts it owes the Debtors Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Active Mould Asserts Lien on Molds ---------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 27, 2006, Active Mould & Design Ltd. sought relief from the automatic stay to enforce its alleged statutory lien rights on various molds that it sold and delivered to Collins & Aikman Corporation and its debtor-affiliates prepetition. The Debtors countered that Active Mould has not established that it has a valid, properly and timely perfected and enforceable security interest in the Molds. Patrick J. Kukla, Esq., at Carson Fischer, PLC, further contended that Active Mould has failed to establish cause for lifting the automatic stay. Pursuant to Section 362(d) of the Bankruptcy Code, the U.S. Bankruptcy Court for the Eastern District of Michigan may lift the stay either: -- for cause, including lack of adequate protection; or -- with respect to an act against property, if the debtor has no equity in the property and if the property is not necessary for an effective reorganization. Active Mould Responds Ryan D. Heilman, Esq., at Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, tells the Court that under Michigan's Moldbuilers' Lien Act, MCL 445.619, et seq., a moldbuilder has a valid and enforceable lien on all molds built by the moldbuilder if two requirements are met: (1) the moldbuilder must record its name and address on the Molds; and (2) the moldbuilder must file financing statements covering the Molds. Mr. Heilman asserts that Active Mould & Design Ltd. has fully complied with both requirements and has a valid and enforceable lien on the Molds. Among other things, the Debtors argued that Active Mould failed to establish cause to lift the automatic stay because "if Active Mould were to be granted relief from the stay today, the Molds would have no greater value to them than if Active Mould were to take possession of the Molds at a later date." Mr. Heilman contends that this argument makes little sense and fails to support the Debtors' burden of proving that no cause exists to lift the automatic stay. The Debtors admit that the Molds are currently being used to run production parts for the Debtors' customers. It is evident in the automotive industry that each customer program requires a finite number of parts. Once sufficient parts are produced and the program is terminated, the molds used to produce the parts become nearly worthless. The more parts produced, the less necessary the Molds become. By continuing to use the Molds to produce production parts, Mr. Heilman notes that the Debtors are necessarily reducing the value of those Molds by reducing the customers' demand for the parts created, even without considering the normal wear and tear that constantly reduces the value of all machinery. Against this backdrop, Mr. Heilman asserts, Active Mould has shown that the Molds are decreasing in value. Thus, Active Mould has is entitled to its request to lift the automatic stay or for adequate protection of its interest in the Molds Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMMUNITY HEALTH: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Community Health Solutions of America, LLC 100 First Avenue South, Suite 600 St. Petersburg, Florida 33701 Tel: (727) 490-9000 Fax: (727) 812-0214 Bankruptcy Case No.: 06-01215 Type of Business: The Debtor provides cost-effective health care services through a variety of insurance products. See http://www.chsamerica.com/ Chapter 11 Petition Date: March 24, 2006 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Allan C. Watkins, Esq. Watkins Law Firm, P.A. 707 North Franklin Street, Suite 750 Tampa, Florida 33602 Tel: (813) 226-2215 Fax: (813) 226-2038 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. COMPTON PETROLEUM: S&P Rates $150 Million Sr. Unsec. Notes at B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' senior unsecured debt rating to Compton Petroleum Corp.'s proposed 7.625% US$150 million add-on to existing senior unsecured notes to be issued by Compton Petroleum Finance Corp., a wholly owned subsidiary of Compton Petroleum. The debt is fully guaranteed by the company and all its wholly owned subsidiaries (except Compton Petroleum (U.S.A.) Corp. and Redwood Energy (U.S.A.) Ltd.). Standard & Poor's also affirmed its existing 'B+' long-term corporate credit and 'B' senior unsecured debt ratings on the company. The outlook is stable. "Compton will use the proceeds from the sale of the notes to repay a portion of its existing debt under its senior secured credit facilities; therefore the company is converting this debt into a more permanent part of its capital structure," said Standard & Poor's credit analyst Jamie Koutsoukis. "Though we expect the company will continue to increase borrowings on its credit facilities throughout the year following the notes offering to fund its ambitious near-term growth objectives, we believe that the increased proven reserve base supports current debt levels. We do, however, need to see Compton capitalize on its reserves and increase its production to realize improved internally generated cash flows, else there could be negative pressure placed on the company's financial profile," Ms. Koutsoukis added. The stable outlook reflects Standard & Poor's expectation that Compton's existing credit profile will remain relatively unchanged in the near to medium term. Although Compton's business profile should improve as the company continues to build on its three core operating areas in western Canada, where its existing portfolio of assets should generate increases to both reserves and production, the company's financial profile is somewhat hampered as Compton will use external debt to fund its growth objectives. A positive rating action is possible if Compton is able to achieve internal reserve and production growth while maintaining a stable break-even cost profile. Alternatively, a negative rating action is possible if Compton is unable to economically increase its proven reserves and production, and its financial profile further weakens. CONMED CORP: Moody's Rates Proposed $250MM Credit Facility at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned a rating of Ba2 to ConMed Corporation's proposed $250 million senior secured credit facility. Proceeds of the offering will be used to refinance its existing senior secured credit facility. Moody's will withdraw the ratings on the existing facility at the completion of the proposed financing transaction. Moody's also affirmed the Ba3 Corporate Family Rating and the B2 rating on ConMed's $150 million senior subordinated convertible notes. The ratings outlook was changed to negative from stable The negative ratings outlook reflects deterioration in ConMed's results in the second half of 2005. Same store revenue fell by 2% in the second half of 2005 compared to a 7.5% increase in the first half of 2005. As a result, cash flow from operations declined from $75 million in 2004 to $51 million in 2005, while free cash flow dropped from $62 million to $35 million during this same time period. Cash flow was negatively affected by a $33 million increase in inventories and a decline in the sale of receivables. Moody's believes the recent deterioration in ConMed's financial results is caused primarily by the following factors: -- lower than anticipated single-use products sales because of lower surgical procedures; -- lower than anticipated capital equipment sales as hospitals delayed concluding capital purchases; -- higher material costs for plastic-based products due to higher oil prices and an increase in legal costs in a suit against a larger competitor alleging unfair marketing practices; and -- an increase in-bound and out-bound freight costs. Moody's believes that ConMed has maintained market share in its key segments and that it has not lost any major customers. The ratings also consider the operational and financial risk of the company's strategy in supplementing internal growth with the acquisition of smaller companies and product divisions from other companies. Moody's notes that ConMed has completed nine acquisitions in the past ten years in order to diversify its core product line while penetrating new markets. In September 2004, ConMed acquired an Endoscopic Technology product from C.R Bard, which added approximately $60 million in annualized revenue and provided the company with a sixth business unit. ConMed has funded these acquisitions through a combination of both equity and debt. Price increases in raw materials may pressure the company's operating costs while affecting the competitive position of ConMed's products. As mentioned earlier, the recent increase in raw material costs, particularly in oil related products such as resin, has pressured gross margins over the past few quarters. The ratings also consider the risk of operating abroad, including foreign exchange risk, as 37% of 2005 revenues came from outside of the United States. Lastly, Moody's is concerned that ConMed may have to accelerate research spending in order to remain competitive as the company only spends approximately 4% of its revenue on research and development. Research and Development expenditures increased by 26% to $25.5 million in 2005 and the company introduced 14 new products. The ratings also consider the stability of the company's revenue because of its geographic diversity, as well as customer and product diversification. The company sells and distributes its products on a global basis in over 100 countries. The company has six major product segments: Arthroscopy, Powered Instruments, Electro surgery, Patient Care, Endo Surgery and Endoscopic Technology. The stability of the company's revenue is also enhanced by the fact that over 75% of the companies products are single-use disposable products, which provide an annuity-like stream of revenues. ConMed manufactures most of its products and components, which allows it to contain costs, control quality, maintain the security of proprietary processes and react quickly to changes in demand. Moody's also notes that none of the critical raw materials are sourced from one single supplier. The company is able to capture the majority of the economics and value-added feature of its products as it has a direct sales-force of almost 400 people in the U.S and 50 sales representatives internationally. The company sells directly to hospitals in ten countries and uses dealers for its two major product lines, arthroscopy and powered instruments. ConMed also sells direct in the UK and Canada for its other four product lines. Moody's expects that ConMed will continue to grow revenue between 4% and 6% over the next few years, benefiting from new product introductions, increased market share, and international growth of 7% to 9%. As a result, Moody's expects that operating cash flow should improve to a range of $60 million to $70 million in 2006 and a range of $70 million to $85 million in 2007 because of stable operating margins, modest working capital requirements, and capital spending of $15 million to $25 million a year. After adjusting for operating leases, Moody's anticipates that operating and free cash flow to debt will rebound from 10% to 13% and 6% to 8%, respectively, in 2005, to 25% to 28% and 20% to 22% in 2006. If the company grows cash flows more rapidly than Moody's expects, and uses the excess cash flows to retire debt, the company's outlook could become stable. ConMed has set its debt to total capitalization target at the 35%-45% range, and is currently operating on the high end of that range. If it lowers its debt to total capitalization by issuing equity to retire debt in order to achieve the lower limit of its debt to total capitalization target, its outlook could also improve. Moody's would also like to see the company sustain free cash flow to debt ratios of 13% to 16% on a sustained basis. Conversely, if competitive pressures further retard revenue and cash flow growth, or additional acquisition financing increases the company's debt burden materially, the ratings could be lowered. The ratings could also face downward pressure if recent results do not stabilize and cash flow continues to deteriorate. The ratings could be downgraded if the adjusted free cash flow to adjusted debt remains in the 6% to 8% range as was the case in 2005. ConMed intends to issue a new $150 million Term Loan Facility and $100 million Revolving Credit Facility. As noted earlier, proceeds from the new facility will be used to refinance its existing $141 million senior secured credit facility as well as for general corporate purposes. As a result of the refinancing, total leverage does not increase much, assuming the revolver remains at full, or nearly full, capacity over the next twelve months. In fact, Moody's rating incorporates Moody's expectation that availability under the company's $100 million proposed revolving credit facility will remain virtually in tact. Under the terms of the proposed transaction, ConMed will have a maximum total leverage ratio, a minimum fixed charge coverage ratio and maximum total senior leverage ratio of 4.5 to 1, 2.25 to 1 and 3.0 to 1, respectively, in 2006. Moody's expects that the company will have sufficient cushion and remain in compliance with these financial covenants under its credit facility for the next twelve months. The company has more cushion in the covenants of the new credit facility compared to those in the existing facility. Moody's rated the senior credit facility one notch above the Corporate Family Rating because Moody's believes there is sufficient collateral coverage in a distressed scenario. That belief is based on the bank debt's seniority, guarantees from subsidiaries, and a collateral package consisting of substantially all assets of the company. The rating reflects a lower expected loss for the senior secured class of debt relative to the senior subordinated debt class and any potential senior secured debt. The B2 rating on the senior subordinated convertible notes reflects the contractual subordination to senior debt at the issuing entity, ConMed. The rating also incorporates an effective subordination to total obligations at the operating subsidiaries. The senior subordinated convertible notes are not guaranteed. Moody's assigned these ratings: * $100 million Senior Secured Revolver, due 2011, rated Ba2 * $150 million Senior Secured Term Loan B, due 2013, rated Ba2 Moody's affirmed these ratings: * Corporate Family Rating, at Ba3 * $150 million senior subordinated convertible notes, due 2024, at B2. The ratings outlook was changed to negative from stable. After the close of the proposed transaction, Moody's will withdraw these ratings assigned to ConMed: * $100 million revolving credit facility, due 2007, rated Ba3 * $140 million Term Loan B, due in 2009, rated Ba3 Located in Utica, New York, ConMed Corporation is a medical device manufacturer specializing in instruments, implants and video equipment for arthroscopic sports medicine and powered surgical instruments, such as drills and saws, for orthopedic, otolaryngology, neuro-surgery and other surgical specialties. In 2005, its consolidated revenues were approximately $617 million. CONMED CORP: S&P Rates Proposed $250 Mil. Credit Facility at BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to ConMed Corp.'s proposed $250 million secured credit facility, consisting of: * a $150 million seven-year term loan; and * a $100 million five-year revolving credit facility. The bank loan rating is 'BB-' (at the same level as the corporate credit rating) with a recovery rating of '3', indicating the expectation for meaningful recovery (50%-80%) of principal in the event of a payment default. At the same time, Standard & Poor's affirmed the existing 'BB-' corporate credit rating on the company. The outlook is stable. "The rating on Utica, N.Y.-based ConMed Corp. reflects Standard & Poor's concern that the midsize medical products manufacturer, though well established in a number of surgical markets, faces the ongoing challenge of competing against larger, better-financed companies," said Standard & Poor's credit analyst Cheryl Richer. The company is trying to capitalize on its position as an important manufacturer of arthroscopic and powered surgical instruments and electrosurgical systems. By focusing on niche areas within operating room services and establishing relationships with physicians through a sizable sales force, ConMed has garnered the second-largest U.S. market share in four of its five product lines. COVAD COMMS: Inks $50MM Stock & Note Purchase Pact with Earthlink ----------------------------------------------------------------- Covad Communications Group, Inc., and its wholly owned subsidiary, Covad Communications Company, entered into a Purchase Agreement with EarthLink, Inc., for the sale of these securities to Earthlink: (1) 6,134,969 shares of Group's common stock, par value $0.001, for an aggregate purchase price of $10,000,000, for a $1.63 price per share. The price per share equals 105% of the arithmetic average of the daily volume weighted average trading price quoted on the American Stock Exchange for the Company's Common Stock for each of the ten trading days immediately preceding March 15, 2006; (2) a $40,000,000 12% Senior Secured Convertible Note due 2011 for an aggregate purchase price of $40,000,000. Terms of the Notes Interest on the Notes will be payable on March 15 and September 15 of each year, starting on September 15, 2006, and may be paid in cash or in additional notes, identical to and of the same series as the original Note. Principal on the Notes will be payable on March 15, 2011, provided that under certain circumstances, EarthLink may require Covad to repay the remaining principal amount of the Notes held by EarthLink in four equal installments due March 15 of each year, starting on March 15, 2007 and ending on March 15, 2010. The Notes will be initially convertible into 21,505,376 shares of Common Stock, reflecting an initial conversion price of $1.86 per share, which equals 120% of the arithmetic average of the daily volume weighted average trading price quoted on the AMEX for the Company's Common Stock for each of the ten trading days immediately preceding March 15, 2006. In the event that Covad makes all interest payments through the issuance of Additional Notes, the Additional Notes will be convertible into 17,007,477 shares of Common Stock, reflecting a conversion price of $1.86 per share. The conversion rate will be subject to weighted average antidilution protection. In no event will the Note and any Additional Notes be converted into an aggregate number of shares of Common Stock which in the aggregate exceeds 19.9% of the then outstanding shares of Common Stock of the Company. The Note will be initially convertible into shares of Common Stock beginning on March 15, 2008, or upon a change of control of the Company, if occurring earlier. The Company will be required to offer to redeem the Note at 100% of the principal amount upon a Change of Control of the Company. The obligations under the Note will be secured by certain property, plant and equipment purchased with the proceeds of the Note pursuant to the terms of a Security Agreement to be entered into between the Company, Operating and EarthLink, and the Primary Shares and the Underlying Shares will be subject to the terms of a Registration Rights Agreement between the Company and EarthLink. Additionally, in connection with the transactions contemplated by the Purchase Agreement, Operating and EarthLink will enter into an Agreement for XGDSL Services, pursuant to which Covad will develop and deploy its next generation broadband services in specified geographic service areas. The proceeds from the Transaction will be used to fund the deployment of these services. The Note and the Primary Shares are being issued to EarthLink in reliance on the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended. A full-text copy of the Purchase Agreement is available for free at http://ResearchArchives.com/t/s?6f4 Covad Communications Group, Inc. -- http://www.covad.com/-- provides broadband voice and data communications. The company offers DSL, Voice over IP, T1, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value- added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. At Dec. 31, 2005, Covad Communications Group, Inc.'s balance sheet showed a stockholders' equity deficit of $20,169,000 compared to a $8,635,000 shareholders' equity deficit at Dec. 31, 2004. Covad emerged from a chapter 11 restructuring in Dec. 2001 under a plan of reorganization that swapped $1.4 billion of bond debt with a combination of cash (about 19 cents-on-the-dollar) and a 15% equity stake in the company. Covad's prepetition shareholders retained an approximate 80% equity interest in the company. CURATIVE HEALTH: Case Summary & 41 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Curative Health Services, Inc. aka Curative Health Services Parent Holding Company 61 Spit Brook Road Executive Tower, Suite 505 Nashua, New Hampshire 03060 Tel: (800) 966-5656 Bankruptcy Case No.: 06-10552 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Curative Pharmacy Services, Inc. 06-10550 Curative Health Services of New York Inc. 06-10551 Curative Health Services Co. 06-10553 CHS Services, Inc. 06-10554 eBioCare.com, Inc. 06-10555 Hemophilia Access, Inc. 06-10556 Apex Therapeutic Care, Inc. 06-10557 Infinity Infusion, LLC 06-10558 Infinity Infusion II, LLC 06-10559 Infinity Infusion Care, Ltd. 06-10560 Optimal Care Plus, Inc. 06-10561 MedCare, Inc. 06-10562 Critical Care Systems, Inc. 06-10563 Curative Health Services III Co. 06-10564 Type of Business: The Debtor is a leading provider of high-touch patient services for chronic disorders and disease states. See http://www.curative.com/ Chapter 11 Petition Date: March 27, 2006 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtors' Counsel: Brian E. Greer, Esq. Martin N. Flics, Esq. Linklaters 1345 Avenue of the Americas New York, New York 10105 Tel: (212) 903-9000 Fax: (212) 903-9100 Debtors' financial condition as of September 30, 2005: Total Assets: $155,000,000 Total Debts: $255,592,000 Debtors' Consolidated List of 41 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank, N.A. Senior Note Claims $185,000,000 Corporate Trust Services Sixth and Marquette MAC N9303-120 Minneapolis, MN 55479 American Surgical Litigation $15,303,627 Pharmacy Inc. 103 East Highland Avenue San Bernardino, CA 92406 Park Compounding Pharmacy Inc. Litigation $15,079,454 280 North Westlake Boulevard Suite 100 Westlake Village, CA 91362 Siskin's San Carlos Litigation $9,951,442 Pharmacy Inc. 825 Laurel Street San Carlos, CA 94070 Jon M. Tamiyasu Apex Note Claim $1,523,530 Stockholders' Representative 5262 Pesto Way Oak Park, CA 91377 Cindy Theiss Litigation $550,000 On Behalf of Carol Theiss 3340 Elaine Way Sparks, NV 89431 J.D. Molex LLC Lease Rejection $239,729 Rincon Holdings LLC Lease Rejection $199,541 WK Equities LLC Lease Rejection $141,344 West Lake Village Lease Rejection $104,456 Industrial Park Unitedhealth Group of Contract Claim $99,500 Hartford, Connecticut Samantha LLC Lease Rejection $91,818 NYNEX Long Distance Company Contract Claim $88,153 dba Verizon Enterprise Solutions Southern Commercial Lease Rejection $68,750 Properties Inc. Caroline Sophia Nickens III Lease Rejection $64,929 Burman's Apthecary LLC Contract Claim $58,000 6 WPI Woodside Road LP Lease Rejection $35,027 c/o WP Investments Wells Fargo Financial Contract Rejection $34,248 Leasing Inc. The Nasdaq Stock Market Inc. Contract Claim $30,500 Allan V. Rose Lease Rejection $26,570 dba AVR Realty Co. CIT Technology Financial Contract Rejection $14,400 Services Bearden Development Lease Rejection $11,900 Company Inc. Roy and Carol Nordman Sublease Rejection $11,460 De Lage Landen Financial Contract Rejection $11,195 Services Singer Properties Lease Rejection $10,365 Ellinwood Court Realty Lease Rejection $6,000 Xerox Corporation Contract Rejection $4,079 Innospine Inc. Sublease Rejection $3,000 Imagistics Contract Rejection $1,080 Carol Reily Litigation $0 on behalf of Christian Brown Coram Inc. and Arlin M. Adama Litigation $0 Donna Ligda Litigation $0 Emilsi Deschamps Litigation $0 Factor Health Management Litigation $0 Mobile Quest Sublease Rejection $0 Entertainment Inc. Robert Gardner Litigation $0 Sharron Akers Litigation $0 Stanley Hamel and Estate of Litigation $0 Sydelle Hamel Thomas M. McMurray Litigation $0 on behalf of William Smith American Surgical Litigation $0 Pharmacy Inc. Ophelia Howe Litigation $0 DANA CORP: Asks Court to Establish Interim Compensation Procedures ------------------------------------------------------------------ Pursuant to Sections 105(a) and 331 of the Bankruptcy Code, Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to establish an orderly, regular process for: (a) the allowance and payment of fees and expenses of attorneys and other professionals whose services are authorized by the Court pursuant to Sections 327 or 1103; and (b) reimbursement of out-of-pocket expenses incurred by members of the Official Committee of Unsecured Creditors and any statutory committees appointed in the Debtors' Chapter 11 cases. Corinne Ball, Esq., at Jones Day, in New York, explains that the procedures proposed by the Debtors will enable them to closely monitor the costs of administration, maintain level cash flow and implement efficient cash management procedures. The procedures will also allow the Court and other parties-in-interest to ensure the reasonableness and necessity of the fees sought by the Retained Professionals. Billing Procedures On or before the last day of each month following the month for which compensation is sought, each Retained Professional will serve a monthly statement to: (i) the Debtors, (ii) Jones Day, (iii) the attorneys for the Committees, (iv) the Office of the United States Trustee, and (v) counsel to Citicorp North America, Inc. The Monthly Statement must contain a list of the individuals and their titles who provided services, their billing rates, the aggregate hours spent by each individual, a reasonably detailed breakdown of the disbursements incurred and contemporaneously maintained time entries for each individual in increments of tenths of an hour. The Monthly Statement need not be filed with the Court. Each Notice Party will have at least 14 days after its receipt of a Monthly Statement to object to the Statement. At the expiration of the 45-day period following the month for which compensation is sought, the Debtors will promptly pay 80% of the fees and 100% of the expenses identified in each Monthly Statement to which no objection has been served. If an objection is served to a particular Statement, the Debtors will only pay the portion not subject to the objection. If the objecting parties and the Retained Professional are able to resolve an objection, then the Debtors will promptly pay the resolved portion of the Monthly Statement. All objections that are not resolved by the parties will be preserved and scheduled for hearing before the Court. The service of an objection to a Monthly Statement will not prejudice the objecting party's right to object to any fee application made to the Court. Furthermore, the decision by any party not to object to a Statement will not be a waiver of any kind or prejudice that party's right to object to any fee application. Approximately every 120 days, each Retained Professional will serve and file with the Court, in accordance with General Order M-242, as amended by General Order M-269 and pursuant to Sections 330 and 331, an application for interim or final Court approval and allowance of the compensation and reimbursement of expenses. Any Retained Professional who fails to file a fee application when due (i) will be ineligible to receive further monthly payments until further Court order and (ii) upon Court order, may be required to disgorge any fees paid since retention or the last fee application, whichever is later. The pendency of an application, or a Court order that payment of fees and expenses was improper as to a particular Monthly Statement will not disqualify a Retained Professional from the future payment of fees and expenses, unless otherwise ordered by the Court. Neither the payment of, nor the failure to pay, in whole or in part, monthly compensation and reimbursement will have any effect on the Court's interim or final allowance of compensation and reimbursement of expenses of any Retained Professional. The attorney for any of the Committees may, in accordance with the Billing Procedures, collect and submit statements of expenses, with supporting vouchers, from members of the Committee he or she represents. The first Monthly Statement for Retained Professionals whose retention has been approved by the Court as of the Petition Date will cover the services rendered beginning on the Petition Date through March 30, 2006. Their first interim fee applications will cover postpetition services rendered through July 31, 2006. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) DANA CORP: Undisputed Supplier Obligations Gets Priority Status --------------------------------------------------------------- In the ordinary course of business, numerous suppliers and service providers provide Dana Corporation and its debtor- affiliates with goods and services that are integral to their ongoing business operations. In addition, as of the bankruptcy filing, the Debtors had outstanding prepetition purchase orders with numerous suppliers, including orders for a variety of supplies and services that the Debtors require to produce goods for their customers and maintain current production and delivery schedules. Due to their Chapter 11 filing, the Debtors are concerned that the suppliers may perceive a risk that they will be treated as prepetition general unsecured creditors for the invoiced cost of any supply shipments made or services provided postpetition pursuant to the Outstanding Orders. As a result, the suppliers may refuse to ship materials and supplies to the Debtors or provide essential services unless the Debtors issue substitute postpetition purchase orders or provide other assurances of payment. However, according to Corinne Ball, Esq., at Jones Day, in New York, issuing substitute purchase orders on a postpetition basis would be administratively burdensome, time-consuming and counterproductive to the Debtors' reorganization efforts. Moreover, even if new postpetition purchase orders are issued, there is no assurance that suppliers will feel sufficiently confident of the Debtors' ability to pay for new goods and services to continue doing business with the Debtors without interruption. Ms. Ball maintains that the obligations arising out of the postpetition delivery of goods and provision of services to the Debtors are expenses incurred for the benefit of the Debtors' estates and assist in preserving the value of the Debtors' businesses. Hence, these costs are accorded administrative expense priority status under the standards contained in Section 503(b)(1)(A) of the Bankruptcy Code. At the Debtors' behest, the U.S. Bankruptcy Court for the Southern District of New York confirms that the Debtors' undisputed obligations to the suppliers arising from shipments of goods and provision of services postpetition, whether or not the purchase orders were made before the chapter 11 filing, will be entitled to administrative expense priority status under Section 503(b)(1)(A). To provide further assurance to the Suppliers on a going forward basis, the Debtors obtained permission to pay their undisputed obligations to Suppliers that are entitled to administrative expense priority in the ordinary course of the Debtors' businesses, pursuant to Section 363(c). The Debtors represent that they have adequate cash reserves and anticipated access to sufficient debtor-in-possession financing to pay their postpetition obligations to suppliers. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Gets Lenders Nod for Changes to $1.9 Billion DIP Loan ---------------------------------------------------------------- Delta Air Lines (Other OTC:DALRQ) received approval from the lenders of its $1.9 billion debtor-in-possession credit facility to amend certain aspects of that facility. The amendments: * will reduce Delta's interest rate on the three term loans making up this facility, resulting in annual savings of more than $30 million and * will result in a reduction in the interest rate in Delta's post-petition financing from American Express Travel Related Services Company, Incorporated. "We are pleased that our lenders have agreed to reduce the interest rate for our debtor-in-possession credit facility, which will result in significant cost savings for Delta going forward," said Edward H. Bastian, Delta's executive vice president and chief financial officer. "Another benefit of the revised DIP agreement is that it will provide us with additional flexibility to expand our fuel hedging program, which has already yielded tangible savings since reinstatement of the program in February 2006. We will continue to aggressively pursue opportunities to reduce costs as we seek to achieve the $3 billion in annual cost savings and revenue enhancements in our business plan." GE Commercial Finance, Administrative Agent for the DIP credit facility, managed the amendment process. The amendments to the DIP credit facility will also enable Delta to consummate amendments to certain unrelated financing arrangements with GE. Delta will file a Form 8-K with the Securities and Exchange Commission within several days that will provide additional detail about the DIP amendments. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DENALI CAPITAL: Moody's Rates $14 Million Class B-2L Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these following ratings to Notes issued by Denali Capital CLO VI, Ltd.: * Aaa to the $100,000,000 Class A-1LR Variable Funding Notes Due April 2020 and to the $277,000,000 Class A-1L Floating Rate Notes Due April 2020; * Aa2 to the $27,000,000 Class A-2L Floating Rate Notes Due April 2020; * A2 to the $24,000,000 Class A-3L Floating Rate Notes Due April 2020; * Baa2 to the $19,000,000 Class B-1L Floating Rate Notes Due April 2020; and * Ba2 to the $14,000,000 Class B-2L Floating Rate Notes Due April 2020. Moody's also assigned the rating of A2 to the Class C-1 Combination Notes Due April 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The rating assigned to the Combination Notes addresses the ultimate return of Rated Balance only. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of U.S. dollar- denominated senior secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. DC Funding Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. DIRECTVIEW INC: Withdraws June 2005 Registration Statement ---------------------------------------------------------- DirectView, Inc., asks the Securities and Exchange Commission to grant the withdrawal of its Registration Statement originally filed on June 1, 2005, pursuant to Rule 477(a) under the Securities Act of 1933. The Registration Statement was filed for the resale of up to 58,699,792 shares of common stock by selling security holders and to comply with contractual requirements accorded certain investors, including Cornell Capital Partners, L.P. The Company is withdrawing its Registration Statement because it: -- was unable to qualify for certain exemptions necessary to execute its obligations to Cornell Capital; and -- wishes to restructure that transaction. The Registration Statement has never been declared effective, and no shares have been sold pursuant to the Registration Statement. A full-text copy of DirectView, Inc.'s withdrawn Registration Statement is available at no charge at http://ResearchArchives.com/t/s?6fe About DirectView, Inc. DirectView, Inc., is a full-service provider of teleconferencing products and services to businesses and organizations. Effective Feb. 23, 2004, the Company completed its acquisition of all of the issued and outstanding shares of Meeting Technologies, Inc., from its sole stockholder, Michael Perry. Meeting Technologies, Inc., was a privately held provider of video conferencing equipment and related services. The Company's results of operations for the six months ended June 30, 2004, include the results of Meeting Technologies, Inc., from the date of acquisition of Feb. 23, 2004. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 1, 2005, Sherb & Co., LLP, expressed substantial doubt about DirectView's ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2004. The Company's limited financial resources have prevented the Company from aggressively advertising its products and services to achieve consumer recognition. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan and generate increased revenues. The Company stated that it currently has working capital to sustain its core operations for approximately four to six months, but these funds are not sufficient to satisfy its short-term debt obligations in the aggregate amount of approximately $1,460,000. The Company has begun conversations with a view towards restructuring the terms of the short-term debt due Dec. 31, 2005, as well as the debentures. But there are no assurances that those discussions will lead to any debt restructuring, in which event, the Company may be unable to pay those obligations as they become due. DOBSON COMMS: $11.1MM of 1.5% Sr. Convertible Notes Up for Resale ----------------------------------------------------------------- Three holders of Dobson Communications, Inc.'s 1.50% Senior Convertible Debentures may sell the securities they hold, the Company disclosed in a prospectus supplement filed with the Securities and Exchange Commission: Selling Noteholder Amount of Notes ------------------ --------------- Lehman Brothers Inc. $6,000,000 Duma Master Fund, L.P. 5,000,000 Cowen & Co., LLC 100,000 Lehman Brothers Inc., a registered broker-dealer and a subsidiary of Lehman Brothers Holdings Inc., owns 3.75% of the total principal amount of the Notes. Lehman Brothers acted as co-manager in the private offering of the Debentures and as a joint book runner in the concurrent private offering of the Company's senior floating rate notes. Nadeem Walji owns 3.13% of the total principal amount of the Notes. Duma Capital Partners, L.P., acts as his investment manager and has the power to direct the voting and disposition of securities. Cowen & Co., LLC, a registered broker-dealer, is a wholly owned subsidiary of SG Americas Securities Holdings, Inc., which is an indirect wholly owned subsidiary of Societe Generale, a French banking corporation with shares listed on the Paris Bourse and Tokyo Stock Exchange. On September 13, 2005, Dobson Communications issued $150.0 million aggregate principal amount of 1.50% Senior Convertible Debentures due 2025 in a private offering, and on October 13, 2005, the initial purchasers of the Debentures exercised an option to purchase an additional $10.0 million aggregate principal amount of Debentures in a private offering. This prospectus covers resales from time to time by selling securityholders of any or all of their Debentures and shares of Class A common stock into which the Debentures are convertible. We will not receive any proceeds from the resale by the selling securityholders of the Debentures or the shares of Class A common stock hereunder. Terms of the Debentures The Debentures will bear interest at a rate of 1.50% per year, payable on April 1 and October 1 of each year, commencing April 1, 2006. The Debentures mature on October 1, 2025. The Debentures will be convertible, at your option, into shares of the Company's Class A common stock initially at a conversion rate of 97.0685 shares per $1,000 principal amount of the Debentures (equivalent to an initial conversion price of approximately $10.30 per share), subject to adjustment. Upon conversion, the Company has the right to deliver common shares, cash or a combination of cash and common shares. In the event of certain types of fundamental changes, the Company will increase the number of shares issuable upon conversion or, in lieu thereof, the Company may elect to adjust the conversion obligation and conversion rate so that the Debentures are convertible into shares of the acquiring or surviving company, in each case as described in this prospectus. The Company may redeem some or all of the Debentures on or after October 1, 2010, for cash at a redemption price equal to 100% of the principal amount of Debentures redeemed. The noteholders may require the Company to repurchase all or a portion of the Debentures on October 1, 2010, October 1, 2015, and October 1, 2020, at a cash repurchase price equal to 100% of the principal amount plus accrued and unpaid interest (including additional interest, if any). In addition, the noteholders may require the company to repurchase all or a portion of the Debentures upon a fundamental change at a cash repurchase price equal to 100% of the principal amount plus accrued and unpaid interest including additional interest, if any. The Debentures are senior unsecured obligations. The Company's Class A common stock is listed on The Nasdaq National Market under the symbol "DCEL." A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?6f5 Headquartered in Oklahoma City, Dobson Communications Corporation -- http://www.dobson.net/-- provides wireless phone services to rural markets in the United States and owns wireless operations in 16 states. Dobson Communications Corp.' 8-7/8% Senior Notes due 2013 carry Moody's Investors Service's Caa2 rating and Standard & Poor's CCC rating. DOLE FOOD: S&P Puts B+ Rating on Proposed $975 Million Facility --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan ratings and '2' recovery ratings to Dole Food Co. and co-borrower, foreign subsidiary Solvest Ltd.'s proposed $975 million senior secured term loan facility, indicating the expectation of substantial (80%-100%) recovery of principal in the event of a payment default. The ratings are based on preliminary terms and are subject to review upon final documentation. At the same time, Standard & Poor's lowered its long-term ratings on the fruit and vegetable producer and marketer, including its corporate credit rating to 'B+' from 'BB-'. Standard & Poor's also affirmed its 'B-2' short-term corporate credit rating. The outlook is negative. Westlake Village, California-based Dole Foods will have about $2.5 billion of lease-adjusted debt outstanding at closing. Net proceeds from the credit facility, along with a $325 million asset-based senior secured revolving credit facility (unrated), will be used to refinance Dole's existing credit facility. Ratings on the existing facility will be withdrawn upon closing of the transaction. The downgrade reflects: * Dole's weaker-than-expected operating performance in recent periods stemming from: -- higher fuel, -- produce, and -- linerboard costs; * lower banana pricing in Japan; and * weaker fresh vegetable pricing in North America. As a result of this performance and the addition of about $100 million of debt following the refinancing, Dole's credit measures have dropped further to levels below those appropriate for the rating. EASTMAN KODAK: $17 Mil. Revenue Bonds Paid & S&P Withdraws Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' rating on Rochester, New York-based Eastman Kodak Co.'s (B+/Negative/--) $17 million industrial revenue bonds due 2017 (issued by Calhoun County, S.C.) because the issue has been defeased. The bond is presumably now well protected, but Standard & Poor's lacks the full extent of legal confirmation, which would include company input and would go beyond the basic escrow deposit agreement. EPIXTAR CORP: Has Until April 4 to File Reorganization Plan ----------------------------------------------------------- The Hon. A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida in Miami extended, until April 4, 2006, Epixtar Corp. and its debtor-affiliates' exclusive period to file a Plan of Reorganization. The Debtors also have until June 3, 2006, to solicit acceptances of their Plan. The Debtors asked the Bankruptcy Court to extend their Plan filing and solicitation periods so that they will have more time to negotiate, propose and seek acceptances of a consensual Plan. The Debtors expect to file a Plan within the extension period in view of the Bankruptcy Court's recent approval of a settlement agreement with Laurus Master Fund, Ltd., its single largest creditor. The settlement agreement is an integral part of the Debtors' proposed Plan. The Debtors owed Laurus approximately $16,250,000, as of Sept. 21, 2005, on account of two prepetition loans. Under the settlement, approved in December 2005, Laurus extended a $2.5 million debtor- in-possession financing, consented to the Debtors' use of cash collateral, and took over ownership of the Debtors' ISP related assets in exchange for a $12 million credit against amounts owed by the Debtors. Based in Miami, Florida, Epixtar Corp. -- http://www.epixtar.com/ -- f/d/b/a Global Assets Holding, Inc., aggregates contact center capacity and robust telephony infrastructure to deliver comprehensive, turnkey services to the enterprise market. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents the Debtors in their restructuring efforts. Glenn D. Moses, Esq., at Genovese Joblove & Battista, P.A., represents the Company's Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. FDL INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: FDL, Inc. 1216 Appletree Lane P.O. Box 606 Kokomo, Indiana 46903 Bankruptcy Case No.: 06-01222 Type of Business: The Debtor manufactures office and fast food metal furniture. Chapter 11 Petition Date: March 24, 2006 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: Deborah Caruso, Esq. Erick P. Knoblock, Esq. Dale & Eke, P.C. 9100 Keystone Xing, Suite 400 Indianapolis, Indiana 46240-2159 Tel: (317) 844-7400 Fax: (317) 574-9426 Estimated Assets: Unknown Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fifth Third Bank $23,6841,000 International Trade Services P.O. Box 630041 38 Fountain Square Plaza Cincinnati, OH 45263-0041 Chia Yeh Enterprises Co., Ltd. $4,053,568 753 Moo 4 Phuttarasa Road Tambol Prakas Samutprakarn 10280 Thailand Fusco Industrial Corporation $1,373,482 P.O. Box 84-252 11-1th Floor No. 342 SEC-1 Fu-Hsing Road Taipei 106 Taiwan R.O.C. Qingyi Metal Product $1,134,464 Ding Xi Village Shen Wan Town Guang-Dong Province China 528462 Torch 2100 Co. Ltd. $601,240 No. 99 Moo 8 Tabbonmee Khochan Sub District Chonburi 20240 Thailand Cheau Yih $597,447 No. 21 Lane 538 Guangde Road Taiping City, Taichung County 411, Taiwan R.O.C. Ziamen Zehui Industry Trade $543,305 Vegetable Base Shanghu Houheng Village, Huli District Xiamen, China King Technology BVI, Inc. $522,319 Jinghe Industrial Area Zhang Mu Tou Dongguan City Guang-Dong, China Delight Furniture $411,808 P.O. Box 511490 Yixing Industrial Area Shiguang Road Shiqiao Town, Panyu District Guangzhou China Euro Sun SDN.BHD $405,861 Lot 3686, Kamapung Bindu Mk.6, Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim, Malaysia Grand Orient Furniture Co. $389,174 Anji Economic Development Zong, Lingfeng Road Anji County, Zhejiang Province China Jollywood SDN.BHD $387,240 Lot 4, 9556, Kaw Perindustiran, Bukit Rambai 75250 Melaka, Malaysia Klaeng Products Woodtrade Co. $380,385 141 M009, T.Krasaebon A. Klaeng Rayong 21110 Thailand Moonheart Textile Co. Ltd. $377,223 12 Peng Xi Road Middle Penglang Town Kunjia Industrial Park Kunhshang, China Evermore Holdings Ltd. $319,181 Mawood Industries SDN.BHD $302,100 Lot 117, Jalan, Enam Kompleks Perabot Olak Lempit, 72700 Banting Selangor De, Malaysia Strongson Furniture Co., Ltd. $293,995 Shenzhen Factory Block 12, Jiang Shi Industrial Park Gong Ming, Shen Zhen Guangtung, China SHH Furniture Industries SDN $289,898 PLO 1, Kawasan Perindustrian Pagoh 84600 Pagoh, Muar Johor, Malaysia Trendex Industries, Ltd. $224,396 Mean Young Universal Co., Ltd. $215,040 FEDDERS CORP: Delays Filing Annual Financial Reports for 2005 ------------------------------------------------------------- Fedders Corporation requests an extension of time to file its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2005. Deloitte & Touche LLP, the Company's former registered public accounting firm, declined to stand for reappointment for fiscal year 2005 or for any of the quarterly periods of fiscal year 2005. The Company was unable to appoint a new registered public accounting firm until the fourth quarter of 2005. The Company and UHY LLP, the newly-appointed Accountant, were initially engaged in the preparation and filing of all three Forms 10-Q for fiscal year 2005, which delayed commencement of work on the preparation of the fiscal year-end financial statements and the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Additionally, the Company has completed significant consolidations and restructuring of its operations during fiscal year 2005, which has added materially to the complexity of the preparation and audit of the year-end financial statements. As a result, the Company is unable to file its Annual Report on Form 10-K for fiscal year 2005 without unreasonable effort or expense. The Company will file its Annual Report on Form 10-K no later than April 15, 2006. Headquartered in Liberty Corner, New Jersey, Fedders Corporation, -- http://www.fedders.com/-- is a leading global manufacturer and marketer of air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in China, India and the Philippines. All products are manufactured to Fedders' one worldwide standard of quality. * * * As reported in the Troubled Company Reporter on July 5, 2005, Standard & Poor's Ratings Services lowered its corporate credit ratings on air treatment products manufacturer Fedders Corp. and Fedders North America Inc. to 'CC' from 'CCC'. At the same time, Fedders North America's senior unsecured debt rating was lowered to 'C' from 'CC'. S&P said the outlook remains negative. FIRSTLINE CORP: Hires Glassratner Advisory as Financial Advisor --------------------------------------------------------------- FirstLine Corporation sought and obtained authority from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Glassratner Advisory & Capital Group LLC as its financial advisor, recovery consultant and chief restructuring officer. As financial advisor and recovery consultant, Glassratner is expected to: (a) assist the Debtor in assessing its current financial needs and preparing financial and operating budgets; (b) attend and advise, as requested by the Debtor, at meetings with the Debtor, their counsel, other financial advisors and representatives of creditors; (c) provide such other services, as requested by the Debtor and agreed by GlassRatner, and (d) attend and provide testimony at hearings. As chief restructuring officer, GlassRatner will: a. perform all the duties of a CRO including, budgeting, cash management, finance, management of communications, management of business relationships, negotiations regarding lending relationships, new produce sale activities, cessation of undesirable business activities, hiring and firing of employees, and insuring that the Debtor complies with all terms, conditions and covenants of any agreements with Debtor's secured lenders as approved by the Court; b. formulate and implement a stabilization and financial plan for the business operations pending a sale of the Debtor; and c. regularly inform Don Murphy, the Debtor's CEO, of his decisions in carrying out his duties, including informing the CEO of all matters of policy and in connection with any modification of the Debtor's business plan and budgeting. The Debtor however relates that GlassRatner will not have the authority to: (i) retain or terminate the employment of legal counsel; (ii) dispose of excess or out of date inventory or assets no longer needed for the operation of the Debtor's business; (iii) approve a sale of substantially all of the assets of the business; or (iv) discharge the CEO, exclude him from the premises, or relocate his office. Thomas Santoro, Senior Managing Director with GlassRatner, and the designated acting CRO, tells the Court that he will bill $280 per hour for this engagement. Mr. Santoro discloses that the two other professionals who will assist him bills: Professional Designation Hourly Rate ------------ ----------- ----------- Ronald Glass Principal $350 Ranvy Singh Consultant $145 Mr. Santoro assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Santoro can be reached at: Thomas Santoro Senior Managing Director GlassRatner Advisory & Capital Group LLC Lenox Overlook, Suite 330, 3391 Peachtree Road, Atlanta, Georgia 30326 Tel: (678) 904-1990 Fax: (678) 904-1991 About FirstLine Corporation Headquartered in Valdosta, Georgia, FirstLine Corporation -- http://www.firstlinecorp.com/-- supplies home-building and construction materials. The company filed for chapter 11 protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145). Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the Debtor in its restructuring efforts. As of Jan. 31, 2006, the Debtor reported assets totaling $37,061,890 and debts totaling $26,481,670. FOAMEX INT'L: Court Okays Lorro Inc. and Foamex L.P. Stipulation ---------------------------------------------------------------- As previously reported, Lorro Inc. and Foamex L.P. were parties to two sales programs -- the TJ Program and the JK Program. Pursuant to the Programs, Foamex supplies cellular polyurethane pads to Lorro to be installed in DaimlerChrysler jeeps. In January 2006, Lorro terminated the JK Program. Foamex contends that Lorro's termination of the JK Program constituted a breach of the Supply Agreement, thereby excusing Foamex's performance with the respect to the Supply Agreement, including the TJ Program. Lorro argues that the Supply Agreement only applies to the TJ Program, and not to the JK Program. The parties engaged in good faith negotiations to resolve, among others, Lorro's Motion to Compel, the Tooling Costs, Termination Charges, the JK Tooling Orders, the Programs, and the parties' obligations to the Supply Agreement. In a Bankruptcy Court-approved stipulation, the parties agree that: 1. Lorro is will immediately pay for the Tooling Costs to Foamex upon Lorro's receipt of payment from DaimlerChrysler; 2. After payment of the Tooling Costs, Foamex will tender the JK tooling and packaging material to Lorro, provided that if the JK materials remain in Foamex's possession after 20 days of payment for the Tooling Costs, Foamex will seek all warehousing and storage charges for the JK Materials; 3. Effective as of March 8, 2006, Foamex is permitted to supply Pads and other products set in the Supply Agreement directly to Collins & Aikman; 4. The Supply Agreement is terminated effective March 16, 2006; 5. Any pads supplied by Foamex to Lorro after March 16 will be supplied on a purchase order basis; 6. Until Foamex starts supplying pads directly to Collins & Aikman, Foamex will continue to supply pads to Lorro on a cash before delivery basis only; 7. Lorro will pay all outstanding invoices for pads that have not yet fully aged; and 8. Foamex waives all rights to collect the Termination Charges. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) FREEDOM RINGS: Court Approves Amended Disclosure Statement ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the Amended Disclosure Statement explaining Freedom Rings, LLC's Amended Liquidating Chapter 11 Plan. The Court determined that the Amended Disclosure Statement contains adequate information -- the right amount of the right kind of information -- required under Section 1125 of the Bankruptcy Code. Changes in the Amended Plan The Debtor told the Court that along with Krispy Kreme Doughnut Corp. and the Official Committee of Unsecured Creditors, they have reached an agreement settling certain disputes regarding the potential causes of action the Debtor and the Committee may hold against Krispy Kreme and the validity of Krispy Kreme's unsecured claim. Pursuant to the settlement, Krispy Kreme has agreed to waive its right to receive its pro rata distribution of: * the distribution fund for general unsecured claims; * avoidance action recoveries, and * proceeds from the third party deposits on account of Krispy Kreme's unsecured claim. Krispy Kreme, the Debtor relates, has also agreed to use $200,000 of the remaining assets to fund the plan administrator expense reserve. Under the amended plan, Krispy Kreme, on account of its unsecured claim, will receive the cash on hand plus proceeds from the sale of the remaining assets, excluding avoidance action recoveries or third party deposits, less: * the aggregate distributions to holders of allowed administrative claims, allowed DIP claim, allowed fee claims, allowed priority claims, allowed other priority claims, and allowed miscellaneous secured claims; * distribution fund for general unsecured claims; and * funds transferred to the Plan Administrator Expense Reserve. Holders of General Unsecured Claims will receive their pro rata share of the Liquidation Trust Assets less the fees and expenses of the Liquidation Trust. Terms of the Original Plan Under the original plan, 1. Administrative Claims, 2. Priority Tax Claims, 3. Fee Claims, 4. Krispy Kreme's DIP claim, and 5. Other Priority Claims, are unimpaired and will be paid in full. At the option of the Debtor and provided that holders of miscellaneous secured claims don't elect to bifurcate their claims under Section 1111(b) of the Bankruptcy Code, holders of miscellaneous secured claims will receive either: (a) return of the collateral securing the claim; (b) net proceeds from the disposition of the collateral securing the claim, without recourse against the Debtor; or (c) any treatment agreed between the Debtor and the holder of the miscellaneous secured claim. Prepetition Lenders Contingent Secured Claims will receive no distribution under the plan. Holders of Equity Interests will receive no distribution and all equity instruments will be cancelled on the effective date. The Court has scheduled a hearing on Mar. 14, 2006, 10:30 a.m., to consider the adequacy of the Debtor's Disclosure Statement. The Court has set a hearing on Apr. 20, 2006, to consider confirmation of the Debtor's amended plan. A full text copy of the Debtor's blacklined Amended Disclosure Statement explaining its Amended Liquidating Chapter 11 Plan is available for free at http://ResearchArchives.com/t/s?6f1 About Freedom Rings Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. Bradford J. Sandler, Esq., and Jonathan M. Stemerman, Esq., at Adelman Lavine Gold and Levin, PC provide the Official Committee of Unsecured Creditors with legal advice. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. G+G RETAIL: Court Approves Davis & Gilbert as Corporate Counsel --------------------------------------------------------------- G+G Retail, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Davis & Gilbert, LLP, as its corporate counsel, nunc pro tunc to Jan. 25, 2006. Davis & Gilbert is expected to provide the Debtor professional services pertaining to: a) corporate and contractual matters; b) employment matters; c) real estate matters; d) litigation matters; and e) intellectual property matters. Davis & Gilbert's professionals and their current hourly billing rates: Professional Rate ------------ ---- Brad J. Schwartzberg, Esq. $530 Joseph Cioffi, Esq. $430 Mary Luria, Esq. $530 Nancy Yanks, Esq. $395 Jason Abramson, Esq. $385 Dan Feinstein, Esq. $410 Alan Hahn, Esq. $395 Bruce Ginsberg, Esq. $510 Miles Baun, Esq. $475 Jesse Schneider, Esq. $395 Joanne Arnold $195 To the best of the Debtor's knowledge, Davis & Gilbert is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. GALVEX CAPITAL: Wants DiConza Law as Bankruptcy Co-Counsel ---------------------------------------------------------- Galvex Capital, LLC, asks the U.S. Bankrupt Court for the Southern District of New York for permission to employ DiConza Law, P.C., as its bankruptcy counsel, nunc pro tunc to Feb. 17, 2006. Galvex Capital tells the Court that it wants DiConza Law to handle matters that Winston & Strawn LLP cannot handle because of a conflict of interest or, alternatively, which can be more efficiently handled by DiConza Law. Galvex Capital contends that this will avoid unnecessary litigation and reduce the overall expense of administering its chapter 11 case. DiConza Law will: (a) advise Galvex Capital in connection with its claims against Galvex Holdings Limited, Galvex Estonia, Galvex Intertrade and Galvex Trade Limited; (b) negotiate with representatives of creditors and other parties in interest, including the landlord on Galvex Capital's office lease; (c) take necessary action to protect and preserve Galvex Capital's estate, including prosecuting actions on behalf of Galvex Capital; (d) advise Galvex Capital of its rights, powers, and duties as debtor in possession under chapter 11 of the Bankruptcy Code; (e) prepare on behalf of Galvex Capital, motions, applications, schedules, answers, orders, reports and papers necessary to the administration of the estate; (f) advise Galvex Capital in reviewing, estimating, and resolving claims asserted against its estate; (g) appear before the Court and any appellate courts and protect the interests of Galvex Capital and its estate; and (h) perform other necessary legal services and provide other necessary legal advice to Galvex Capital in connection with its chapter 11 case. Gerard DiConza, Esq., principal of DiConza Law, tells the Court that he will bill $350 per hour for this engagement. Mr. DiConza assures the Court the he and his firm as "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. DiConza can be reached at: Gerard DiConza, Esq. DiConza Law, P.C. 630 Third Avenue, Seventh Floor, New York, NY 10017. Tel: (212) 682-4940 Fax: (212) 682-4942 About Galvex Capital Headquartered in New York City, Galvex Capital, LLC -- http://www.galvex.com/-- and its affiliates operate the largest independent galvanizing line in Europe. The Debtors have offices in New York, Tallinn, Bermuda, Finland, Ukraine, Germany and the United Kingdom. The company and four of its affiliates filed for chapter 11 protection on Jan. 17, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10082). Galvex Capital, LLC, is represented by David Neier, Esq., at Winston & Strawn LLP, and Gerard DiConza, Esq., at DiConza Law, P.C. Galvex Holdings Ltd. and the other debtor-affiliates are represented by David Neier, Esq., at Winston & Strawn LLP, and Lori R. Fife, Esq., Marcia L. Goldstein, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP. John P. McNicholas, Esq., and Thomas R. Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. GENERAL MOTORS: PBGC Looks to Private Lawyers for Advice about GM ----------------------------------------------------------------- The Pension Benefit Guaranty Corporation is turning to private law firms for advice related to the problems plaguing General Motors Corp. Reuters reports that the pension agency is soliciting advice related to, among other things, GM's pensions and work-force reductions and the prospect of a possible bankruptcy filing. Reuters says that GM carried $10.9 billion in pension liabilities at the end of 2005. According to a United Press International report, the Government is worried that a GM bankruptcy would further burden an already strained pension agency. As reported in the Troubled Company Reporter on March 23, 2006, GM, the United Auto Workers union and Delphi Corp. inked an agreement to reduce the number of U.S. hourly employees through an accelerated attrition program. Quoting Barry Bosworth at Brookings Institution, UPI reports that GM's early retirement buyouts could be a move to transfer costs to its pension plan, costs that can be shed in bankruptcy. About the PBGC The Pension Benefit Guaranty Corporation -- http://www.pbgc.gov/ -- was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of private- sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum. The PBGC protects the retirement incomes of 44.1 million American workers in 30,330 private-sector defined benefit pension plans. About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Mar. 21, 2006, Moody's Investors Service placed the B2 long-term rating of General Motors Corporation on review for possible downgrade and lowered the company's Speculative Grade Liquidity to SGL-2 from SGL-1. Moody's also changed the review status of General Motors Acceptance Corporation's Ba1 long-term rating to "review for possible downgrade" from "review with direction uncertain" and confirmed GMAC's Not Prime short-term rating. In addition, Moody's changed the review status of ResCap's senior unsecured Baa3 and short-term Prime-3 ratings to "review for possible downgrade" from "review with direction uncertain." These rating actions follow GM's announcement that it will delay filing its annual report on Form 10-K with the SEC due to an accounting issue regarding the classification of cash flows at ResCap, the residential mortgage subsidiary of GMAC. GLAZED INVESTMENTS: Pachulski Stang Okayed as Panel's Lead Counsel ------------------------------------------------------------------ The Honorable Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, gave the Official Committee of Unsecured Creditors appointed in Glazed Investments, LLC's bankruptcy case, authority to retain Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP as its lead counsel, nunc pro tunc to Feb. 17, 2006. The Committee filed its application to retain the Firm on Mar. 6, 2006, and Judge Hollis approved the Committee's request on Mar. 9, 2006. Pachulski Stang will: (a) provide legal advice and assistance to the Committee in its consultation with the Debtor relative to its administration of its reorganization; (b) represent the Committee at hearings held before the Court and communicate with the Committee regarding the issues raised, as well as the decisions of the Court; (c) assist and advice the Committee in its examination and analysis of the conduct of the Debtor's affairs and the reasons for its chapter 11 filing; (d) review and analyze all applications, motions, orders, statements of operations and schedules filed with the Court by the Debtor or third parties, advise the Committee as to their propriety, and after consultation with the Committee, take appropriate action; (e) assist the Committee in preparing applications, motions and orders in support of positions taken by the Committee, as well as prepare witnesses and review documents in this regard; (f) apprise the Court of the Committee's analysis of the Debtor's operations; (g) confer with the accountants and any other professionals retained by the Committee so as to advise the Committee and the Court more fully of the Debtor's operations; (h) assist the Committee in its negotiations with the Debtor and other parties-in-interest concerning the terms of any proposed plan of reorganization; (i) assist the Committee in its consideration of any plan of reorganization proposed by the Debtor or other parties-in- interest as to whether it is in the best interest of creditors and is feasible; (j) assist the Committee with other services as may contribute to the confirmation of a plan of reorganization; (k) advise and assist the Committee in evaluating and prosecuting any claims that the Debtor may have against third parties; (l) assist the Committee in the determination of whether to, and if so, how to, sell the assets of the Debtor for the highest and best price; and (m) assist the Committee in performing other services as may be in the interest of creditors, including but not limited to, the commencement of, and participation in, appropriate litigation respecting the estate. The Firm will coordinate with the Committee's local counsel -- Robert F. Coleman and Associates -- to avoid duplication of work. Jeffrey N. Pomerantz, Esq., a partner at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, discloses the principal attorneys and their hourly rate: Professional Hourly Rate ------------ ----------- James I. Stang, Esq. $675 Jeffrey N. Pomerantz, Esq. $495 Jason S. Pomerantz, Esq. $425 Jorge E. Rojas $120 Jeffrey Pomerantz assures the Court that Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP is disinterested as that term is defined in Section 101(14) of the U.S. Bankrutpcy Code. About Pachulski, Stang, Ziehl, Young, Jones & Weintraub With offices in Los Angeles, San Francisco, New York and Wilmington, Delaware, Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP -- http://www.pachulskilaw.com/-- provides legal services in business reorganizations and out-of-court workouts, business litigation, business, commercial and real estate transactions, and avoidance, claims and other bankruptcy litigation. Mr. Pomerantz can be contacted at: Jeffrey N. Pomerantz, Esq. Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP 10100 Santa Monica Boulevard, 11th Floor Los Angeles, CA 90067-4100 About Glazed Investments, LLC Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, makes and sells doughnuts. Krispy Kreme owns 97% of the Debtor. The Debtor filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). Daniel A. Zazove, Esq., at Perkins Coie LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $28,599,346 in assets and $32,953,785 in debts. GLAZED INVESTMENTS: Robert Coleman Okayed as Panel's Local Counsel ------------------------------------------------------------------ The Honorable Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, gave the Official Committee of Unsecured Creditors appointed in Glazed Investments, LLC's bankruptcy case, authority to retain Robert F. Coleman & Associates as its local counsel, nunc pro tunc to Feb. 17, 2006. The Committee filed its application to retain the Firm on Mar. 6, 2006, and Judge Hollis approved the Committee's request on Mar. 9, 2006. The Committee's lead counsel -- Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP -- does not have an Illinois office, so the Committee selected Robert Coleman as its local counsel. The Firm will take direction in the representation of the Committee from Pachulski Stang to avoid duplication of services. Robert F. Coleman, Esq., the sole proprietor of the Firm, discloses the principal attorneys who will handle the engagement and their hourly rate: Professional Hourly Rate ------------ ----------- Robert F. Coleman, Esq. $550 Steven R. Jakubowski, Esq. $410 Elizabeth E. Richert, Esq. $235 Ryan S. Zeller, Esq. $185 Allison R. Grow $115 Kelly B. Frame, Esq. $115 Mr. Coleman assures the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. About Robert F. Coleman & Associates With nine attorneys, Robert F. Coleman & Associates -- http://www.colemanlawfirm.com/-- provides legal services in business litigation including legal and accountant malpractice, class actions and employment discrimination. Mr. Coleman can be contacted at: Robert F. Coleman, Esq. Robert F. Coleman & Associates 77 West Wacker Drive, Suite 4800 Chicago, IL 60601 About Glazed Investments, LLC Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, makes and sells doughnuts. Krispy Kreme owns 97% of the Debtor. The Debtor filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). Daniel A. Zazove, Esq., at Perkins Coie LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $28,599,346 in assets and $32,953,785 in debts. GOODYEAR TIRE: Files Prospectus for Resale of Conv. Senior Notes ---------------------------------------------------------------- The Goodyear Tire & Rubber Company filed a prospectus on the possible resale of its $350 million of 4.00% convertible senior notes due June 15, 2034, and shares of its common stock into which the notes are Convertible, by 43 securityholders. A list of the 43 Selling Noteholders is available at no charge at http://ResearchArchives.com/t/s?6fc The Company will not receive any proceeds from the resale of the notes or the shares of common stock. The notes will mature on June 15, 2034. Noteholders may convert the notes into shares of the Company's common stock at a conversion rate of 83.0703 shares of common stock per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $12.04 per share. The Company will pay interest on the notes on June 15 and December 15 of each year. The notes will be issued only in denominations of $1,000 and integral multiples of $1,000. On or after June 20, 2008, the Company has the option to redeem all or a portion of the notes that have not been previously converted at redemption prices set forth in this prospectus. The notes are senior, unsecured obligations that rank equally with our existing and future unsecured and unsubordinated indebtedness. A full-text copy of the Prospectus is available for free at http://ResearchArchives.com/t/s?6fd Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * Goodyear's 9% Senior Notes due 2015 carry Moody's Investor Service's B3 rating, Standard & Poor's B- rating, and Fitch Ratings' CCC+ rating. HANOVER COMPRESSOR: S&P Puts B Rating on $150 Million Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to natural gas compression equipment provider Hanover Compressor Co.'s (BB-/Stable/--) $150 million senior notes due in 2013. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the company. The outlook is stable. Houston, Texas-based Hanover has about $1.5 billion of debt. The proceeds of the $150 million financing will be used to redeem the company's existing zero coupon subordinated notes. "Hanover's note offering should modestly aid its liquidity by effectively extending the upcoming maturity of the convertible notes that were due in March 2007," said Standard & Poor's credit analyst Andrew Watt. "In addition, operating cash flow is improving and could result in modest free operating cash flow over the intermediate term," said Mr. Watt. Hanover competes in the market for transportable natural gas compression and production processing equipment, which is used in: * natural gas production, * processing, * gathering, and * storage. HANOVER COMPRESSOR: To Publicly Offer $150 Million of Senior Notes ------------------------------------------------------------------ Hanover Compressor Company (NYSE:HC) intends to publicly offer, subject to market conditions, $150 million aggregate principal amount of Senior Notes due 2013. Hanover intends to use the net proceeds from the offering, together with borrowings under its bank credit facility to redeem its Zero Coupon Subordinated Notes due March 31, 2007. The offering and sale of the Senior Notes is pursuant to an automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission. J.P. Morgan Securities Inc. and Credit Suisse Securities (USA) LLC are joint book-running managers for the offering of the Senior Notes. Copies of the preliminary prospectus relating to the offering of the Senior Notes may be obtained by contacting: J.P. Morgan Securities Inc. Attention: Syndicate Desk 270 Park Avenue, 8th Floor New York, NY 10017 Telephone 1-800-245-8812 About Hanover Compressor Company Headquartered in Houston, Texas, Hanover Compressor Company -- http://www.hanover-co.com/-- is a global market leader in the full service natural gas compression business and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees, for both customer-owned equipment and its fleet of rental equipment. * * * As reported in the Troubled Company Reporter on Jan. 25, 2006, Moody's Investors Service withdrawn the Ba3 rating on Hanover Compressor Company's core wholly owned operating subsidiary Hanover Compression Limited Partnership's $350 million secured bank revolving credit facility. The credit facility due to mature in December 2006 was replaced with a new five-year $450 million senior secured revolving credit facility. Moody's does not rate the new facility. No other ratings are affected by this action. HANOVER COMPRESSOR: Moody's Holds Junked Preferred Stock Rating --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Hanover Compressor Company's proposed $150 million senior unsecured note offering and Moved HC's rating outlook to positive from stable. The notes are guaranteed on a senior subordinated basis by core operating subsidiary Hanover Compression, L.P., which carries senior secured bank debt. Note proceeds will redeem HC's zero- coupon notes. With a positive ratings outlook, Moody's also took these actions: * Affirmed the B1 corporate family rating. * Affirmed the B2 rating on Hanover Equipment Trust 2001A 8.50% partly secured notes due 2008. * Affirmed the B2 rating on Hanover Equipment Trust 2001 B 8.75% partly secured notes due 2011. * Affirmed a B3 rating on parent HC's two 4.75% non-guaranteed senior convertible note issues due 2008 and 2014, respectively. * Affirmed the B3 rating on parent HC's 8.625% senior unsecured notes due 2010 and 9% senior unsecured notes due 2014, each with senior subordinated guarantees from core operating subsidiary Hanover Compression, L.P. * Affirmed the Caa1 rating on HC's zero-coupon subordinated notes due 2007, to be withdrawn upon repayment with the proceeds of the new senior unsecured notes. * Affirmed the Caa1 rating on 7.25% non-guaranteed convertible trust preferred stock. The move to a positive rating outlook from stable reflects HC's ongoing business growth relative to debt levels, rising cash flow and overall margins, and the company's position as one of the largest natural gas compression rental firms. HC has benefited from its greater up-cycle pricing power and higher utilization in domestic and international markets. It is also recommencing growth in the size of its fleet. Its fleet is widely diversified by horsepower range and by participation across many domestic and international oil and natural gas producing basins. The ratings are also supported by relative EBITDA durability during sector downturns due to existing rentals being tied to production rather than new drilling activity. The ratings are restrained by still high levels of leverage, a limited debt reduction outlook for 2006 due to capital spending projections relative to expected cash flow, and an understandable need for HC to devote more cash flow for growth capital spending rather than debt reduction. In effect, for now, after restraining capital spending for several years, HC understandably currently seeks to reduce leverage by growing its business relative to debt levels rather than by substantial debt reduction. A considerable amount of growth capital spending is being allocated to growing international markets. Moody's would want to see lower leverage to also accommodate a rising degree of business risk given the historically challenging political and fiscal risks in most of those countries. An upgrade to Ba3 would await further business and cash flow improvement, reduced debt, and further signs that HC can satisfy its growth objectives can demonstrate that it can fund its heavy capital spending program in 2006, preferably with a common equity issuance, but specifically without reliance on the use of additional debt. The ratings outlook would be pressured if significant growth spending or acquisitions were funded with materially increasing leverage or if HC experienced a significant deterioration in business activity while still fully-leveraged for the rating. HC was able to increase compression rental fees on approximately one third of its domestic rental fleet as the US market continued to tighten. The market now faces long-lead times for new equipment as well. Record fabrication backlogs have pushed the price of new equipment much higher and E&P companies are finding it more difficult to buy compression equipment due to the long- lead times. HC does face a tight sector market for compressor components, as are its competitors, causing delay in its fabrication of compressor packages and delivery to customers. In 2005, HC generated approximately $320 million of EBITDA, driven by continued strong capital spending by producers which stimulated higher domestic and international compressor fleet utilization and a record fabrication backlog of over $500 million so far in 2006. The fact that HC's existing compressors in use by producers are tied to production rather than to drilling activity that is sensitive to natural gas prices has provided a degree of stability to its cash flow during downturns has been important. HC has reduced debt by $300 million since it peaked in 2003, with Debt/EBITDA falling from 7.7x to roughly 4.9x pro-forma for the new notes offering and adjusted for operating leases and direct non-consolidated debt guarantees. Moody's does not expect material debt reduction in 2006, since HC will spending between $175 to $225 million in capital outlays. The company may add roughly 50,000 to 60,000 horsepower to its premium domestic fleet over the next year with approximately half of that already being contracted. HC was able to generate sufficient liquidity through its recent amine plant sale to Crosstex Energy for approximately $52 million in January of this year. At year-end, HC had approximately $48 million of cash on hand and $280 million of availability under its $450 million revolving credit facility after deducting roughly $50 million of borrowings and $120 million of letters of credit. However, Moody's will continue to monitor the company's revolver usage and leverage levels during this period of considerable capital outlays. A significant rise in leverage would pressure the ratings outlook. Approximately half of HC's revenues are generated through its international operations. Approximately 92% of its international horsepower located in Latin America. The company faces increased competition from a small group of major gas compression fabricators that compete in both the rental and fabrication businesses, however, due to HC's multiple domestic and international fabrication locations it is more able than most of its competitors to fabricate large custom-engineered systems nearer to the point of end-use through its worldwide network. Hanover Compressor Company is based in Houston, Texas. HIGH VOLTAGE: Court Agrees to $1.3 Mil. Preconfirmation Payment --------------------------------------------------------------- The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, authorized Stephen S. Gray, the Chapter 11 Trustee appointed in High Voltage Engineering Corporation and its debtor-affiliates' bankruptcy cases, to make certain preconfirmation distributions to its creditors. Pursuant to Judge Feeney's order, Mr. Gray will pay undisputed claims, totaling $1.35 million, to High Voltage and its affiliate, Robicon Corporation's creditors. The payment incorporates interest of 5% per annum, calculated from the Petition Date through the date of claim payment. Mr. Gray anticipates making the payment by April 8, 2006. The Trustee says that paying the undisputed claims before April 29, 2006 would result in savings of approximately $534,000 for the current taxable year. The Official Committee of Unsecured Creditors and the Official Committee of Equity Interest Holders support the requested payments. Headquartered in Wakefield, Massachusetts, High Voltage Engineering Corporation -- http://www.asirobicon.com/-- owns and operates a group of three industrial and technology based manufacturing and services businesses. HVE's businesses focus on designing and manufacturing high quality applications and engineered products, which are designed to address specific customer needs. The Debtor filed its first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No. 04-11586). Its Third Amended Joint Chapter 11 Plan of Reorganization was confirmed on July 21, 2004, allowing the Company to emerge on Aug. 10, 2004. High Voltage and its debtor-affiliates filed their second chapter 11 petition on Feb. 8, 2005 (Bankr. Mass. Case No. 05-10787). S. Margie Venus, Esq., at Akin, Gump, Strauss, Hauer & Feld LLP, and Douglas B. Rosner, Esq., at Goulston & Storrs, represent the Debtors. In the Company's second bankruptcy filing, it listed $457,970,00 in total assets and $360,124,000 in total debts. Stephen S. Gray was appointed chapter 11 Trustee in February 2005. John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate, Hall & Stewart LLP represent the chapter 11 Trustee. Ira M. Levee, Esq., at Lowenstein Sandler PC and Steven B. Levine, Esq., at Brown Rudnick Berlack Israels LLP represent the Official Committee of Unsecured Creditors. HSI ASSET: Moody's Puts Low-B Ratings on Two Certificate Classes ---------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by HSI Asset Securitization Corporation Trust 2006-OPT2, Mortgage Pass-Through Certificates, Series 2006-OPT2, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Option One Mortgage Corporation originated adjustable-rate and fixed-rate subprime mortgage loans acquired by HSBC Bank USA, N.A. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, an interest rate cap agreement, and an interest rate swap agreement. Moody's expects collateral losses to range from 5.35% to 5.85%. Option One Mortgage Corporation will service the loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned Option One its top servicer quality rating as a primary servicer of subprime loans. The complete rating actions are: HSI Asset Securitization Corporation Trust 2006-OPT2 Mortgage Pass-Through Certificates, Series 2006-OPT2 * Class I-A, Assigned Aaa * Class II-A-1, Assigned Aaa * Class II-A-2, Assigned Aaa * Class II-A-3, Assigned Aaa * Class II-A-4, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa2 * Class M-9, Assigned Baa3 * Class M-10, Assigned Ba1 * Class M-11, Assigned Ba2 ICOS CORPORATION: Dec. 31 Balance Sheet Upside Down By $59 Million ------------------------------------------------------------------ ICOS Corporation delivered its annual financial results for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 8, 2005. ICOS Corporation reported a $74,842,000 net loss on $71,410,000 of total revenue for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $241,767,000 in total assets and $301,037,000 in total liabilities, resulting in a $59,270,000 stockholders' equity deficit. Full-text copies of ICOS Corporation's annual financial statements for the year ended Dec. 31, 2005, are available at no charge at http://ResearchArchives.com/t/s?6f7 About ICOS Corp ICOS Corporation, a biotechnology company headquartered in Bothell, Washington, is dedicated to bringing innovative therapeutics to patients. Through Lilly ICOS LLC, ICOS is marketing its first product, Cialis (tadalafil), for the treatment of erectile dysfunction. ICOS is working to develop treatments for serious unmet medical conditions such as benign prostatic hyperplasia, pulmonary arterial hypertension, cancer and inflammatory diseases. At Dec. 31, 2005, ICOS Corp.'s balance sheet reflected a $59,270,000 stockholders' equity deficit compared to $6,528,000 of positive equity at Dec. 31, 2004. ICOS CORPORATION: Will Hold Annual Stockholders Meeting on May 11 ----------------------------------------------------------------- ICOS Corporation will hold its annual stockholders meeting at 1:30 p.m. on May 11, 2006, at ICOS Corporation, 22021 - 20th Avenue S.E., located in Bothell, Washington. ICOS' stockholders will be asked to: (1) elect three members to the Board of Directors, (2) ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for the year ending Dec. 31, 2006, (3) consider and act upon a shareholder proposal regarding board declassification; (4) consider and act upon a shareholder proposal regarding engagement with certain shareholders; and (5) transact other business that may properly come before the annual meeting. Stockholders of record at the close of business on March 7, 2006, are entitled to notice of, and to vote at, the meeting. A full-text copy of ICOS Corporation's Proxy Statement is available for free at http://ResearchArchives.com/t/s?6f6 About ICOS Corp ICOS Corporation, a biotechnology company headquartered in Bothell, Washington, is dedicated to bringing innovative therapeutics to patients. Through Lilly ICOS LLC, ICOS is marketing its first product, Cialis (tadalafil), for the treatment of erectile dysfunction. ICOS is working to develop treatments for serious unmet medical conditions such as benign prostatic hyperplasia, pulmonary arterial hypertension, cancer and inflammatory diseases. At Dec. 31, 2005, ICOS Corp.'s balance sheet reflected a $59,270,000 stockholders' equity deficit compared to $6,528,000 of positive equity at Dec. 31, 2004. IMPERO INC: Wants Chapter 11 Bankruptcy Case Dismissed ------------------------------------------------------ Impero, Inc., d/b/a Quest Redline Products asks the United States Bankruptcy Court for the Northern District of Illinois to dismiss its chapter 11 case. The Debtor told the Court that after liquidating its assets, resolving its adversary proceedings against Glare Logistics, Inc., and Hartford Computer Group, Inc., and once LaSalle Business Credit LLC forecloses on the balance of its collateral, there will no longer be any assets left to administer. The Debtor says that since LaSalle did not vote to accept its plan, its plan can't be confirmed. LaSalle Collateral LaSalle is a secured lender pursuant to a Loan and Security Agreement dated May 17, 2004. LaSalle holds a lien on substantially all of the Debtor's tangible and intangible assets. The Debtor discloses that it initially wanted to sell its business on a going-concern basis. However, it became evident that selling the company was not a viable alternative so the Debtor embarked on a three-tiered liquidation process in order to maximize the value of its remaining assets. Liquidation of Assets In order to capitalize on the relationships of its existing sales personnel, it entered into a court-approved agreement wherein the Debtor's employees would receive a commission on any sales made. The Debtor related that it managed to sell approximately $350,000 of its prime inventory to two of its customers. On Aug. 15, 2005, the Court approved the sale of a significant stock of non-prime, commercially discontinued or returned merchandise formerly located at the Debtor's Des Plaines, Illinois warehouse for $380,000. On Sept. 8, 2005, the Debtor conducted an auction on its: * remaining inventory located in Los Angeles, * consigned inventory located in various places in the U.S., and * intellectual property trademarks and patent. Pilot Automotive, Inc. emerged as the winner with a $640,000 bid. Finally, in order to free itself, it obtained a Court order ro reject its lease obligations in Miramar, Florida and liquidate remaining property and miscellaneous inventory in its Florida sales office. Resolved Adversary Proceedings The Debtor filed a complaint against Glare Logistics in order to recover certain preferential payments and determine the validity of Glare Logistics' alleged lien on the sale proceeds of its property. The Court approved a settlement agreement and the adversary proceeding was dismissed on Feb. 16, 2006. The Debtor also filed a complaint against Hartford