/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060412.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 12, 2006, Vol. 10, No. 87 Headlines A-1 MOVE: Case Summary & 20 Largest Unsecured Creditors AH-DH APARTMENTS: Case Summary & 80 Largest Unsecured Creditors AINSWORTH LUMBER: S&P Rates $75MM Sr. Floating Rate Notes at B+ ALLIED HOLDINGS: Teamsters Object to CBA Protective Order ALLIED HOLDINGS: Taps Glass & Associates as Consultants AMERICAN GREETINGS: Moody's Rates New Credit Facilities at Ba1 AMERIPATH INC: Earns $9.9 Million of Net Income in 2005 AMR CORP: 4.25% Senior Conv. Notes Now Convertible to Stock ANCHOR GLASS: Obtains $10 Million in Additional DIP Financing ANCHOR GLASS: Signs Agreements for Property Damage Insurance ARINC INC: S&P Places BB Corp. Credit Rating on CreditWatch ATA AIRLINES: Wants NatTel Settlement Agreement Approved ATA AIRLINES: Wants U.S. Bancorp's $3.9MM Admin. Claim Disallowed ATLANTIC GULF: Trustee Sells 185 Tennessee Lots for $770,000 BEAR STERNS: Moody's Holds Low-B Ratings on Six Cert. Classes BEST BUY: Moody's Upgrades Debenture Rating to Baa3 from Ba1 BEVERLY ENTERPRISES: Debts Repaid & S&P Withdraws Ratings BGF INDUSTRIES: S&P Lifts Corporate Credit Rating to B- from CCC+ BIOVAIL CORP: Earns $119.7 Million of Net Income in Fourth Quarter BORLAND SOFTWARE: Late 10-K Filing Prompts Nasdag Delisting Notice BURLINGTON COAT: Moody's Junks Proposed Unsecured Notes' Rating CABLEVISION SYSTEMS: DBRS Confirms B(Low) Rating on Senior Notes CALPINE CORP: NY Court Approves KPMG LLP as Tax & Risk Consultant CALPINE CORP: Court Approves Deloitte Tax as Tax Service Providers CALPINE CORP: Wants to Extend Lease Decision Period by 90 Days CHATTEM INC: Earns $11.5M of Net Income in First Fiscal Quarter CHATTEM INC: Recovers $8.75 Mil. from Delaco's Settlement Trust CHELSEA INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors CSC HOLDINGS: DBRS Confirms Ratings After $3BB Dividend Payment DANIEL DOHERTY: Case Summary & 17 Largest Unsecured Creditors DARLING INTERNATIONAL: Inks New $175 Million Credit Facility DELOCO COMPANY: Plan Settlement Trust Makes Distribution DELPHI CORP: Court Okays $7.5 Million Shanghai Delco JV Sale DELPHI CORP: Court Okays KPMG LLP as Tax Advisor DELPHI CORP: Has Until June 7 to Remove Civil Actions DESIGN WITHIN: Faces Nasdaq Delisting Due to Late 10-K Filing DIGITAL LIGHTWAVE: Borrows Additional $300,000 from Optel Capital DIVERSIFIED CORPORATE: Restructures Greenfield Credit Facility DS WATERS: S&P Affirms CCC+ Corp. Credit Rating & Positive Outlook DYLEX LTD: Trustee Issues Unsecured Creditors Interim Dividend ECUITY INC: Equity Deficit Tops $9 Million at December 31 ENGINEERING TECTONICS: Case Summary & 15 Unsecured Creditors EMPRESA DISTRIBUIDORA: Moody's Places Regular Bond Ratings at B3 FDL INC: Section 341(a) Meeting Scheduled for May 8 FDL INC: U.S. Trustee Appoints Nine-Member Creditors Committee GARY GODDARD: Voluntary Chapter 11 Case Summary GENERAL MOTORS: Selling 7.9& Stake in Isuzu Motors Ltd. GENERAL MOTORS: Outlines GMAC Dividend Policy After Stake Sale GREAT ATLANTIC: Moody's Holds Junk Rating on Senior Unsecured Debt GST TELECOMMS: Pays Additional $12.5 Mil. to Unsecured Creditors GTSI INC: Gets Nasdaq Delisting Notice Due To Delayed 10-K Filing HOST MARRIOTT: Completes Acquisition of 28 Starwood Hotels INFOSEARCH MEDIA: Dec. 31 Balance Sheet Shows $229K Equity Deficit INNUITY INC: Hansen Barnett Expresses Going Concern Doubt INTERNATIONAL MANAGEMENT: Wants Kroll to Look for Assets INVERNESS MEDICAL: Pays $73.85 Million to Buy Two ACON Units ITC HOMES: Robert Moore & Patricia Moore Want Four Leases Rejected IVOW INC: Recurring Net Losses Spur Auditors' Going Concern Doubt JABIL CIRCUIT: Discloses Second Fiscal Quarter Financial Results J.L. FRENCH: Court Establishes May 1 as General Claims Bar Date JORDAN INDUSTRIES: Rapid Debt Maturity Cues Going Concern Doubt J.P. MORGAN: Moody's Places Low-B Ratings on Two Cert. Classes KAISER ALUMINUM: District Court Consolidates Plan-Related Appeals KANSAS CITY SOUTHERN: S&P Lowers Sr. Unsecured Debt Rating to B- KINETEK INC: 2006 Debt Maturity Triggers Going Concern Doubt KINGSLEY COACH: Equity Deficit Widens to $2.3 Million at Dec. 31 KRONOS INTERNATIONAL: Closes EUR400 Mln Private Debt Placement LG.PHILIPS DISPLAYS: Has Interim Access to Lenders' Collateral LG.PHILIPS DISPLAYS: Wants Conway MacKenzie as Financial Advisor LONDON FOG: Section 341(a) Meeting Scheduled for April 24 LONDOG FOG: U.S. Trustee Appoints Seven-Member Creditors Committee LYONDELL CHEMICAL: S&P Puts BB- Corp. Credit Rating on Pos. Watch MAYTAG CORP: Moody's Lifts Debt and Corp. Family Ratings to Ba2 McCUNE PAPER: Involuntary Chapter 11 Case Summary MEDIA GENERAL: $600 Mil. NBC Deal Cues Moody's to Review Ratings MICRON TECH: Earns $193 Million During Second Quarter of FY 2006 MOTIVE INC: Faces Nasdaq Delisting Due to Late Filing of Form 10-K MUSICLAND HOLDING: Gets OK to Honor Prepetition Bonus Obligations N-45 FIRST: Moody's Holds Ba1 Rating on $3.7 Mil. Class E Bonds NEW SKIES: Moody's Upgrades Debenture Rating to B2 from Caa1 NORTHWESTERN CORP: Moody's Places Rating on Revenue Bonds at Ba1 ONE GREGORY'S: Case Summary & 20 Largest Unsecured Creditors O'SULLIVAN INDUSTRIES: Successfully Emerges from Bankruptcy PACKAGING DYNAMICS: Moody's Rates $150MM Subordinated Notes at B3 PAYETTE VALLEY: Case Summary & 20 Largest Unsecured Creditors PETER HALAMANDARIS: Voluntary Chapter 11 Case Summary PHI INC: Moody's Puts B1 Rating on Proposed $150MM Note Offering PREMIUM PAPERS: U.S. Trustee Appoints Seven-Member Committee PREMIUM PAPERS: Section 341(a) Meeting Scheduled for April 28 PRESIDENT CASINOS: Chairman & CEO Fired & Disqualified from Board PRESIDENT CASINOS: Ex-CEO Connelly's Co. Makes More Distributions PRG-SCHULTZ: New CEO, Chairman & Chief Restructuring Officer PRO TECH: Eisner Expresses Going Concern Doubt QUAKER FABRIC: PwC Expresses Going Concern Doubt RAILAMERICA INC: Earns $30.8 Million for Year Ended Dec. 31, 2005 READER'S DIGEST: Moody's Says Rating Outlook is Negative REALITY WIRELESS: Files Four Amended Quarterly Financial Reports RESIDENTIAL CAPITAL: DBRS Rates Proposed $1 Bil. Note at BBB(Low) RIVIERA HOLDINGS: Moody's Reviews Ratings Following $426MM Merger SALOMON BROTHERS: Moody's Lifts Ba1 Class BR Cert. Rating to Aaa SEARS HOLDINGS: Reacts to Pershing's Call for Higher Tender Price SEARS HOLDINGS: Canadian Unit President and CEO Steps Down SECURECARE TECHNOLOGIES: Euro Financial Grants $7 Million Loan SENSATA TECH: Moody's Junks Proposed $450 Mil. Sr. Sub. Debt Issue SERACARE LIFE: Section 341(a) Meeting Scheduled for April 18 SIX FLAGS: S&P Affirms B- Corp. Credit Rating With Stable Outlook SOLAR TRUST: Moody's Holds Low-B Ratings on 4 Certificate Classes SOLO CUP: Gets Access to $80M Loan under Second-Lien Credit Pact SOLUTIA INC: Wants Plan-Filing Period Stretched to October 10 STARWOOD HOTELS: Completes Sale of 28 Hotels to Host Marriot Corp. SUPERIOR ENERGY: Case Summary & 20 Largest Unsecured Creditors TENFOLD CORP: Issues Pref. Shares & Warrants in $2-Mil. Placement TOWER AUTOMOTIVE: Delays Filing of Annual Financial Report TOWER AUTOMOTIVE: Has Until July 31 to Decide on Unexpired Leases TOWER AUTOMOTIVE: Wants to Assume Menlo Logistics Contract US CAN: Moody's Withdraws Ratings Following Ball Acquisition VALOR COMMS: Alltel Merger Produces Windstream Communications VARIG S.A.: Needs More Time to Pay Brazilian Government Debt VARIG S.A.: VarigLog Extends $350 Mil. Purchase Offer VARIG S.A.: Foreign Reps Ask Court to Endorse Recovery Plan VERIFONE INC: S&P Affirms BB- Rating & Revises Outlook to Negative WALKER FINANCIAL: Marcum & Kliegman Raises Substantial Doubt WAVE WIRELESS: Aidman Piser Raises Going Concern Doubt WHIRLPOOL CORP: Maytag Deal Prompts Moody's to Lower Ratings WHITING PETROLEUM: S&P Affirms Ratings & Says Outlook is Positive WINN-DIXIE: Lonestar Appointed & Committee Now Has Seven Members WINN-DIXIE: Gets Open-Ended Deadline to Decide on Unexpired Leases W.S. LEE: U.S. Trustee Appoints 11-Member Creditors Committee XYBERNAUT CORP: Settling Dispute with Original DIP Lender ZALE CORP: SEC Launches Accounting Investigation * Deirdre Martini Resigns as United States Trustee for New York * Sheppard Mullin Awards A. Guilford as Pro Bono Atty. of the Year * Upcoming Meetings, Conferences and Seminars ********* A-1 MOVE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: A-1 Move Center, Inc. 501 South Francis Street Longmont, Colorado 80501 Bankruptcy Case No.: 06-11702 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- GLS International, Inc. 06-11706 Chapter 11 Petition Date: April 11, 2006 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtors' Counsel: Harvey Sender, Esq. Bonnie Bell Bond, Esq. Sender & Wasserman, P.C. 1999 Broadway, Suite 2305 Denver, Colorado 80202 Tel: (303) 296-1999 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtors' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ High Plains Commercial $61,800 10919 Sapp Brothers Drive Omaha, NE 68138 Qwest $6,126 Denver, CO 80244-0001 Xcel Energy $4,121 P.O. Box 9477 MPLS, MN 55484-9477 AGS Construction Consulting $1,757 Colorado Building Specialist $1,738 Beltman Group $1,529 Alegra Print & Imaging $1,376 Household Movers Services $1,234 SW Forklift $1,179 Faison Office Products $1,060 Midwest Spring Truck Parts $1,029 T. Michael Installation $1,020 Denver Metro Chamber of Comm. $1,007 Emeritus Communications $794 Star Industrial Supplies $785 Great America Leasing Corp. $728 Suburban Propane $719 Truck Parts Specialists $693 Fsh Communications $633 Crane, Sterling $607 AH-DH APARTMENTS: Case Summary & 80 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: AH-DH Apartments, Ltd. Park Ventura Building B 5055 West Park Boulevard, Suite 700 Plano, Texas 75093 Bankruptcy Case No.: 06-40355 Debtor affiliates filing separate chapter 11 petitions on March 22, 2006: Entity Case No. ------ -------- DH Apartments Limited Partnership 06-40356 HT Apartments Limited Partnership 06-40357 Shadow Creek Apartments, Ltd. 06-40358 Debtor affiliates filing separate chapter 11 petitions on April 8, 2006: Entity Case No. ------ -------- DH Holdings Limited Partnership 06-40479 DH Holdings GP, Inc. 06-40480 Debtor affiliate filing separate chapter 11 petition on April 10, 2006: Entity Case No. ------ -------- DB Holdings, LLC 06-40484 Type of Business: The Debtors own 16 apartment complexes. Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtors' Counsel: David L. Woods, Esq. J. Mark Chevallier, Esq. McGuire Craddock & Strother, P.C. 500 North Akard, Suite 3550 Dallas, TX 75201 Tel: (214) 954-6847 Fax: (214) 954-6850 Estimated Assets Estimated Debts ---------------- --------------- AH-DH Apartments, Ltd. $50 Million to $50 Million to $100 Million $100 Million DH Apartments Limited $10 Million to $10 Million to Partnership $50 Million $50 Million HT Apartments Limited $50 Million to $10 Million to Partnership $100 Million $50 Million Shadow Creek Apartments, $10 Million to $1 Million to Ltd. $50 Million $10 Million DH Holdings Limited $1 Million to $10 Million to Partnership $10 Million $50 Million DH Holdings GP, Inc. Less than $50,000 Less than $50,000 DB Holdings, LLC Not Stated Not Stated A. AH-DH Apartments, Ltd.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Three Amigos Trade Debt $62,949 15302 Evergreen Place Drive Houston, TX 77083 Suncoast Plumbing Trade Debt $45,902 1204 Missouri South Houston, TX 77587 Hughes/Century Trade Debt $39,686 P.O. Box 842434 Dallas, TX 75284 Enviroteam (Law Care) Trade Debt $38,132 Genie Services Trade Debt $33,845 Presto Trade Debt $33,801 Dalcor Property Management, Management Fees $26,698 Inc. Waste Management Trade Debt $21,531 Golden Greek Carpets Trade Debt $20,706 Brusniak Blackwell Legal Services $19,180 Network Multifamily Trade Debt $19,148 HPC (Apt. Guide) Trade Debt $16,820 Butler Burgher Appraisals $14,700 Best Choice Carpet Care Trade Debt $13,800 L&F Painting Trade Debt $11,150 Find It Apartment Locators Trade Debt $9,688 Resident Data Trade Debt $9,071 Superior Refinishing Trade Debt $7,382 Mendez Carpet Cleaning Trade Debt $6,780 AAA Plumbers Trade Debt $5,578 B. DH Apartments Limited Partnership's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Three Amigos Trade Debt $68,393 15302 Evergreen place Drive Houston, TX 77083 Hughes/Century Trade Debt $27,939 Dallas, TX 75284 Enviroteam (Lawn Care) Trade Debt $26,701 P.O. Box 421238 Houston, TX 77242 Genie Services Trade Debt $26,370 Suncoast Plumbing Trade Debt $19,037 Dalcor Property Management, Management Fees $17,735 Inc. L&F Painting Trade Debt $16,378 Best Choice Carpet Care Trade Debt $15,316 Presto Trade Debt $14,759 Waste Management Trade Debt $13,601 Butler Burgher Appraisals $8,400 Southwest Pool & Spa Trade Debt $7,627 Golden Greek Trade Debt $7,104 Texas Apartment Locators Trade Debt $6,150 Resident Data Trade Debt $6,071 Find It Apartment Locators Trade Debt $5,766 AAA Plumbers Trade Debt $5,459 Superior Refinishing Trade Debt $5,261 HPC (Apt. Guide) Trade Debt $4,306 Ameristar Screen & Glass Trade Debt $3,674 C. HT Apartments Limited Partnership's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Three Amigos Trade Debt $44,525 15302 Evergreen Place Drive Houston, TX 77083 Enviroteam (Lawn Care) Trade Debt $23,275 P.O. Box 421238 Houston, TX 77242 Dalcor Property Management, Management Fees $20,347 5505 West Park Blvd., #700 Plano, TX 75093 Hughes/Century Trade Debt $16,119 best Choice Carpet Care Trade Debt $15,951 Waste Management Trade Debt $14,627 Presto Trade Debt $13,725 Golden Greek Carpets Trade Debt $10,898 J&R Resurfacing Trade Debt $8,889 Genie Services Trade Debt $8,657 Butler Burgher Appraisals $6,300 Envirotrol Company (Pest) Trade Debt $5,562 Resident Data Trade Debt $4,962 Suncoast Plumbing Trade Debt $4,490 HPC (Apt. Guide) Trade Debt $4,158 AAA Plumbers Trade Debt $4,005 L&F Painting Trade Debt $3,977 Apartment Living Locators Trade Debt $3,763 Find It Apartment Locators Trade Debt $3,166 Connect IT Trade Debt $2,880 D. Shadow Creek Apartments, Ltd.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Genie Services Trade Debt $6,585 3581 West Northern Ave., #13 Phoenix, AZ 85051 Three Amigos Trade Debt $6,403 15302 Evergreen Place Drive Houston, TX 77083 Hughes/Century Trade Debt $6,052 P.O. Box 84234 Dallas, TX 75284 Enviroteam (Lawn Care) Trade Debt $5,250 Dalcor Property Mangement, Management Fees $4,514 Inc. Best Choice Carpet Care Trade Debt $4,451 Suncoast Plumbing Trade Debt $2,208 Viking office Products Trade Debt $2,178 Waste Management Trade Debt $2,143 Presto Trade Debt $2,111 Butler Burgher Appraisals $2,100 AAA Plumbers Trade Debt $1,957 HPC (Apt. Guide) Trade Debt $1,386 L&F Painting Trade Debt $1,222 Superior Refinishing Trade Debt $1,055 Brilliant Promotional Trade Debt $820 Products Golden Greek Trade Debt $799 Find It Apartment Locators Trade Debt $485 Resident Data Trade Debt $448 Great American Trade Debt $439 E. DH Holdings' 20 Largest Unsecured Creditors: This Debtor has no unsecured creditors who are not insiders. F. DH Holdings GP, Inc.'s 20 Largest Unsecured Creditors: This Debtor has no unsecured creditors who are not insiders. G. DB Holdings, LLC's 20 Largest Unsecured Creditors: This Debtor has no unsecured creditors who are not insiders. AINSWORTH LUMBER: S&P Rates $75MM Sr. Floating Rate Notes at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to oriented strand board (OSB) producer Ainsworth Lumber Co. Ltd.'s US$75 million senior floating rate notes due 2013. At the same time, Standard & Poor's affirmed its 'B+' long-term corporate credit, senior secured, and senior unsecured debt ratings on the company. The outlook is stable. "The new issue will be used to bolster the company's cash reserves and improve liquidity while Ainsworth completes an expansion of its Grand Prairie, Alta. mill and upgrades several of its Minnesota mills," said Standard & Poor's credit analyst Dan Parker. Although the company should have enough cash on hand to complete the expansion, the proceeds from the note issuance will ensure that Ainsworth has adequate liquidity in the event OSB prices deteriorate faster than expected. Standard & Poor's expects OSB prices to decline in 2007 as a significant amount of new OSB capacity starts up, and as U.S. housing construction appears poised for a slowdown from record levels. The ratings on Vancouver, B.C.-based Ainsworth reflect: * the company's aggressive financial profile; * its narrow product concentration; * pricing volatility; and * the risk of oversupply of its major product, OSB. These risks are partially offset by the company's strong cost position stemming from its: * strong asset base, * good market position, and * adequate liquidity. The major business risk is the extreme volatility of OSB prices, which is generally caused by supply and demand imbalances. Demand has been driven primarily by the residential housing market and product substitution, as OSB has continued to displace plywood. A slowdown in the residential construction market would hurt OSB prices, as the industry has been supported by record levels of new home construction. This growth has been driven by low interest rates and favorable demographics, but Standard & Poor's believes the market could be vulnerable to a potential slowdown, as interest rates are rising. Furthermore, record OSB prices have afforded all producers with windfall profits, and this has spurred new investment in supply. A significant amount of new OSB capacity will comes onstream in 2007, including Ainsworth's expansion of its Grande Prairie mill. Although overall industry capacity will not increase significantly in 2006, excess supply remains a large risk for 2007 and beyond, and in all likelihood will negatively affect pricing. The outlook is stable. With Ainsworth's highly leveraged balance sheet, Standard & Poor's expects the company to maintain good liquidity to offset the volatile pricing, and the heavy capital spending for expansion. Despite the current strong credit metrics, Standard & Poor's expectation is that 2007 will be a challenging year, as significant new OSB capacity comes onstream and U.S. housing construction moderates from record levels. Standard & Poor's expects OSB prices to deteriorate significantly, which will negatively affect Ainsworth's earnings and cash flow, and the company will likely enter the cyclical trough in 2007 with a highly leveraged balance sheet. ALLIED HOLDINGS: Teamsters Object to CBA Protective Order --------------------------------------------------------- The Teamsters National Automobile Transportation Industry Negotiating Committee and various Local Unions, all affiliated with the International Brotherhood of Teamsters, ask the U.S. Bankruptcy Court for the Northern District of Georgia to deny Allied Holdings, Inc., and its debtor-affiliates' request for a protective order, and direct the Debtors to turn over to the union all information covered by Section 1113(b) of the Bankruptcy Code. Pursuant to Section 1113 of the Bankruptcy Code, on March 8, 2006, the Debtors provided a proposal to the International Brotherhood of Teamsters, Teamsters National Automobile Transporters Negotiating Committee and applicable local unions for modifications to the collective bargaining agreement between certain of the Debtors and the IBT. The relevant information necessary to evaluate the Debtors' Proposal includes confidential, commercial, proprietary, financial, or otherwise non-public data. According to Jeffrey W. Kelley, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, the disclosure of material non-public information to all members of the IBT could result in that information being made available to other persons and entities. Mr. Kelley contended that the unlimited disclosure of that relevant information could compromise the Debtors in an increasingly competitive industry. Because of the issue of confidentiality the Debtors asked the Court to enter a protective order to prevent disclosure of any and all confidential information provided in connection with the CBA Proposal. "Allied is currently waging a vicious anti-union campaign against its Teamster employees," Frederick Perillo, Esq., at Previant, Goldberg, Uelmen, Gratz, Miller and Brueggeman, S.C., in Milwaukee, Wisconsin, says. Among others, the Union also alleged that the Debtors' request for a protective order is a ploy in their anti-union campaign, and that the Debtors and their counsel have engaged in "sleazy tactics". Mr. Perillo argues that Section 1113(D)(3) does not permit the Court to prevent disclosure of information to an authorized representative including the Teamster Local Unions. Mr. Perillo notes that Section 1113 imposes an affirmative obligation on the debtor to make full disclosure to the union. Section 1113(d)(3) also limits protective orders to very narrow circumstances when there is an undue risk of exposure to a direct competitor, and no order can be granted prohibiting disclosure to local unions or members, Mr. Perillo adds. Moreover, Mr. Perillo argues that under Eleventh Circuit standards for protective orders, Allied has not met its burden to show specific harm, to tailor the order narrowly, and to prove that no other alternative exists. The Teamsters Union contends that Allied is seeking a protective order to circumvent, rather than aid, the process of bargaining. "The court should not allow itself to be enlisted by Allied in its unlawful campaign to evade its bargaining responsibilities, and should deny the protective order." Allied contends that it is seeking relief pursuant to Section 1114. Section 1114, Mr. Perillo explains, allows for modifications to retiree benefits. The Debtors' proposal to cease contributions to the pension plans is a proposal under Section 1113. In making its contention that Section 1114 applies, Allied has either not read the statute, or did not understand it, Mr. Perillo says. Debtors Respond The Debtors denied the Union's allegations. The Debtors tell the Court that they will not respond to the Teamsters in kind and will instead focus on the real issues. The Debtors submitted a revised, proposed protective order to counsel for the Teamsters Union on March 22, 2006. Jeffrey W. Kelley, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, relates that the Debtors' March 22 Proposed Order establishes a typical, eminently reasonable procedure for handling a massive document production when confidentiality concerns arise, as they already have, as the Debtors are gathering and reviewing documents for production to the Teamster. The Debtors propose to implement these uniform procedures: 1. All relevant information will be produced to the bargaining committee appointed by the Teamsters, as well as the Teamsters' advisors and executives, on the entry of an order. The Teamsters will thus have all of the relevant information, including confidential information, in its possession for evaluation. 2. The Debtors are authorized to designate as confidential only those portions of relevant information that fall within the scope of Section 1113(d)(3); or constitute material, non-public information under Regulation FD. 3. If, on review of the relevant information designated by the Debtors as confidential, the Teamsters disagree with the designation, the parties are required to attempt to resolve the disagreement through negotiation. 4. If the Teamsters, during the bargaining process, seeks to expand the list of approved recipients beyond its bargaining committee and the numerous other Teamster officers, employees and advisors already listed in the March 22 Proposed Order, it may negotiate for that result with the Debtors or seek an order changing the March 22 Proposed Order to add the additional recipients. 5. The March 22 Proposed Order expressly authorizes the Teamsters to share conclusions drawn by the IBT from confidential information with members of local unions who are also employees of the Debtors so long as the confidential information itself is not disclosed. 6. The March 22 Proposed Order also provides a procedure for dealing with confidential information in the event of discovery or hearings related to motions filed pursuant to Sections 1113 or 1114 of the Bankruptcy Code. The Debtors note that the Teamsters Union has previously voluntarily entered into a Nondisclosure Agreement with Allied dated June 30, 2005, and a Confidentiality Letter dated Aug. 24, 2005, arising out of the Teamsters' membership on the Creditors Committee. Accordingly, the Debtors ask the Court to enter an order substantially similar to the March 22, 2006 Proposed Order and put an end to what has been the difficult process of setting forth procedures for the handling of confidential information produced to the Teamsters. A full-text copy of the revised Protective Order is available for free at http://researcharchives.com/t/s?7b9 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Taps Glass & Associates as Consultants ------------------------------------------------------- Allied Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ Glass & Associates, Inc., on an emergency basis, as their Operational Consultants, nunc pro tunc to March 21, 2006. The Debtors believe they need to employ experienced consultants to render operational advisory services due to the size of their operations and the complexity of their financial difficulties, In addition, due to the limited size of the Debtors' financial management staff, employing those consultants will allow management to focus its attention on successfully reorganizing the Debtors' business and financial affairs, Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, says. Mr. Winsberg relates that Glass & Associates has experience with business assessments, management, consulting, interim management, financial restructuring, litigation consulting, and bankruptcy matters. As Operational Consultants, Glass will: a) assist the Debtors in preparing and reviewing its cash flow forecasts, departmental budgets, and financial projections, and in analyzing operational trends; b) assist the Debtors in identifying opportunities to increase the efficiency and productivity of its haul operations; c) assist the Debtors in evaluating its fleet requirements and repair and maintenance costs, and determining the capital requirements to support those assets; d) assist the Debtors in evaluating and identifying alternatives for its risk management strategy, with a focus on property, liability and workers' compensation insurance and on the return of excess cash collateral from insurance carriers; e) work with the Debtors and its advisors on optimizing liquidity; f) work with the Debtors and its advisors on coordinating due diligence of labor-related parties and their advisors; g) assist the Debtors and its advisors in developing contingency plans should its negotiations with the IBT not achieve targeted results on appropriate timing; h) perform a liquidation analysis of the Debtors for purposes of a reorganization plan; i) provide expert advice and expert testimony relating to financial matters on work it performed; j) assist the Debtors and its advisors with respect to communicating Glass' work product and other issues to the Debtors' various creditor groups; and k) render other operational advisory services as may be requested by the Debtors. Dalton Edgecomb, Esq., a principal at Glass & Associates, Inc., assures the Court that Glass is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Edgecomb assures Judge Drake that to the best of his knowledge, Glass does not hold or represent any interest adverse to the Debtors' estates. The firm's hourly rates are: Principals $400 to $575 Case Director $325 to $450 Senior Consultant $250 to $300 Clerical or Administrative $75 to $95 The Debtors and Glass have agreed that Glass will earn an additional fee of $750,000 for any restructuring, reorganization or recapitalization of the Debtors with respect to any of its existing and potential debt obligations, trade claims, leases, unfounded pension liabilities, and other liabilities. 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICAN GREETINGS: Moody's Rates New Credit Facilities at Ba1 -------------------------------------------------------------- Moody's Investors Service affirmed American Greetings Corporation Ba1 corporate family rating, but revised the company's outlook to negative from stable. Moody's also assigned a Ba1 rating to American Greetings' new senior secured credit facilities, consisting of a $350 million revolving credit facility and a $300 million multiple draw term loan facility. Moody's also affirmed the Ba1 rating on the company's senior notes and the Ba2 rating on its convertible subordinated notes. The outlook revision reflects American Greetings' announcement that it may purchase additional shares beyond the current $200 million program that is currently in place and that the multiple draw term loan facility could accommodate this, implying the potential for an increase in leverage. Moody's also recognizes that the company is contemplating additional share repurchases at a time when it is initiating a $75 million investment in its North American card business for FY2007. The ratings reflect American Greetings' leading and stable market position in the U.S. greeting card industry with approximately 35% market share due to the stable demand for its products and long- standing customer relationships. In addition, the company's long- term contracts and scan-based trading systems provide a meaningful barrier to entry. The company also has favorable credit metrics, with some representative of an investment grade profile; however, Moody's believes stronger credit metrics are necessary to compensate for the significant risks inherent in an industry that is characterized by low or declining growth rates, persistently fierce competition, weak consumer branding, and increased retailer bargaining power. The ratings also consider the weak performance of the company's retail and international businesses. To the extent that costs associated with American Greetings' investment in its card business are greater than anticipated or the company uses capacity under the multiple draw term loan facility to fund additional share repurchases, such that debt to EBITDA increases to over 3.5 times or free cash flow to debt declines below 8% on a sustained basis, the ratings could be lowered. Conversely, if American Greetings' investment in its card business gains traction in restoring margins and improving growth while the company pursues a prudent financial policy, such that it maintains a debt to EBITDA below 3.0 times and free cash flow to debt above 10%, Moody's could revise the outlook to stable. With principal executive offices in Cleveland, Ohio, American Greetings Corporation is a leading developer, manufacturer and distributor of greeting cards and social expression products. The company has the second largest market share in the U.S. greeting card industry, behind Hallmark, but estimates that it maintains the leading position in the mass, food and drug markets. Net sales were approximately $1.9 billion for FY2006. AMERIPATH INC: Earns $9.9 Million of Net Income in 2005 ------------------------------------------------------- AmeriPath, Inc., reported its financial results for the fourth quarter and the year ended December 31, 2005. Net revenues for the fourth quarter of 2005 increased 11.0% to $142.6 million from $128.4 million in the fourth quarter of 2004. Net revenues for the year ended December 31, 2005, increased 11.1% to $563.6 million compared to $507.3 million for the year ended December 31, 2004. Same store net revenues for the fourth quarter of 2005 increased 10.0%, or $12.6 million, when compared to the fourth quarter of 2004. Same store net revenues for the year ended December 31, 2005 increased 7.7%, or $38.5 million, when compared to the year ended December 31, 2004. EBITDA (earnings before interest, taxes, depreciation and amortization), which is a non-GAAP financial measure, for the fourth quarter of 2005 was $21.8 million compared to $14.1 million for the fourth quarter of 2004. EBITDA for the year ended December 31, 2005, was $90.7 million compared to $67.8 million for the year ended December 31, 2004. Costs of services for the fourth quarter of 2005 increased to $75.7 million (53.1% of net revenues) from $71.5 million (55.7% of net revenues) in the fourth quarter of 2004. Costs of services for the year ended December 31, 2005, increased to $300.2 million (53.3% of net revenues) from $271.0 million (53.4% of net revenues) for the year ended December 31, 2004. Selling, general and administrative expenses for the fourth quarter of 2005 were $29.5 million (20.7% of net revenues) compared to $26.4 million (20.6% of net revenues) in the fourth quarter of 2004. Selling, general and administrative expenses for the year ended December 31, 2005, increased to $109.2 million (19.4% of net revenues) from $95.7 million (18.9% of net revenues) in the year ended December 31, 2004. The increases in the fourth quarter and year ended December 31, 2005, are primarily from adding additional resources in information technology and sales and marketing. The provision for doubtful accounts for the fourth quarter of 2005 was $19.3 million (13.5% of net revenues) compared to $18.2 million (14.2% of net revenues) in the fourth quarter of 2004. The provision for doubtful accounts for the year ended December 31, 2005, decreased to $73.8 million (13.1% of net revenues) from $76.5 million (15.1% of net revenues) in the year ended December 31, 2004. Outpatient revenues, as a percentage of revenues, continued to grow at a faster rate than the inpatient revenues. The bad debt percentage on outpatient revenues is generally much lower than on inpatient revenues and therefore reduces total bad debt expense as a percentage of revenues. Outpatient revenues, as a percentage of total revenue, for the three months and year ended December 31, 2005 were 61.9% and 60.5%, respectively compared to 55.6% and 53.7%, respectively in the comparable periods of 2004. Net income for the fourth quarter of 2005 was $0.2 million compared to a net loss of $1.6 million for the same quarter of 2004. Net income for the year ended December 31, 2005, was $9.9 million compared to net income of $1.5 million for the year ended December 31, 2004. On January 31, 2006, AmeriPath completed its previously announced acquisition of Specialty Laboratories, Inc., a hospital-focused clinical reference laboratory. AmeriPath financed its acquisition through a combination of cash on hand, contribution of Specialty shares by its majority shareholder, additional cash equity from AmeriPath's majority stockholder, Welsh Carson, Anderson & Stowe IX, L.P., and borrowings under AmeriPath's new credit facility. About AmeriPath AmeriPath Inc., a national provider of physician-based anatomic pathology, dermatopathology and molecular diagnostic services to physicians, hospitals, clinical laboratories and surgery centers, supports community-based medicine by helping physicians provide excellent and effective care for their patients. A team of subspecialized pathologists and Ph.D. scientists provide medical expertise, diagnostic quality, and personal consultation services. AmeriPath's team of more than 400 highly trained, board-certified pathologists provide medical diagnostics services in outpatient laboratories owned, operated and managed by AmeriPath, as well as in hospitals and ambulatory surgical centers. Specialty Laboratories supports local pathology and community- based medicine by partnering with pathologists and hospitals to improve patient care and reduce episodes-of-care costs. Specialty offers hospitals an extensive menu of highly advanced clinical tests used by physicians to diagnose, monitor and treat disease and a single-source solution for esoteric testing needs. * * * Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AmeriPath Inc., in November 2005. S&P said the rating outlook is negative. Moody's Investors Service rates Ameripath's senior secured bank credit facility (under which Wachovia Bank, N.A., serves as the Agent) at B2 and rates the physician practice management company's 10-1/2% Senior Subordinated Notes due April 1, 2013, at B3. AMR CORP: 4.25% Senior Conv. Notes Now Convertible to Stock ----------------------------------------------------------- AMR Corporation's 4.25% Senior Convertible Notes due 2023 have become convertible into shares of AMR common stock. AMR Corporation is the parent company of American Airlines. As provided in the indenture under which the Notes were issued, the Notes have become convertible because the sale price of AMR's common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the calendar quarter ended March 31, 2006, was greater than 120% of the conversion price per share of AMR common stock on the last trading day. The Notes are convertible into Common Stock at the conversion rate specified in, and otherwise in accordance with the terms of, the Notes and the indenture under which the Notes were issued, and they will remain convertible for so long as they are outstanding. American Airlines is the world's largest airline. American, American Eagle and the AmericanConnection regional airlines serve more than 250 cities in over 40 countries with more than 3,800 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's Web site -- http://www.AA.com/-- provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve more than 600 destinations in over 135 countries and territories. As of December 31, 2005, AMR Corporation's equity deficit doubled to $1.478 billion from a $581 million deficit from December 31, 2004. AMR shares rocketed from $10 per share in September 2005 to over $25 per share this month. Bloomberg reported yesterday that Fidelity Investments, the world's largest mutual fund company, has almost doubled its holdings in AMR Corporation since year-end to become the biggest shareholder in the parent of American Airlines. Fidelity owns 24.1 million AMR shares, representing a 13% equity stake in the world's largest air carrier. ANCHOR GLASS: Obtains $10 Million in Additional DIP Financing ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Anchor Glass Container Corporation to secure an additional postpetition financing totaling $10,000,000 from Wells Fargo, National Association, and certain noteholders, who under the Plan of Reorganization will become owners of a majority of the reorganized Anchor Glass' common stock. Wells Fargo is the agent for certain holders of the Debtor's $350,000,000 11% Secured Senior Notes. The new financing will be in the form of an amendment to the Note Purchase Agreement. A full-text copy of the Amendment to the Note Purchase Agreement is available for free at http://researcharchives.com/t/s?7bc The Court rules that security interests, administrative claims and other rights and remedies granted to the New Purchasers will be identical to and pari passu with the liens, claims, rights and remedies in respect of the previous Notes. In its motion to obtain additional DIP financing, the Debtor asked the Court to: (a) modify the automatic stay, as applicable; (b) grant Wells Fargo a superpriority administrative claim status in respect of all postpetition obligations; (c) provide adequate protection to the Noteholders in the form of liens on and security interests in the same property that secures the Note Purchase Agreement, subject only to the liens of Wells Fargo and valid and existing liens of third parties on that property as of the Petition Date; (d) permit it to use the loan proceeds to pay all fees and expenses of the $10,000,000 Facility and to operate its business. The Debtor ought additional financing to protect its business from the volatility of natural gas prices and to build additional cash reserves. The additional financing will avoid disruption of the Debtor's business, preserve and maximize the value of the Debtor's estate, and avoid immediate and irreparable harm to the Debtor's creditors and employees. In connection with the additional financing, the Debtor will pay Wells Fargo a $10,000 fee. The Debtor has discussed the financing with the Ad Hoc Committee of Senior Secured Noteholders, the Official Committee of Unsecured Creditors and the Note Trustee. None of the parties object to the Debtor's request. BNY's Response The Bank of New York did not present any objections to the Debtors' additional DIP financing request. However, BNY preserves all of the rights it asserted in its request for adequate protection, in connection with the additional financing. BNY is the Trustee and Collateral Agent for $350,000,000 in face amount of 11% Senior Secured Notes due 2013, as issued pursuant to an Indenture dated February 7, 2003. BNY is seeking modification of the Final Noteholder Financing Order and the grant of additional adequate protection of the interests it asserted on behalf of the Noteholders in the Noteholders' Collateral. Judge Paskay clarified that BNY's adequate protection motion will be deemed to apply to his Order, without prejudice to the rights and objections of any party-in-interest. 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Signs Agreements for Property Damage Insurance ------------------------------------------------------------ The U.S Bankruptcy Court for the Middle District of Florida authorized Anchor Glass Container Corporation to enter into a premium financing agreement with Imperial Premium Finance, Inc. The Debtor inked the premium financing agreement in connection with their entry into agreements with eight insurance companies, effective as of March 2006, for property damage and steam boiler inspection insurance coverage: Policy Insurance Company Policy No. Premiums ----------------- --------- ----------- Ace American Insurance Co. GPAD36109178 $42,659 Arch Specialty Insurance PRP0013391 77,023 Axis Reinsurance Company RNB725178-06 21,804 Commonwealth Ins. Co. America IND1243 20,519 Hartford Steam Boiler Insurance FB2310759 6,227 Lexington Insurance Company 7477933 774,596 Lloyd's of London WB0600122 133,528 Lloyd's of London XP00000008 62,567 Lloyd's of London WB0600124 14,220 Lloyd's of London WB0600124 20,856 RSUI Indemnity Company LHD34539 8,532 ---------- $1,284,595 ========== The salient terms of the Finance Agreement are: a. Imperial will advance the amounts of premiums due to each of the insurers for the Insurance Programs. b. Anchor Glass is obligated to make monthly payments of the amount financed by Imperial to pay the premiums due to the Insurers. c. Substantial cash down payments are required, and the unpaid balance due to Imperial will be secured by substantial unearned premium previously paid to the Insurers. The cash down payment required is $449,608. d. Imperial will have the right, upon non-payment of Anchor, and filing a notice of default with the Court to relief from the automatic stay, to cancel the Insurance Policies which are the subject of the Premium Finance Agreement, and receive and retain the unearned premium amounts back from the Insurers to satisfy the amounts due Imperial under the Premium Finance Agreement. The Court authorizes the Debtor to grant Imperial a first priority security interest in the Policies, including: (i) all money that become due under the under the Agreement because of a loss under the Policies that reduces unearned premiums; (ii) any return of premiums or unearned premiums under the Policies; (iii) any dividends that may become due Anchor Glass in connection with the Policies. The Court rules that the Lien granted to Imperial in connection with the Policies will be senior to any security interests and liens granted to any other secured creditors in Anchor Glass' case. 