in order to determine the validity of Hartford's alleged lien on the sale proceeds. After a number of counter claims and cross-claims, the Debtor, LaSalle and Hartford eventually resolve their dispute. The Court approved the settlement agreement on Feb. 16, 2006 and dismissed the adversary proceeding. Relief from Automatic Stay The Debtor discloses that on Feb. 27, 2006, the Court gave LaSalle relief from the automatic stay thus allowing LaSalle to exercise its rights and remedies under the Loan Agreement with respect to its collateral. The Debtor told the Court that LaSalle in the process of foreclosing on its accounts receivables. Case Dismissal The Debtor told the Court that after consultations with LaSalle, dismissal of its chapter 11 case was appropriate since: (1) LaSalle was no longer willing to fund the administration of the Debtor's case; (2) there are no unencumbered assets with which to satisfy administrative claims; and (3) the Debtor cannot have the plan confirmed unless LaSalle changes its vote. The Debtor proposes to pay administrative expenses, U.S. Trustee fees and distribution of any remaining proceeds to LaSalle and dismiss its case. The Debtor also proposes that the Court retain jurisdiction after the dismissal of the case to: * resolve any disputes to the distribution of the collateral proceeds to LaSalle, * exercise jurisdiction relating to the settlements achieved with its two litigations, and * enforce any and all orders entered by the Court during the pendency of the Debtor's chapter 11 case. Court records show no update on the Mar. 23, 2006, hearing regarding the Debtor's request to dismiss its case. Headquartered in Chicago, Illinois, Impero, Inc., manufactures Neon Ultrabrights -- small, ultra bright neon tubes. The Company filed for chapter 11 protection on July 12, 2005 (Bankr. N.D. Ill. Case No. 05-27502). Ann E. Stockman, Esq., and Matthew A. Swanson, Esq., at Shaw, Gussis, Fishman, Glantz, Wolfson & Towbin LLC represent the debtor. When the Company filed for protection from its creditors, it estimated $1 million to $10 million in assets and $10 million to $50 million in debts. INTEGRATED DISABILITY: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Integrated Disability Resources, Inc. delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of Texas, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $3,064,513 C. Property Claimed as Exempt D. Creditors Holding $3,423,554 Secured Claims E. Creditors Holding $317,708 Unsecured Priority Claims F. Creditors Holding $23,031,686 Unsecured Nonpriority Claims ---------- ----------- Total $3,064,513 $26,772,947 Headquartered in Irving, Texas, Integrated DisAbility Resources, Inc. -- http://www.myidr.com/-- provides disability plans and ongoing health and productivity services to claimants and employees. The Debtor filed for chapter 11 protection on Feb. 10, 2006 (Bankr. N.D. Tex. Case No. 06-30575). Cynthia Williams Cole, Esq., and Vincent P. Slusher, Esq., at Godwin Pappas Langley Ronquillo LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $1 million to $10 million in assets and $10 million to $50 million in debts. INTELSAT LTD: Names Jeffrey P. Freimark as Executive VP & CFO ------------------------------------------------------------- Intelsat, Ltd., disclosed that Jeffrey P. Freimark has been appointed Executive Vice President and Chief Financial Officer, effective on the resignation of Robert Medlin. Mr. Medlin has been serving as Acting Chief Financial Officer of Intelsat since June 2005, and is expected to resign his post in April 2006. Mr. Freimark resigned on March 15 as executive vice president, chief financial and information officer of Beverly Enterprises Inc., a leading provider of healthcare services to the elderly. Beverly Enterprises was sold to Pearl Senior Care, Inc., in a transaction that closed on March 14, 2006. Prior to his role at Beverly, Mr. Freimark held officer-level positions at a number of public companies, including serving as chief financial officer of OfficeMax Inc., chief executive officer, president, and chief financial officer for Grand Union Company, and chief financial officer of Pueblo International, Inc. Intelsat Chief Executive Officer Dave McGlade commented, "Jeff's experience in working with the capital markets and building strong finance and accounting teams will be very valuable as Intelsat completes the PanAmSat merger. Including his work on integrations, Jeff has successfully implemented significant cost reduction and process improvement programs, demonstrating his strong abilities and effectiveness in driving company value. We know that he will be a major contributor at Intelsat." Mr. Freimark, who holds an MBA in accounting and taxation from the Stern School of Business at New York University and a JD degree from New York Law School, is a Certified Public Accountant and a member of the New Jersey Bar. Mr. McGlade also noted the role played by Robert Medlin for Intelsat: "Bob Medlin has been very important to Intelsat over the past several months, and he has assisted in maintaining solid financial controls and processes during this period. All of us at Intelsat are appreciative of the efforts of Bob and his team." Mr. Medlin, a senior managing director of FTI Consulting, Inc., will continue to support Intelsat's financial operations for an interim period on a consulting basis. Intelsat, Ltd., offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high-quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on Nov. 16, 2005, Intelsat, Ltd.'s announcement of its results for the third quarter ended Sept. 30, 2005, does not affect the ratings of Intelsat, wholly owned subsidiary Intelsat (Bermuda), Ltd., and operating subsidiary Intelsat Subsidiary Holding Company Ltd. The company remains on Rating Watch Negative. As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's Investors Service has affirmed Intelsat, Ltd.'s ratings and changed the outlook for all ratings to developing from negative following the company's announcement that it is acquiring PanAmSat for $3.2 billion plus the assumption of PanAmSat's debt ($3.2 billion). The transaction, which Moody's expects to be largely, if not entirely, financed with new debt, would significantly increase Intelsat's pro forma leverage thereby increasing credit risk for Intelsat debt holders and pressuring the rating downwards. Therefore, Moody's anticipates placing all ratings on review for possible downgrade or lowering the ratings once the timing and structure of the transaction and resolution of regulatory review becomes more certain. Moody's has affirmed these ratings: Intelsat: * Corporate family rating -- B2 * $400 Million 5.25% Global notes due in 2008 -- Caa1 * $600 Million 7.625% Sr. Notes due in 2012 -- Caa1 * $700 Million 6.5% Global Notes due in 2013 -- Caa1 Intelsat Subsidiary Holding Company Ltd.: * $300 Million Sr. Secured Revolver due in 2011 -- B1 * $350 Million Sr. Secured T/L B due in 2011 -- B1 * $1 Billion Sr. Floating Rate Notes due in 2012 -- B2 * $875 Million Sr. 8.25% Notes due in 2013 -- B2 * $675 Million Sr. 8.625% Notes due in 2015 -- B2 Intelsat (Bermuda) Ltd.: * $478.7 Million Sr. Unsecured Discount Notes due 2015 -- B3 Moody's has changed the outlook to developing from negative. ISLES CBO: Moody's Places Ba2 Note Ratings on Watch & May Upgrade ----------------------------------------------------------------- Moody's Investors Service placed on watch for possible upgrade the ratings of these classes of notes issued in 1998 by Isles CBO, Limited, a collateralized bond obligation issuer: * The $30,000,000 Class A-1 Senior Secured Fixed Rate Notes, Due 2010 Prior Rating: Ba2 Current Rating: Ba2, on watch for possible upgrade * The $235,000,000 Class A-2 Senior Secured Floating Rate Notes, Due 2010 Prior Rating: Ba2 Current Rating: Ba2, on watch for possible upgrade The rating actions reflect the improvement in the credit quality of the transaction's underlying collateral portfolio, consisting primarily of high yield bonds, as well as the ongoing delevering of the transaction, according to Moody's. As of February 2006, the weighted average rating factor of the portfolio was 2939, compared to the transaction's trigger level of 3000 and the diversity score was 48.9, compared to the trigger level of 40. ITC HOMES: Court Denies M&S Unlimited's Pitch to Dismiss Case ------------------------------------------------------------- The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona denied the request of M&S Unlimited, LLC, and Moshe and Suzie Gedalia to dismiss ITC Homes, Inc.'s chapter 11 proceedings. Judge Hollowell stated that since the Debtor's property, customers and creditors are located in Pima County, creditors will have easier access to the Arizona Court than the Nevada Court. Judge Hollowell said that the Arizona Court's jurisdictional scope is broader than that of the Nevada Court, which is limited to the parties before it in the Nevada Action. Judge Hollowell further said that the Debtor's primary secured creditor, the First National Bank of Arizona, did not support the dismissal, abstention or suspension of the Chapter 11 proceeding. A cash collateral agreement with FBNA also limits the Debtor's expenditures and provides detailed accountings regarding the Debtor's use of funds. Judge Hollowell also said that the Debtor has not been negligent in paying its subcontractors and a number of home sales have been closed with the consent of M&S and the Gedalia's. The Debtor in the meantime, Judge Hollowell sees, has asked for an examiner to investigate M&S Unlimited and the Gedalia's on allegations of mismanagement and fraud. Judge Hollowell therefore deferred ruling on the request to appoint a chapter 11 trustee until the examiner motion has been decided. Judge Hollowell also orders that, for the time being, the Debtor may not sell houses in the ordinary course of business without a stipulated agreement with M&S and the Gedalia's, FBNA or an order of the Court. The Debtor is also ordered not make payments to insiders without a court order approving those payments. Finally, Judge Hollowell orders that Ron Amiran may receive compensation as the manager of the Debtor, but his compensation can't exceed $10,000 a month. Nevada District Court Action M&S Unlimited, the Gedalia's, Mr. Amiran and the Debtor are parties to an agreement to develop a tract of land in Vail, Arizona, named Santa Rita Acres Estate. Mr. Amiran formed ITC Homes for the sole purpose of developing that property. M&S Unlimited told the bankruptcy court that during this time, Mr. Amiran had no funds so it agreed to borrow capital for the project. The Gedalias told the bankruptcy court that it filed an action in the Nevada state court against Mr. Amiran, the Debtor and related entities seeking emergency relief to stop further diversion of the assets of the real estate development and permanent relief for an accounting and for damages. On Dec. 1, 2005, the Nevada state court entered an order enjoining any further payments to Mr. Amiran and further ordering an accounting. On Jan. 4, 2006, the Nevada Court appointed an independent receiver, retired Brigadier General Ashley Hall and even then, M&S Unlimited alleges, Mr. Amiran continued to attempt to exert control over ITC Homes. On Jan. 13, 2006, Debtor and Mr. Amiran filed for removal of the state court action, but abandoned the removal. Since assuming operational control, the receiver has continued sales and construction in the ordinary course but has periodically been confronted with various attempts by Mr. Amiran to direct and divert funds from the receivership, or to interfere with the operation of the business. M&S Unlimited and the Gedalias have pursued the court-ordered accounting through the court-approved auditors and discovered apparent misappropriation of assets. After filing its petition, M&S Unlimited related, the Debtor asked that the bankruptcy court to require the receiver to turnover its assets which the bankruptcy court granted. Pursuant to the bankruptcy court's turnover order, the receiver turned over operational control of Debtor's business to Debtor. Debtor now has control over its assets while the receiver remains in operational control of related non-Debtor entities. Dismiss or Suspend Chapter 11 Case M&S Unlimited and the Gedalias asked the Bankruptcy Court to dismiss the Debtor's chapter 11 proceedings or suspending the reorganization proceedings under these terms and conditions: (1) The Nevada Court receiver shall resume operational control of Debtor, shall re-employ the project's historical licensed contractor on terms and conditions established by the Receiver, and may pay pre-petition and post-petition obligations subject to the orders of the Nevada Court and the other terms set forth below; (2) The receiver appointed by the Nevada Court shall resume and continue operations of the development pursuant to the Nevada Court Order; (3) Debtor's disbursements shall continue to be subject to review by MCA and review and approval by the Nevada Court Plaintiffs in accordance with existing contractual arrangements; (4) The automatic stay shall be modified to permit continuation of the Nevada state court litigation and enforcement of the order for an accounting issued by the Nevada Court; (5) The Nevada Court shall have exclusive jurisdiction to authorize the receiver of Debtor to sell property, according to such procedures, and on such terms and conditions as are established by the Nevada Court. (6) The automatic stay shall remain in force and effect as to the enforcement of any judgment entered against Debtor in the Nevada Court. In the event that the Court denied the request, M&S and the Gedalias wanted the Court to appoint a Chapter 11 trustee, pursuant to Section 1104 of the Bankruptcy Code. About ITC Homes, Inc. Headquartered in Vail, Arizona, ITC Homes, Inc. -- http://www.itchomesinc.net/-- develops residential real estates. The Company filed for chapter 11 protection on Jan. 26, 2006 (Bankr. D. Ariz. Case No. 06-00053). Scott D. Gibson, Esq., at Gibson, Nakamura & Decker, PLLC, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts of $10 million to $50 million. LAGUARDIA ASSOCIATES: Taps Robert Price as Special Counsel ---------------------------------------------------------- LaGuardia Associates, L.P., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for permission to employ Robert S. Price, Esq., as its special counsel. The Debtors want Mr. Price's services for bond matters related to the 1998 refinancing of the hotel properties. Mr. Price may also provide expert testimony to other bond issues arising in the Debtors' cases. Mr. Price will bill the Debtors at $200 per hour for his services. To the best of the Debtors' knowledge, Mr. Price does not hold any interest adverse to the Debtors, their creditors, or any party-in- interest. Headquartered in King of Prussia, Pennsylvania, LaGuardia Associates, L.P., owns and operates the 358-room Crowne Plaza Hotel located at 104-04 Ditmars Boulevard in East Elmhurst, New York. The Company and its debtor-affiliate filed for chapter 11 protection on October 29, 2004 (Bankr. E.D. Pa. Case No. 04-34514). Martin J. Weis, Esq., at Dilworth Paxon LLP represent the Debtors in their restructuring. When the Company filed for protection from its creditors, it estimated assets and liabilities of $10 to $50 million. LUCENT TECH: Alcatel Deal Cues Moody's to Hold Low-B Ratings ------------------------------------------------------------ Moody's Investors Service affirmed Lucent Technologies Inc.'s B1 Corporate Family Rating and changed the outlook to developing from positive following the company's announcement that it is in merger discussions with Alcatel. The developing outlook reflects the possibility that Lucent's credit profile would benefit from a merger with Alcatel but that absent a merger Lucent would continue to face challenges to improve recent soft operating performance. These ratings have been affirmed: * B1 Corporate Family rating * B1 Senior unsecured rating * B3 Subordinated rating * B3 Trust preferred rating Outlook Developing Should Lucent reach a definitive merger agreement with Alcatel, Lucent's ratings and outlook could face upward pressure depending on the new corporate structure and support provided existing Lucent debt by the new company. Alternatively, if the companies do not reach a definitive merger agreement, the outlook could be stabilized or face negative pressure due to recent soft operational performance and possible consolidation of Lucent's competitors within the telecom equipment industry. Lucent Technologies Inc., headquartered in Murray Hill, New Jersey, is a leading global provider of telecommunications equipment and services. LUNN 119TH: Court Okays Plante & Moran's Retention as Accountants ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois gave Robert J. Lunn, Lunn 119th LLC, and Lunn 26th LLC, permission to retain Plante & Moran, PLLC, as their accountants. Plante & Moran will provide general tax and accounting services to the Debtors, including, without limitation, preparing and finalizing the Debtors' tax returns for the years 2004 and 2005 and analyzing and reporting the tax implications of the Sale. Guy Ackermann, a Plante & Moran partner, discloses that he bills $440 per hour for his work. Other Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $350 - $480 Senior Associates $300 - $350 Associates $200 - $300 Paraprofessionals $60 - $200 Mr. Ackermann assures the Court that his Firm does not hold or represent any interest adverse to the Debtors or their estates. Headquartered in Chicago, Illinois, Lunn 119th LLC and its affiliate, Lunn 26th LLC, are owned by Robert J. Lunn, the managing member of the LLCs. Lunn 119th and Lunn 26th filed for chapter 11 protection (Bankr. N.D. Ill. Case Nos. 05-11666 and 05-11672) on March 30, 2005. An asbestos environmental cleanup proceeding (Case No. 03-CH 15247) brought by the City of Chicago is pending against the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts of $10 million to $50 million. MEDCO HEALTH: Lockout Looms for United Steelworker Members ---------------------------------------------------------- Approximately 500 of Medco Health Solutions Inc.'s workers face a possible lockout on Saturday, April 1, 2006, if they fail to reach a new agreement with the mail-order pharmacy giant. Barbara Martinez at The Wall Street Journal reports that Medco informed the affected workers in its Las Vegas mail-order pharmacy of the planned lockout on March 23, 2006. Medco says that it has set up contingency measures to ensure that the lockout won't disrupt its services to its clients. According to Ms. Martinez, Medco is trying to convince the workers, represented by United Steelworkers, to agree to pay a larger percentage of their health benefits, in line with the benefits received by other Medco employees. USW has fought the proposal and charged that "Medco continues to ask its employees to pay more and more for fewer benefits." On its Web site, the Steelworkers criticized Medco's Jan. 27, 2006, negotiations with the union saying the company offered no new proposals to the Union's counter-proposals over healthcare and other benefit issues. According to the Union, Medco Senior VP David Reilly told the bargaining committee that the company has had one health plan for all employees for the past 16 years and the company will not give up the "flexibility" to make changes to that plan whenever they want. Medco remains open to negotiations with the union prior the lockout. However, union representative Jack Hammond told the Journal that it is unlikely that a deal could be reached by Saturday. About USW The USW -- http://www.steelworkers-usw.org/-- has over 600,000 members in the United States and Canada and represents workers in steel, rubber and tire, aluminum, mining and health care. About Medco Health Medco Health Solutions, Inc. -- http://www.medco.com/-- is a leader in managing prescription drug benefit programs that are designed to drive down the cost of pharmacy healthcare for private and public employers, health plans, labor unions and government agencies of all sizes. With its technologically advanced mail-order pharmacies and its award-winning Internet pharmacy, Medco has been recognized for setting new industry benchmarks for pharmacy dispensing quality. Medco serves the needs of patients with complex conditions requiring sophisticated treatment through its specialty pharmacy operation, which became the nation's largest with the 2005 acquisition of Accredo Health. Medco, the highest-ranked prescription drug benefit manager on Fortune magazine's list of "America's Most Admired Companies." * * * As reported in the Troubled Company Reporter on Oct. 31, 2005, Moody's Investors Service changed the rating outlook of Medco Health Solutions Inc. to positive from stable. The rating agency also affirmed Medco's Ba1 corporate family rating; a Ba1 rating on the company's $500 million issue of senior unsecured 7.25% notes due 2013; and its Ba1 rating on two senior unsecured loans totaling $1.25 billion maturing in 2010. MESA TRUST: Low Debt Enhancement Level Cues Moody's Rating Review ----------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade one subordinated tranche from one mortgage securitization issued by MESA 2001-2 Trust. The transaction is backed by "scratch and dent" mortgage loans originated by Option One Mortgage Corporation. The action is based on the fact that the bond's current credit enhancement level is low given the current projected losses on the underlying pool. The transaction has taken losses and pipeline loss could cause eventual erosion of the overcollateralization. Complete rating action: * Class B, current rating Ba2, under review for possible downgrade METABOLIFE INT'L: Court Threatens Chapter 7 Conversion ------------------------------------------------------ The Hon. John J. Hargrove of the U.S. Bankruptcy Court for the Southern District of California directs Metabolife International, Inc., and Alpine Health Products, LLC, to appear in Court at 10:00 a.m. on April 25, 2006, and show cause why its Chapter 11 case should not be converted to a liquidation proceeding under Chapter 7 of the Bankruptcy Code. Judge Hargrove tells the Debtors that cause exists supporting a Chapter 7 conversion of their cases. Among other things, the judge says, the Debtors' lack of ongoing operations and escalating administrative fees and costs associated with the Debtors' disagreements with the Official Committee of Unsecured Creditors. Both the Debtor and the Committee have filed competing Reorganization Plans. Each has vowed that they will vigorously oppose disagreeable provisions on the other's plan. The Debtors sold substantially all of their non-Ephedra assets to IdeaSphere, Inc., for approximately $12 million. Apart from the sale proceeds, the Debtors' remaining assets include the proceeds of potential actions against their former directors and officers, avoidance actions and legal claims to insurance policy proceeds. In their monthly operating report for January 2005, the Debtors disclosed approximately $18.8 million of total available cash. Headquartered in San Diego, California, Metabolife International, Inc. -- http://www.metabolife.com/-- sells dietary supplements and management products in grocery, drug and mass retail locations nationwide. The Company and its subsidiary, Alpine Health Products, LLC, filed for chapter 11 protection on June 30, 2005 (Jointly Administrated Under Bankr. S.D. Calif. Case No. 05-06040). David L. Osias, Esq., and Deb Riley, Esq., at Allen Matkins Leck Gamble & Mallory LLP, represent the Debtors in their chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $23,983,112 in total assets and $12,214,304 in total debts. MILE HIGH: U.S. Trustee Appoints Eight-Member Creditors Committee ----------------------------------------------------------------- The United States Trustee for Region 19 appointed eight creditors to serve on an Official Committee of Unsecured Creditors in Mile High Capital Group, Ltd.'s chapter 11 case: 1. Gary and Lila Aamodt 7000 Edgebrook Place Eden Prairie, MN 55346 Tel: (952) 934-6429 2. Lori Fuller E6321 County Road Marion, WI 54950 Tel: (715) 754-5428 3. Sam Noel 6335 Oberom Road Arvada, CO 80004 Tel: (303) 421-0444 4. Stephen Fischer 15710 Parrish Road Berthoud, CO 80513 Tel: (720) 635-7499 5. Harold Heckman P.O. Box 115 Elizabeth, CO 80107 Tel: (303) 646-9598 6. Dan Silverman 10808 Figtree Court San Diego, CA 92131 Tel: (858) 450-8466 7. Barry Blair 20977 E. Berry Place Centennial, CO 80015 Tel: (303) 690-8654 8. Dan Prehn 8250 East Harvard Avenue, #4-101 Denver, CO 80231 Tel: (303) 671-8191 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Hall Wells DiNardo, LLC, the Receiver appointed by the District Court for the City and County of Denver, Colorado, filed a chapter 11 petition on behalf of Mile High Capital Group, Ltd. on Jan. 13, 2006 (Bankr. D. Colo. Case No. 06-10106). Joli A. Lofstedt, Esq., at Connolly, Rosania & Lofstedt, P.C., represents the Receiver. At the time of the filing, the company had $5,990,000 in total assets and $13,879,059 in total debts. John C. Smiley, Esq., the chapter 11 trustee, is represented by Harvey Sender, Esq., and David V. Wadsworth, Esq., at Sender & Wasserman, P.C. MILE HIGH: Chap. 11 Trustee has Until Aug. 12 to Decide on Leases ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado extended, until Aug. 12, 2006, the time for John C. Smiley, Esq., the chapter 11 trustee appointed in Mile High Capital Group, Ltd.'s bankruptcy proceedings, to decide whether to assume or reject unexpired nonresidential real property leases. Mr. Smiley says the only non-residential real property lease he knows about is the Debtor's lease of its office space at 9780 Mount Pyramid Court, #300, in Englewood, Colorado. Mr. Smiley says he won't be able to analyze the best means of administering the estate or making a reasoned decision about whether to assume or reject nonresidential real property leases until, at the earliest, the summer months. Hall Wells DiNardo, LLC, the Receiver appointed by the District Court for the City and County of Denver, Colorado, filed a chapter 11 petition on behalf of Mile High Capital Group, Ltd. on Jan. 13, 2006 (Bankr. D. Colo. Case No. 06-10106). Joli A. Lofstedt, Esq., at Connolly, Rosania & Lofstedt, P.C., represents the Receiver. At the time of the filing, the company had $5,990,000 in total assets and $13,879,059 in total debts. John C. Smiley, Esq., the chapter 11 trustee, is represented by Harvey Sender, Esq., and David V. Wadsworth, Esq., at Sender & Wasserman, P.C. MUSICLAND HOLDING: Verizon Wants Service Contract Decision Now -------------------------------------------------------------- Pursuant to a Service Agreement dated August 2005, Musicland Holding Corp. and its debtor-affiliates agreed to purchase a minimum of $1,500,000 worth of telecommunication services from Verizon Business, Inc., formerly known as MCI, Inc., each year, over a three-year term, with additional six-month ramp-up and ramp-down provisions. Verizon provides telecommunication services, including: * interstate and intrastate telecommunications services, * local service, * regional calling, * local metered TI service, and * voicemail service. William J. Hanlon, Esq., at Seyfarth Shaw LLP, in Boston, Massachusetts, relates that as a part of the Service Agreement, and as a reward for committing to the three-year term, Verizon agreed to pay a $250,000 sign-up credit. The Sign-up Credit becomes due four months after the start of the Ramp-up Period, which started on October 15, 2005. The Service Agreement also provides that if the Debtors terminate the Agreement before the end of the Term, or if Verizon terminates the Agreement for a cause, the Debtors are required to pay a pro rata portion of any and all credits. According to Mr. Hanlon, there is a potential substantial injury to Verizon if the Service Agreement is not assumed. If Verizon pays the Sign-up Credit without a prior assumption, the Debtors will be able to reject the Service Agreement and treat both their obligations to refund the cash Signing bonus and the balance due for breach to Verizon as an unsecured non-priority, prepetition claim. The Debtors should not be allowed to pick and choose the advantageous portion of the Service Agreement, while retaining the option of avoiding its own obligation, Mr. Hanlon contends. Verizon believes that the telecommunication services it provided under the Service Agreement are necessary to the Debtors' operations. Thus, there is little prejudice to the Debtors' estate in compelling them to assume the Service Agreement. Accordingly, Verizon asks the U.S. Bankruptcy Court for the Southern District of New York to fix a deadline for the Debtors to assume or reject the Service Agreement. Verizon also seeks the Court's permission to file the Service Agreement under seal. Mr. Hanlon notes that the disclosure of certain information contained in the Service Agreement, including the pricing of telecommunications services, would put Verizon at a competitive disadvantage. Verizon asks the Court to restrict access to the Service Agreement to: (a) the Court, (b) the United States Trustee, (c) professionals retained by an official committee in the Debtor's Chapter 11 cases, and (d) those persons who: * are deemed acceptable by the Debtors and Verizon; * have executed a confidentiality agreement acceptable to the Debtors and Verizon; and * present the Clerk of the Court with a document evidencing satisfaction of the previous two Conditions, signed by Verizon. Verizon asks the Court to rule that: -- access to the Service Agreement will only be for determining whether the relief requested in its Motion to Fix Deadline for Assumption or Rejection should be granted; -- any parties permitted access to the Service Agreement will not share any information contained in that document with any third party; and -- any party found to have violated those conditions will be subject to sanctions. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) NAVISTAR INT'L: Gets Consents from 4.75% Subordinated Noteholders ----------------------------------------------------------------- Navistar International Corporation (NYSE:NAV) reported that the expiration and final results of its cash tender offer and consent solicitation with respect to its outstanding $220 million in aggregate principal amount of 4.75% subordinated exchangeable notes due 2009. The tender offer expired at midnight, Eastern Standard Time, on March 23, 2006. As of March 24, 2006, Navistar accepted for payment and paid for notes from holders of $ 217.042 million in aggregate principal amount, or 98.7%, of the outstanding notes pursuant to Navistar's offer to purchase and related letter of transmittal. In exchange for each $1,000 principal amount of notes validly tendered and accepted for payment, holders of the notes received $1,000 in cash, plus accrued and unpaid interest through, but not including, the date of purchase. As a result of receiving consents from holders of more than a majority in aggregate principal amount of the 4.75% notes, Navistar: * executed a supplemental indenture relating to the indenture governing the notes, which, among other things, * waived any and all defaults and events of defaults existing under the indenture, * eliminated substantially all of the material restrictive covenants and certain events of default and related provisions in the indenture and * rescinded any and all prior notices of default and/or acceleration delivered to Navistar pursuant to such indenture. A full-text copy of the Company's Tender Offer Statement is available at no charge at http://ResearchArchives.com/t/s?6f3 Acceleration of the 6.25% Senior Notes Navistar also retired all $400 million of its 6.25% senior notes due 2012 in response to an acceleration notice from more than 25% of the holders of such notes. "This is all part of the orderly transition of the company's capital structure," said Robert C. Lannert, Navistar vice chairman and chief financial officer. "The acceleration of the 6.25% senior notes allowed Navistar to pay off the debt at par and replace the obligation with debt from the company's senior unsecured loan facility. This also means that all defaults under the indenture for the 6.25% senior notes were cured upon repayment and all existing cross defaults and/or cross accelerations were eliminated upon repayment of the 6.25% senior notes." Holders of Navistar's 6.25% senior notes were paid $1,000 per $1,000 principal amount of notes, plus accrued and unpaid interest through the settlement date. In order to settle the acceleration of the 6.25% senior notes due 2012 and pay for the tendered 4.75% subordinated exchangeable notes due 2009, Navistar made a second draw on its $1.5 billion senior unsecured term loan facility. About Navistar Navistar International Corp. -- http://www.nav-international.com/ -- is the parent company of International Truck and Engine Corporation. The company produces International(R) brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts and service sold under the International(R) brand. A wholly owned subsidiary offers financing services. * * * As reported in the Troubled Company Reporter on Feb. 7, 2006, Moody's Investors Service lowered the ratings of Navistar International Corporation (senior unsecured to B1 from Ba3 and subordinate to B3 from B2) and placed the ratings under review for further possible downgrade. Moody's rating actions followed Navistar's announcement that it has received notice from purported holders of more than 25% of the company's approximately $200 million senior subordinated exchangeable notes due 2009, claiming that the company is in default of reporting requirements relating to the filing of its financial statements for the fiscal year ending Oct. 31, 2005. The company disputes the allegation of default. Nevertheless, receipt of the notice of default represents a further negative development for the company stemming from its inability to file financial statements in a timely manner because of accounting issues. The downgrade and review reflect the heightened financial risk stemming from uncertainty as to Navistar's ability to file its financial statements in a timely manner given the number and complexity of various open items that the company continues to discuss with its auditors Deloitte and Touche. As a result of these open issues, Navistar cannot estimate the time frame for the filing of its October 2005 financial statements. NEW CENTURY: S&P Affirms BB Rating & Changes Outlook to Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on New Century Financial Corp. to negative from stable. In addition, Standard & Poor's affirmed its 'BB' counterparty credit rating on the company. "The outlook revision reflects Standard & Poor's concerns regarding deterioration in profitability metrics that began to emerge in the last two quarters of 2005 as a result of industry- wide developments," said Standard & Poor's credit analyst Anne Cosgrove. Like many other subprime mortgage lenders, New Century has seen profit margins erode during late 2004 and 2005, as a flattening yield curve pushed up funding costs while intensifying competition limited New Century's ability to increase interest rates charged on loans originated. Positive developments in the first quarter are evidenced by substantial increases in the weighted average coupon on originations since September 2005, resulting in higher premiums being paid by whole loan buyers on first and second quarter forward sales. Moreover, in the current environment, New Century's size and scale in the industry provide it with the opportunity to pick up market share from weaker players. However, Standard & Poor's remains concerned about the prospect of asset quality deterioration in 2006, which combined with unpredictable subprime market conditions could further erode profit margins. Standard & Poor's is especially sensitive to the adverse effect rising interest rates might have for the debt service burden of New Century's subprime customers. As a result, Standard & Poor's can envision a scenario in which credit costs could rise at the same time the company is struggling to maintain production volumes, preventing any recovery in profitability metrics. Standard & Poor's will continue to monitor the company's asset quality and ability to execute its business in a challenging operating environment. Should: * asset quality remain stable, * profitability metrics continue to improve from the levels experienced in the second half of 2005, and * the trend sustain throughout 2006, the outlook could be revised back to stable. However, if profitability metrics fail to improve and asset quality metrics materially deteriorate, the rating could be lowered. OBSIDIAN ENT: Losses & Equity Deficit Prompt Going Concern Doubt ---------------------------------------------------------------- Somerset CPAs, P.C. expressed substantial doubt about Obsidian Enterprises, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the year ending Oct. 31, 2005. The auditing firm pointed to Obsidian's recurring losses from operations, current liabilities in excess of current assets, loan covenant violations and stockholders' deficit. Obsidian's previous auditors, McGladrey & Pullen, LLP also pointed to the same conditions about the Company's ability to continue as a going concern after auditing its financial statements for the year ending Oct. 31, 2004. Reasons for Filing an Amended Annual Report Obsidian files an amended annual report to eliminate prior period adjustments contained in the financial statements, to include an audit opinion for the fiscal years ended October 31, 2004 and 2003, to revise the control provisions disclosed in Item 9A, and to correct certain typographical errors within the Original Form 10-K. 2005 Financials For the 12 months ended Oct 31, 2005, Obsidian incurred a $12,119,000 net loss on $65,774,000 of net sales. For the 12 months ended Oct. 31, 2004, the Company incurred a $8,033,000 net loss on $64,360,000 of net sales. At Oct. 31, 2005, Obsidian had a $18,584 negative working capital balance. The Company says that the decrease in working capital is primarily attributable to certain loans that became current as of Oct. 31, 2005. Obsidian is currently working to cure its loan covenant violations for its subsidiary, United Expressline, Inc., and extend the Company's subordinate debt of $8,500, refinance loans for Obsidian Leasing in the amount of $2,974 and US Rubber in the amount of $5,005 as noted in further detail below. The refinancing of those obligations along with positive cash flow from operations is expected to improve Obsidian's working capital to a positive position upon completion. At Oct. 31, 2005, Obsidian's balance sheet showed $46,439,000 in total assets and $66,239,000 in total liabilities. The Company's balance sheet shows a $214,000 minority interest, a $1,377,000 redeemable stock and a accumulated deficit $34,858,000 at Oct. 31, 2005. A full-text copy of Obsidian Enterprises' amended annual report is available for free at http://ResearchArchives.com/t/s?6fb About Obsidian Enterprises Headquartered in Indianapolis, Indiana, Obsidian Enterprises, Inc. -- http://www.obsidianenterprises.com/-- is a publicly traded (OTC: OBDE) holding company that invests in small and mid cap companies in basic industries such as manufacturing and transportation. The Company currently conducts business through five subsidiaries: * Classic Manufacturing, Inc., a manufacturer of commercial, racing and recreational trailers; * Danzer Industries, Inc., a manufacturer of cargo trailers and service and utility truck bodies and accessories; * Pyramid Celebrity Coaches, Inc., a leading provider of corporate and celebrity entertainer coach leases; * United Trailers, a manufacturer of steel-framed cargo, racing, ATV and specialty trailers; and * U.S. Rubber Reclaiming, Inc., a butyl rubber reclaiming operation. As of Oct. 31, 2005, Obsidian Enterprises' balance sheet showed a $21,391,000 stockholders' equity deficit, larger than the $9,463,000 equity deficit reported at Oct. 31, 2004. OCEANVIEW CBO: Poor Credit Quality Prompts Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed these notes issued by Oceanview CBO I, Ltd., on watch for possible downgrade: * The $28,000,000 Class A-2 Floating Rate Notes Due 2037 Prior Rating: A1 Current Rating: A1, on watch for possible downgrade * The $10,000,000 Class B-F Fixed Rate Notes Due 2037 Prior Rating: B3 Current Rating: B3, on watch for possible downgrade * The $5,000,000 Class B-V Floating Rate Notes Due 2037 Prior Rating: B3 Current Rating: B3, on watch for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. ON TOP COMMS: Wants Until April 19 to Decide on La. Studio Lease ---------------------------------------------------------------- On Top Communications, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Maryland to further extend, until April 19, 2006, the period within which they can elect to assume, assume and assign, or reject their unexpired nonresidential real property lease for studio space located at 27104 Highway 23, in Port Sulphur, Louisiana. The Debtor has a lease agreement for the space with Dr. Russell Rawls. The Debtor tells the Court that its FM radio station KNOU licensed by the Federal Communications Commission has ceased to operate as of March 15, 2006. FCC regulations require that the public files for the station be located in a place accessible to the general public. The extension, the Debtors say, will give them more time to decide where to maintain the public files for the station. Headquartered in Lanham, Maryland, On Top Communications, LLC, and its affiliates acquire, own and operate FM radio stations located in the Southeastern United States. The Company and its debtor- affiliates filed for chapter 11 protection on July 29, 2005 (Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of Bowie, Maryland, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of $10 million to $50 million. OVERWATCH SYSTEMS: S&P Affirms B+ Ratings with Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Overwatch Systems LLC. At the same time, Standard & Poor's affirmed its 'B+' bank loan rating and '3' recovery rating on the company's secured credit facility, which is being increased $20 million to $119 million to fund an acquisition. The outlook is stable. "The affirmation reflects an appropriate financial profile despite the higher debt levels," said Standard & Poor's credit analyst Christopher DeNicolo. The additional funds from the credit facility will be used to finance an acquisition, the details of which are not public. Pro forma for the transaction, debt to EBITDA is expected to be around 4x. The ratings on Overwatch reflect: * a modest scale of operations; * limited product and program diversity; * competitors that are much larger; and * the likelihood of debt-financed acquisitions. These factors are offset somewhat by leading positions in niche markets for intelligence analysis tools and high operating margins. The company is owned by Kelso & Co., a private equity firm. Although leverage is moderate, the absolute level of earnings and cash flows are small. Total revenues in 2006 are expected to be only around $100 million. In addition, goodwill from this and prior acquisitions will comprise more than 80% of total assets and be more than 1.5x book equity. Operating margins (before depreciation) are high at around 30% due to a significant portion of revenues coming from software licenses and maintenance contracts. Funds from operations to debt is expected to be around 20% in the near term. Free cash flows could be retained to finance future acquisitions or used to reduce debt. Further acquisitions are likely, but leverage is not expected to increase above current levels. Overwatch is a leading developer of intelligence analysis software tools for the intelligence community and the U.S. military. The market outlook for the company's products is quite favorable due to the high levels of U.S. defense spending and the importance of intelligence analysis and dissemination to both the global war on terror and the transition to network centric warfare. Although the company has leading positions in the markets served, these markets are quite small and competition consists of similar-sized firms, in addition to large defense contractors such as: * Lockheed Martin Corp., * General Dynamics Corp., and * BAE Systems PLC. Also, program/product diversity is limited, with half of the company's revenues coming from the top three programs or products. Revenue growth is expected to remain above 10% for the next few years due to the solid demand for Overwatch's products. Funded backlog is around $90 million, with most of related to the Army's Future Combat System program. The company's leading niche market positions and high operating margins should enable it to reduce debt and maintain a credit profile consistent with current ratings. The outlook could be revised to negative if leverage increases significantly to fund acquisitions. A revision of the outlook to positive is not likely in the near term. OWENS CORNING: 8 Parties Say Disclosure Statement is Inadequate --------------------------------------------------------------- At least eight objections to the approval of the Disclosure Statement accompanying the Fifth Amended Joint Plan of Reorganization of Owens Corning and its debtor-affiliates were filed by the objection deadline. The objecting parties are: 1. The Ad Hoc Committee of Preferred and Equity Security Holders; 2. Bondholders King Street Capital Management, L.L.C.; D.E. Shaw Laminar Portfolios, L.L.C.; Lehman Brothers Inc.; Canyon Capital Advisors LLC; Plainfield Special Situations Master Fund Limited; Quadrangle Debt Opportunities Master Fund Ltd.; QDRF Master Ltd., Davidson Kempner Capital Management LLC; and Blue Bay Asset Management Ltd.; 3. Century Indemnity and Central National Insurance Company; 4. Creditor Pacific Employers Insurance Company; 5. Longacre Master Fund, Ltd., and affiliates; 6. Law firms Reaud Morgan & Quinn, Inc., and Environmental Litigation Group, P.C.; 7. Owens Corning shareholder Daniel C. Cadle; and 8. Owens Corning shareholder Susan C. McKelvey. The objecting parties complain that the Disclosure Statement cannot be approved because it fails to provide adequate information necessary to satisfy Section 1125 of the Bankruptcy Code. The Disclosure Statement, some of the objectors argue, describes a plan that is patently uncomfirmable. The objectors note that: -- while the Debtors acknowledge that certain insurers object to various aspects of the Plan as being violative of the insurers' rights, the Disclosure Statement does not make the requisite affirmative representation that the Fifth Amended Plan will not impair the rights of any insurer; -- the Disclosure Statement is ambiguous on the issue of whether the Alabama Wrongful Death Act damages will be compensable under the Asbestos Personal Injury Trust Distribution Procedures and, therefore, claimants are deprived of information adequate enough to enable an informed decision on whether to vote in favor of the Plan; -- the Disclosure Statement does not provide any information about the volume or aggregate amount of Liquidated Claims that will receive priority under the TDP; -- the Disclosure Statement fails to discuss plan alternatives that could avert the need to cram down holders of equity and achieve a fair, equitable and consensual plan for the benefit of all constituencies; -- the Disclosure Statement does not provide information of the proposed payment scheme to creditors, especially of the Bank Holder Claims, the valuation of the individual Debtor and the rationale for the disparate treatment regarding postpetition interest; and -- it is impossible for creditors to determine if proposed treatment of claims and distributions to be made under the Plan are in accordance with provisions of the Bankruptcy Code. The objecting parties ask the Court to deny approval of the Disclosure Statement if the deficiencies are not addressed. Ms. McKelvey wants the Disclosure Statement to provide that: "Existing shareholders will recover either the full amount of their stock purchases plus interest in the company's bankruptcy case or be awarded the same number of shares in the reorganized, new company equal to the number of shares they currently own in Owens Corning." King Street and the other objecting bondholders point out that the Disclosure Statement fails to: -- address the Bondholders' and other parties' pending appeal of the decision and order of the District Court estimating the total liability of the Asbestos Personal Injury Claims and the consequences of a reversal or remand; -- adequately describe the FAIR Act, the proposed federal asbestos legislation; -- provide information regarding the "Management Arrangements" to be implemented and the justification for the 1,800,000 shares of New OCD Common Stock contemplated to be distributed to the Debtors' employees; -- explain why third-party releases and exculpations are appropriate and are "deemed given" in particular, when a claimant is otherwise voting to reject the Plan; and -- describe other potential restructuring alternatives that might offer higher levels of recovery to unsecured creditors, and disclose that the Bondholders do not support the Plan. The Disclosure Statement should not be approved at this time, the Bondholders insist. According to the Ad Hoc Committee, the Fifth Amended Plan is patently uncomfirmable because of: -- its failure to comply with applicable law, -- lack of good faith and feasibility, -- not in best interests of creditors or equity holders, and -- unfair discrimination and unfair and inequitable treatment; "Even if the Plan could be confirmed, the Disclosure Statement cannot be approved in accordance with . . . Section 1125 because the Disclosure Statement misrepresents or omits material information that parties in interest need to evaluate the Plan properly," says Marc J. Phillips, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, on behalf of the Ad Hoc Committee. Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 127; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Wants Court to Okay Revised Plan Voting Protocol --------------------------------------------------------------- To accommodate the revised structure of their Fifth Amended Plan of Reorganization, Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve revisions to previously approved procedures for the solicitation and tabulation of plan votes. The Voting Procedures, as revised, are by no means novel or unique, J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware, tells Judge Fitzgerald. They are, she asserts, substantially the same as the previously approved procedures and are substantially similar to the procedures approved in other asbestos Chapter 11 cases. In accordance with the Voting Procedures and the Fifth Amended Plan, these classes are entitled to vote to accept or reject the Plan: * A3 to U3 (Convenience Claims) * A4 to 14 (Bank Holder Claims) * A5 (Bondholders Claims) * A6A (General Unsecured Claims - Owens Corning) * A6B (General Unsecured/Senior Indebtedness Claims Owens Corning) * B6 to U6 (General Unsecured Claims - against Debtors other than Owens Corning) * A7 (PI Trust Claims against Owens Corning) * I7 (PI Trust Claims Against Integrex) * B8 (PI Trust Claims against Fibreboard Corporation) * B9 (FB Asbestos Property Damage Claims) * A10 to U10 (Intercompany Claims) * A11 (Subordinated Claims Against Owens Corning) Although the Debtors believe each of those classes should be permitted to vote, they assert that some should be allowed to vote on a provisional or conditional basis only. Pursuant to the Fifth Amended Plan, holders of Bank Holder Claims in Classes A4 to 14 are unimpaired. To save the Debtors' estates potentially significant administrative costs, expenses and delay associated with an unimpairment determination that will be unnecessary if Classes A4 to 14 accept the Plan, the Debtors will solicit votes from Class A4 to 14 claimholders. Forms of Ballot and Notices The Debtors further ask the Court to approve their form of ballots and notices. According to Ms. Stickles, the forms of the Debtors' Ballots and Master Ballots are based on Official Form No. 14, but have been modified to address the particular aspects of their Chapter 11 cases and to include additional information that they believe will be relevant and appropriate for each class of claims. The appropriate Ballot or Master Ballot forms will be distributed in Classes A3 to U3, A4 to I4, A5, A6A, A6B, B6 to U6, A7, I7, B8, B9, A10 to U10 and A11. The Debtors contemplate the use of various forms of notice regarding the Plan confirmation process. The Debtors assert that the Plan Notices will permit them to give effective and reasonable notice of Plan-related deadlines and matters. Record Date The Debtors ask the Court to set the date that is two business days after the later of: a. the entry of an order approving the Disclosure Statement relating to their Fifth Amended Plan; and b. the entry of an order approving their proposed voting and solicitation procedures; as the Record Date for purposes of determining creditors entitled to vote on the Fifth Amended Plan, or in the case of non-voting classes, to receive the Solicitation Packages. Voting Agents The Debtors will be using two agents to distribute Solicitation Packages and tabulate votes. Omni Management Group, LLC -- the Voting Agent -- is the entity that developed the Debtors' computerized claims database and will be responsible for the distribution of Solicitation Packages to, and tabulation of ballots received from, all entities other than the holders of Debt Securities and OCD Interests. Financial Balloting Group LLC -- the Special Voting Agent -- will be responsible for the distribution of Solicitation Packages to holders of Debt Securities and OCD Interests and the tabulation of ballots and master ballots received from holders of Debt Securities. Convenience Claims The Debtors estimate that there are over 9,800 creditors holding Convenience Class Claims. Since the Convenience Claims will be paid in full under the Fifth Amended Plan, the Debtors expect that the creditors will have little or no interest in the details of the Plan, the history of the Debtors or the conduct of the Debtors' Chapter 11 cases. Thus, the Debtors propose that each holder of a Convenience Class Claim is to receive a Solicitation Package consisting solely of: -- the Notice of Confirmation Hearing; -- an appropriate Ballot; -- the Voting Procedures; and -- a supplemental Notice indicating that holders of Allowed Convenience Class Claims will receive full payment of their Allowed Convenience Class Claims, in cash, on the Initial Distribution Date, subject to limited exceptions. PI Trust Claims The PI Trust Claims are not required to be filed by the Bar Date. Accordingly, the Debtors intend to implement special procedures for publication notice to the PI Trust Claimholders, direct notice to their known attorneys, and voting of PI Trust Claims by attorneys to the extent the attorneys wish, and have authority to do so and direct notice to known claimholders who are unrepresented. Because a large percentage of the claims against the Debtors fall into the PI Trust Claim category, the Debtors will also establish procedures for allowing the claims temporarily. Each holder of a PI Trust Claim will be entitled to a vote in a specified amount based on the disease level noted on the ballot. Each of the eight designated Disease Levels will be assigned a different dollar value for voting purposes, based on the severity of the Disease Level and consistent with the values set forth in the Asbestos Personal Injury Trust Distribution Procedures proposed in the Fifth Amended Plan. Only one Disease Level may be selected for each PI Trust Claimholder. In the event a PI Trust Claimholder selects more than one Disease Level, the Voting Agent will count solely the selected Disease Level with the highest value for voting purposes. If a holder of a PI Trust Claim fails to select a Disease Level, the Voting Agent is to select the Disease Level with the lowest possible value for voting purposes with respect to the claimant. Each PI Trust Claimholder must certify that it: -- has been exposed to asbestos-containing material or product with respect to which the relevant Debtor has legal liability; and -- has the Disease Level asserted on its Ballot or Master Ballot, based on medical records or similar documentation in the possession of the parties specified on the Ballot. The Debtors also propose special procedures for the distribution of Solicitation Packages for the PI Trust Claims. To all individuals who may hold or assert PI Trust Claims, the Debtors will send to their attorneys a single Solicitation Package on behalf of all the claimants represented by the attorney. Attorneys will be required to certify, under penalty of perjury, that they are authorized to vote on behalf of each claimholder as to whom they cast a vote. Each attorney to a claimholder must certify that the Disease Level identified on behalf of the holder is proper. Otherwise, attorneys are required to send to the Voting Agent, on or before 35 calendar days prior to the Voting Deadline, a list of the names, addresses and social security numbers -- last four digits only -- of claimants on whose behalf the attorneys are not entitled to vote, in which case individual Solicitation Packages will be promptly sent to those claimants. The attorneys will be provided a Master Ballot on which they can record the votes of the claimants. The Master Ballots require submission of a summary sheet that will list each PI Trust Claimholder by name, social security number and Disease Level. In the event that not all claimants represented by an attorney vote in the same manner, the summary sheet will identify each voting claimant by name and social security number, and will indicate whether each claimant votes to accept or reject the Plan. No vote by or on behalf of a claimant is counted unless, inter alia, the claimant's social security number is provided. The Voting Procedures also provide that no vote by attorneys on behalf of their clients will be counted or considered by the Voting Agent: -- if the Master Ballot does not contain the required certification regarding the attorneys' authority; and -- to the extent the attorneys do not, contemporaneously with or before submitting the Master Ballot, comply with the Court's order requiring the filing of statements pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure and related orders. The Debtors ask the Court, solely for the purpose of voting on the Plan, that the 10-day period to submit statements pursuant to the 2019 Orders be eliminated, so that parties required to submit statements pursuant to the 2019 Orders be required to do so contemporaneously with, or prior to, submission of their Ballots or Master Ballots. Counsel may submit additional Master Ballots containing non- duplicative votes for individual Asbestos Claimants as supplements to prior submitted Master Ballots. The Voting Agent will mail a Solicitation Package directly to individuals if: -- a PI Trust Claimholder requests a Solicitation Package; -- an individual signs and files a PI Trust Claim or entry of appearance before the Record Date; -- a PI Trust Claimholder is represented by an attorney whose address is unknown; -- a PI Trust Claimholder is, according to the Debtors' records, pro se; or -- an attorney representing PI Trust Claimholders timely advises the Voting Agent of the names, addresses and social security numbers of individuals who should receive their own Solicitation Packages. Ballots and Master Ballots cast by the PI Trust Claimholders against Owens Corning will also be deemed cast against Integrex on a provisional basis, for voting purposes only. Debt Securities Many of the Debt Securities are not held directly by the beneficial owners, but are instead held in "street name" by various Debt Nominees -- financial institutions that hold Debt Securities on behalf of the beneficial owners. The Debtors will put up customary procedures for the distribution of Solicitation Packages to Debt Nominees and provide for either the "prevalidation" of individual Ballots or the compilation of Master Ballots by the Debt Nominees. "Prevalidated" Ballots will be returned directly to the Special Voting Agent. If "prevalidated" Ballots are not used, individual Ballots will be summarized on a Master Ballot and then returned to the Special