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARINC INC: S&P Places BB Corp. Credit Rating on CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB' corporate credit rating, on ARINC Inc. on CreditWatch with developing implications. The CreditWatch follows a recent announcement that the company has retained an investment bank to explore new equity investments, including a sale of the company. "Ratings could be raised, lowered, or affirmed depending on the firm's leverage and financial policy following any transaction," said Standard and Poor's credit analyst Christopher DeNicolo. ARINC's principal shareholders are the six large U.S. airlines. Lease-adjusted debt to EBITDA (including the lease on the firm's headquarters) is currently appropriate for the rating at around 3x, although debt to capital is high at about 75%. ARINC is granted the exclusive right by the FCC to manage and license the radio frequencies used by the airlines. This function has been transferred to a separate legal entity that will continue to be owned by the U.S. airlines. Annapolis, Maryland-based ARINC is a leading provider of mission- critical communications and IT services to the global aviation industry (40%-45% of revenues) and engineering services to the U.S. military and other government agencies (55%-60%). ARINC networks carry more than half of all air-ground messages in the world between commercial aircraft and airline operations centers. Other commercial transportation products include: * airport check-in and boarding systems; * flight display and information systems; * commuter rail control and information systems; and * mobile private digital networks and ground communications systems. ATA AIRLINES: Wants NatTel Settlement Agreement Approved -------------------------------------------------------- Over the course of ATA Airlines, Inc., and its debtor-affiliates' Chapter 11 cases, NatTel, LLC, filed various objections and asserted various claims, including notices of appeal and a pending appeal. Following arm's-length negotiations, the Debtors, the Official Committee of Unsecured Creditors, and NatTel agreed to settle all outstanding matters among the parties pursuant to a settlement agreement. The salient terms of the Settlement Agreement are: (i) The Debtors, the Committee and NatTel will enter into a stipulation providing that NatTel's appeal pending in the U.S. District Court for the Southern District of Indiana will be dismissed with prejudice, with each side to bear its own attorneys' fees and costs. The stipulation will be filed with the District Court; (ii) Except with respect to two filed prepetition claims, NatTel abandons all claims it holds in any of the Chapter 11 cases and agrees that neither NatTel nor its affiliates will be or will become a party-in-interest with respect to any of the Chapter 11 cases or any contested matter or proceeding arising in, or related to, any of the Chapter 11 cases; (iii) NatTel abandons all pleadings filed in any of the Chapter 11 cases and abandons all rights remedies and objections it may have or might assert in any of the Chapter 11 cases, including its objections to various administrative claims asserted in the Chapter 11 case of C8 Airlines, Inc., and any rights or remedies NatTel may have or might assert to comment on or object to any proposed plan or disclosure statement. However, notwithstanding anything to the contrary, NatTel may vote its claims regarding any plan proposed in the C8 Chapter 11 case and share in any recoveries pursuant to the claims pari passu with all of C8's other general unsecured creditors. NatTel agrees that it will not file any other pleadings nor appeal any other orders in the Chapter 11 cases, and the Debtors and the Creditors Committee agree that any plan or disclosure statement filed or approved in the C8 Chapter 11 case will not refer to or mention by name, NatTel and its Affiliates; and (iv) The Parties exchange mutual releases. Accordingly, the Debtors ask the Court to approve the Settlement Agreement. If there are no objections to the Settlement Agreement, the Debtors ask the Court to consider and rule on their request without further hearing. 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. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Wants U.S. Bancorp's $3.9MM Admin. Claim Disallowed ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 28, 2006, U.S. Bancorp asked the U.S. Bankruptcy Court for the Southern District of Indiana to allow its $3,944,426 administrative expense claim and compel ATA Airlines, Inc., to pay that claim without further delay. 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. Debtors Object Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, argues that U.S. Bancorp wants a windfall at the expense of the Debtors and in contravention of fundamental principles of the Bankruptcy Code. Mr. Nelson recounts that U.S. Bancorp's $3,944,426 administrative expense claim is comprised of three components: (1) The "Lien Claim," which is a purported administrative expense claim for $53,567 related to payments U.S. Bancorp made to GE Engine Services, Inc., to release mechanics' liens on two engines; (2) The "Return Condition Claim," which is a purported administrative expense claim for $1,625,554 for damages U.S. Bancorp contends are attributable to ATA's alleged failure to comply with maintenance and return obligations set forth in the Leases and related agreements; and (3) The "Rent Claim," which is a purported administrative expense claim for $2,265,305 for unpaid rental payments under the Leases for calendar year 2006. According to Mr. Nelson, the Return Condition Claim impermissibly seeks to categorize ordinary rejection damages as priority administrative expense claims. In addition to miscategorizing the nature of the Return Condition Claim, U.S. Bancorp has incorrectly calculated the claim and has overstated its amount by many-fold. Moreover, treating the Rent Claim as an administrative expense claim would be inequitable and contrary to fundamental principles of bankruptcy law, Mr. Nelson asserts. "ATA never had possession of the Aircraft for a single day during the rental period to which the Rent Claim relates," Ms. Nelson says. Not only did ATA pay rent to U.S. Bancorp for every single day ATA possessed the Aircraft, but ATA even paid rent for a period of almost a year after the Aircraft were returned to U.S. Bancorp and subsequently sold. The Rent Claim is also subject to principles of mitigation and should be substantially reduced or eliminated, Mr. Nelson explains. For these reasons, the Debtors ask the Court to disallow U.S. Bancorp's administrative expense claim. 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. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATLANTIC GULF: Trustee Sells 185 Tennessee Lots for $770,000 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave Michael B. Joseph, the chapter 7 trustee appointed in Atlantic Gulf Communities Corporation and its debtor-affiliates' cases, permission to sell 185 real property lots located in Cumberland Lakes, Tennessee, to David Fetzner and Aldo DiSorbo, free and clear of any and all liens, claims, interests and encumbrances. As reported in the Troubled Company Reporter on Mar. 6, 2006, pursuant to a Sale Contract, the Trustee will transfer all of the Debtors' right, title and interest in and to the 251.60-acre property for $770,000, subject to certain adjustments, including the satisfaction of about $140,000 of delinquent real estate taxes. The transaction is a cash deal with no financing or inspection contingencies. A full-text copy of the Contract of Sale is available for free at http://researcharchives.com/t/s?60c Headquartered in Fort Lauderdale, Florida, Atlantic Gulf Communities Corporation was a developer and operator of luxury residential real estate communities. The Company and its affiliates filed for chapter 11 protection on May 1, 2001 (Bankr. D. Del. Case Nos. 01-01594 through 01-01597). Michael R. Lastowski, Esq., at Duane Morris LLP represents the Debtor. The Bankruptcy Court converted the Debtors' chapter 11 cases to a chapter 7 liquidation proceeding on June 18, 2002. Michael B. Joseph is the chapter 7 Trustee for the Debtors' estates. John D. McLaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP represents the chapter 11 Trustee. When the Debtors filed for chapter 11 protection, they listed $148,546,000 in assets and $170,251,000 in liabilities. BEAR STERNS: Moody's Holds Low-B Ratings on Six Cert. Classes ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of six classes and affirmed the ratings of ten classes of Bear Sterns Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2002-PBW1: * Class A-1, $319,851,478, Fixed, affirmed at Aaa * Class A-2, $385,855,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $26,483,000, Fixed, upgraded to Aaa from Aa2 * Class C, $31,089,000, Fixed, upgraded to Aa2 from A2 * Class D, $8,060,000, Fixed, upgraded to Aa3 from A3 * Class E, $9,211,000, Fixed, upgraded to A1 from Baa1 * Class F, $13,817,000, Fixed, upgraded to A3 from Baa2 * Class G, $13,817,000, Fixed, upgraded to Baa2 from Baa3 * Class H, $16,120,000, Fixed, affirmed at Ba1 * Class J, $10,363,000, Fixed, affirmed at Ba2 * Class K, $3,454,000, Fixed, affirmed at Ba3 * Class L, $5,757,000, Fixed, affirmed at B1 * Class M, $9,211,000, Fixed, affirmed at B2 * Class N, $2,302,000, Fixed, affirmed at B3 As of the March 13, 2006 distribution date, the transaction's aggregate principal balance has decreased by 5.6% to $869.2 million from $921.2 million at securitization. The Certificates are collateralized by 126 loans, ranging in size from less than 1.0% to 7.0% of the pool, with the top ten loans representing 33.5% of the pool. The pool includes two shadow rated investment grade loans, which comprise 11.6% of the pool. Six loans, representing 6.9% of the pool, have defeased and are collateralized by U.S. Government securities. The largest defeased loan is the Cranston Parkade Loan, which is the third largest loan in the pool. The pool has not experienced any losses since securitization and there are no loans currently in special servicing. Six loans, representing 8.3% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for 94.0% of the pool, excluding the defeased loans. Moody's weighted average loan to value ratio for the conduit component is 81.3%, compared to 83.8% at securitization. Moody's upgrade of Classes B, C, D, E, F and G is due to increased credit support and improved overall pool performance. The largest shadow rated loan is the Belz Factory Outlet Loan, which is secured by a 640,000 square foot factory outlet center located in Orlando, Florida. The center was built in 1981 and renovated and expanded in 1991. Property performance has been impacted by new competition that has opened since securitization. Occupancy has declined to 81.0% as of March 2005, compared to 91.6% at securitization. Moody's current shadow rating is Ba3, compared to Baa3 at securitization. The second shadow rated loan is the RREEF Textron Portfolio Loan, which represents the A Note portion of an $80.0 million mortgage loan. The loan is secured by a cross-collateralized and cross- defaulted portfolio of seven diverse properties, which include industrial, office, retail and multifamily. The properties are located in five states plus Washington, D.C. and total 1.4 million square feet. Property performance has been stable since securitization. The loan sponsor is Textron Master Trust, the pension fund of Textron Inc. The loan is interest only for its entire term. The properties are also encumbered by a $39.0 million B Note, which is held outside the trust. Moody's current shadow rating is Aaa, the same as at securitization. The top three conduit loans represent 9.8% of the pool. The largest conduit loan is the 50 Danbury Road Loan, which is secured by a 220,000 square foot office building located in Wilton, Connecticut. The property is 100.0% occupied, compared to 96.1% at securitization. The largest tenants are the marketing firm D.L. Ryan and AIG Financial Products Corp. Moody's LTV is 87.0%, compared to 89.3% at securitization. The second largest conduit loan is the Fifth Third Center Loan, which is secured by a 300,000 square foot Class A office building located in downtown Dayton, Ohio. The property is 90.5% occupied, compared to 86.1% at securitization. The largest tenant is Fifth Third Bank, Ohio. Financial performance has been stable since securitization. Moody's LTV is 91.8%, virtually the same as at securitization. The third largest conduit loan is the Mountain Square Shopping Center Loan, which is secured by a 275,000 square retail center located in Upland, California. The center is 99.0% occupied, compared to 94.4% at securitization. Major tenants include Home Depot, Vons Supermarket and Staples. Financial performance has improved since securitization due to increased rental rates. Moody's LTV is 77.1%, compared to 85.9% at securitization. The pool's collateral is a mix of retail, office and mixed use, multifamily, industrial and self-storage and U.S. Government securities. The collateral properties are located in 26 states and Washington, D.C. The highest state concentrations are California, Florida, Georgia, Texas and Ohio. BEST BUY: Moody's Upgrades Debenture Rating to Baa3 from Ba1 ------------------------------------------------------------ Moody's Investors Service upgraded the ratings of Best Buy Co., Inc., including the issuer rating to Baa2 from Baa3, concluding the review for possible upgrade begun on Jan. 11, 2006. The rating outlook is stable. Ratings upgraded: * Issuer rating to Baa2 from Baa3 * Convertible subordinated debentures, guaranteed by wholly owned subsidiary Best Buy Stores LLP, to Baa3 from Ba1 The key drivers of the ratings upgrade and stable outlook are: 1) the company's continued ability to generate robust comparable store sales increases while improving operating profit margins; 2) Best Buy's continued investment in its store base to open new stores and to convert stores to the customer centric model, creating a platform for future growth; 3) the company's maintenance of ample liquidity and solid credit metrics despite intense competition and its appropriately aggressive capital expenditure program; and 4) Moody's expectations that Best Buy's varied growth initiatives will not result in sales or earnings disruption and that the company will fund shareholder enhancement from free cash flow. A further upgrade is unlikely in the near term given the intense competition in the company's retail segment and Best Buy's ambitious growth plans. Over the intermediate term, ratings could be raised if customer centric stores continue to generate solid returns, if Best Buy successfully executes its numerous initiatives to grow consolidated sales and store productivity, and if reported operating profit margin is likely to be sustained at 7% and free cash flow to debt at 25%. Ratings could be lowered if competition increases, if financial policies become more aggressive or if a material acquisition is completed. Quantitatively, ratings would be lowered if comparable store sales became negative for a sustained period, or if reported operating profit margin fell below 5%, or if debt to EBITDA rose above 2 times. Headquartered in Minneapolis, Best Buy operates more than 940 retail stores in the U.S. and Canada that sell consumer electronics, home office products, entertainment software, appliances and related services. Sales for the fiscal year ended Feb. 25, 2006 were approximately $30.8 billion. BEVERLY ENTERPRISES: Debts Repaid & S&P Withdraws Ratings --------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings for Beverly Enterprises Inc. The debt was repaid when the company was acquired by Pearl Senior Care Inc., an affiliate of Fillmore Capital Partners LLC, on March 14, 2006. The operations are now part of a new entity called GGNSC Holdings LLC, to which S&P has assigned a single-B corporate credit rating. BGF INDUSTRIES: S&P Lifts Corporate Credit Rating to B- from CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on BGF Industries Inc., including the corporate credit rating to 'B-' from 'CCC+'. The outlook is stable. At Dec. 31, 2005, BGF had total debt, including capitalized operating leases, of $97 million. "The rating action reflects the glass fiber fabrics producer's weak yet stabilized, operating and financial performance. New product introductions and cost management have somewhat mitigated declining sales to the U.S. electronics industry," said Standard & Poor's credit analyst Kenneth L. Farer. "We expect modest improvements in leverage and cash flow ratios over the near-term as the company focuses on further developing organic growth and innovative products, managing inventory levels, and good demand from its other end markets." Greensboro, North Carolina-based BGF, an indirect, wholly owned subsidiary of unrated France-based Porcher Industries Group, manufactures specialty woven and nonwoven fabrics made from: * glass, * carbon, and * aramid yarns for various applications. These applications include composite materials used in: * aircraft (33% of 2005 sales), * printed circuit boards for the electronics industry (19%), * dust filtration (19%), * insulation (8%), and * protective fabrics (9%). The company's liquidity remains limited. "We could revise the outlook to negative if end markets decline more than we currently expect, resulting in constrained liquidity or negative free cash flow," Mr. Farer said. "For us to revise the outlook to positive the company would have to substantially increase its size and operating diversity while adopting a less aggressive financial profile." BIOVAIL CORP: Earns $119.7 Million of Net Income in Fourth Quarter ------------------------------------------------------------------ Biovail Corporation (NYSE:BVF)(TSX:BVF) disclosed its financial results for the three-month and 12-month periods ending December 31, 2005. Total revenues for the three months ended December 31, 2005, were $287.6 million, compared with $275.4 million for the fourth quarter of 2004, an increase of 4%. Total revenues for the 12 months ended December 31, 2005, were $935.5 million, compared with $879.2 million for the full year of 2004, an increase of 6%. Fourth-quarter 2005 net income, in accordance with United States Generally Accepted Accounting Principles (GAAP), was $119.7 million, compared with $46.0 million for the corresponding 2004 period. For the 12 months ended December 31, 2005, net income was $236.2 million, compared with $161.0 million for the same period a year earlier. GAAP net income for the fourth quarter of 2005 were negatively impacted by a charge related to the write-down of the Company's investment in Reliant Pharmaceuticals, which negatively impacted net income by $2.7 million. GAAP net income for the full year of 2005 were impacted by a restructuring charge, an equity loss in the Company's investment in Western Life Sciences, a non-cash write-down of assets and the write-off of inventory related to the transaction with Kos Pharmaceuticals, Inc., in May 2005. These items negatively impacted 2005 GAAP net income by $60.6 million. In 2004, net income were impacted by an acquired research-and- development charge associated with the acquisition of the remaining interest in BNC-PHARMAPASS, a write-off of the Rondec product rights, a write-down of Biovail's investment in Ethypharm, an equity loss in the Company's investment in Western Life Sciences and a gain on the sale of Cedax. "Biovail's record level of operating cash flows in the fourth quarter and full-year 2005 has further solidified the Company's financial position," said Biovail Chief Executive Officer Dr. Douglas Squires. "Given our strong base business, which has been further enhanced by the recent launch of Ultram(R) ER, we are well positioned to execute our long-term growth strategy. To this end, we are actively evaluating a number of complementary product and company acquisition opportunities." Fourth-Quarter 2005 Financial Performance Product revenues for the fourth quarter of 2005 were $274.8 million, compared with $264.5 million in the fourth quarter of 2004, a 4% increase that primarily reflects the positive performance of Wellbutrin XL(R) and Cardizem(R) LA; partially offset by declines in Biovail Pharmaceuticals Canada (BPC) and Biovail's generics portfolio, as well as in Teveten revenues following the May 2005 transaction with Kos. Product revenues for the 12 months ended December 31, 2005 were $884.3 million compared with $837.1 million for the 12 months ended December 31, 2004. Product revenues for Wellbutrin XL(R) were $137.7 million in the fourth quarter of 2005, and $354.2 million in the full year of 2005, compared with $109.7 million and $317.3 million in the corresponding periods in 2004. In December 2005, Wellbutrin XL(R) captured 58.5% of the new prescriptions written for the Wellbutrin brand (including generics). Revenues for Biovail's Zovirax franchise were $27.7 million in the fourth quarter of 2005, and $95.9 million in the full year of 2005, representing a decrease of 10% and an increase of 27%, respectively, when compared with $30.8 million and $75.5 million in the prior-year periods. Revenues in 2005 were favourably impacted by a 3% increase in total prescription volume, a price increase and a reduction in wholesaler inventory levels in 2004. In the fourth quarter of 2005, Zovirax Ointment and Zovirax Cream held a combined 68.2% share of the U.S. topical herpes market, an increase of 3.4 percentage points in market share versus fourth- quarter 2004 levels. Fourth-quarter 2005 revenues for Biovail Pharmaceuticals Canada (BPC) were $27.4 million, compared with $29.7 million in the prior year period. BPC revenues for the full year of 2005 were $99.5 million, compared with $101.9 million in the full year of 2004. The key performance driver for BPC was the Tiazac(R) line (including Tiazac(R) XC), where total prescription volume increased 14% in the fourth quarter and 15% in the full year of 2005, relative to the corresponding periods in 2004. Launched in January 2005, Tiazac(R) XC continues to perform ahead of expectations. Also contributing in the fourth quarter of 2005 was Glumetza(TM), a once-daily formulation of metformin that was launched to Canadian physicians by the BPC sales force in November 2005. Offsetting these growth drivers was a 38% decline in total prescription volume for Wellbutrin(R) SR in the fourth quarter of 2005 versus the comparable 2004 period, as a result of the availability of a generic formulation. Looking forward, Biovail received approval from Canada's Therapeutic Products Directorate (TPD) in January 2006 for Wellbutrin XL(R) and initial trade shipments commenced in March 2006. Biovail anticipates the formal launch of this product to Canadian physicians in April 2006. In the third quarter of 2005, the litigation between RhoxalPharma Inc. and Biovail concerning a generic formulation of Tiazac(R) concluded with a decision in RhoxalPharma's favour. It is Biovail's understanding that the generic product became commercially available in February 2006. This event has not impacted Biovail's ongoing conversion strategy for Tiazac(R) XC to date, and has been considered in the Company's 2006 guidance. In the U.S., Cardizem(R) LA generated revenues of $13.4 million in the fourth quarter of 2005, compared with $10.3 million for the corresponding period in 2004. In the full year of 2005, Cardizem(R) LA generated revenues of $59.7 million, compared with $53.6 million in the full year of 2004. Biovail now manufactures and supplies Cardizem(R) LA to Kos at contractually determined prices that are in excess of 30% of their net selling prices. The amortization of deferred revenues associated with the May 2005 Kos transaction positively impacted Cardizem(R) LA revenues by $3.8 million and $10.0 million in the fourth quarter and full year of 2005, respectively. The Teveten line, divested in May 2005 to Kos, generated revenues of $6.4 million in the full year of 2005, compared with $17.6 million in the prior-year period. Biovail no longer has an economic interest in Teveten. Biovail's legacy products generated revenues of $35.0 million for the fourth quarter of 2005, compared with $35.7 million in the fourth quarter of 2004, representing a decrease of 2%. In the full year of 2005, legacy products generated revenues of $133.4 million, compared with $121.6 million in the full year of 2004, an increase of 10%. This performance is largely attributable to price increases in 2005 and a reduction of wholesaler inventory levels in 2004. Partially offsetting factors include the expected year-over-year declines in total prescription volumes for these mature products, and the termination of the sub- licensing agreement for Cedax in August 2004. In November 2005, Biovail announced its intention to pursue a spin-off of substantially all of the Company's off-patent branded products to its shareholders on a pro rata basis, either as a dividend in kind or a return of capital. The spin-off transaction is subject to a number of conditions including, but not limited to, the preparation, review and approval of an offering document containing financial statements and other related disclosures related to the performance of these products; satisfactory third- party consents; and regulatory and shareholder approval, depending on the form of the distribution. Product revenue for Biovail's portfolio of generic products (distributed by a subsidiary of Teva Pharmaceutical Industries Ltd.) was $33.7 million in the fourth quarter of 2005, compared with $43.1 million in the fourth quarter of 2004, a 22% decrease that is largely attributable to weaker sales of generic Cardizem CD and Adalat CC. Full-year 2005 revenues were $135.2 million, compared with $149.7 million in the prior-year period, a decrease of 10%. Total prescription volume for these products increased 7% in the fourth quarter and 1% in the full year of 2005. Research-and-development revenue decreased 5% in the fourth quarter of 2005 to $6.7 million, and increased 45% to $27.9 million for the full year of 2005, compared with the corresponding periods of 2004. The full-year increase in 2005 reflects a higher level of clinical research and laboratory testing services provided to external customers by Biovail's Contract Research Division. Royalty and other revenue was $6.1 million in the fourth quarter of 2005 and $23.3 million in the full year of 2005, compared with $3.7 million and $22.8 million in the corresponding periods in 2004. The increase reflects higher royalty income from our economic interest in Tricor and Cardizem(R) CD, partially offset by a decrease in royalties from branded Tiazac(R) sales. Cost of goods sold for the fourth quarter of 2005 was $53.6 million, compared with $63.9 million in the fourth quarter of 2004. Gross margins based on product sales were 80.5% and 76.6% in the fourth quarter and full year of 2005 compared with 75.9% and 73.5% in the fourth quarter and full year of 2004. Excluding the $10.6 million in inventory charges incurred in the second quarter of 2005 (related to Cardizem(R) CD and inventories of Teveten and Cardizem(R) LA not purchased by Kos), gross margins were 77.8% in the full year of 2005. Research-and-development expenditures were $26.3 million for the fourth quarter of 2005 and $88.4 million for the full year of 2005, compared with $18.5 million and $68.4 million for the corresponding periods in 2004. These increases reflect activity within Biovail's product-development pipeline, including ongoing development efforts for a novel once-daily formulation of carvedilol, a combination product incorporating tramadol and a long-acting, non-steroidal anti-inflammatory drug (NSAID), combination products incorporating bupropion with other anti-depressant agents, and Biovail's formulation of a bupropion salt. Based on the availability of new data, this formulation is being further optimized, and a New Drug Application (NDA) filing is now anticipated in mid-2006. With respect to Wellbutrin XL(R), GSK recently submitted applications for regulatory approval in several European countries. Selling, general and administrative (SG&A) expenses for the fourth quarter and full year of 2005 were $53.1 million and $227.4 million, respectively, compared with $72.0 million in the fourth quarter of 2004, and $253.5 million in the full year of 2004. The decreases reflect Biovail's restructured approach to commercializing products in the U.S., and an associated reduction in headcount in the Company's U.S. commercial operations group. Amortization expense in the fourth quarter of 2005 was $15.4 million, compared with $15.7 million in the fourth quarter of 2004, a modest decrease that reflects the divestiture of the Teveten products in May 2005. In the full year of 2005, amortization expense was $62.3 million, compared with $64.7 million, a decrease that also reflects the final amortization of Biovail's interest in generic omeprazole in the first quarter of 2004. Specific Items Affecting Operations In the fourth quarter of 2005, Biovail recorded a $2.7-million charge related to the write down of the Company's investment in Reliant Pharmaceuticals, a $0.4-million equity loss in the Company's investment in the Western Life Sciences Fund, and a $0.5-million adjustment to the write-down of the Company's Nutravail assets. In the full year of 2005, Biovail incurred a $19.8-million restructuring charge, primarily related to severance costs associated with the May 2005 realignment of the Company's U.S. commercial operations. The decision to divest the Company's Nutravail division resulted in a $5.6-million non-cash write-down of the carrying value of those assets, which is recorded in the loss from discontinued operations. In addition, the disposal of the Teveten line resulted in a $25.8 million write-down of the carrying value of these product rights to reflect their fair value at the date of disposition. Biovail also wrote off a $0.7 million investment in convertible debentures of Procyon Biopharma Inc. following the termination of the Fibrostat licensing agreement. Additionally, $4.9 million of Cardizem(R) LA and Teveten inventory not purchased by Kos was written-off to cost of goods sold in 2005. Further, Biovail incurred a $1.2-million equity loss in 2005 related to the Company's investment in the Western Life Sciences Fund. In the fourth quarter of 2004, Biovail recorded a $4.4-million charge related to the write off of the remaining value of Rondec, a $37.8-million charge relating to the write-down of the carrying value of the Company's investment in Ethypharm, and a $4.1-million loss on an investment in Western Life Sciences. In the full year of 2004, Biovail also incurred an $8.6-million acquired R&D charge related to the acquisition of the remaining interest in BNC-PHARMAPASS, and a $1.5-million gain related to the sale of the Cedax product rights. Balance Sheet & Cash Flow At the end of December 2005, Biovail's cash balances were $445.3 million, with no outstanding borrowings under its revolving term credit facility. The Company's debt-to-equity ratio was 0.4 at the end of the fourth quarter of 2005, compared with 0.5 at December 31, 2004. Cash flows from continuing operations were $223.4 million in the fourth quarter of 2005 and $501.9 million in full year of 2005, representing growth of 99% and 80% compared with $112.1 million and $279.6 million in the corresponding periods of 2004. Net capital expenditures amounted to $13.7 million in the fourth quarter of 2005 and $37.8 million in the full year of 2005, compared with $7.8 million in the fourth quarter of 2004 and $28.0 million in the full year of 2004. The increases reflect the ongoing expansion of the Company's Steinbach manufacturing facility, which Biovail expects to complete in 2006. Biovail Corporation -- http://www.biovail.com/-- is a specialty pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture and commercialization of pharmaceutical products utilizing advanced drug-delivery technologies. * * * As reported in the Troubled Company Reporter on Aug. 29, 2005, Standard & Poor's Ratings Services revised its outlook on Mississauga, Ontario-based Biovail Corp. to stable from negative and affirmed its 'BB+' long-term corporate credit rating on Biovail. BORLAND SOFTWARE: Late 10-K Filing Prompts Nasdag Delisting Notice ------------------------------------------------------------------ Borland Software Corporation (NASDAQ:BORL) received a notice from the staff of The Nasdaq Stock Market stating that Borland is not in compliance with Marketplace Rule 4310(c)(14) because it has not timely filed its Annual Report on Form 10-K for the year ended Dec. 31, 2005. The notice is automatically generated by Nasdaq and indicated that due to such noncompliance, Borland's common stock will be subject to delisting. Borland intends to request a hearing before a Nasdaq Listing Qualifications Panel to appeal the Nasdaq staff's determination. The hearing request will automatically stay the delisting of Borland's common stock pending the Panel's decision. There can be no assurance, however, that the Panel will grant Borland's request or that Borland's common stock will not be delisted. Borland and its audit committee are working diligently to finalize and file the 2005 Form 10-K as promptly as possible. About Borland Based in Cupertino, California, Borland Software Corporation -- http://www.borland.com/-- is the global leader in platform independent solutions for Software Delivery Optimization. Founded in 1983, the Company provides the software and services that align the people, process, and technology required to maximize the business value of software. BURLINGTON COAT: Moody's Junks Proposed Unsecured Notes' Rating --------------------------------------------------------------- Moody's Investors Service changed Burlington Coat Factory Warehouse Inc.'s rating on its proposed senior unsecured notes to Caa1 from B3 and affirmed the corporate family, senior secured term loan, and speculative grade liquidity ratings following the company's announcement that it had revised the capital structure that will finance the pending acquisition of the company by affiliates of Bain Capital Partners. The downgrade reflects the $125 million increase in the senior secured term loan that is structurally ahead of the senior unsecured notes. In addition, the revised capital structure eliminates the proposed $200 million of senior subordinated notes resulting in the senior unsecured notes becoming the most junior level of debt in the capital structure. The amount of senior unsecured notes being offered has been increased by $75 million to $375 million from $300 million. The corporate family and speculative grade liquidity ratings are being affirmed given the company's business and competitive position remain unchanged as well as the immaterial impact of the new capital structure on liquidity and credit metrics. The rating outlook is stable. This rating is changed: * $375 million of senior unsecured guaranteed notes to Caa1 from B3. These ratings are affirmed: * Corporate family rating at B2, * $900 million senior secured term loan at B2, * Speculative grade liquidity rating at SGL-2. This rating is withdrawn: * $200 million senior subordinated notes at Caa1. The key drivers of the corporate family rating and stable outlook are: 1) the weak financial metrics of Burlington Coat Factory pro- forma for the transaction; 2) the company's competitive position in the industry; 3) financial policies which favor shareholders; 4) the high business risk of the specialty retail industry; 5) its well recognized brand name; and 6) its solid ability to offer off-price apparel. A positive outlook could be assigned should operating performance improve causing Debt/EBITDA to be sustained below 6.0x and FCF/Debt to be sustained above 5.0%. Negative rating pressure would develop should Debt/EBITDA rise to 6.75x or should the company's liquidity deteriorate. The senior unsecured notes are notched down by two as a result of the dominant amount of secured debt in the revised capital structure; an $800 million unrated asset based revolving credit facility and a $900 million senior secured term loan. In addition, the two notch differential reflects the senior unsecured notes position as the most junior debt in the capital structure. The proposed $900 million senior secured term loan is rated at the corporate family rating reflecting the enterprise value multiple needed to fully cover the term loan as well as the value of the assets securing the term loan facility, particularly the portfolio of owned real estate. Burlington Coat Factory Warehouse Inc., headquartered in Burlington, New Jersey, is a nationwide off price apparel retailer that operates approximately 367 stores in 42 states under the nameplates of Burlington Coat Factory, Cohoes, MJM, and Baby Depot. Revenues for the LTM period ended Nov. 26, 2005 were approximately $3.4 billion. CABLEVISION SYSTEMS: DBRS Confirms B(Low) Rating on Senior Notes ---------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of CSC Holdings, Inc., at BB (low), B (high), and B, and its parent, Cablevision Systems Corporation, at B (low). The trends are Stable. With this action, the ratings are removed from "Under Review with Developing Implications". Rating action: * CSC Holdings, Inc. -- Bank Debt Confirmed BB (low) * CSC Holdings, Inc. -- Senior Notes and Debentures Confirmed B (high) * CSC Holdings, Inc. -- Subordinated Notes, Debentures Confirmed B * Cablevision Systems Corporation Senior Notes Confirmed B (low) The confirmation of Cablevision's ratings is a result of the completion of its plans to pay a $3 billion special dividend payment to shareholders, which will be principally financed from proceeds that were drawn from its new $5.5 billion credit facility. This revised plan remains within DBRS's original expectations when DBRS had downgraded Cablevision's ratings based on the Company's expected leveraged dividend payment. DBRS's review began on Dec. 19, 2005, after the Company announced a bank covenant violation that immediately halted its dividend payment plans at that time. This violation was subsequently resolved but DBRS's review continued pending an outcome of the Company's renewed intentions to pay a special dividend. DBRS acknowledges that Cablevision's financing for its special dividend has led to a significant increase in leverage at the CSC Holdings level, which is mainly supported by the Company's cable operations. However, despite leverage being high with gross debt- to-EBITDA of over 6.0 times, Cablevision's ratings are supported by its strong cable franchise -- with roughly 3 million basic subscribers -- that leads the industry in many operating metrics including generating EBITDA margins near 40% and over $100 per month in average revenue per user. CALPINE CORP: NY Court Approves KPMG LLP as Tax & Risk Consultant ----------------------------------------------------------------- Calpine Corp. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court of the Southern District of the New York to employ KPMG LLP as their tax and risk advisory consultants and advisors, nunc pro tunc to Dec. 20, 2005. KPMG LLP is the United States-based member firm of KPMG International, a Swiss cooperative of member firms, each a separate legal entity, located worldwide. KPMG provides tax, audit and advisory services to multi-national clients in a variety of industries, including the energy and power generation industry. KPMG has provided prepetition tax consulting and advisory services to the Debtors since 2001, including tax provision assistance, international tax consulting, transfer pricing analysis and documentation and sales and use tax compliance and consulting. With these transactions, KPMG is familiar with the books, records, financial information and other data the Debtors maintain. Pursuant to a letter agreement, KPMG has agreed to provide, among other things, tax advisory, tax compliance and tax provision assistance services to the Debtors. KPMG has also agreed to provide risk advisory services to the Debtors pursuant to three separate letter agreements. Except for the Debtors' indemnification obligations, the Court rules that neither KPMG LLP nor the Debtors will be liable to the other party for any actions, damages, claims, liabilities, costs, expenses or losses in any way arising out of or relating to the services performed under the Engagement Letters for an aggregate amount in excess of the fees paid or owing to KPMG for services rendered by KPMG under the Engagement Letter. However, the limitation of liability will not apply to actions, damages, claims, liabilities, costs, expenses or losses that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the bad-faith, self-dealing, breach of fiduciary duty, gross negligence or willful misconduct of KPMG. As tax consultants and advisors, KPMG is expected to provide these services: a) General tax consulting and advisory services, including: (1) review of and assistance in the preparation and filing of any tax returns; (2) advice and assistance to the Debtors regarding tax planning issues, including assistance in estimating net operating loss carry forwards, international taxes, and state and local taxes; (3) assistance regarding transaction taxes, state and local sales and use taxes; (4) assistance regarding tax matters related to the Debtors' pension plans; (5) assistance regarding real and personal property tax matters, including review of real and personal property tax records, negotiation of values with appraisal authorities, preparation and presentation of appeals to local taxing jurisdictions and assistance in litigation of property tax appeals; (6) assistance regarding any existing or future Internal Revenue Service, state and local tax examinations; and (7) advice and assistance on the tax consequences of proposed plans of reorganization, including, assistance in the preparation of IRS ruling requests regarding the future tax consequences of alternative reorganization structures. b) Assistance regarding tax provision services, including: (1) gathering the necessary financial information and compiling and reviewing tax provision schedules; (2) the identification and computation of temporary and permanent differences; and (3) reviewing changes in the consolidated current and deferred liability tax accounts. c) Assisting with income tax compliance matters, including preparing federal and state corporate tax returns and supporting schedules for the Debtors' 2005 tax year. d) Assisting with sales/use and local tax return compliance matters. e) Assisting with sales and use tax refund analysis for the Debtors' Texas facilities, including reviewing prior claims and preparing these for refund packages and assisting in the processing through the exhaustion of the administrative appeals process. The Debtors propose to pay KPMG as tax advisors in accordance with the firm's standard hourly rates, discounted at 15% for Washington National and 25% for all other professionals: Standard Discounted Professional Rate Rate ------------ -------- ---------- Washington National Tax Partner $808 $700 Washington National Tax Sr. Manager $725 $630 Partner $808 $630 Tax Managing Director $781 $610 Senior Manager $725 $560 Manager $530 $410 Senior Associates $362 $280 Associates $335 $260 With respect to KPMG's work relating to Sales and Use Tax Refund Analysis for the Debtors' Texas facilities, the Debtors will pay KPMG on a contingency basis, where KPMG will receive 25% of any benefits the Debtors receive. As risk advisors, KPMG is expected to assist in: (a) documenting the Company's internal control over financial reporting -- ICOFR -- including planning and scooping assistance, internal control framework gap analysis, gap analysis comparisons to control reference sources, and remediation assistance; (b) the design of controls based on the results of documentation and gap analysis; (c) performing tests of the design and operating effectiveness of the Company's ICOFR; and (d) evaluating the effectiveness of management's internal accounting and operational controls through the performance of specified internal audits on behalf of the Company's Audit Committee. The Debtors propose to pay KPMG as risk advisors at these hourly rates: Professional Rate ------------ ---- Partner $375 - $400 Director/Senior Manager $300 - $330 Manager $250 - $275 Senior Associate $185 - $200 Associate $175 - $190 Catherine A. Lewis, a partner at KPMG, assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. About Calpine Corp. 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) CALPINE CORP: Court Approves Deloitte Tax as Tax Service Providers ------------------------------------------------------------------ Calpine Corp. and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Deloitte Tax LLP as their tax service providers, nunc pro tunc Dec. 20, 2005. Deloitte Tax is expected to: (a) consult with the Debtors regarding federal and state income tax matters; (b) advise and assist the Debtors regarding U.S. and foreign tax matters on Calpine's International Operations; (c) assist the Debtors related to sales and use tax matters; (d) assist the Debtors relating to the ongoing audit by the Internal Revenue Service of the Debtors' tax returns for the periods ending Dec, 31, 2000 to 2004 and with certain other Federal and State audit, assessment, or tax examination matters; (e) assist the Debtors with property tax matters; (f) assist the Debtors with various international assignment services; and (g) advise and assist the Debtors with the entity rationalization and simplification project. Guy S. Johnson, partner at Deloitte Tax, discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partner, Principal or Director $448 to $755 Senior Manager $371 to $605 Manager $322 to $378 Tax Senior $224 to $294 Tax Staff $161 to $217 Paraprofessionals $105 to $140 The services related to the Domestic Tax Services, the International Tax Matters, and the IRS Audit and State and Local Audit Assistance will be billed on a time and materials basis using discounted hourly rates -- 70% of standard billing rates or a 30% discount -- plus reasonable expenses. The consulting tax services for the California sales and use tax audits are billed on a time and materials basis using discounted hourly rates -- 70% of standard billing rates -- plus reasonable expenses. The consulting tax services for all other states' sales and use tax audits are to be billed on a time and materials basis using discounted hourly rates -- 60% of standard billing rates -- plus reasonable expenses. The preparation and review of returns in connection with the Sales and Use Tax Services will be billed at $90 per return. Consulting tax services with regard to the Property Tax Matters will be billed on a time and materials basis using discounted hourly rates -- 60% of standard billing rates -- plus reasonable expenses. Compliance tax services related to the Property Tax Matters will also be billed on a time and materials basis using a rate of $200 per hour, plus reasonable expenses. In addition to other potential charges, each U.S. federal income tax return prepared will cost between $1,350 and $2,000. Each state and local income tax return will cost $550. These hourly rates will apply to additional services, including consulting services, related to the Expatriate Services rendered in the United States: Professional Hourly Rate ------------ ----------- Partner $500 Senior Manager $450 Manager $400 Senior $350 Consultant $300 With regard to services provided in connection with the project on Entity Rationalization and Simplification Matters, these tax services will be billed on a time and materials basis using discounted hourly rates -- 70% of standard billing rates for local professionals. For National professionals, tax services will be billed at 100% standard billing rate. Reasonable expenses associated with these services will also be billed as incurred. Expatriate Services Certain foreign member firms of Deloitte Touche Tohmatsu, a Swiss Verein of which Deloitte & Touche USA LLP, an affiliate of Deloitte Tax, is a member, may be needed in Mexico or Canada to: -- prepare home/host country tax returns for eligible expatriates; -- conduct meetings in home/host country with eligible expatriates, where reasonable, to discuss local tax issues; and -- when applicable, calculate estimated foreign tax payments. Fees incurred and expenses associated with expatriate services will be included in Deloitte Tax' fee applications. The Debtors anticipate the services to be performed by the DTT Member Firms and billed to the Debtors to reach $100,000. Mr. Johnson assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and as required by Section 327(a). Deloitte Tax holds no interest adverse to the Debtors or their estates for the matters for which Deloitte Tax is to be employed and has no connection to the Debtors, their creditors or their related parties. About Calpine Corp. 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) CALPINE CORP: Wants to Extend Lease Decision Period by 90 Days -------------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend by 90 days within which they may assume or reject unexpired leases of nonresidential real properties. The Debtors are currently parties to over 400 leases of nonresidential real property that have not been the subject of a notice of assumption or rejection under their Chapter 11 cases. The unexpired leases include: * oil and gas mineral leases, * geothermal mineral leases, * office leases, * ground leases for power generation facilities, * facility leases for power generation facilities, * oil and gas pipeline leases and * construction lay-down leases. The unexpired leases are critical to the operation of the Debtors' businesses and, in particular, the continued operation of their fleet of power generation facilities. Significantly, many of the Debtors' power generation facilities, from which the Debtors conduct a significant portion of their business operations, are either leased facilities or are located on premises that are subject to certain of the unexpired leases. Since Dec. 20, 2006, the petition date, the Debtors have been called to respond to several complex issues to stabilize their operations and ensure the continuing viability of their businesses. In addition, the Debtors have been expending substantial time and resources litigating several contested matters. These contested matters have taken up the Debtors' time and limited resources and have delayed the Debtors' and their management's ability to analyze and determine whether assumption or rejection is appropriate for each of their numerous nonresidential real property leases. Bennett L. Spiegel, Esq., at Kirkland & Ellis LLP, in New York, relates that notwithstanding the work at hand, the Debtors have begun to evaluate their nonresidential real property lease portfolio and have already rejected some burdensome nonresidential real property leases. However, the Debtors believe that an extension of 90 days is needed to complete their evaluation. At this stage of the Debtors' complex reorganization cases, Mr. Spiegel says a premature rejection of the Unexpired Leases may harm the Debtors' estates by resulting in the loss of Unexpired Leases that may be essential to the Debtors' business operations and reorganization. On the other hand, the premature assumption of any of the Unexpired Leases may harm the estates by requiring the Debtors to cure prepetition claims before a thorough evaluation is conducted. Mr. Spiegel notes that the three conditions in the case In re Wedtech Corp. under which an extension may be granted are met in the Debtors' cases: * The unexpired leases are important assets of the estate and cover a wide range of property interests, including the corporate headquarters, office space, mineral interests, and power generation facilities; * The reorganization cases are large and complex and involve over 270 separate Debtor entities, many of which are parties to the unexpired leases and all of which have been involved in numerous complex matters critical to their reorganization since the Petition Date; and * The Debtors have had insufficient time to fully appraise the value of each unexpired lease as they have focused on efforts to keep their fleet of power generation facilities operating. Mr. Spiegel assures the Court that the lessors under the unexpired leases will not be prejudiced by the extension because the Debtors have performed and will continue to perform in their undisputed post-Petition Date obligations under unexpired leases. Moreover, he says any lessor may request that the Court fix an earlier date by which the Debtors must assume or reject its lease in accordance with Section 365(d)(4) of the Bankruptcy Code. About Calpine Corp. 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) CHATTEM INC: Earns $11.5M of Net Income in First Fiscal Quarter --------------------------------------------------------------- Chattem, Inc. (NASDAQ: CHTT), disclosed its financial results for the first fiscal quarter ended February 28, 2006. Total revenues for the first quarter of fiscal 2006 were a record $84.0 million compared to total revenues of $71.5 million in the prior year quarter representing a 17% increase. Total revenues increased 23% over the prior year quarter excluding sales of pHisoderm, which was divested in 2005 from the first quarter of fiscal 2005. "We are extremely pleased with our 23% increase in year-over-year sales," commented Zan Guerry, the Company's Chairman and Chief Executive Officer. "This strong increase was driven by a positive initial sell-in of our new products, including Icy Hot(R) Pro- Therapy(TM) and Selsun(R) Salon(TM), and strong sales from existing products such as Gold Bond Ultimate(R) Healing Lotion and Dexatrim(R) Max(TM). We are excited about the potential of our new products and the positive momentum of our base business at retail. Importantly, during the first quarter, retail movement of our key brands, as measured by A.C. Nielsen and account level point of sale data for the 13 week period ending February 25, 2006, was stronger than net sales, registering an estimated 9% increase. This positive retail sales movement has translated into strengthened factory sales thus far in the second quarter. We will have clearer visibility into the performance of our new products when consumer take-away trends surface in mid 2006." Net income for the first quarter of fiscal 2006 was $14.8 million, up 70%, compared to net income of $8.7 million in the prior year quarter. Net income in the first quarter of fiscal 2006 included: -- a pre-tax gain of $8.6 million related to a recovery, net of legal expenses, in the Dexatrim litigation settlement; -- a $2.8 million pre-tax loss on early extinguishment of debt related to the redemption of the Company's floating rate senior notes; and -- $0.9 million of employee stock option expenses under FAS 123R after taxes. Net income in the first quarter of fiscal 2005 included a $2.8 million pre-tax charge relating to costs of the Dexatrim litigation settlement after taxes. As adjusted to exclude these items, net income in the first quarter of fiscal 2006 was $11.5 million, up 10%, compared to $10.5 million in the prior year quarter and earnings per share were $0.59, up 16%, compared to $0.51 in the prior year quarter. Key Financial Highlights -- gross profit margin for the first quarter of fiscal 2006 was 69.0%, compared to 71.7% in the prior year quarter. The decline was largely attributable to the launch of Icy Hot Pro-Therapy, which has lower gross margins than the Company's other products. -- advertising and promotion expense for the first quarter of fiscal 2006 increased to $27.2 million from $20.4 million in the prior year quarter, due primarily to increased spending to support the Company's new product launches. Advertising and promotion expense as a percentage of total revenues was 32.4% for the first quarter of fiscal 2006, as compared to 28.5% in the prior year quarter. -- selling, general and administrative expenses (SG&A) for the first quarter of fiscal 2006 decreased to $11.6 million from $11.9 million in the prior year quarter. The decrease was attributable to lower compensation expense in the current period reflecting restricted stock grants in the prior year quarter, offset in part by share-based payment expense under FAS 123R and higher freight costs in the current period. SG&A as a percentage of total revenues for the first quarter of fiscal 2006 decreased to 13.8%, as compared to 16.6% in the prior year quarter. -- the Company's effective tax rate for the first quarter of fiscal 2006 was 34%. -- the Company's interest expense decreased $0.7 million, or 18.6%, in the first quarter of fiscal 2006 as compared to the prior year quarter reflecting the impact of the previously announced refinancing transactions. -- in the first quarter of fiscal 2006, the Company repurchased 275,000 shares of its common stock at an average cost of $36.84 per share, or $10.1 million in the aggregate. A total of $19.9 million remained available as of February 28, 2006 under the Company's previously announced $30.0 million board authorized stock repurchase program. -- International revenues decreased 6.7% in the first quarter of fiscal 2006 to $5.6 million from $6.0 million in the prior year quarter, primarily due to the reduction of sales as a result of the divestiture of pHisoderm at the end of fiscal 2005 and the suspension of distribution in a single European market in mid 2005, partially offset by the successful introductions of Icy Hot in Canada and Mexico. 2006 Outlook The Company expects total revenues to be in the range of $315 million to $330 million for fiscal 2006, unchanged from previous guidance. The Company expects its growth in total revenues to be driven by the previously announced new product launches, which include Icy Hot Pro-Therapy, Selsun Salon, Dexatrim Max2 0(TM), BullFrog Mosquito Coast, Garlique CardioAssist, Capzasin(R) Back & Body Patch and Pamprin Max. Headquartered in Chattanooga, Tennessee, Chattem Inc. manufactures and markets a variety of branded consumer products, including over-the-counter healthcare products and toiletries and skin care products. The Company's products include Gold Bond medicated powder, Icy Hot topical analgesic, Dexatrim appetite suppressant, and Bullfrog sunblock. * * * As reported in the Troubled Company Reporter on Dec. 9, 2005, Standard & Poor's Ratings Services revised its outlook on Chattem to positive from stable. At the same time, Standard & Poor's affirmed its ratings on the Company, including its 'BB-' corporate credit rating. CHATTEM INC: Recovers $8.75 Mil. from Delaco's Settlement Trust --------------------------------------------------------------- Chattem Inc. received $8.75 million from a settlement trust established under The Delaco Company's bankruptcy plan. The U.S. Bankruptcy Court for the Southern District of New York confirmed Delaco's plan on February 17, 2006, and effectively released the Company from liability for all Dexatrim PPA products liability cases with injury dates prior to December 21, 1998. Delaco is successor by merger to Thompson Medical Company, Inc. and the company from which Chattem acquired the Dexatrim(R) brand in 1998. Chattem was named in various lawsuits for personal injury and wrongful death allegedly due to use of Dexatrim products. The settlement trust was created in February to resolve the lawsuits. Chattem's insurers and the product manufacturer funded a total of $70.9 million into a settlement trust. All lawsuits have been settled after plaintiffs were paid a total of $56.0 million. Headquartered in Chattanooga, Tennessee, Chattem Inc. manufactures and markets a variety of branded consumer products, including over-the-counter healthcare products and toiletries and skin care products. The Company's products include Gold Bond medicated powder, Icy Hot topical analgesic, Dexatrim appetite suppressant, and Bullfrog sunblock. * * * As reported in the Troubled Company Reporter on Dec. 9, 2005, Standard & Poor's Ratings Services revised its outlook on Chattem to positive from stable. At the same time, Standard & Poor's affirmed its ratings on the Company, including its 'BB-' corporate credit rating. CHELSEA INVESTMENTS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Chelsea Investments LLC dba Howard Johnson Inn 33790 Essendene Avenue Abbotsford, B.C. V2S 2H2 Canada Bankruptcy Case No.: 06-00737 Type of Business: The Debtor operates a hotel located in Spokane, Washington. Chapter 11 Petition Date: April 6, 2006 Court: Eastern District of Washington Debtor's Counsel: Steven Schneider, Esq. Murphy, Bantz & Bury, P.S. 818 West Riverside, Suite 631 Spokane, Washington 99201 Tel: (509) 838-4458 Fax: (509) 838-5466 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Howard Johnson International $212,000 1 Sylvan Way Parsippany, NJ 07054 Washington State Department of Revenue $182,664 P.O. Box 34052 Seattle, WA 98124 Washington State Department of Labor & $28,796 Industries P.O. Box 44835 Olympia, WA 98504 City of Spokane $9,979 Avista $9,472 XO Communications $4,490 RTI Fitness $2,500 United Communications System $2,499 Cintas Corp. $2,325 Culligan $2,137 Harmon Glass $2,150 Comcast $2,100 Travelers Discount Guide $1,785 Moore Wallace $1,723 Spokane Regional CVB $1,100 OTIS $754 TYCO/Simplex $320 Galloway Company $268 USA Today $258 Northwest Laundry Supply $253 CSC HOLDINGS: DBRS Confirms Ratings After $3BB Dividend Payment --------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of CSC Holdings, Inc., at BB (low), B (high), and B, and its parent, Cablevision Systems Corporation, at B (low). The trends are Stable. With this action, the ratings are removed from "Under Review with Developing Implications". Rating action: * CSC Holdings, Inc. -- Bank Debt Confirmed BB (low) * CSC Holdings, Inc. -- Senior Notes and Debentures Confirmed B (high) * CSC Holdings, Inc. -- Subordinated Notes, Debentures Confirmed B * Cablevision Systems Corporation Senior Notes Confirmed B (low) The confirmation of Cablevision's ratings is a result of the completion of its plans to pay a $3 billion special dividend payment to shareholders, which will be principally financed from proceeds that were drawn from its new $5.5 billion credit facility. This revised plan remains within DBRS's original