Voting Agent. Customary procedures will apply in the tabulation of Ballots with respect to Debt Securities. Equity Interests Holders of OCD Interests (Class A12) and Integrex Interests (Class I12) who are designated as impaired and not entitled to vote on the Plan will receive a Solicitation Package consisting solely of the Notice of Confirmation Hearing and a supplemental Notice to Equity Interest Holders indicating that they will receive no distribution from, and retain no interest in the Debtors under the Fifth Amended Plan. Multiple Unsecured Claims For purposes of voting, classification and treatment under the Fifth Amended Plan, the number and amount of General Unsecured Claims held by an entity to which any General Unsecured Claim is transferred will be determined based on the identity of the original holder of the General Unsecured Claim. Claimant's Voting Motion A claimholder may file a Claimant's Voting Motion if: -- it is not entitled to vote because its claim is the subject of an objection pending before the Court; or -- it is entitled to vote but seeks to challenge the amount or classification of its claim for voting purposes. A Claimant's Voting Motion must be filed on or before 30 calendar days prior to the Voting Deadline, and must be supported by an accompanying affidavit by an appropriate representative of the moving party that certifies the proposed amount and classification of the claim and whether the movant votes to accept or reject the Plan. As to any creditor filing a Claimant's Voting Motion, the creditor's vote will not be counted unless its claim is temporarily allowed by the Court for voting purposes after notice and a hearing on the Claimant's Voting Motion. Publication Notices The Debtors contemplate an extensive publication notice program designed to provide notice of the Plan, of the Confirmation Hearing and of the opportunity to obtain a Solicitation Package, to unknown asbestos claimants. Based on the asbestos notification program recommended by the Debtors' Court-approved asbestos claims notification consultant, Katherine Kinsella, president of Kinsella/Novak Communications, Ltd., the Debtors will cause asbestos notices to be published in national and international publications, which have been selected to give appropriate publication notice to unknown asbestos claimants, in accordance with Bankruptcy Rules 2002 and 3017. The Debtors will also publish notice of the Confirmation Hearing and the opportunity to obtain a Solicitation Package: * once in the weekday edition of the national -- and, if applicable, international -- editions of The New York Times, The Wall Street Journal, USA Today and the Toledo Blade; and * once, in a German publication gazette -- the Bundesanzeiger or Borsen-Zeitung. The Debtors will post a notice of the Confirmation Hearing and the opportunity to obtain a Solicitation Package at http://www.ocplan.com To the extent practicable, the Debtors will mail notices to all known creditors and other parties-in-interest to the extent practicable. Miscellaneous Procedures Holder of a timely filed claim that is unliquidated, contingent or undetermined will be deemed, for voting purposes only, to have a $1.00 claim amount so long as the claim has not been disallowed or is not the subject of an objection pending as of the Record Date. Claimants who wish to have their claims allowed for voting purposes in an amount greater than $1.00 must file, on or before 30 calendar days prior to the Voting Deadline, a Claimant's Voting Motion pursuant to Bankruptcy Rule 3018 for an order temporarily allowing the claim in a different amount for voting purposes. Consistent with the general approach of the Voting Procedures, the Debtors will be sending Solicitation Packages only to those holders of Class A11 claims that have filed proofs of claim in their Chapter 11 cases. The Debtors reserve the right to modify the procedure, the Class A11 Ballots and notices with respect to Class A11 prior to the hearing to consider the approval of the Voting Procedures. A full-text copy of the Debtors' Proposed Voting Procedures is available for free at http://ResearchArchives.com/t/s?6f2 Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 127; Bankruptcy Creditors' Service, Inc., 215/945-7000) PENNSYLVANIA REAL: Inks $150 Mil. Interest Rate Swap Agreements --------------------------------------------------------------- Pennsylvania Real Estate Investment Trust (NYSE: PEI) entered into forward-starting interest rate swap agreements to hedge the expected interest payments associated with a portion of the Company's anticipated future issuances of long term debt. The aggregate notional amount of these swap agreements is $150 million. In May 2005, PREIT entered into swap agreements with an aggregate notional amount of $370 million in connection with anticipated debt issuances in 2007 and 2008. In 2008, PREIT has some additional, previously disclosed obligations that are likely to require financings. Also, the Company may have strategic opportunities for other financings in that year. With these new swap agreements, the Company has taken additional action intended to manage a portion of the interest rate risk associated with these anticipated future financings, which may include the refinancing of the Company's 15-property REMIC that matures in 2008. Combined with the May 2005 swap agreements, the Company now has $120 million in notional amount of swap agreements starting in 2007 and $400 million of aggregate notional amount of swap agreements starting in 2008. In the new agreements, the Company locked in a blended 10-year swap rate on a notional amount of $150 million starting in 2008 of 5.3562%. Excluding the transaction date swap spread component, the underlying effective Treasury rates in the swap agreements would be 4.8212%. Ultimately, the effective interest rate on the Company's 2008 debt issuances will depend on the credit spreads in effect at that time, among other factors. The swap agreements are not expected to impact the Company's income statement prior to their cash settlement, provided that the Company completes the future financing transactions in the amounts and at the times currently contemplated. The counterparties to these swaps are all major financial institutions and participants in PREIT's credit facility. Chatham Financial served as financial advisor to PREIT in connection with the swap agreements. About Pennsylvania Real Estate Investment Trust Headquartered in Philadelphia, Pa., Pennsylvania Real Estate Investment Trust -- http://www.preit.com/-- has a primary investment focus on retail shopping malls and power centers (approximately 34.5 million square feet) located in the eastern United States. Founded in 1960 and one of the first equity REITs in the U.S., PREIT's portfolio currently consists of 52 properties in 13 states, including 39 shopping malls, 12 strip and power centers and one office property. * * * On Feb. 26, 2004, Moody's Investors Service assigned a B1 rating to Pennsylvania Real Estate Investment Trust's Cumulative preferred stock. On Oct. 14, 2005, Fitch Ratings assigned BB Senior Unsecured Debt and B+ Preferred Stock ratings to Pennsylvania Real Estate Investment Trust. PETROLEUM HELICOPTERS: Launches Cash Offer for 9-3/8% Senior Notes ------------------------------------------------------------------ Petroleum Helicopters Inc. is commencing a cash tender offer for all of its outstanding $200,000,000 aggregate principal amount of 9-3/8% Senior Notes due 2009 on the terms and subject to the conditions set forth in PHI's Offer to Purchase and Consent Solicitation Statement. PHI is also soliciting consents for proposed amendments to the indenture under which the Notes were issued which would eliminate most of the restrictive covenants and events of default contained in the indenture and would shorten the minimum redemption notice period from 30 to five days. The proposed amendments to the indenture will be set forth in a first supplemental indenture and are described in more detail in the Offer to Purchase. The first supplemental indenture will not be executed unless and until PHI has received consents from holders of a majority of outstanding principal amount of the Notes, and the amendments will not become operative unless and until PHI has purchased these Notes pursuant to the Offer to Purchase. Holders who tender their Notes will be deemed to consent to the proposed amendments, and holders who consent will be required to tender their Notes. Consummation of the Offer is subject to the satisfaction or waiver of a number of conditions, including execution of the first supplemental indenture and satisfactory financing arrangements in an amount that, together with existing cash, will be sufficient to purchase the Notes tendered in the Offer. The Offer will expire at 9:00 a.m., New York City time, on April 24, 2006, unless extended or terminated by PHI. The consent solicitation will expire at 5:00 p.m., New York City time, on April 6, 2006, unless extended. The total consideration for each $1,000 principal amount of Notes tendered and accepted for payment pursuant to the Offer is $1,048.88, plus accrued and unpaid interest up to, but not including, the date of payment for such Notes. A portion of the total consideration is a consent payment in the amount of $2.00 per $1,000 principal amount of Notes for delivering consents to the proposed amendments to the indenture prior to the Consent Deadline. PHI will pay the total consideration on a business day it selects following both the Consent Deadline and the satisfaction or waiver of the conditions to closing of the Offer. Holders that tender their Notes after the Consent Deadline but prior to the Expiration Time will be eligible to receive only the purchase price of $1,046.88 per $1,000 principal amount of Notes, plus accrued and unpaid interest. If PHI accepts these Notes for purchase, it will pay the purchase price promptly after the Expiration Time. Notes tendered and related consents may be withdrawn prior to the execution of the first supplemental indenture providing for the proposed amendments but not afterwards, except in limited circumstances where withdrawal rights are required by law. Requests for documentation should be directed to the information agent for the Offer: D.F. King & Co., Inc. Toll Free (888) 567-1626 Telephone (212) 269-5550 for banks & brokerage firms Questions regarding the tender offer and consent solicitation should be directed to the dealer manager: Attention: Liability Management Group UBS Investment Bank U.S. Toll Free (888) 722-9555 x4210 Telephone (203) 719-4210 (collect) About Petroleum Helicopters Headquartered in Lafayette, La., PHI --http://www.phihelico.com/ -- provides helicopter transportation and related services to the oil and gas industry, air medical industry and others and also provides third-party maintenance services to select customers. PHI's Common Stock is traded on The Nasdaq National Market System (symbols PHII and PHIIK). Petroleum Helicopters Inc.'s 9-3/8% Series B Senior Notes due 2009 carry Moody's Investors Service's B1 rating and Standard & Poor's BB- rating. PINNACLE CBO: Credit Quality Decline Cues Moody's Ratings Review ---------------------------------------------------------------- Moody's Investors Service placed on watch for possible downgrade the ratings of these classes of notes issued in 1997 by Pinnacle CBO, Limited, a high yield and emerging markets collateralized debt obligation issuer: * The $239,500,000 Senior Secured Fixed Rate Notes due 2009 Prior Rating: A1 Current Rating: A1, on watch for possible downgrade * The $56,000,000 Second Priority Senior Secured Fixed Rate Notes due 2009 Prior Rating: Caa1 Current Rating: Caa1, on watch for possible downgrade The rating actions reflect the deterioration in the credit quality of the transaction's underlying collateral portfolio, which consists primarily of high yield and emerging markets securities, the occurrence of asset defaults and par losses, and the continued failure of certain collateral and structural tests, according to Moody's. As reported in the February 2006 trustee report, the weighted average rating factor of the portfolio was 4216, compared to the transaction's trigger level of 2450, the diversity score was 7, compared to the trigger level of 32, the senior interest coverage ratio was 126%, compared to the trigger level of 142%, the subordinate overcollateralization ratio was 22%, compared to the trigger level of 107%, and the subordinate interest coverage ratio was 18.7%, compared to the transaction's trigger level of 113%. QUEEN'S SEAPORT: Disclosure Hearing Scheduled for March 30 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will convene a hearing on Mar. 30, 2005, to consider the adequacy of information contained in Bandero, LLC's Disclosure Statement explaining its Chapter 11 Plan of Reorganization for Queen's Seaport Development, Inc. Bandero Litigation Bandero is a 24% shareholder of the Debtor, Joseph Prevratil owns 27% of the equity, and Paul Leevan owns a 49% stake. Pursuant to a phased ownership change agreement, Messrs. Prevratil and Leevan sold Bandero the 24% slice of the equity for $2 million. Messrs. Prevratil and Leevan granted Bandero an option to purchase the remaining 76% interest for an additional sum of $3 million and further payment of $2 million upon proper exercise of the option. The agreement also provided that the Debtor would receive $1 million with respect to landside development rights and both Bandero and the Debtor would both have the right to approve any new developments. Bandero disclosed that the Debtor contended: * that the consent of the City of Long Beach regarding the transfer of any interest of the Debtor in a lease agreement was never obtained; and * Bandero's option to purchase 76% of the Debtor's stock from Messrs. Prevratil and Leevan was never properly exercised. The Debtor then commenced a litigation against Bandero seeking to rescind the Bandero Agreement and avoid the transfer of $1 million as a fraudulent conveyance. Overview of the Plan The Plan, Bandero relates, will be funded from the HP Gardena Investors, LLC, New Value Fund and the Bandero New Value Fund. Bandero estimates that HPGI will be required to pay $8,680,458 on the effective date. Treatment of Claims The County of Los Angeles' $76,535 secured claim will be in full plus interest. Upon payment, the Count of Los Angeles will release its lien. The secured of R.E. Loans, LLC, totaling $728,282 will be cured and reinstated by HP Gardena Investors, LLC. HPGI will pay R.E. Loans' claim in full and assume liability for the claims. However, upon confirmation of the plan, R.E. Loans will be prohibited from claiming a default or accelerating the loan on the basis of: * cancellation of interests in the Debtor; * establishment of 76% of new interest in the Debtor in favor of HPGI; and * any transaction or event that occurred prior to the petition date constitues a default under the note and deed of trust. Jacom Computer Services, Inc.'s secured claim of: -- $675,478 regarding a judgment lien, and -- $407,950 regarding a UCC-1 lien, will be paid in full plus interest, by HPGI. Upon payment, Portfolio Financial Servicing Company will release the liens. Bandero tells the Court that Sempra Energy Solutions holds a secured claim of $390,500. Under the plan, and to extent that the Sempra Agreement is an executory contract, the Debtor will assume that agreement all obligations due for the remaining term of the agreement. On the effective date, HPGI will pay the Sempra in full and upon payment, Sempra will dismiss the Sempra Complaint. International City Bank's secured will be paid in full by HPGI and upon payment, International City Bank will release its lien. Sunnycrest, Inc.'s secured claim of $114,383 will be paid in full by HPGI and upon payment, International City Bank will release its lien. Other secured claims and priority claims will also be paid in full by HPGI. Unsecured claims will receive their pro rata distribution from the $500,000 to be provided by HPGI. Bandero estimates that unsecured creditors will receive 50% of their total claims. Messrs. Prevratil and Leevan's will get nothing under Bandero's plan and their interests in the Debtor will be deemed cancelled and void. City of Long Beach's Claim Under Bandero's Plan, the Debtor will assume its lease from the City of Long Beach. Bandero tells the Court that the City of Long Beach filed a claim totaling $4,592,662 asserting prepetition defaults of the Debtor. The City of Long Beach also filed an adversary proceeding judicial determination of the amount of the claim and has obtained Court approval to intervene in the Bandero Litigation. Bandero tells the Court the pending resolution of the proceedings, HPGI will establish a city cure reserve in an amount and manner specified in the confirmation order. If the reserve in insufficient to pay the City's claim in full, then the deficiency will paid on entry of the final order establishing the amount. Depositing of the amount into the reserve will constitute a cure for all defaults under the lease and within five days of HPGI providing evidence of establishing the reserve, the City will dismiss, with prejudice, its complaint in intervention in the bandero litigation. Claim of Adrian Waworuntu Under the Plan, Mr. Waworuntu's $12,000,000 claim will be paid by HPGI in an amount equal to the same percentage as that of unsecured creditors. However, if: * Bandero's Plan is confirmed, * HPGI is issued 76% of the interests in the Debtor; and * Patrick Cheung and Vivian Chan select Option 1 Treatment for their claims, then Mr. Waworuntu may opt to: Option 1: Mr. Waworuntu will enter into a settlement agreement with all parties to the Waworuntu Litigation and Bandero Litigation releasing all parties from any claim to the Development Rights of the Debtor and the dismissal of the two litigations. In exchange: 1. HPGI will transfer 25% of its interest in the Debtor to Cheng Cheng USA LLC, and 2. Mr. Waworuntu will maintain his 25% membership in Cheng Cheng. Option 2: Retain the right to litigate the Waworuntu Proof of Claim, Waworuntu Litigation and Bandero Litigation and when it becomes an allowed claim, be paid by HPGI in the same percentage as unsecured creditors. Claim of Patrick Cheung Bandero tells the Court that Mr. Cheung's $5,952,000 claim was disallowed in its entirety on Oct. 7, 2005. However Mr. Cheung is a named plaintiff in the Waworuntu litigation and sought to intervene in the Bandero litigation. Under the Plan, Mr. Cheung claim will be paid by HPGI in an amount equal to the same percentage as that of unsecured creditors. However, if: * Bandero's Plan is confirmed, * HPGI is issued 76% of the interests in the Debtor; and * Mr. Waworuntu and Vivian Chan select Option 1 under their treatment, then Mr. Cheung may opt to: Option 1: Enter into a settlement agreement with all parties to the Waworuntu Litigation and Bandero Litigation releasing all parties from any claim to the Development Rights of the Debtor and the dismissal of the two litigations. In exchange: 1. HPGI will transfer 25% of its interest in the Debtor to Cheng Cheng, 2. Mr. Cheung will maintain his 7% membership in Cheng Cheng, and 3. Bandero will transfer 3% of its interests in Cheng Cheng to Mr. Cheung. Option 2: Retain the right to litigate the Waworuntu Proof of Claim, Waworuntu Litigation and Bandero Litigation and when it becomes an allowed claim, be paid by HPGI in the same percentage as unsecured creditors. Claim of Vivian Chan Bandero tells the Court that Ms. Chan's $1,728,000 claim was disallowed in its entirety on Oct. 7, 2005. However, Ms. Chan is a named plaintiff in the Waworuntu litigation and sought to intervene in the Bandero litigation. Under the Plan, Ms. Chan claim will be paid by HPGI in an amount equal to the same percentage as that of unsecured creditors. However, if: * Bandero's Plan is confirmed, * HPGI is issued 76% of the interests in the Debtor; and * Mr. Waworuntu and Mr. Cheung select Option 1 under their treatment, then Ms. Chan may elect to: Option 1: Enter into a settlement agreement with all parties to the Waworuntu Litigation and Bandero Litigation releasing all parties from any claim to the Development Rights of the Debtor and the dismissal of the two litigations. In exchange: 1. HPGI will transfer 25% of its interest in the Debtor to Cheng Cheng, 2. Mr. Cheung will maintain her 3% membership in Cheng Cheng, and 3. Bandero will transfer 3% of its interests in Cheng Cheng to Ms. Chan. Cheng Cheng's Claim Cheng Chen USA LLC has in interest in the Development Rights which it acquired in a transaction with Bandero. In the Bandero Litigation, the Debtor has sought to avoid or void Cheng Cheng's interest in the Development Rights. Bandero tells the Court that if: * Bandero's Plan is confirmed, * HPGI is issued 76% of the interests in the Debtor; and * Mr. Waworuntu, Mr. Cheung and Ms. Chan, select Option 1 under their treatment, then Cheng Cheng will transfer its interests in the Development Rights to the Debtor. In exchange, the Debtor will enter into a settlement agreement and dismiss the Bandero Litigation and HPGI will transfer 25% of the interests in the Debtor to Cheng Cheng. Shareholder Interest of Bandero Bandero tells the Court that it filed a proof of claim totaling $1,632,382, which the Debtor has objected. The Debtor, Bandero relates, has also sought to avoid or void Cheng Cheng's interest in the Development Rights. Bandero holds an interest in the Development Rights after acquiring it from the Debtor. These two actions are included in the Bandero Litigation. Bandero tells the Court that if: * its Plan is confirmed, * HPGI is issued 76% of the interests in the Debtor; and * Mr. Waworuntu, Mr. Cheung and Ms. Chan, select Option 1 under their treatment, then it will contribute to the Bandero New Value Fund and relinquish its secured proof of claim. Bandero will then retain its 24% interest in the Reorganized Debtor. A full-text copy of Bandero, LLC's Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060327024727 Headquartered in Long Beach, California, Queen's Seaport Development, Inc. -- http://www.queenmary.com/-- operates the Queen Mary ocean liner, various attractions and a hotel. The Company filed for chapter 11 protection on March 15, 2005 (Bankr. C.D. Calif. Case No. 05-15175). Joseph A. Eisenberg, Esq., at Jeffer Mangles Butler & Marmaro LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. QUEEN'S SEAPORT: Has Until April 20 to Decide on Long Beach Lease ----------------------------------------------------------------- Judge Vincent Zurzolo of the U.S. Bankruptcy Court for the Central District of California extended until April 20, 2006, the period within which the Queen's Seaport Development, Inc. can decide to accept its lease with the City of Long Beach. Harry Saltzgaver, writing for the Gazette Newspaper, reports that the Debtor's bankruptcy filing last year stems from a conflict with the City regarding rent credits that led to the City filing a notice of default of lease payments. The Debtor holds a long-term lease on the ship and the surrounding 55 acres. The nonprofit RMS Foundation operates the ship, which is not in bankruptcy. According to Mr. Saltzgaver, the Debtor has claimed rent credits under a 2001 agreement that the City has said were improperly applied. The original $3.4 million discrepancy has grown to nearly $5 million in the last year. On March 23, 2006, a hearing is set asking Judge Zurzolo to issue summary judgment regarding claims by minority stockholder Bandero, LLC, against the Debtor. Bandero partners assert they were sold development rights to the property around the ship when they purchased a 24% equity stake in the Debtor. Joseph Prevratil, the Debtor's CEO and president, said in an interview with Mr. Saltzgaver, that Bandero only bought "a seat at the table" when development was discussed. As reported in the Troubled Company Reporter on March 7, 2006, a Court-ordered mediation will begin today among the Debtor, the City, primary creditor Barney Ng, Bandero and the Creditor's Committee representative. A second mediation session is scheduled March 31. Headquartered in Long Beach, California, Queen's Seaport Development, Inc. -- http://www.queenmary.com/-- operates the Queen Mary ocean liner, various attractions and a hotel. The Company filed for chapter 11 protection on March 15, 2005 (Bankr. C.D. Calif. Case No. 05-15175). Joseph A. Eisenberg, Esq., at Jeffer Mangles Butler & Marmaro LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. RAPID LINK: January 31 Balance Sheet Upside-Down by $49.8 Million ----------------------------------------------------------------- Rapid Link, Inc., fka Dial Thru International Corporation reported its financial results for the quarter ended Jan. 31, 2006, to the Securities and Exchange Commission on March 17, 2006. Covenant Violations Rapid Link says that it has violated certain requirements of its convertible debt agreements by failing to register its underlying securities and timely pay all principal and interest, including payment in full on the maturity date of the notes, either through the issuance of common stock, or payment in cash. Rapid Link's lenders have not declared a default and have allowed the Company to continue to operate. On June 1, 2005, the Company and its third-party lenders agreed to amendments to its notes payable and convertible debenture agreements to extend the maturity dates to various times ranging from Nov. 26, 2006 through Feb. 29, 2008. Quarterly Financials For the three months ended Jan. 31, 2006, Rapid Link incurred a $705,176 net loss on $1,986,112 of total revenues. For the three months ended Jan. 31, 2005, the Company incurred a $236,000 net loss on $2,784,252 of total revenues. At Jan. 31, 2006, Rapid Link balance sheet showed $3,256,577 in total assets and $9,003,092 in total current liabilities. The Company's balance sheet shows $303,031 of convertible debentures and $934,454 of convertible notes. The Company reports a $49,817,290 accumulated deficit at Jan. 31, 2006. A full-text copy of Rapid Link's latest quarterly report is available for free at http://ResearchArchives.com/t/s?6ff Going Concern Doubt KBA Group LLP expressed substantial doubt about Rapid Link, Incorporated's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Oct. 31. 2005 and 2004. The auditing firm pointed to the Company's recurring losses from continuing operations during each of the last two fiscal years as well as working capital and shareholders' deficits at Oct. 31, 2005. About Rapid Link Rapid Link, Inc., fka Dial Thru International Corporation -- http://www.rapidlink.com/-- provides value-added Voice over Internet Protocol (VoIP) communication services to customers, both domestically and internationally. Rapid Link is a niche market provider that has focused on the US military and other key niche markets through its proven, high-quality Internet telephony products, services and infrastructure for service providers, businesses and individuals worldwide. As of Jan. 31, 2006, Rapid Link's balance sheet shows a $6,984,000 total shareholders' equity deficit, larger than the $6,278,824 equity deficit at Oct. 31, 2005. REAL ESTATE: Moody's Rates $500,000 Class L Certificates at (P) B3 ------------------------------------------------------------------ Moody's Investors Service assigned these provisional ratings to certificates issued by Real Estate Asset Liquidity Trust Commercial Mortgage Pass-Through Certificates, Series 2006-1: * (P) Aaa to the $215.0 million Class A-1 Certificates due December 2021, * (P) Aaa to the $142.4 million Class A-2 Certificates due December 2021, * (P) Aa2 to the $6.7 million Class B Certificates due December 2021, * (P) A2 to the $8.9 million Class C Certificates due December 2021, * (P) Baa2 to the $8.42 million Class D-1 Certificates due December 2021, * (P) Baa2 to the $0.001 million Class D-2 Certificates due December 2021, * (P) Baa3 to the $2.9 million Class E-1 Certificates due December 2021, * (P) Baa3 to the $0.001 million Class E-2 Certificates due December 2021, * (P) Ba1 to the $2.8 million Class F Certificates due December 2021, * (P) Ba2 to the $2.2 million Class G Certificates due December 2021, * (P) Ba3 to the $1.0 million Class H Certificates due December 2021, * (P) B1 to the $1.0 million Class J Certificates due December 2021, * (P) B2 to the $1.0 million Class K Certificates due December 2021, * (P) B3 to the $0.5 million Class L Certificates due December 2021, * (P) Aaa to the $395.2 million Class XP-1 Certificates due December 2021, * (P) Aaa to the $1.0 million Class XP-2 Certificates due December 2021, * (P) Aaa to the $395.2 million Class XC-1 Certificates due December 2021, and * (P) Aaa to the $1.0 million Class XC-2 Certificates due December 2021. The ratings on the Certificates are based on the quality of the underlying collateral -- a pool of multifamily and commercial loans located in Canada. The ratings on the Certificates are also based on the credit enhancement furnished by the subordinate tranches and on the structural and legal integrity of the transaction. The pool's strengths include its high percentage of less risky asset classes, recourse on 74.1% of the pool, the overall low leverage and the creditor friendly legal environment in Canada. Moody's concerns include the concentration of the pool, where the top ten loans account for 58.6% of the total pool balance and the existence of subordinated debt on 5.6% of the pool. Moody's beginning loan-to-value ratio was 79.1% on a weighted average basis. SABRELINER CORP: Debt Retired & Moody's Withdraws All Ratings ------------------------------------------------------------- Moody's Investors Service withdrew all ratings assigned to Sabreliner Corporation. The ratings have been withdrawn due to the retirement of all rated debt through the use of proceeds from the sale of its Midcoast Aviation subsidiary to Swiss-based Jet Aviation Group. These ratings have been withdrawn: * Senior secured credit facility of Caa1; * Senior unsecured notes of Ca; * Corporate Family Rating of Caa2. Sabreliner Corp., headquartered in St. Louis, is a diversified aviation services, maintenance and modification firm supporting government and corporate aviation customers worldwide. SAINT VINCENTS: Assumes University Place Lease ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to assume their University Place Lease on these terms: Landlord: 41 East 11th Street LLC Lease Renewal Term: Five years Annual Rent: $453,200 Use of Premises: Office for Home Care Agency and Community Medicine Practice Early Termination: Nine months' notice to Landlord Sublet: The Debtors may sublet, with Landlord's consent not be unreasonably withheld, 49% or less of the premises to four or less subtenants. However, if the Debtors are able to sublet the entire premises to one subtenant, the 49% limitation will not apply. The Official Committee of Unsecured Creditors had previously asked the Bankruptcy Court to: (a) further reduce the notice of termination period to limit 41 East LLC's potential administrative claim; (b) require 41 East LLC to mitigate any of its damages in the event that the Debtors terminate the University Place Lease; and (c) give the Debtors broad rights to sublet the premises. The Committee had expressed reservations about the Debtors' option to terminate the University Place Lease on two years and six months' notice to 41 East 11th Street LLC. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, in New York, asserts that the option could expose the Debtors to a potential administrative claim of $1,131,000. According to Mr. Bunin, the Committee has raised its concern with the Debtors. As a result, 41 East LLC has agreed to permit the Debtors to terminate the University Place Lease on nine months' notice. Nevertheless, the Debtors' exposure to a potential administrative claim is still $339,300, Mr. Bunin says. 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Court Directs Former Broker to Produce Documents ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York directs Willis of New York, Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' former broker, to: (a) produce certain documents requested by the Debtors; and (b) designate an individual with knowledge of the matters and produce that individual to be examined by the Debtors under oath. Several medical malpractice claimants have sought copies of the Debtors' excess insurance policies that may be applicable to their asserted claims. The Court previously indicated that subject to confidentiality restrictions, the Debtors should provide copies of the requested excess policies. Willis maintained the excess policies over the course of its relationship with the Debtors. Thus, the Debtors believe that the excess policies, their copies or, the actual policy numbers are in Willis' custody and possession. Andrew M. Troop, Esq., AT Weil, Gotshal & Manges LLP, in New York, tells the Court that the Debtors have asked Willis to produce either original versions or copies of the policies or alternatively, the policy reference numbers. However, Willis did not respond. In December 2005, due to independent business reasons, the Debtors replaced Willis with another broker. Willis alleged that the Debtors owe it $150,000 to $300,000 for postpetition services relating to the acquisition of reinsurance and the establishment of their non-debtor New York captive insurance company. The Debtors dispute that any amount is owed to Willis. Mr. Troop contends that even if amounts are due to Willis, there is no basis on which it can withhold the requested information with respect to prepetition insurance policies for which the Debtors previously paid. The information is not privileged nor reflect work performed by Willis for which it was not paid. 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) SEA CONTAINERS: S&P Downgrades Corporate Credit Rating to CCC+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'CCC+' from 'B+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and subsequently lowered to the 'B+' level on Feb. 16, 2006. The company has hired financial advisors and is evaluating an appropriate financial structure for the company. The company also announced that it will exit its ferry businesses completely, which will result in a non-cash, pretax impairment charge of approximately $500 million to be taken in the fourth quarter of 2005, significantly higher than the previously expected $138 million. The charge will reduce Sea Containers' net worth by approximately $475 million, and result in noncompliance with certain net worth covenants in certain of its bank agreements. Sea Containers is currently in discussions with the bank lenders regarding covenant waivers or amendments. As a result, its 2005 10-K financial filing will be delayed to allow adequate time to resolve the bank covenant issues and finalize accounting matters. "The downgrade is based on heightened uncertainty regarding continued debt service after management stated that it was evaluating 'all options' for Sea Containers' financial structure," said Standard & Poor's credit analyst Betsy Snyder. "Although Sea Containers currently has $250 million to $300 million of cash, and expects proceeds from sales of the ferry operations sufficient to pay off associated debt, cash flow from the company's continuing operations [GNER, its U.K. railroad franchise, and its marine cargo container leasing business] could prove insufficient to service remaining debt," the analyst continued. If the company were to default on debt payments or to undertake an exchange of existing debt that Standard & Poor's considered to be a distressed exchange, ratings would be lowered to 'D' or 'SD' (selective default). Ratings reflect a relatively weak financial profile, even after the planned divestiture of Sea Containers' unprofitable ferry operations, expected to occur in 2006. However, the company does benefit from fairly strong competitive positions in its two major remaining businesses: * GNER (Great North Eastern Railway, a passenger rail line between London and Scotland); and * marine cargo container leasing. Sale of the Silja assets, which account for approximately 75% of the ferry assets, is expected to occur in the second quarter of 2006, with the second round of bids due shortly. The timing and proceeds from sale of the other ferry assets are more uncertain, although their sale is expected to occur by the end of 2006. Standard & Poor's will monitor: * the potential financial restructuring of the company; * progress on the sale of the ferry operations; * progress on waivers or amendments on the covenants in the bank facilities; and * resolution of the arbitration with General Electric to resolve the CreditWatch. SEQUA CORP: S&P Affirms BB- Rating & Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Sequa Corp. to stable from negative. At the same time, Standard & Poor's affirmed its ratings, including the 'BB-' corporate credit rating, on the diversified aviation support services provider. About $900 million of debt is outstanding. "The outlook revision is based on improving profitability, with further gains expected, aided by generally healthy economic conditions and the continued recovery in the global airline industry," said Standard & Poor's credit analyst Roman Szuper. "This, coupled with anticipated debt reduction, should strengthen key credit protection measures to levels appropriate for the rating in the intermediate term." The ratings on New York, New York-based Sequa reflect an overall subpar financial profile and exposure to the cyclical airline industry. Those factors are partly offset by the firm's adequate liquidity and major positions in several niche markets. Debt to EBITDA is currently relatively high, at around 4.5x, with funds from operations to debt in the low-teens percent area and EBITDA interest coverage about 2.75x. Standard & Poor's expects gradual strengthening in those measures to 3.5x-4.0x and 3.0x- 3.25x, respectively, in the intermediate term, as earnings improve and debt is reduced from excess cash on hand and internally generated funds. Debt to capital, in the mid-50% area, is already consistent with the rating. The continued recovery in the global airline industry, generally healthy economic conditions, and sufficient liquidity should support Sequa's upward trending financial performance to levels appropriate for the ratings. An outlook revision to negative could occur if renewed problems in the airline industry, coupled with a weaker economy, cause the company's revenue and profit improvement to stall. The outlook revision to positive is not likely, at least in the near term. SOLUTIA INC: Court Approves DIP Loan Increase & Term Extension -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the fourth amendment to Solutia Inc. and its debtor-affiliates' DIP Credit Agreement. The Fourth Amendment provides, among other things, extension of the DIP Agreement until March 31, 2007. As reported in the Troubled Company Reporter on Mar. 2, 2006, the Fourth Amendment inked among the Debtors and Citigroup Global Markets Inc., on behalf of Citigroup -- CGMI, Citibank, N.A., CUSA, and Citicorp North America, Inc., provide for: (a) the Debtors to (i) borrow an additional $300 million in Tranche B Term Loans and (ii) convert $50 million in existing Tranche A Term Loans into Tranche B Term Loans, (b) an extension of the term of the DIP Agreement to March 31, 2007, (c) an increase of certain thresholds that allow the Loan Parties to retain more of the proceeds from certain dispositions and other extraordinary receipts, (d) the approval of the disposition of certain assets of the Loan Parties, (e) the refinancing of, and certain amendments to, the Euro Notes, (f) an amendment of certain financial and other covenants, and (g) other miscellaneous modifications. Solutia has received a fully underwritten commitment from Citigroup Global Markets Inc. for the financing to be provided under the Fourth Amendment. The $825,000,000 Amended Superpriority Senior Secured Financing Facility will consist of: -- $175,000,000 revolving credit facility with a -- $150,000,000 letter of credit sublimit and a -- $650,000,000 Term Loan B The Debtors covenant with the Lenders that Consolidated EBITDA will be no less than: Twelve-Month Period Ended Minimum Consolidated EBITDA ------------------------- ---------------------------- March 31, 2006 $120,800,000 April 30, 2006 $124,300,000 May 31, 2006 $127,000,000 June 30, 2006 $125,400,000 July 31, 2006 $124,400,000 August 31, 2006 $134,700,000 September 30, 2006 $135,800,000 October 31, 2006 $148,900,000 November 30, 2006 $151,900,000 December 31, 2006 $157,500,000 January 31, 2007 $153,000,000 February 28, 2007 $151,100,000 Citigroup is represented by Skadden Arps Slate Meagher & Flom LLP. A full-text copy of the Commitment Letter is available for free at http://ResearchArchives.com/t/s?5f5 Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA INC: Water Works Won't Assert $30 Million Claim ------------------------------------------------------- Pharmacia Corporation and the Water Works and Sewer Board of the City of Anniston engaged in further negotiations with respect to their Settlement Agreement dated December 24, 2004, with Solutia, Inc., regarding the expansion of the Choccolocco Creek Wastewater Treatment Plant in Calhoun County, Alabama. The negotiations resulted in modifications to the Settlement Agreement. The U.S. Bankruptcy Court for the Southern District of New York approved the amendments and additions to the Settlement Agreement with Pharmacia and Water Works, at Solutia's behest. The amended Settlement Agreement provides that Pharmacia will pay $500,000 to Water Works in connection with the Expansion Project. The payment will be made in two installments: * the first $250,000 will be paid 5 days after effective date of the Settlement Agreement; and * the second $250,000 will paid upon completion of the Choccolocco Creek Wastewater Treatment Plant Expansion Project. In addition, the parties agree to: (1) the withdrawal of Water Works' proof of claim for $30,000,000 against Solutia; (2) Pharmacia's assignment of its obligations under the Settlement Agreement to Solutia; and (3) a Covenant Not To Sue and Tolling Agreement, which states that: * the parties will not sue or take adverse actions against each other with respect to any claims relating to PCBs at the Treatment Plant; and * any statutes of limitations with respect to the actions will be tolled. A full-text copy of the Amended Settlement Agreement is available for free at http://ResearchArchives.com/t/s?6f0 Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA INC: Equity Panel's Report on Monsanto Case Draws Fire -------------------------------------------------------------- The Official Committee of Equity Security Holders appointed in the chapter 11 cases of Solutia Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York its status report to apprise the Court of the background, substance and significant impact on the Debtors' cases of the outcome of its adversary proceeding against Pharmacia Corporation and Monsanto Company. The premise of the Complaint is that the 1997 spin-off of Solutia by Pharmacia Corporation (Old Monsanto) was a fraudulent transfer in that the original Monsanto Company forced Solutia to take on excessive liabilities and insufficient assets, such that Solutia was destined to fail from its inception. A full-text copy of the 14-page Status Report is available for free at http://bankrupt.com/misc/solutia_equitystatusreport.pdf The Equity Committee also presented to the Court a preliminary legacy environmental liabilities report. A copy of that report isn't publicly available. Craig A. Barbarosh, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, tells the Court that the Equity Committee found Solutia was undercapitalized at the time of the Spin-off, thus explaining why Solutia's failure was unavoidable in light its initial undercapitalization. Since the Spin-off, Solutia has paid substantially more to address its Legacy Liability indemnity obligations than what Pharmacia has represented, Mr. Barbarosh points out. Hence, Mr. Barbarosh argues that Pharmacia and Monsanto should not be allowed to extract any more from Solutia and its shareholders under the Legacy Liability indemnity than the economic risk portrayed in the rosy (but false) picture that Pharmacia painted for investors in 1997. The Equity Committee believes that an overview of the results of the its Adversary Proceeding is critical for the Court's evaluation and analysis of the Debtors' Plan of Reorganization and accompanying Disclosure Statement, because the Plan purports to settle the Equity Committee Adversary Proceeding for a tiny fraction of its real value. Mr. Barbarosh argues that the Global Settlement cannot survive scrutiny under Rule 9019 of the Federal Rules of Bankruptcy Procedure. A Plan based on the Global Settlement cannot satisfy the standards for confirmation under the Bankruptcy Code either, he adds. Mr. Barbarosh asserts there is sufficient evidence of the potential liability of Pharmacia and Monsanto for claims made in the Equity Committee Adversary Proceeding to require the Court to reject the Global Settlement and allow the Equity Committee to prosecute its Adversary Proceeding against Pharmacia and Monsanto. To fully explore the Equity Committee's challenge to the Debtor's Disclosure Statement and Plan, Mr. Barbarosh says it is critical to seek written discovery addressed to the Debtors, Pharmacia, Monsanto and the Official Committee of Unsecured Creditors, and depositions of the corporations. Mr. Barbarosh contends that the discovery should be completed before the Court conducts a hearing to consider the adequacy of the Disclosure Statement. Pharmacia, Monsanto and Creditors Committee Seeks Protective Order from Discovery Pursuant to its Status Report on its Adversary Proceeding, the Equity Committee served discovery requests to Pharmacia, Monsanto and the Official Committee of Unsecured Creditors, seeking information related to the Debtors' Plan of Reorganization and the 1997 Spin-off transaction and the assumed liabilities as part of the Spin-off. Pharmacia, Monsanto and the Creditors' Committee assert that the Court should not permit the Equity Committee's discovery to proceed because there is no contested matter before the Court to trigger the discovery provisions of the Bankruptcy Rules and the Federal Rules. In addition, Pharmacia, Monsanto and the Creditors' Committee note that any discovery will require the Debtors' and other Plan proponents' participation. "The estates and the nondebtor proponents of the plan risk incurring significant time and expenses in complying with discovery for a plan that has not yet been approved for solicitation and objected to by parties in interest." Pharmacia, Monsanto and the Creditors' Committee anticipate that Solutia will request a discovery schedule at an appropriate time. Furthermore, Pharmacia, Monsanto and the Creditors' Committee point out, the Equity Committee already had access to informal discovery relating to the Plan and the Spin-off. The Equity Committee's insistence on discovery now represents nothing more than an effort to be disruptive of the confirmation process in the hopes of extracting value for a constituency that is out of the money, Pharmacia, Monsanto and the Creditors' Committee argue. Thus, Pharmacia, Monsanto and the Creditors' Committee ask the Court for a protective order prohibiting the Equity Committee from proceeding with the Discovery Requests, or alternatively, staying the Equity Committee's Discovery Requests until the Court enters an appropriate order setting forth a discovery schedule relating to the plan. Strike Status Report, Debtors and Creditors Committee Say The Debtors, joined by the Creditors Committee, point out that this is the second time in their Chapter 11 cases that the Equity Committee filed a pleading without seeking, as required, leave of the Court. The Equity Committee has obviously ignored the rules and filed a pleading with the Court that does not ask for any relief and does not respond to any motion, Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, asserts. Mr. Henes argues that the so-called "status report" is in reality an advocacy piece that is an unabashed and irresponsible attempt to mislead the Court and other constituents in the Debtors' Chapter 11 cases regarding the Plan and the Equity Committee Adversary Proceeding. Mr. Henes contends that the Equity Committee's action raises serious and significant concerns that put the Debtors' reorganization efforts at risk. Accordingly, the Debtors ask the Court to strike the Status Report from the docket and records for all purposes, and schedule a status conference to determine whether a scheduling order or alternative procedure should be implemented to protect the integrity of the Plan process and their chapter 11 cases. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUTHERN UNION: Board Declares Cash Dividend on Common Stock ------------------------------------------------------------ The Board of Directors of Southern Union Company (NYSE:SUG) has approved its first regular quarterly cash dividend of $0.10 per share on the Company's common stock. The dividend is payable on April 14, 2006, to holders of record at the close of business on March 31, 2006. The dividend payable to participants in the Company's Direct Stock Purchase Plan will automatically be reinvested in accordance with the terms of the Plan, while all other registered and beneficial shareholders will receive a cash payment. The Company is in the process of amending the Plan to allow participants the choice of receiving the cash dividend or reinvesting the full dividend. The Company also expects to make available by the second quarter's dividend payment a reinvestment option for all registered shareholders. Southern Union Company -- http://www.sug.com/-- is engaged primarily in the transportation, storage and distribution of natural gas. Through Panhandle Energy, the Company owns and operates 100% of Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Sea Robin Pipeline Company, Southwest Gas Storage Company and Trunkline LNG Company - one of North America's largest liquefied natural gas import terminals. Through CCE Holdings, LLC, Southern Union also owns a 50% interest in and operates the CrossCountry Energy pipelines, which include 100% of Transwestern Pipeline Company and 50% of Citrus Corp. Citrus Corp. owns 100% of the Florida Gas Transmission pipeline system. Southern Union's pipeline interests operate approximately 18,000 miles of interstate pipelines that transport natural gas from the San Juan, Anadarko and Permian Basins, the Rockies, the Gulf of Mexico, Mobile Bay, South Texas and the Panhandle regions of Texas and Oklahoma to major markets in the Southeast, West, Midwest and Great Lakes region. Through its local distribution companies, Missouri Gas Energy, PG Energy and New England Gas Company, Southern Union also serves approximately one million natural gas end-user customers in Missouri, Pennsylvania, Rhode Island and Massachusetts. * * * As reported in the Troubled Company Reporter on Feb. 27, 2006, Moody's Investors Service confirmed the Baa3 senior unsecured debt ratings of Southern Union Company with negative outlook and its transportation and storage subsidiary, Panhandle Eastern Pipe Line Company, LLC, with stable outlook. Moody's also confirmed the Ba2 rating on Southern Union Company's non-cumulative perpetual preferred securities. These ratings concluded a review for possible downgrade initiated by Moody's on December 19, 2005, following the company's announcement to acquire Sid Richardson Energy Services Co., a gas gathering and processing company based in Fort Worth, Texas, for $1.6 billion. SPEEDY TRACK: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Speedy Track, Inc. dba Tigermart #15 103 Main Street Gun Barrel City, Texas 75147 Bankruptcy Case No.: 06-31239 Chapter 11 Petition Date: March 27, 2006 Court: Northern District of Texas (Dallas) Debtor's Counsel: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, Texas 75251 Tel: (972) 991-5591 Fax: (972) 991-5788 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Equipment $1,915,000 P.O. Box 60150 Los Angeles, CA 90060 Zion Bank $195,000 P.O. Box 26304 Salt Lake City, UT 84126-0304 RETax Funding, L.P. Loan $19,705 Hance Scarborough Wright Finsberg B 750 Signature Place 14785 Preston Road Dallas, TX 75254 IRS $15,000 Kaufman County $12,000 Tax Assessor CD Hartnett Company $7,500 Henderson ISD $6,000 Twin Distributing, Inc. $3,243 Krispy Kreme Doughnut Corp. $3,037 STELCO INC: Posts $120 Million Net Loss in 2005 Fourth Quarter -------------------------------------------------------------- Stelco Inc. released its 2005 Audited Consolidated Financial Statements together with Management's Discussion and Analysis, which outlines the Corporation's financial results and condition. The results reported include certain discontinued operations of the Corporation. During 2005 all of the non-core businesses in the Mini-mill and Manufactured Products segments were sold or committed to be sold in whole or in part. As a result, these business units were characterized as discontinued operations. Previously reported financial results have been restated to isolate their income statement and cash flow activities from the continuing operations of the Corporation. In addition, their assets and liabilities have been presented as held for sale. Net Loss For the year ended Dec. 31, 2005, Stelco reported a net loss of $73 million, including a $64 million net loss from discontinued operations. This compares with restated net earnings of $64 million for the year ended Dec. 31, 2004, which included net earnings of $30 million from discontinued operations. For the fourth quarter of 2005, Stelco reported a net loss of $120 million, including a $53 million net loss from discontinued operations. During this period the continuing operations recorded production of 982,000 semi-finished tons and shipments of 888,000 tons. For the fourth quarter of 2004 Stelco had restated net earnings of $1 million, which included a net loss of $20 million from discontinued operations, on production of 1,115,000 semi- finished tons and shipments of 881,000 tons from continuing operations. Cash from Continuing Operations Cash consumed from continuing operations for 2005 amounted to $23 million compared to $69 million generated in 2004. Major elements of cash consumption in 2005 included: * $154 million usage for capital expenditures, * $17 million used for the repayment of non-Applicant long- term debt, * $124 million generated from cash earnings before working capital changes, and * $23 million generated from gross proceeds on the sale of Camrose Pipe. As at Dec. 31, 2005, Stelco's continuing operations net liquidity stood at $254 million. Cash, cash equivalents and restricted cash totaled $42 million. Available lines of credit stood at $403 million. And lines of credit drawn down totaled $191 million. Net short-term debt for continuing operations decreased from $152 million as at Dec. 31, 2004 to $149 million as at Dec. 31, 2005. CEO Comment Courtney Pratt, Stelco's President and Chief Executive Officer, said, "The past year was one of transition for Stelco. The bottom line results were recorded in the context of much more positive developments that bode well for the Company's future. These included the achievement of a consensual restructuring plan, the conclusion of agreements to place the pension plans on a sound financial footing, the sale of non-core assets, the announcement of a contribution by the federal government to the funding of our electricity cogeneration projects, and the ratification of a new collective bargaining agreement at Lake Erie. About Stelco Stelco is expected to emerge from its Court-supervised restructuring on March 31, 2006. At that time, new common shares will be issued under the approved restructuring plan and are expected to begin trading on the TSX on April 3, 2006, subject to certain conditions. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. The company is currently in the final stages of a Court-supervised restructuring. This process is designed to establish the Company as a viable and competitive producer for the long term. The new Stelco will be focused on its Ontario-based integrated steel business located in Hamilton and in Nanticoke. These operations produce high quality value-added hot rolled, cold rolled, coated sheet and bar products. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until March 31, 2006. STILLMAN LOFTS: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Stillman Lofts II 113 Stillman Street San Francisco, California 94107 Tel: (415) 227-4780 Bankruptcy Case No.: 06-30195 Chapter 11 Petition Date: March 27, 2006 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Iain A. Macdonald, Esq. Law Offices of Macdonald and Associates 2 Embarcadero Center #1670 San Francisco, California 94111-3930 Tel: (415) 362-0449 Fax: (415) 394-5544 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dayco Funding Group Mortgage on 113 $2,400,000 4751 Wilshire Boulevard Stillman Street Los Angeles, CA 90010 San Francisco, CA Victor Lee $350,000 701 Fremont Villas Los Angeles, CA 90042 Agustin Rosas-Maxemim $250,000 113 Stillman Street San Francisco, CA 94107 City and County of San Francisco $78,000 Tax Collector TKO SPORTS: Hires Paul Keul of Deloitte & Touche as Accountant -------------------------------------------------------------- TKO SPorts Group USA, Limited sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ Paul Keul of Deloitte & Touche, LLP, as its accountant. Mr. Keul will prepare and file federal and state tax returns and any associated filing required to be filed by the Debtor for the tax year 2004. Mr. Keul tells the Court that he will bill $500 per hour for this engagement and has received a $10,000 retainer. The Debtor tells the Court that the Firm holds a $17,594 general unsecured claim but assures the Court that the limited engagement will not be detrimental to its estate. Headquartered in Houston, Texas, TKO Sports Group USA Limited, a/k/a TKO Sports Group, Inc. -- http://www.strengthtko.com/-- manufactures sporting goods and fitness equipment. The Company filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D. Tex. Case No. 05-48509). Edward L. Rothberg, Esq., at Weycer, Kaplan, Pulaski & Zuber, P.C., represents the Debtor in its restructuring efforts. Andrew I. Silfen, Esq., and Schuyler G. Carroll, Esq., at Arent Fox, PLLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $8,193,809 in assets and $10,571,610 in debts. TRM CORP: Jeffrey F. Brotman Elected as Interim President & CEO --------------------------------------------------------------- Jeffrey F. Brotman was appointed as interim President and Chief Executive Officer for TRM Corporation (NASDAQ: TRMM) and was elected to the company's Board of Directors. Mr. Brotman replaces Kenneth L. Tepper, who left the company for personal reasons. Mr. Tepper will remain available to the company on a consulting basis for a period up to 12 months. Mr. Brotman has been the President and managing member of Ledgewood, a Philadelphia based law firm. In addition to his legal practice, he has been a certified public accountant and has taught accounting at the University of Pennsylvania Law School since 1990. "Jeff's knowledge of TRM, as one of its attorneys for several years, his leadership qualities, and his expertise in accounting, financial and transactional matters, makes him particularly suited to lead the Company at this time," Daniel G. Cohen, the Chairman of TRM's Board of Directors, said. Headquartered in Portland, Oregon, TRM Corporation -- http://www.trm.com/-- is a consumer services company that provides convenience ATM and photocopying services in high-traffic consumer environments. TRM's ATM and copier customer base has grown to over 35,000 retailers throughout the United States and over 46,200 locations worldwide, including 6,400 locations across the United Kingdom and over 4,900 locations in Canada. TRM operates one of the largest multi-national ATM networks in the world, with over 22,000 locations deployed throughout the United States, Canada, Great Britain, including Northern Ireland and Germany. * * * As reported in the Troubled Company Reporter on Mar. 23, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Portland, Oregon-based TRM Corporation to 'CCC' from 'B+' and revised its CreditWatch placement to developing from negative. The downgrade reflected the weakened status of the company's loan agreement as outlined in its forbearance agreement and amendment with its bank group. As reported in the Troubled Company Reporter on Mar. 23, 2006, Moody's Investors Service downgraded the corporate family rating of TRM Corporation to Caa1 from B2 and assigned a negative outlook. US MICROBICS: Posts $6.4MM Total Shareholders' Deficit in FY 2005 ----------------------------------------------------------------- U.S. Microbics, Inc.'s revenues for fiscal year ended Sept. 30, 2005, increased 186% to $1,199,334, from $419,318 during the fiscal year ended Sept. 30, 2004, while the Company's net loss for the period decreased to $2,997,661 from $4,041,046 in the fiscal year ended 2004. The Company's selling, general and administrative expenses for the fiscal year ended 2005 totaled $3,707,426 compared to $4,937,649 in the fiscal year ended 2004. For the fiscal year ended 2005, the Company's interest expense is $133,198, compared to $169,361 for fiscal year 2004. According to the Company, the decrease in interest expense of $36,163 was due primarily to a decrease in outstanding notes payable. Liquidity and Capital Resources The Company's cash and cash equivalents totaled $108,498 on Sept. 30, 2005, compared to $38,699 for the prior fiscal year ended Sept. 30, 2004. During the fiscal year ended 2005, net cash used by the Company's operating activities totaled $(1,946,995) compared to $(2,338,515) for the fiscal year ended 2004. Net cash provided by the Company's financing activities for the fiscal year ended 2005 totaled $2,041,206, compared to $2,351,793 for the prior fiscal year. The Company's net working capital was a negative $1,381,177 as of Sept. 30, 2005, and negative $1,609,690 as of Sept. 30, 2004, which is a 14.2% decrease. The Company's total shareholders' deficit increased to $6,450,519 during the fiscal year ended 2005 from $5,223,835 for the fiscal year ended 2004, or an increase of $1,226,684. The increase, the Company says, was the result of a net loss of approximately $2,997,661 less increases resulting from issuance of common stock and stock options in exchange for services of $577,739, issuance of common stock and stock options in settlement of notes payable and accrued expenses of $40,579, issuance of common stock and stock options for employee compensation of $25,500, issuance of common stock in private placement and through equity and other increases net of $140,000. About U.S. Microbics Headquartered in Carlsbad, California, U.S. Microbics, Inc. -- http://www.bugsatwork.com/-- is a business development and holding company that acquires, develops and deploys innovative environmental technologies for soil, groundwater and carbon remediation, air pollution reduction, modular drinking water systems and agriculture enhancement. VALENTINE PAPER: Disclosure Hearing Scheduled for April 25 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana will convene a hearing on at 10:00 a.m. on Apr. 25, 2006, to consider the adequacy of information contained in the Disclosure Statement explaining Valentine Paper, Inc.'s Chapter 11 Plan of Reorganization. Objections to the Plan, if any, must be in writing and filed with the Court by Apr. 18, 2006. Overview of the Plan The Debtor tells the Court that to the Plan and a Liquidating Trust Agreement, a trust will be created for the purposes of liquidating the assets of the Debtor and satisfying claims against the Debtor. Treatment of Claims Under the Plan, Administrative Claim and Priority Tax Claims will be paid in full. Holder of the Note Acquisition Residual Claim will be entitled to funds remaining in the Escrow Account. The Debtor tells the Court that as agreed between the Debtor, the Official Committee of Unsecured Creditors and the Noteholder, there will be no deficiency claim. Priority Non-Tax Claims will receive their pro-rate share of the cash distribution from cash held by the Liquidating Trustee after payment of priority claims. Holders of Unsecured Claims will receive their pro-rate share of the cash distribution from cash held by the Liquidating Trustee after payment of all other claims. Holders of Equity Interests in the Debtor will receive nothing under plan and those interests will be extinguished. A full text copy of the Debtor's disclosure statement explaining its chapter 11 plan of reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060327023800 About Valentine Paper Headquartered in Lockport, Louisiana, Valentine Paper, Inc. -- http://www.valentinepaper.com/-- produces technical and specialty papers. The Company filed for chapter 11 protection on June 6, 2005 (Bankr. E.D. La. Case No. 05-14659). David F. Waguespack, Esq., at Lemle & Kelleher, L.L.P., represents the Debtor in its restructuring efforts. C. Davin Boldissar, Esq., at Locke, Liddell & Sapp LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. VERTIS INC: Increasing Debt Burden Cues Moody's to Junk Ratings --------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family rating of Vertis, Inc., to Caa1 from B3 and changed the rating outlook to stable from negative. Details of the rating action are as follows: Ratings downgraded: * $349 million 10.875% senior notes due 2009 -- to Caa2 from Caa1 * $286 million 13 1/2% senior subordinated notes due 2009 -- to Caa3 from Caa2 * Corporate Family rating -- to Caa1 from B3 Rating affirmed: * $345 million 9 3/4% senior secured second lien notes due 2009 -- B3 The ratings outlook is changed to stable from negative. The ratings downgrade reflects the company's continuing free cash flow losses and its increasing debt burden which will likely continue to reduce liquidity and elevate the company's already high leverage. The change in outlook to stable recognizes a recent moderation in Vertis' top line decline, and the recent improvement in EBITDA which has resulted from continuing cost cutting initiatives and the sale of its loss-making UK business. Ratings continue to reflect the vulnerability of Vertis' business upon the highly competitive print insert business and the limited prospects of a rebound in market spending on printed insert advertising. The affirmation of the B3 second lien notes rating reflects Moody's view that second lien debt holders face adequate recovery prospects in a downside scenario. Vertis, Inc., a leading provider of integrated advertising products and marketing services, recorded fiscal 2005 revenues of $1.5 billion. The company is headquartered in Baltimore, Maryland. VERTIS INC: Earns $10.3 Million in 4th Quarter 2005 --------------------------------------------------- Vertis, Inc.'s net sales amounted to $414.8 million in the fourth quarter of 2005 versus $415.9 million in the fourth quarter of 2004. During the quarter, the Company changed its revenue recognition policy, which had the effect of lowering net sales by $12.7 million. In addition, the Company's EBITDA amounted to $60.9 million in 2005 versus $54.4 million in 2004. The Company's revenue recognition accounting change lowered net sales in Advertising Inserts by $7.4 million and lowered net sales in Direct Mail by $5.3 million. The Company also changed its accounting for maintenance parts, resulting in an increase in EBITDA of $6.2 million. Including net losses of $1.5 million in 2005 and $6.3 million in 2004 from discontinued operations, the Company's net income for the fourth quarter is $10.3 million versus a net loss of $2.6 million in the fourth quarter of 2004. Commenting on the fourth quarter, Dean D. Durbin, president and chief executive officer, stated, "The fourth quarter represents the third consecutive period of quarter-over-quarter EBITDA growth. Our Direct Mail, Premedia and Technology businesses performed well in the quarter. Our insert team continued to manage controllable spending, which is critical given the difficult market conditions facing this portion of the advertising market." For the year ended Dec. 31, 2005, the Company's net sales amounted to $1.5 billion, an increase of $3.4 million, and its EBITDA amounted to $162.7 million compared to $133.4 million in 2004. Discontinued Operations The full year loss from the Company's discontinued operations is $148.8 million in 2005 and $10.2 million in 2004. The 2005 loss, the Company notes, includes non-cash charges of $136.2 million in asset impairment charges and charges to write-down the carrying amount of long-lived assets and a loss on the sale of approximately $1.6 million on proceeds of $2.4 million. About Vertis Headquartered in Baltimore, Maryland, Vertis, Inc. -- http://www.vertisinc.com/-- is the premier provider of targeted advertising, media and marketing services. Its products and services include consumer research, audience targeting, media planning and placement, creative services and workflow management, targeted advertising inserts, direct mail, interactive marketing, packaging solutions, and digital one-to-one marketing and fulfillment. With facilities throughout the U.S., Vertis combines technology, creative resources and innovative production to serve the targeted marketing needs of companies worldwide. * * * On March 23, 2006, Moody's lowered three Vertis, Inc. ratings by one notch each with a stable outlook: * LT Corp Family Rating -- Caa1 from B3 * Senior unsecured debt -- Caa2 from Caa1 * Senior subordinate -- Caa3 from Caa2 Moody's retained the Company's senior secured debt rating at B3, which it placed on March 24, 2005. Standard & Poor's assigned the Company's long-term foreign and local issuer credit ratings at B- on May 6, 2005, with a negative outlook. WASTE SERVICES: $39 Mil. Liberty Deal Cues Moody's to Hold Ratings ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Waste Services, Inc. The affirmation is in anticipation of the completion of the acquisition of Liberty Waste, LLC and Sun Country Materials, LLC which had been announced by the company in February 2006. The acquisition is for a purchase price of approximately $39.2 million and is expected to be financed through a combination of debt and equity. The affirmation of the ratings acknowledges the partial financing of the acquisitions through equity and the resulting modest reduction in financial leverage. Moody's favorable view of the intended purchases also takes into consideration expected benefits from increased internalization and overall position in the Tampa market. The ratings are supported by: -- a strong pricing environment across the sector; -- Waste Service's revenue management efforts; -- the expectation of positive adjusted free cash flow in 2006; -- the market position of the company's Canadian subsidiary as the third largest municipal solid waste company in Canada; and -- the asset configuration built by the company over the last several months in Florida. The ratings also reflect the incremental liquidity provided under the December 2005 refinancing of the revolver outstandings with longer-term debt. The ratings remain constrained by high financial leverage highlighted by adjusted debt at Dec. 31, 2005, which slightly exceeded revenue of $382 million and pro forma debt to EBITDA of about five times. The ratings also reflect negative adjusted 2005 free cash flow. Additionally, the ratings also reflect the potential uncertainties with respect to the refinancing of the company's cumulative mandatorily redeemable preferred stock held by Kelso & Company, the absence of growth expectations in the company's Canadian operations, and the potential for higher labor costs as US unemployment levels continue to fall. Waste Services' acquisition-based strategy and, despite expected improvements, relatively narrow covenant margins which constrain effective liquidity are also incorporated into the ratings. The stable outlook is supported by a strong pricing environment across the sector, substantive progress on a number of operating initiatives in recent months, and the cash generating potential of the company's asset portfolio. Meaningful steps toward stable, positive free cash flow generation while maintaining appropriate capital expenditure levels could result in improvements in ratings outlook and the ratings. Declining cash flow metrics, debt-only financed acquisitions or lack of progress toward improved total leverage metrics could pose negative pressure on the ratings. On Dec. 28, 2005, Waste Services entered into an amendment to its senior secured credit facilities, which provided for the incurrence of up to $50.0 million of additional term loans under a an accordion feature. The company drew $25.0 million of this facility at closing to refinance amounts then outstanding under the revolver. The remaining $25.0 million un-drawn portion of the new term loan tranche is available on a delayed draw basis until March 31, 2006 for the financing of potential acquisitions and $13 million from that facility is expected to be used toward the intended Liberty Waste/Sun Country Materials acquisition. The acquisition is expected to close on March 31, 2006 and will require a bank covenant amendment as the total transaction value of $39.2 million exceeds the maximum of $30 million permitted under the current covenant package. Moody's affirmed these ratings: * B2 rating on the $60 million guaranteed senior secured credit facilities due 2009; * B2 rating on the $200 million guaranteed senior secured Term Loans due 2011; * Caa2 rating on $160 million guaranteed senior subordinated notes due 2014; * B3 Corporate Family Rating. The ratings outlook remains stable. Waste Services, Inc., is a multi-regional, integrated solid waste services company, providing collection, transfer, landfill disposal and recycling services for commercial, industrial and residential customers in the United States and Canada. The company is the successor to Capital Environmental Resource Inc., now Waste Services Inc. It is based in Burlington, Ontario and its US operations office is located in South Florida. Fiscal 2005 revenues were $382 million. WESTAR ENERGY: Fitch Raises Issuer Default Rating to BB+ from BB ---------------------------------------------------------------- Fitch Ratings upgraded Westar Energy, Inc. (WR) and Kansas Gas and Electric Company (KG&E) as: WR: -- Issuer Default Rating (IDR) to 'BB+' from 'BB' -- First mortgage bonds to 'BBB' from 'BBB-' -- Senior unsecured rating to 'BBB-' from 'BB+' -- Preferred stock to 'BB+' from 'BB' KGE: -- Issuer Default Rating (IDR) to 'BB+' from 'BB' -- First mortgage bonds to 'BBB' from 'BBB-' -- Secured facility notes to 'BBB' from 'BBB-' The Rating Outlook is Stable. At the same time, Fitch assigned an 'F3' short-term rating for WR and KG&E. Approximately $2.1 billion of debt is affected by the rating action. The higher ratings reflect improvement in WR's: * underlying operating fundamentals, * regulatory environment, and * cash flow generation. The utility's enhanced credit metrics result from management's post-2002 restructuring, which refocused WR on its core Kansas- based electric utility business, while using the proceeds from non-utility asset sales and a 2004 equity offering of $245 million to reduce debt. The ratings also consider the more constructive relationship with regulators under its current management as well as the advantage of low electric rates relative to other Kansas investor-owned utilities. The Stable Rating Outlook assumes reasonable regulatory outcomes in prospective rate proceedings. Regulatory decisions are expected to have a significant impact on WR's credit quality, given the company's accelerating 2006-2008 capital spending program. WR's 2006 cap-ex is expected to increase 53% to $325 million from $213 million in 2005 and average $430 million in 2007 and 2008. Notwithstanding the higher capital investment outlays, Fitch expects the company's credit metrics to remain consistent with the 'BBB' rating category. Utility investments will be funded with a combination of internal cash flow, new debt and modest equity funding from ongoing programmatic issuance. The ratings and Stable Outlook also recognize the expected favorable impact of rate adjustment mechanisms approved by the Kansas Corporation Commission (KCC) in its December 2005 order in WR's general rate case. The rate adjustment mechanisms are expected to facilitate the timely recovery of environmental, fuel and purchase power and transmission costs outside of general rate case proceedings partially mitigating rate lag concerns. While the environmental portion of WR's capital investment (27% of the 2006-2008 program) can be recovered under the new adjustment mechanism, there is still some regulatory uncertainty and potential lag in recovery of other investments (73% of total) through general rate cases. The consequence of a lag in recovery of these costs could cause WR's credit measures to weaken in 2008 and beyond. Fitch notes that Kansas remains a challenging regulatory environment from an investor point-of-view, as evidenced by the modest rate increase and below-industry-average 10% return on equity accorded the company in the KCC's December 2005 order in WR's general rate case. Consequently, upside ratings potential is considered limited. WHITEHORSE III: Moody's Puts Ba2 Rating on $12MM Class B-2L Notes ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to five classes of notes issued by Whitehorse III Ltd.: * Aaa to the $254,000,000 Class A-1L Floating Rate Notes Due May 2018; * Aa2 to the $30,000,000 Class A-2L Floating Rate Notes Due May 2018; * A2 to the $19,000,000 Class A-3L Floating Rate Notes Due May 2018; * Baa2 to the $12,000,000 Class B-1L Floating Rate Notes Due May 2018; and * Ba2 to the $12,000,000 Class B-2L Floating Rate Notes Due May 2018. The collateral manager is WhiteHorse Capital Partners, L.P. Moody's noted that its ratings of notes issued by this cash flow CDO reflect the credit quality of the collateral pool, the credit enhancement for the notes inherent in the capital structure and the transaction's legal structure. WILLIAM KENTER: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: William A. Kenter aka Bill Kenter 4101 Brittany Place Pensacola, Florida 32504 Bankruptcy Case No.: 06-30150 Chapter 11 Petition Date: March 24, 2006 Court: Northern District of Florida (Pensacola) Debtor's Counsel: J. Steven Ford, Esq. Wilson, Harrell, Smith, Farrington & Ford 307 South Palafox Street Pensacola, Florida 32502 Tel: (850) 438-1111 Fax: (850) 432-8500 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Heidelberg Judgment $262,000 1000 Gutenberg Drive Kennesaw, GA 30144 Bank of Pensacola Commercial $137,038 125 West Romano Street Building Pensacola, FL 32501 AmSouth Credit Line $33,109 Bankcard Services P.O. Box 15026 Wilmington, DE 19850 Regions Bank $27,332 Escambia County Tax Collector Ad Valorem Taxes $16,567 USAA Credit Card Credit Card $7,197 Navy Federal Credit Union $5,402 CB&T Visa $4,073 Bank of America Credit Card Credit Card $1,779 SunTrust Visa $1,469 WOOD RESOURCES: Narrow Product Line Prompts Moody's B3 Ratings -------------------------------------------------------------- Moody's Investors Service rated Wood Resources LLC's new $75 million issue of floating rate notes B3, and assigned a stable outlook. The company was also assigned a speculative grade liquidity rating of SGL-2, indicating good liquidity. The B3 rating accounts for the combination of the company's very modest aggregate scale and its narrow product line and geographic focus that together represent a B rating profile for a company operating in the paper and forest products sector. Based on the very short operating history under the current ownership group, margins appear to be fairly stable, and provide a rating indication that likely exceeds the B rating. In absolute terms however, margins have been consistent with a B or lower rating. Pro forma for the new debt issue, Wood Resources has high debt leverage and thin coverage that is not expected to improve until the benefits of recent and planned capital expenditures are realized. On balance, these factors are consistent with a B rating. The outlook is stable. Ratings and Outlook Assigned: * Corporate Family Rating, Assigned B3 * Speculative Grade Liquidity Rating, Assigned SGL-2 * Senior Secured Regular Bond/Debenture, Assigned B3 Outlook: Stable Wood Resources LLC is a modestly sized private company with operations located solely in the United States. The company produces plywood and a very small amount of lumber. In the context of the paper and forest products sector, this profile of modest aggregate scale, very limited product diversity and geographic concentration is consistent with a B rating. With historic EBITDA margins in the low-to-mid single digits, profit margins are also consistent with a B rating, it being noted that margins may be subject to erosion should the level of general economic activity abate. Competitive pressures from other plywood manufacturers looking to replace markets displaced by oriented strandboard may also cause margin compression. While a portion of the proceeds of the new note issue is to be used to fund capital investments whose purpose is to increase productivity and reduce costs, owing to execution risks and the previously noted risks that margins may be subject to future pressure, only a portion of these potential benefits have been incorporated in the rating assessment. Moody's sees the capital projects as being essential to maintaining margins in the face of longer term uncertainties, and evaluates margins as being consistent with a B rating. However, margins appear to be relatively stable, a factor that provides a signal that is superior to the B rating. It is noted however, that this judgment is based on a limited historic time horizon that corresponds with a period of relatively favorable general economic activity and strong pricing for commodity grades of plywood and lumber. Proforma for the new note issue, LTM credit protection measures are not strong, and lag the B rating. Other important rating influences include the fact that Wood Resources does not have proven access to the equity markets. As well, the company may exhibit behavior more focused on shareholder returns than would otherwise be the case. It is noted that a substantial portion of the proceeds of the new note issue will repay capital provided by the ownership group, and subsequently, the group's residual investment will be relatively nominal. As well, management fees are paid to a related party, and distributions to fund income tax liabilities of owners are featured in the company's plans. These factors are representative of aggressive financial policies that may not always be aligned with debt holder interests, and suggest that caution is warranted in evaluating credit risk. Wood Resources has good financial liquidity, consisting of unallocated funds from the new note issue of approximately $15 million, plus a new substantially unused $25 million 3-year asset- back credit facility that will be entered into concurrent with completion of the note offering. The facility features a standard structure for facilities of this type, with minimal financial covenants. Given surplus funds from the debt offering and the new facility being largely unused at close, Moody's does not expect the financial covenants to restrict access over the near term. With the new note issue refinancing other indebtedness, there are no near term maturities. While the company does not have ready access to the equity market, and may not be able to access the debt market again for some time, the approximately $35-to-$40 million combination of the surplus cash and available credit provides good liquidity, and warrants the SGL-2 speculative grade liquidity rating. The new notes are rated B3, equivalent with the company's corporate family rating. While the company's credit facility benefits from preferential access to accounts receivable and inventory, given expected low usage levels, and future benefits from of pending capital expenditures that will improve fixed asset valuation coverage, this circumstance is not sufficient to warrant notching. In the current context, it is unlikely that the outlook or ratings would be subject to upgrade prior to the benefits of recent and planned capital expenditures being fully realized. Should the cash flow stream grow so that normalized retained cash flow-to-total adjusted debt approaches 10% with the commensurate (RCF-Capex)/TD nearing 5%, an upgrade could be considered. Alternatively, adverse ratings actions could result if normalized RCF/TD and (RCF- Capex)/TD fall significantly below 5% and 2.5% respectively, the company increases leverage to support additional growth initiatives, or if financial liquidity deteriorates. Headquartered in Greenwich Connecticut, Wood Resources LLC is a manufacturer and distributor of specialty and commodity plywood with a small lumber operation. XTO ENERGY: Moody's Puts (P)Ba2 Preferred Stock Rating on Watch --------------------------------------------------------------- Moody's Investors Service assigned Baa3 ratings to XTO Energy's $400 million 10-year senior note and $600 million 30-year senior note offerings. The new ratings are also under review for upgrade along with XTO's existing ratings that were placed on review Jan. 24, 2006. Other ratings under review for upgrade include XTO's existing Baa3 senior unsecured note ratings, Baa3 corporate family rating, prospective (P)Ba1 subordinated note shelf rating, and prospective (P)Ba2 preferred stock shelf rating. If XTO is upgraded, it would be by one rating notch. Moody's expects to complete the review within the next quarter. Moody's review assesses capital reinvestment efficiency trends, ongoing organic production trends, and whether acquisition, funding, and shareholder buyback scenarios can be conducted at leverage levels suitable for a Baa2 rated exploration and production company. Leverage to date in 2006 is evaluated using year-end 2005 debt, pro-forma for completed first quarter 2006 acquisitions, first half-2006 cash flow after capital spending, and for potential cash outflows that may be associated with activity potentially related to the pending second quarter 2006 distribution of Hugoton Royalty Trust units to shareholders. Moody's would look for organic production and cost trends to remain on competitive trajectories, within the context of expected historically strong prices being sufficient to amply cover escalating upcycle acquisition, drilling, and oilfield services costs by a margin compatible with a Baa2 rating. As expected, 2005 all-sources reserve replacement costs were substantially higher due to property acquisitions at historically high prices. Of note, XTO's increase in the proportion of proven undeveloped reserves to 31% of total reserves limited the reserve replacement cost increase. Furthermore, reflecting the rising capital intensity of XTO's activity, its future FAS 69 development capital spending rose 100% versus a 46% increase in the associated proven undeveloped reserves. XTO's lease adjusted pro-forma leverage on proven developed reserves, in the range of $4/boe, reduces its flexibility to conduct significant leveraged acquisitions at a Baa2 rating level. XTO has grown rapidly at acceptable leverage over the years through a sustained balance of successful acquisitions and organic reinvestment in properties rendering a durable PD reserve life as well. XTO has differentiated itself with highly competitive capital reinvestment productivity and highly competitive cash-on- cash returns. XTO Energy Inc., is headquartered in Fort Worth, Texas. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (24) 122 N.A. Accentia Biophar ABPI (9) 39 (19) AFC Enterprises AFCE (49) 213 40 Adventrx Pharma ANX (8) 24 (9) Alaska Comm Sys ALSK (19) 576 28 Alliance Imaging AIQ (40) 675 1 AMR Corp. AMR (1,478) 29,495 (2,156) Atherogenics Inc. AGIX (115) 198 173 Bally Total Fitn BFT (1,463) 486 (442) Biomarin Pharmac BMRN (77) 195 (29) Blount International BLT (145) 455 112 CableVision System CVC (2,414) 9,845 (428) CCC Information CCCG (95) 112 34 Centennial Comm CYCL (488) 1,511 69 Cenveo Inc CVO (50) 1,080 122 Choice Hotels CHH (167) 265 (57) Cincinnati Bell CBB (710) 1,863 16 Clorox Co. CLX (528) 3,567 (205) Columbia Laborat CBRX (15) 15 (3) Compass Minerals CMP (79) 750 195 Crown Media HL CRWN (64) 1,250 (125) Deluxe Corp DLX (82) 1,426 (277) Denny's Corporation DENN (265) 513 (86) Domino's Pizza DPZ (511) 461 4 DOV Pharmaceutic DOVP (19) 102 79 Echostar Comm DISH (867) 7,410 247 Emeritus Corp. ESC (113) 748 (29) Emisphere Tech EMIS (6) 29 5 Encysive Pharm ENCY (11) 147 111 Enzon Pharmaceut ENZN (84) 341 (218) Foster Wheeler FWLT (313) 1,895 (146) Gencorp Inc. GY (73) 1,057 9 Graftech International GTI (183) 887 245 Guilford Pharm GLFD (20) 136 60 Hercules Inc. HPC (25) 2,569 331 Hollinger Int'l HLR (177) 1,001 (396) I2 Technologies ITWO (71) 202 (34) ICOS Corp ICOS (59) 242 122 IMAX Corp IMAX (34) 245 30 Immersion Corp. IMMR (17) 45 29 Incyte Corp. INCY (19) 374 326 Indevus Pharma IDEV (126) 100 65 Investools Inc. IED (24) 73 (47) Koppers Holdings KOP (195) 552 132 Kulicke & Soffa KLIC (3) 440 217 Level 3 Comm. Inc. LVLT (476) 8,277 242 Ligand Pharm LGND (110) 315 (102) Linn Energy LLC LINE (45) 280 (51) Lodgenet Entertainment LNET (70) 263 14 Loral Space & Co. LORL (1,101) 1,101 (1,083) Maxxam Inc. MXM (677) 1,044 114 Maytag Corp. MYG (187) 2,954 150 McDermott Int'l MDR (83) 1,668 230 McMoran Exploration MMR (58) 408 67 NPS Pharm Inc. NPSP (98) 331 234 New River Pharma NRPH (6) 54 47 Nighthawk Radiol NHWK (65) 36 4 Omnova Solutions OMN (15) 350 65 ON Semiconductor ONNN (276) 1,148 202 Quest Res. Corp. QRES (73) 247 (61) Qwest Communication Q (3,217) 21,497 (1,071) Revlon Inc. REV (1,096) 1,044 121 Riviera Holdings RIV (31) 212 2 Rural/Metro Corp. RURL (89) 310 54 Rural Cellular RCCC (481) 1,431 130 Sepracor Inc. SEPR (165) 1,275 769 St. John Knits Inc. SJKI (52) 213 80 Sun Healthcare SUNH (3) 512 (67) Tivo Inc. TIVO (27) 162 27 USG Corp. USG (302) 6,142 1,579 Unigene Labs Inc. UGNE (17) 13 (11) Unisys Corp UIS (33) 4,029 339 Vertrue Inc. VTRU (30) 446 (82) Weight Watchers WTW (81) 835 (38) Worldspace Inc. WRSP (1,492) 724 249 WR Grace & Co. GRA (559) 3,517 876 ********* 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. 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For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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