expectations when DBRS had downgraded Cablevision's ratings based on the Company's expected leveraged dividend payment. DBRS's review began on Dec. 19, 2005, after the Company announced a bank covenant violation that immediately halted its dividend payment plans at that time. This violation was subsequently resolved but DBRS's review continued pending an outcome of the Company's renewed intentions to pay a special dividend. DBRS acknowledges that Cablevision's financing for its special dividend has led to a significant increase in leverage at the CSC Holdings level, which is mainly supported by the Company's cable operations. However, despite leverage being high with gross debt- to-EBITDA of over 6.0 times, Cablevision's ratings are supported by its strong cable franchise -- with roughly 3 million basic subscribers -- that leads the industry in many operating metrics including generating EBITDA margins near 40% and over $100 per month in average revenue per user. DANIEL DOHERTY: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Daniel G. Doherty, Sr. 63 Carver Road West Wareham, Massachusetts 02576 Bankruptcy Case No.: 06-10840 Chapter 11 Petition Date: April 4, 2006 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Stephen E. Shamban, Esq. Stephen E. Shamban Law Offices, P.C. P.O. Box 850973 222 Forbes Road, Suite 208 Braintree, Massachusetts 02185 Tel: (781) 849-1136 Fax: (781) 848-9055 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gilbert Couto Loan 9/3/2004 $50,000 25 Alexander Street Wareham, MA 02571 Funding Services Trust LLC Execution levied $42,693 c/o George Miller, Esq. & suspended on 1550 Falmouth Road Jan. 27, 2006 at Centerville, MA 02632 Barnstable Deeds Book 32130 Page 228 on various parcels. Town of Wareham Tax $15,840 Bank of America 2003 Ford Mustang $10,000 motor vehicle loan dated 2004 Value of security: $8,000 Chase Line of credit $7,289 American Express Revolving credit $6,600 G.A.F. Engineering Engineering services $6,000 2003 GEMB/Aquavantage Solar energy heater $5,088 June 2004 CitiFinancial Services Revolving credit $4,699 CitiFinancial Retail Revolving credit $4,447 Allied Waste Services Rubbish removal $4,368 2005 CitiBank - Retail Services Revolving credit $3,978 opened September 2003 Allied Waste Services Rubbish removal $3,700 2005 GEMB/Lowes Revolving credit $1,880 opened July 2002 Sears Revolving credit $529 St. Petersburg Medical Emergency room $50 Center 2003 Capital One Bank Revolving credit $20 DARLING INTERNATIONAL: Inks New $175 Million Credit Facility ------------------------------------------------------------ Darling International Inc. (Amex: DAR) entered into a new credit agreement with new lenders effective April 7, 2006. The refinancing replaces the prior credit agreement executed in April 2004. The new credit agreement provides for $175 million in financing facilities, including: * a $50 million term loan facility which will be amortized at $5 million a year over a six-year term and * a $125 million revolver facility for a five-year term which provides a $35 million letter of credit sub-facility. The refinancing provides Darling with increased liquidity and financial flexibility: * to complete its acquisition of the assets of National By-Products, which the Company expects to close in the second quarter, and * to retire the Company's senior subordinated notes. Additional benefits that Darling expects to realize from the refinancing include: * lower interest rates, * an extended term, fewer restrictions on investments, and * improved flexibility for paying dividends or repurchasing stock, all of which are subject to the terms of the new facility. Headquartered in Irving, Texas, Darling International Inc. -- http://www.darlingii.com/-- is the largest publicly traded, food processing by-products recycling company in the United States. The Company recycles used restaurant cooking oil and by-products from the beef, pork and poultry processing industries into useable products such as tallow, feed-grade fats and meat and bone meal. These products are primarily sold to animal feed and oleo-chemical manufacturers around the world. In addition, the Company provides grease trap collection services and sells equipment to restaurants. Moody's Investors Service assigned a B2 rating to Darling International's Subordinated Debt and a Ba3 rating to its bank facilities in Aug. 1995. DELOCO COMPANY: Plan Settlement Trust Makes Distribution -------------------------------------------------------- Chattem Inc. disclosed in a regulatory filing that it received $8.75 million from a settlement trust established under The Delaco Company's bankruptcy plan. The U.S. Bankruptcy Court for the Southern District of New York confirmed Delaco's plan on February 17, 2006, and effectively released Delaco from liability for all Dexatrim PPA products liability cases with injury dates prior to December 21, 1998. Delaco is successor by merger to Thompson Medical Company, Inc. and the company from which Chattem acquired the Dexatrim(R) brand in 1998. Chattem was named in various lawsuits for personal injury and wrongful death allegedly due to use of Dexatrim products. The settlement trust was created in February to resolve the lawsuits. Chattem's insurers and the product manufacturer funded a total of $70.9 million into a settlement trust. All lawsuits have been settled after plaintiffs were paid a total of $56.0 million. The Delaco Company, a leading over-the-counter pharmaceutical drug company whose major products have included SlimFast and Dexatrim, filed for chapter 11 protection on February 12, 2004 (Bankr. S.D.N.Y. Case No. 04-10899) estimating more than $100 million in assets and unknown debts arising from personal injury and wrongful death suits. Laura Engelhardt, Esq., at Skadden, Arps, Slate, Meagher & Flom, represents the Debtor. DELPHI CORP: Court Okays $7.5 Million Shanghai Delco JV Sale ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corporation and its debtor-affiliates to sell their interest in Shanghai Delco Electronics & Instrumentation Company Ltd. to Shanghai Agriculture, Industry & Commerce Group Changjiang General Corporation and its senior manager, Yang Yi. Delphi Electronics (Holding) LLC and Changjiang General Corporation established Shanghai Delco in 1995. Shanghai Delco is a company incorporated in the People's Republic of China. Shanghai Delco produces instrument clusters for automobiles. Delphi and Changjiang each owns 50% of Shanghai Delco's equity. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, related that Delphi Electronics has de-emphasized its focus on the instrument clusters product line as part of its ongoing product portfolio process. Thus, the sale will allow Delphi Electronics to exit the joint venture at a time when it is limiting its investment in cluster technology and competing global automotive component suppliers have entered the Asian region, Mr. Butler explains. Marketing Process Over the course of three years, Delphi Electronics approached nearly 20 potential buyers for its equity interest in Shanghai Delco. Although several prospects expressed early interest to the point of making non-binding offers, all subsequently withdrew after further discussions or due diligence. Delphi Electronics also worked with three Asian-based investment bankers to help identify other potential buyers. However, the regional investment bankers declined due to their perceptions about the feasibility and profitability and difficulty of finding a buyer. In 2005, Delphi Electronics began discussing in earnest the sale of its equity interest to its joint venture partner and its senior manager. Over the course of several months, Delphi Electronics negotiated the economic and legal terms of the Transaction with the Purchasers. After careful evaluation, Delphi Electronics decided that the sale to the Purchasers was the best alternative. The Debtors finalized with the Purchasers the terms of the Transaction reflected by a Transfer Agreement. Sale Terms The Purchasers agree to pay $7,500,000 to Delphi Electronics for its equity interest in Shanghai Delco: -- $3,750,000 will be payable on closing; -- $3,000,000 will be payable within 12 months from closing; and -- $750,000 will be made within 24 months from closing. Changjiang will acquire 45% of the equity interest in SDE from Delphi Electronics for $6,750,000. Mr. Yang Yi will acquire 5% of the equity interest for $750,000. According to Mr. Butler, the parties anticipate that the Transaction will be completed by June 2006. About Delphi Corp Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Court Okays KPMG LLP as Tax Advisor ------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corporation and its debtor-affiliates to employ KPMG LLP as one of their tax and transaction services advisors, nunc pro tunc to Oct. 8, 2005. As reported in the Troubled Company Reporter on March 8, 2006, KPMG will perform tax advisory and consulting services for the Debtors under these engagement letters: (a) Engagement Letter for international tax process improvement project assistance dated May 24, 2005, as revised on Aug. 31, 2005, and Sept. 12, 2005; (b) Engagement Letter for certain tax consulting services dated March 1, 2005, as amended by letter dated May 23, 2005; (c) Engagement Letter for international executive services dated Oct. 5, 2004, as amended on Nov. 3, 2004; and (d) Engagement Letter for acquisition and due diligence services dated Jan. 23, 2006. KPMG's tasks will fall under three categories: (1) Tax Advisory and Consulting Services -- review of and assistance in the preparation and filing of any tax returns; -- advice and assistance to the Debtors regarding tax planning issues, including but not limited to assistance in estimating net operating loss carryforwards, international taxes, and state and local taxes; -- assistance regarding transaction taxes and state and local sales and use taxes; -- assistance regarding tax matters related to the Debtors' pension plans; -- assistance regarding real and personal property tax matters, including but not limited to review of real and personal property tax matters, negotiation of values with appraisal authorities, preparation and presentation of appeals to local taxing jurisdictions, and assistance in litigation of property tax appeals; -- assistance regarding any existing or future Internal Revenue Service, state, or local tax examinations; -- advice and assistance on the tax consequences of proposed plans of reorganization, including but not limited to assistance in the preparation of IRS ruling requests regarding the future tax consequences of alternative reorganization structures; -- assistance to the Debtors in modifying the Debtors' tools and processes for collecting data from the Debtors' foreign operations in support of the computation of an income tax provision; -- serve as the Debtors' VAT representative in certain foreign jurisdictions; and -- other consulting, advice, research, planning, or analysis regarding tax issues as may be requested from time to time. (2) International Executive Services -- collect tax data; -- calculate annual hypothetical tax withholdings; -- prepare required home and host country individual income tax returns during, and one year after, assignment; -- prepare requests for extension of time to file tax returns where required; -- prepare U.S. estimated tax vouchers, if required; -- prepare year-end withholding calculations; -- reconcile tax advance accounts; -- prepare tax equalization calculations; -- conduct pre-departure and post-arrival tax consultations, as requested; -- determine and arrange for timely payment of local taxes in the host countries, where applicable; -- conduct repatriation tax consultation sessions for expatriates; -- handle routine correspondence with the IRS and foreign tax authorities, including review of tax assessments; and -- additional services as requested by the Debtors or their counsel regarding their expatriate employees. (3) Transaction Advisory & Other Services -- provide sell-side due diligence services associated with the potential sale of certain businesses or assets of the Debtors; -- provide buy-side due diligence services associated with the potential acquisition of certain businesses or assets by the Debtors; -- provide accounting advice and assistance in conjunction with the preparation of financial information for the Debtors' business operations, as specified by the Debtors; and -- other functions as requested by the Debtors or their counsel to assist their businesses and reorganization. Compensation The Debtors will pay KPMG at these hourly rates: * For Tax Advisory and Consulting Services Partners $350 - $425 Senior Managers $325 - $375 Managers $300 - $325 Senior Staff $225 Staff $175 * For International Executive Services Expatriates assigned to the U.S. $1,750 Expatriates assigned from the U.S. $2,700 Expatriates assigned to/from non-U.S. countries $2,100 Employees assigned to the Mexican border $750 Trainees/J Visa Holders $375 Additional Hourly Rates, as applicable Partners $760 Senior Managers $520 Managers $405 Senior Staff $320 Staff $260 KPMG has agreed to charge the Debtors a maximum of 70% of the additional hourly rates. * For Transactions Services Partners $340 - $925 Directors $270 - $630 Managers $220 - $575 About Delphi Corp Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Has Until June 7 to Remove Civil Actions ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York further extended Delphi Corporation and its debtor-affiliates' period within which they may remove actions to the later to occur of: a) June 7, 2007; or b) 30 days after entry of an order terminating the automatic stay with respect to any particular action sought to be removed. The Debtors are parties to over 200 judicial and administrative proceedings pending in various courts or administrative agencies throughout the United States. The Actions involve a wide variety of claims. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, asserts that because of the number of Actions involved and the wide variety of claims, the Debtors need additional time to determine which of the Actions should be removed. The proposed deadline is consistent with the Debtors' goals of emerging from Chapter 11 protection by early to mid-2007. According to Mr. Butler, the extension will afford the Debtors a sufficient opportunity to make fully informed decisions concerning the possible removal of the Actions, protecting the Debtors' valuable right to adjudicate lawsuits economically. About Delphi Corp Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) DESIGN WITHIN: Faces Nasdaq Delisting Due to Late 10-K Filing ------------------------------------------------------------- Design Within Reach, Inc. (Nasdaq:DWRI) received notice from The Nasdaq Stock Market, Inc. Listing Qualifications Staff that the Company's securities are subject to potential delisting as of April 12, 2006 due to the Company's failure to file its annual report on Form 10-K for the fiscal year ended Dec. 31, 2005 on a timely basis. On March 14, 2006, and March 30, 2006 the Company previously announced a delay in the filing of its 2005 Form 10-K due to continued delays in completing year-end procedures as a result of difficulties encountered related to the Company's IT system conversion and the increased reporting requirements under Section 404 of the Sarbanes-Oxley Act. The Company's independent public accounting firm has also not yet completed its audit. The Company expects to file its 2005 Form 10-K by April 14, 2006. As the Company disclosed in its Current Report on Form 8-K filed on March 31, 2006, the Company is not in compliance with Nasdaq Marketplace Rule 4310(c)(14), which requires the timely filing with Nasdaq of all reports and other documents filed or required to be filed with the SEC. If necessary, the Company plans to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff determination and request continued listing on Nasdaq until the Company files its 2005 Form 10-K. In its notification letter, the Nasdaq staff informed the Company that this request will result in a postponement of the delisting pending the Panel's decision. However, the Company can provide no assurance that the Panel will grant its request for continued listing. About Design Within Reach, Inc. Headquartered in San Francisco, California, Design Within Reach, Inc. -- http://www.dwr.com/-- is an integrated multi-channel provider of distinctive modern design furnishings and accessories. Founded in 1998, the Company markets and sells its products to both residential and commercial customers nationwide through the DWR catalog, studios, website and direct sales force, and a single common "in stock and ready to ship" inventory. DIGITAL LIGHTWAVE: Borrows Additional $300,000 from Optel Capital ----------------------------------------------------------------- Digital Lightwave, Inc., borrowed $300,000 from Optel Capital, LLC, on March 31, 2006, to fund its working capital requirements. Optel is controlled by Digital Lightwave's largest stockholder and current chairman of the board of directors, Dr. Bryan J. Zwan. The loan bears interest at 10.0% per annum, and is secured by a security interest in substantially all of the Company's assets. Optel can demand payment after May 31, 2006. As of March 31, 2006, the Company owed Optel around $49.9 million in principal plus approximately $7.2 million of accrued interest, all of which is secured by a first priority security interest in substantially all of the Company's assets and accrues 10% annual interest. The Company continues to have insufficient short-term resources for the payment of its current liabilities. As of March 31, 2006, the Company has been unable to secure any financing agreement or to restructure its financial obligations with Optel. The company has warned many times that if it is not able to obtain financing, it expects that it will not have sufficient cash to fund its working capital and capital expenditure requirements for the near term and will not have the resources required for the payment of its current liabilities when they become due. The Company's ability to meet cash requirements and maintain sufficient liquidity over the next 12 months is dependent on the Company's ability to obtain additional financing from funding sources, which may include, but may not be limited to Optel. Optel currently is, and continues to be, the principal source of financing for the Company. The Company has not identified any funding source other than Optel that would be prepared to provide current or future financing to the Company. The Company is continuing its discussions with Optel to restructure its debt by extending the maturity date, and to arrange for additional short-term working capital. If the Company does not reach an agreement to restructure the debt, and obtain additional financing from Optel, the Company will be unable to meet its obligations to Optel and other creditors, and in an attempt to collect payment, creditors including Optel, may seek legal remedies. Based in Clearwater, Florida, Digital Lightwave, Inc., provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. The Company designs, develops and markets a portfolio of portable and network-based products for installing, maintaining and monitoring fiber optic circuits and networks. Network operators and telecommunications service providers use fiber optics to provide increased network bandwidth to transmit voice and other non-voice traffic such as internet, data and multimedia video transmissions. The Company provides telecommunications service providers and equipment manufacturers with product capabilities to cost-effectively deploy and manage fiber optic networks. The Company's product lines include: Network Information Computers, Network Access Agents, Optical Test Systems, and Optical Wavelength Managers. The Company's wholly owned subsidiaries are Digital Lightwave (UK) Limited, Digital Lightwave Asia Pacific Pty, Ltd., and Digital Lightwave Latino Americana Ltda. At December 31, 2005, Digital Lightwave's equity deficit widened to $49,190,000 from a $29,146,000 deficit at Dec. 31, 2004. DIVERSIFIED CORPORATE: Restructures Greenfield Credit Facility -------------------------------------------------------------- Diversified Corporate Resources, Inc. (OTC Bulletin Board: HIRD), entered into a revised line of credit facility with Greenfield Commercial Credit. The transaction allows the Company to move away from the higher cost of factoring receivables. The debt moved to Greenfield from the Company's previous factor will have an effective borrowing cost of nearly 47% less than under the previous factoring arrangement. Under this new arrangement with Greenfield, the maturity date of the line of credit has been extended until March of next year. Net direct placement sales at DCRI have increased significantly since December. The new line of credit will give the Company more flexibility and the ability to expand this line of business at a more aggressive pace. "This is an important event for DCRI as we continue to take advantage of the growth in the market for providing highly specialized personnel for our clients. This lower cost of borrowing, coupled with the new improving staffing industry marketplace, our previously announced subordination and installment agreements with the IRS, the restructuring we have implemented, and new initiatives underway will allow the company to take advantage of the many opportunities for expansion currently being offered and explored by our executive team," said J. Michael Moore, Chief Executive Officer and Chairman of the Board for Diversified Corporate Resources, Inc. Diversified Corporate Resources, Inc., is a national employment services and consulting firm, servicing Fortune 500 and larger regional companies with permanent recruiting and staff augmentation in the fields of Engineering, Information Technology, Healthcare, BioMed and Finance and Accounting. The Company currently operates a nationwide network of eight regional offices. At Sept. 30, 2005, Diversified Corporate's balance sheet showed a $4,456,000 stockholders' deficit, compared to a $1,899,000 deficit at Dec. 31, 2004. The Company informed the U.S. Securities and Exchange Commission on April 3, 2006, that it experienced delays in the preparation of its financial statements and related disclosure, and, therefore, its auditors have experienced delays in the conduct of their audit of its financial statements. As a result, the Company is unable, without unreasonable effort or expense, to complete and file its Annual Report on Form 10-K for the year ended December 31, 2005, by March 31, 2006, the prescribed deadline for filing. J. Michael Moore, the Company's Chairman of the Board and Chief Executive Officer, disclosed that the Company expects to post a $4.95 million net loss for 2005. DS WATERS: S&P Affirms CCC+ Corp. Credit Rating & Positive Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its '3' recovery rating to DS Waters Enterprises' $310 million senior secured credit facility, indicating an expected meaningful recovery of principal (50%-80%) in the event of a payment default. Standard & Poor's also affirmed its existing ratings on the Atlanta, Georgia-based bottled water producer and distributor, including its 'CCC+' corporate credit rating. The outlook is positive. Standard & Poor's estimates that DS Waters had about $229 million of total debt outstanding at April 7, 2006. The bank facility consists of: * a $92 million revolving credit facility due 2008; and * a $218 million term loan due 2009. DYLEX LTD: Trustee Issues Unsecured Creditors Interim Dividend -------------------------------------------------------------- RSM Richter Inc., the Trustee in Bankruptcy of Dylex Limited, pursuant to an appointment order from the Ontario Superior Court of Justice dated Sept. 28, 2001, will be issuing a further distribution to the unsecured creditors. The distribution will be $0.47 on each $1.00 of allowed claims, bringing the distributions to date to 65%. The distribution is expected to be made in May 2006. A final distribution is expected to be made towards the end of the year. The final distribution is estimated to bring the total return to the unsecured creditors to approximately 67 cents-on- the-dollar. About RSM Richter Headquartered in Calgary, Alberta, RSM Richter Inc. -- http://www.rsmrichter.com/-- is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms. RSM Richter is one of the largest independent accounting, business advisory and consulting firms in Canada. Its ability to help owner-managed organizations anticipate and meet complex challenges is why it is still the firm that means business for entrepreneurs. About Dylex Ltd. Headquartered in Toronto, Ontario, Dylex Limited operates over 350 stores across Canada. Their retail divisions included BiWay, a convenient general merchandise discount chain, and the well-known specialty women's apparel banner-Fairweather. Internal business restructuring included the relocation to new premises for the Fairweather administrative offices. This allowed for an opportunity to introduce an environment supportive of teamwork and collaboration. It was also timely for a new image, a 'cool' working environment, reflective of their industry sector. Contact: Robert Harlang Telephone (416) 932-6225 Gus Tertigas Telephone (416) 932-6247 ECUITY INC: Equity Deficit Tops $9 Million at December 31 --------------------------------------------------------- Ecuity, Inc., delivered its financial statements for the second quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 24, 2006. The company reported an $837,944 net loss on $596,001 revenues for the three months ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $1,962,085 in total assets and $10,967,461 in total liabilities, resulting in a $9,005,376 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $536,820 in total current assets available to pay $9,304,967 in total current liabilities coming due within the next 12 months. Full-text copies of Ecuity, Inc.'s financial statements for the second quarter ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7c2 Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 9, 2005, De Leon & Company, PA, expressed substantial doubt on Ecuity, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the fiscal years ended June 30, 2005, and 2004. The auditing firm pointed to the company's current year losses from operations, net capital deficiency, and cumulative deficit at June 30, 2005. Ecuity, Inc., is a facilities-based telecommunication carrier providing Voice over Internet Protocol service offerings as well as legacy telecommunication services. Ecuity currently provides VoIP services over FTTP including fiber to residences and businesses, VoIP over WiFi, Business VoIP Services including IP- PBX and IP-Centrix solutions, "SmartCall" VoIP services utilizing a downloadable soft-client on a customer's PC or other Windows compatible computing device, and conference calling. At Dec. 31, 2005, the company's stockholders' equity deficit swelled to $9,005,376 from a $7,352,530 equity deficit at June 30, 2005. ENGINEERING TECTONICS: Case Summary & 15 Unsecured Creditors ------------------------------------------------------------ Debtor: Engineering Tectonics, P.A. 1720 Vargrave Street Winston-Salem, North Carolina 27107 Bankruptcy Case No.: 06-50425 Type of Business: The Debtor provides geotechnical engineering, environmental site assessment, construction, drilling, and mining services. See http://www.engineeringtectonics.com/ Chapter 11 Petition Date: April 5, 2006 Court: Middle District of North Carolina (Winston-Salem) Judge: Thomas W. Waldrep, Jr. Debtor's Counsel: R. Bradford Leggett, Esq. Allman Spry Leggett & Crumpler, P.A. Suite 700, 380 Knollwood Street P.O. Box 5129 Winston-Salem, North Carolina 27113 Tel: (336) 722-2300 Fax: (336) 722-8720 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stafford Consultants, Inc. Alleged claim for $2,053,368 c/o David V. Moore indemnity Moore & Weber, PLLC P.O. Box 945 Charleston, WV 25323 Lexus Financial Services 2004 Lexus $47,739 P.O. Box 371339 Value of security: Pittsburgh, PA 15250 $40,000 Chrysler Financial Services 2005 Dodge Ram SLT $38,070 P.O. Box 55000 Value of security: Dept. 277001 $28,600 Detroit, MI 48255 Pullin, Fowler & Flannagan Lawyer for lawsuit in $37,097 West Virginia Chrysler Financial Services 2004 Dodge Ram 3500 $31,756 Value of security: $24,000 Chrysler Financial Services 2004 Dodge Ram 3500 $25,628 Value of security: $24,000 Research & Analytical Lab work for $15,617 environmental department Prism Laboratories Lab work for projects $14,802 Drillers Service Drilling $14,007 Gobble - Callahan Concrete for jobs $11,063 Ready Mix Concrete Concrete for jobs $5,934 Volvo Rents Equipment for $4,455 projects Western Forms, Inc. Invoice Number; $3,641 57248 RI Triad Concrete Placement Pumps for concrete; $1,634 for jobs Reprotech Graphics, Inc. Blueprints, copy; $676 job expenses EMPRESA DISTRIBUIDORA: Moody's Places Regular Bond Ratings at B3 ---------------------------------------------------------------- Moody's Investors Service assigned a B3 Global Scale and Baa3.ar National Scale first-time rating to Empresa Distribuidora Norte S.A.'s dollar denominated notes. The rating outlook is stable. The ratings reflect Edenor's improved financial structure after the planned debt exchange and also the uncertain nature of Argentina's electricity market. Moody's National Scale Ratings are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs in Argentina are designated by the ".ar" suffix. NSRs differ from global scale ratings in that they are not globally comparable to the full universe of Moody's rated entities, but only with other rated entities within the same country. Assignments: Issuer: Empresa Distribuidora Norte S.A. * Senior Unsecured Regular Bond/Debenture, Assigned B3 * Senior Unsecured Regular Bond/Debenture, Assigned B3 * Senior Unsecured Regular Bond/Debenture, Assigned B3 * Senior Unsecured Regular Bond/Debenture, Assigned B3 * Senior Unsecured Regular Bond/Debenture, Assigned Baa3.ar * Senior Unsecured Regular Bond/Debenture, Assigned Baa3.ar * Senior Unsecured Regular Bond/Debenture, Assigned Baa3.ar * Senior Unsecured Regular Bond/Debenture, Assigned Baa3.ar The B3 senior unsecured rating on the global scale reflects Edenor's expected financial performance and its regulatory risk profile in accordance with Moody's global rating methodology for regulated electric utilities. The key expected credit metrics over the next several years include a ratio of funds from operations to debt in the range of 10% to 15% and a debt to capitalization of about 50%. These financial metrics would be consistent with the B3 rating for a company whose risk profile falls into the high-risk category under the global methodology. The high-risk category for Edenor reflects the regulatory environment in Argentina, which is less consistent than average, and considers the lack of timely rate relief to cover increased costs in the recent past. Edenor's ratings consider its improved debt position and financial profile resulting from the restructuring, which will include a debt reduction of approximately $90 million to be paid in cash from its current cash balance. Edenor will benefit from the more favorable terms of the new notes including reduced interest rates and extensions on principal debt maturities, which will increase gradually from 2008 to 2019. The ratings also incorporate the uncertainties surrounding Argentina's electric industry and the market's unclear and unstable regulations. Moreover, Edenor has not reduced its foreign exchange exposure as all the new notes will continue to be denominated in foreign currency. Moody's assumes the government will address the tariff question in the near term given that maintaining the current frozen tariffs will ultimately affect service quality. In support of this view, Edenor's new controlling group has already arranged for a Memorandum of Understanding with the government to increase tariffs, including a 28% raise in the distribution margin of which 5% will be applied to certain investments. The agreement was passed by Congress and only lacks presidential approval. However, there is no definite timeframe for presidential approval. The rating outlook is stable, reflecting expectations that tariff changes will be made in the near future but that the regulatory environment will continue to have an above average level of uncertainty. Based in Buenos Aires, Argentina, Edenor is the largest electricity distribution company in Argentina in terms of number of customers and volume of energy sold. Edenor commenced operations in 1992, as a result of the privatization of the previously state-owned SEGBA. At that time, it was granted a 95- year concession to distribute electricity on an exclusive basis in its concession area, the greater Buenos Aires metropolitan area and northern portion of the City of Buenos Aires. EASA, which is controlled by Dolphin Energia S.A., is Edenor's holding company. FDL INC: Section 341(a) Meeting Scheduled for May 8 --------------------------------------------------- The U.S. Trustee for Region 10 will convene a meeting of FDL, Inc.'s creditors at 2:00 p.m., on May 8, 2006, at Room 416C, U.S. Courthouse, 46 East Ohio Street in Indianapolis, Indiana. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Kokomo, Indiana, FDL, Inc. manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. When the company filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. FDL INC: U.S. Trustee Appoints Nine-Member Creditors Committee -------------------------------------------------------------- The United States Trustee for Region 10 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in FDL, Inc.'s chapter 11 case: 1. Noppandon Mingvanish Torch 2100 Co., Ltd. No. 99 Moo & Taboonme Khochan Sub District Chonburi 20240 Thailand Mobile: +66 18048410 Fax: +66 29383129 United States Representative: Steven Strum P. O. Box 780 Mamaroneck, NY 10543-0780 Tel: (914) 381-6000 Fax: (914) 381-6499 2. Millon Tsai Fusco Industrial Corporation 7F, No. 352, Sec. 1, FU Hsing S. Road Taipei 10640, Taiwan R.O.C. Tel: (886) 2-27073597 Fax: (886) 2-27073379 3. Susan McCardell UPS Global Trade Finance Corp 800 Red Brook Boulevard Owings Mills, MD 21117-1008 Tel: (410) 753-0753 Fax: (410) 753-0943 4. Ken Ho, Vice-President Excellent Tripod Co., Ltd. XiaoBian Village, ChangAn Town, DongGuan City, GuangDong Province, China 523852 Tel: (86) 769-8547-8335 Fax: (86) 769-8531-6500 5. Ada Chen, Sales Manager King Technology B.V.I. Inc. Jinghe Industrial Area . Zhang Mu Tou Dongguan City, Guang-Dong, China Tel: (86) 769-8779-3957 Fax: (86) 769-8779-3946 6. Charlie Wen Mean Young Universal Co., Ltd. c/o 2, Shang YI TS'US, TA BAY Hisiang, Yun Lin Hsien, 631 Taiwan Tel: (86) 55912315 Fax: (86) 55916200 United States Representative: Steven Strum P. O. Box 780 Mamaroneck, NY 10543-0780 Tel: (914) 381-6000 Fax: (914)-381-6499 7. James Wang Delight Furniture Co., Ltd. Yixing Ind. Area, Shiguang Road, Shiqiao Town, Panyu Dist, Guangzhou, China Tel: (86) 20-3480-8118 Fax: (86) 20-3480-8113 8. Gregory Chang, Sales Manager ZhongShan QingYi Metal Products DingXi Village, ShenWan Town Zhong-Shan City, GuangDong Province, China Tel: (486) 760-660 7888 Fax: (486) 760 660 9955 9. China Export & Credit Insurance Corporation a/k/a SINOSURE c/o Malhar S. Pagay, Esq. Pachulski Stang Ziehl Young Jones & Weintraub LLP 10100 Santa Monica Blvd., 11th Floor Los Angeles, California 90067 Tel: (310) 277-6910 Fax: (310) 201-0760 eFax: (603) 462-5486 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. The Committee's hired Elliott D. Levin, Esq., at Rubin & Levin, P.C., for legal advice in the Debtor's chapter 11 restructuring. Headquartered in Kokomo, Indiana, FDL, Inc. manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. When the company filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. GARY GODDARD: Voluntary Chapter 11 Case Summary ----------------------------------------------- Joint Debtors: Gary D. & Karen J. Goddard 1164 Mattox Drive Sullivan, Missouri 63080 Bankruptcy Case No.: 06-41374 Chapter 11 Petition Date: April 6, 2006 Court: Eastern District of Missouri (St. Louis) Judge: Kathy A. Surratt-States Debtors' Counsel: A. Thomas DeWoskin Danna McKitrick, P.C. 150 North Meramec Avenue, 4th Floor St. Louis, Missouri 63105 Tel: (314) 726-1000 Fax: (314) 725-6592 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 The Debtors did not file a list of their 20 largest unsecured creditors. GENERAL MOTORS: Selling 7.9& Stake in Isuzu Motors Ltd. ------------------------------------------------------- General Motors Corp. (NYSE: GM) disclosed that it would sell its 7.9% equity stake in Isuzu Motors Ltd. The automaker emphasized that its commercial partnership with Isuzu will continue. The Isuzu shares held by GM will be sold to Isuzu's strategic business partners and major shareholders, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank. GM currently holds a total of 90.09 million Isuzu shares. Based on a selling price of JPY397 per share, GM expects to realize cash proceeds of about $300 million. The proceeds of the sale will be used to support the Company's North American turnaround plan, finance future growth initiatives, strengthen the balance sheet and fund other corporate priorities. "GM's 35-year relationship with Isuzu has been strong, and we look forward to our continued partnership," said Rick Wagoner, GM chairman and chief executive officer. "We will maintain our strategic relationships with Isuzu in the many different areas of cooperation we have established over the years. At the same time, GM will take another step to enhance our liquidity position." GM has held an equity stake in Isuzu since 1971, when it purchased approximately 34% of the Isuzu shares outstanding. Between 1971 and 1998, GM increased its stake to 49% from 34%. In 2002 as part of the Isuzu restructuring, GM cancelled shares related to its 49% stake and invested fresh capital of $500 million primarily for the purchase of certain strategic commercial assets and for a new equity stake of 12% in Isuzu. Between 2002 and 2005 GM's stake in Isuzu was diluted from 12% to the current 7.9%, due to conversion of Isuzu's convertible bonds. Over the last 35 years, the companies have been involved in various joint projects in product development, advanced technology, global purchasing and supply chain management, and product distribution. Among the successful collaborations that will continue are: -- midsize pickup truck assembly and distribution in Asia Pacific, Latin America, Africa, and the Middle East; -- development and manufacturing of diesel engines for passenger cars in Europe; -- development and manufacturing of diesel engines for full- size pickups in the United States; and -- commercial vehicle design, engineering and manufacturing The sale of GM's equity stake in Isuzu, including cash proceeds received and any potential gain on sale, will be recorded in the second quarter. GM expects a pre-tax gain on the sale of approximately $300 million from this transaction as GM's book base was written-down to zero in 2002. 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 April 3, 2006, Moody's Investors Service lowered the ratings of General Motors Corporation: Corporate Family Rating and senior unsecured to B3 from B2 and Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The outlook is negative. GMAC and ResCap are unaffected. The GM rating actions came in response to the company's disclosure that restatements of its 2002, 2003 and 2004 financial statements could result in the acceleration of as much as $3 billion in various lease obligations and in the company potentially not being be able to borrow under its $5.6 billion unused revolving credit facility. As reported in the Troubled Company Reporter on April 6, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp., including its 'B' long-term and 'B-3' short- term corporate credit ratings, on CreditWatch with negative implications after the Company announced that it entered into an agreement to sell a 51% ownership stake in General Motors Acceptance Corp. to a consortium headed by Cerberus Capital Management L.P. As reported in the Troubled Company Reporter on April 6, 2006, Fitch Ratings retained General Motors Corp. Issuer Default Rating of 'B', Rating Watch Negative, following the Company's announcement of the sale of its controlling interest in GMAC. GENERAL MOTORS: Outlines GMAC Dividend Policy After Stake Sale -------------------------------------------------------------- On April 2, 2006, General Motors Corporation and its wholly owned subsidiaries General Motors Acceptance Corporation and GM Finance Co. Holdings Inc. entered into a Purchase and Sale Agreement with FIM Holdings LLC. Pursuant to the Purchase and Sale Agreement, GM agreed to sell to FIM common limited liability company interests of GMAC representing 51% of the common limited liability company interests of GMAC. Subject to the satisfaction or waiver of the various closing conditions, GM expects that the Acquisition will be completed in the fourth quarter of 2006. Upon completion of the acquisition, GMAC's dividend policy will comply with these terms: -- the Company will distribute to GM and the Purchaser, as the holders of the preferred membership interests in the Company, the accrued 10% yield for the immediately preceding quarter based on the number of preferred membership interests they hold. (GM will acquire $1.555 billion in preferred membership interests from the Company at Closing at a 10% discount, or a cash cost of $1.4 billion.) -- Prior to the second anniversary of the closing date, at least 40% and, from and after the second anniversary of the closing date, at least 70%, of the excess of a) the earnings of the Company and its subsidiaries generated in any fiscal quarter over b) the amount of yield distributed to the holders of the preferred membership interests in such fiscal quarter will be distributed to the members of the Company pro rata in accordance with the number of common membership interests held by each holder. Forty percent roughly approximates the income tax expense that would be attributable to GM and the Purchaser, although GM is not expected to have to use the distribution to pay actual cash income taxes in the near term. In years three through five following the Acquisition, Purchaser will reinvest cash distributions it receives, at least attributable to the indirect interest of Cerberus Capital Management, LP, in the Company, in excess of 40% into additional preferred membership interests of the Company. -- the board of directors of the Company could, with the consent of GM, reduce any distribution. In addition, the board of directors of the Company could, without the consent of GM, reduce any distribution to the extent required to avoid a reduction of the equity capital of the Company below an agreed minimum capital amount. -- the board of directors of the Company could increase any distribution provided that if a distribution would be reasonably likely to result in a credit downgrade of any unsecured indebtedness of the Company or certain subsidiaries or a negative change in the outlook of the credit rating of the Company, the distribution would require the approval of at least a majority of the independent directors of the Company. -- any distribution that would reduce the equity capital below the required minimum capital amount would require the approval of at least a majority of the independent directors of the Company. If the Acquisition is completed, GM and GMAC will enter into a number of agreements that will require that GMAC continue to allocate capital to provide financing to GM customers and wholesale dealers in accordance with historical practice. While GMAC will retain the right to make individual credit decisions, GMAC will commit to fund a broad credit spectrum of customers and dealers consistent with historical practice in the relevant jurisdiction. In the U.S. and Canada, GMAC will continue to purchase retail lease contracts, and upon remarketing of the leased vehicles at the end of the lease, GMAC will continue to be responsible for 50% of the difference between the resale proceeds and the adjusted Automotive Lease Guide value. Subject to GMAC's fulfillment of certain conditions, GM will grant GMAC exclusivity for 10 years for U.S., Canadian, and international GM-sponsored retail and wholesale marketing incentives. The transaction is expected to reduce GMAC's cost of funds as GMAC's ratings are delinked from GM's and improve over time. Under the agreements, GM will directly benefit from GMAC's lower cost of funds. In the U.S., GMAC will pay GM $75 million annually to be the exclusive provider of incentives relating to retail financing. The amount and timing of rate support paid by GM to GMAC are not expected to be materially different from historic practice. GM will pay estimated residual support on lease contracts at lease inception. GMAC will continue to have access to GM trademarks, but going forward GMAC will pay GM a royalty of 3.25% of GMAC's revenue from the sale of contracts for the GM Protection Plan and GM Motor Club. The royalty fees are expected to total approximately $25 million annually, but in no event will the fees be less than $15 million annually. 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 April 7, 2006, Moody's Investors Service reviewed for possible downgrade, General Motors Acceptance Corporation's Ba1 long-term rating and Residential Capital Corporation's Baa3 long-term and Prime-3 short-term ratings will continue. The action follows General Motors's entry into an agreement to sell a 51% stake in GMAC to a consortium led by Cerberus, a large private equity and hedge fund management firm. As reported in the Troubled Company Reporter on April 5, 2006, Standard & Poor's Ratings Services held its ratings on General Motors Acceptance Corp. (GMAC; 'BB/B-1') and on GMAC's subsidiary, Residential Capital Corp. (ResCap; 'BBB-/A-3'), on CreditWatch with developing implications after the announcement by ultimate parent General Motors Corp. (B/Watch Neg/B-3) that GM has entered into a definitive agreement to sell a 51% ownership stake in GMAC to a consortium headed by: * Cerberus Capital Management L.P., * Citigroup Inc., and * Aozora Bank Ltd. As reported in the Troubled Company Reporter on April 6, 2006, Dominion Bond Rating Service confirmed the ratings of General Motors Corporation and General Motors of Canada Limited following the announcement that GM has signed a definitive agreement to sell a 51% interest in General Motors Acceptance Corporation to a Consortium led by Cerberus Capital Management, LP, a private investment firm, and including Citigroup Inc., and Aozora Bank, Ltd. * General Motors Corporation Commercial Paper -- Confirmed R-3 (middle) * General Motors of Canada Limited Commercial Paper -- Confirmed R-3 (middle) * General Motors Corporation Long-Term Debt -- Confirmed B (high) * General Motors Corporation Convertible Debentures -- Confirmed B (high) * General Motors Corporation Ind. Dev. Empower. Zone Rev. Bds., S2004, Issued by NYC Ind. Dev. Agency, Guar. by GMC -- Confirmed B (high) * General Motors of Canada Limited Long-Term Debt -- Confirmed B (high) The trends of the ratings remain Negative. As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service lowered the ratings of General Motors Corporation: Corporate Family Rating and senior unsecured to B3 from B2 and Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The outlook is negative. GMAC and ResCap are unaffected. As reported in the Troubled Company Reporter on April 6, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp., including its 'B' long-term and 'B-3' short- term corporate credit ratings, on CreditWatch with negative implications after the Company announced that it entered into an agreement to sell a 51% ownership stake in General Motors Acceptance Corp. to a consortium headed by Cerberus Capital Management L.P. As reported in the Troubled Company Reporter on April 6, 2006, Fitch Ratings retained General Motors Corp. Issuer Default Rating of 'B', Rating Watch Negative, following the Company's announcement of the sale of its controlling interest in GMAC. GREAT ATLANTIC: Moody's Holds Junk Rating on Senior Unsecured Debt ------------------------------------------------------------------ Moody's Investors Service changed The Great Atlantic & Pacific Tea Company, Inc.'s rating outlook to negative from stable and lowered the company's speculative grade liquidity rating to SGL-3 from SGL-1. The company's debt ratings are affirmed. Rating lowered: * Speculative Grade Liquidity Rating to SGL-3 from SGL-1. Ratings affirmed: Issuer: The Great Atlantic & Pacific Tea Company, Inc. * Corporate Family rating at B3 * Senior unsecured notes at Caa1 * Multi-seniority shelf at (P)Caa1 for senior, (P)Caa2 for subordinated, (P)Caa2 for junior subordinated, and (P)Caa3 for preferred stock Issuer: A&P Finance I, A&P Finance II and A&P Finance III * Trust preferred securities shelf at (P)Caa2 The key driver of the downgrade in the speculative grade liquidity rating and the change in outlook for the long term ratings to negative is the imminent reduction in what had been a substantial cash cushion to mitigate the risk of any future deterioration in cash flow generation, given that A&P has announced a special cash dividend of $7.25 per share, or approximately $300 million. Cash balances of $517.8 million at Dec. 3, 2005, primarily from the August 2005 sale of the company's Canadian operation, were viewed by Moody's as a funding source for operating shortfalls, if any, as A&P invests in upgrading its store base and building comparable store sales in its highly competitive regional trade areas. Ratings could be lowered if liquidity erodes further due to deterioration in operating cash flow or if the level of working capital investment increases significantly. Conversely, the rating outlook could stabilize if comparable store sales become positive, if operating profitability improves and if free cash flow generation exceeds any funding needs. Headquartered in Montvale, New Jersey, The Great Atlantic & Pacific Tea Company, Inc., operates 405 supermarkets in 9 states and the District of Columbia. GST TELECOMMS: Pays Additional $12.5 Mil. to Unsecured Creditors ---------------------------------------------------------------- GST Telecommunications, Inc., and its debtor-affiliates will make its sixth distribution to unsecured creditors, amounting to $12.5 million, pursuant to their Plan of Reorganization this month. This distribution is equal to 1.70% of allowed unsecured claims, making the total distribution to date $359.7 million or 48.62% of unsecured creditors' allowed claims. After this distribution the Company will have approximately $1.5 million in cash, held in various reserves. These reserves are recalculated quarterly to determine the amount of distribution allowable under the Plan. Based in Vancouver, Wash., GST Telecommunications, Inc., and its subsidiaries filed for chapter 11 protection on May 17, 2000 (Bankr. Del. Case No. 00-1982 (GMS)). On December 3, 2001, the Company filed its First Amended Joint Plan of Liquidation of GST Telecom Inc., et al. At a hearing before the Court on February 16, 2002, the Company announced that the Plan had been accepted by all classes eligible to vote on the Plan. The Plan was confirmed on April 18, 2002, and declared effective on April 30, 2002. Steven M. Yoder, Esq., at The Bayard Firm, represents GST. When the company filed for chapter 11 protection, it disclosed $489,161,008 in assets and $179,719,929 in debts. GTSI INC: Gets Nasdaq Delisting Notice Due To Delayed 10-K Filing ----------------------------------------------------------------- GTSI(R) Corp. (NASDAQ:GTSI) received a staff determination letter from The Nasdaq Stock Market stating that because the Company has not filed its Annual Report on Form 10-K for 2005 with the Securities and Exchange Commission, as required by Market Place Rule 4310(c)(14), GTSI's common stock is subject to delisting from The Nasdaq National Market. GTSI expects to request a hearing with Nasdaq, which would stay the delisting pending the determination of NASDAQ's hearing panel. While there is no assurance, the Company expects to avoid delisting of its common stock from The Nasdaq National Market by filing its Form 10-K for 2005 with the SEC before delisting would otherwise take effect. About GTSI Corp. Based in Chantilly, Virginia, GTSI Corp. -- http://www.gtsi.com/ -- is the leading information technology product and solutions provider, combining best of breed products and services to produce solutions that meet government's evolving needs. For more than two decades, GTSI has focused exclusively on Federal, State, and Local government customers worldwide, offering a broad range of products and services, an extensive contract portfolio, flexible financing options, global integration and worldwide distribution. GTSI's Lines of Business incorporate certified experts and deliver exceptional solutions to support government's critical transformation efforts. Additionally, GTSI focuses on systems integrators on behalf of government programs. HOST MARRIOTT: Completes Acquisition of 28 Starwood Hotels ---------------------------------------------------------- Host Marriott Corporation (NYSE: HMT) completed the acquisition of 28 hotels from Starwood Hotels & Resorts Worldwide, Inc. and the issuance of approximately 133.5 million shares of common stock of the Company to Starwood stockholders. The Company will also change its name to Host Hotels & Resorts, Inc. on April 17, 2006, and on April 18, 2006, it will begin trading on the New York Stock Exchange under the new ticker symbol HST. The Company and Starwood agreed to defer the purchase of two hotels located in Fiji due to certain notice periods and approvals that have not yet lapsed or been received. As a result of the deferral of the Fijian assets: * the purchase price for the transactions completed was reduced by approximately $129 million; * the amount of assumed debt was reduced by approximately $31 million; and * the cash consideration was reduced by approximately $98 million. The Company also expects to complete the purchase of four additional hotels from Starwood located in Europe by the previously-reported joint venture between the Company and two partners by no later than May 3, 2006 and to complete the purchase of The Westin Europa & Regina in Venice, Italy by no later than June 15, 2006. "We are thrilled to announce the completion of the majority of this transformational transaction and to officially announce our name change to Host Hotels & Resorts," Christopher J. Nassetta, president and chief executive officer, stated. "We are also pleased to have completed the financing of the cash portion of the transaction as originally contemplated by completing certain high- multiple asset sales, the formation of a European joint venture and our recent issuance of senior notes. Finally, we are very excited to embark on a strategic partnership with Starwood and look forward to working with Steve Heyer and his team in the years to come to create value in this portfolio and on future transactions." About Starwood Hotels Headquartered in White Plains, New York, Starwood Hotels & Resorts Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the leading hotel and leisure companies in the world with approximately 750 properties in more than 80 countries and 120,000 employees at its owned and managed properties. With internationally renowned brands, Starwood(R) corporation is a fully integrated owner, operator and franchiser of hotels and resorts including: St. Regis(R), The Luxury Collection (R), Sheraton(R), Westin(R), Four Points(R) by Sheraton, and W(R), Hotels and Resorts as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. About Host Marriott Headquartered in Bethesda, Maryland, Host Marriott Corporation -- http://www.hostmarriott.com/-- is a lodging real estate company that currently owns or holds controlling interests in 130 upper upscale and luxury hotel properties primarily operated under premium brands, such as Marriott(R), Westin(R), Sheraton(R), Ritz- Carlton(R), Hyatt(R), W(R), Four Seasons(R), St. Regis(R), The Luxury Collection(R), Fairmont(R) and Hilton(R). * * * As reported in the Troubled Company Reporter on March 31, 2006, Standard & Poor's Ratings Services assigned its 'BB-' rating to Host Marriott Corp.'s proposed $600 million senior notes due 2016. Host is proposing to offer the notes in a private placement and use the proceeds to fund a portion of the cash consideration for the company's pending purchase of hotels from Starwood Hotels & Resorts Worldwide Inc. (BB+/Positive/--). All other ratings for Host were affirmed, including the 'BB-' corporate credit rating. The outlook is stable. "The ratings on Host reflect its highly leveraged financial profile and, as a REIT, its reliance on external sources of capital for growth," said Standard & Poor's credit analyst Emile Courtney. INFOSEARCH MEDIA: Dec. 31 Balance Sheet Shows $229K Equity Deficit ------------------------------------------------------------------ InfoSearch Media, Inc., delivered its financial statements for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 23, 2006. The company earned $314,997 of net income on $9,364,401 of net sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $5,741,846 in total assets and $5,970,948 in total liabilities, resulting in a $229,102 stockholders' equity deficit. Full-text copies of InfoSearch Media, Inc.'s financial statements for the year ended Dec. 31, 2005, are available at no extra charge at http://ResearchArchives.com/t/s?7b8 InfoSearch Media, Inc. -- http://www.infosearchmedia.com/-- is a global developer of content-based search marketing solutions that support non-paid search marketing initiatives of its clients through ContentLogic and ArticleInsider. ContentLogic delivers, through sale or license agreements, branded original content for use on the company's client's Web sites. ArticleInsider is designed to target clients desiring to increase and improve traffic to their existing Web site by providing highly qualified leads. At Dec. 31, 2005, the company's balance sheet showed a $229,102 stockholders' equity deficit. INNUITY INC: Hansen Barnett Expresses Going Concern Doubt --------------------------------------------------------- Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised substantial doubt about Innuity, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's accumulated deficit, losses from operations, negative cash flows from operating activities, negative working capital, and capital deficiency. Financials The company reported a $9,366,030 net loss on $12,465,601 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $9,861,532 in total assets and $12,448,488 in total liabilities, resulting in a $2,586,956 total stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $5,309,874 in total current assets available to pay $7,527,956 in total current liabilities coming due within the next 12 months. Full-text copies of Innuity, Inc.'s financial statements for the year ended Dec. 31, 2005, are available at no extra charge at http://ResearchArchives.com/t/s?7b6 Innuity, Inc. -- http://innuity.com/-- is an Internet technology company that designs, acquires, and integrates applications to deliver software for small business. The company's Internet technology is based on an affordable, on-demand model that allows small businesses to interact simply with customers, business partners, and vendors and to manage their businesses efficiently. Using the company's on-demand applications, small businesses can grow their revenues, reach and serve customers, and run everyday operations. At Dec. 31, 2005, the company's stockholders' equity deficit widened to $2,586,956 compared to a $1,417,620 equity deficit at Dec. 31, 2004. INTERNATIONAL MANAGEMENT: Wants Kroll to Look for Assets -------------------------------------------------------- International Management Associates, LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ Kroll Associates, Inc., to assist them in locating their assets. Daniel E. Karson, Esq., executive managing director of and counsel to Kroll Associates, tells the Court that the Firm's professionals bill between $230 to $450 per hour. Mr. Karson assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Escrow Account The Debtors tell the Court that Kroll is unwilling to commence services on behalf of the Debtors unless and until it receives assurance of payment. The Debtors say that several investors have agreed to fund an extension of unsecured credit for $100,000. That fund will be put into an escrow account to be held and controlled W.G. Hays & Associates, LLC the Debtors' financial consultant and adviser. The Debtors assure the Court that the investors are under no obligation to replenish the escrow account at any time. The Debtors thus ask the Court for authority to incur unsecured credit pursuant to Section 364(c)(1) of the Bankruptcy Code. The Debtors also ask that to the extent any amount are paid from the escrow to Kroll, the escrow will be reimbursed from the assets of the estates on a super-priority administrative basis, if and when available, after payment of routine and ordinary administrative expenses in the full amount of any such payments to Kroll. About International Management Headquartered in Atlanta, Georgia, International Management Associates, LLC -- http://www.imafinance.com/-- managed hedge funds for investors. The company and nine of its affiliates filed for chapter 11 protection on Mar. 16, 2006 (Bankr. N.D. Ga. Case No. 06-62966). David A. Geiger, Esq., and Dennis S. Meir, Esq., at Kilpatrick Stockton LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not state their total assets but estimated total debts to be more than $100 million. INVERNESS MEDICAL: Pays $73.85 Million to Buy Two ACON Units ------------------------------------------------------------ Inverness Medical Innovations, Inc., and some of its subsidiaries completed the purchase of assets of ACON Laboratories Inc.'s units for approximately $55.1 million cash plus 711,676 shares of the Company's common stock (valued at $18.75 million), on March 31, 2006. The Company paid a total of $73.85 million for Manfield Top Worldwide Ltd. and Overseas Square Ltd. Manfield Top and Overseas Square researches, develops, manufactures, markets and sells lateral flow immunoassay and directly-related products in the United States, Canada, Europe (excluding Russia, the former Soviet Republics that are not part of the European Union, Spain, Portugal and Turkey), Israel, Australia, Japan and New Zealand. Subsequent Acquisitions The Company's acquisition agreement with ACON Laboratories also provides that the Company will acquire, through a subsequent acquisition, all of the capital stock of Rich Horizons International, Ltd., and its wholly owned subsidiary ABON BioPharm (Hangzhou) Co., Ltd., which owns a newly constructed manufacturing facility currently undergoing validation in Hangzhou, China. The Company expects these transactions to occur during the second quarter of 2006. The Company will buy Rich Horizon for an additional $10 million in cash. An additional $1.2 million will be paid on consummation of delayed closings with respect to Manfield Top's and Overseas Square's assets of relating to Spain and Portugal, where regulatory approval is required as a condition to the acquisition. The Company will pay between $140 million and $175 million for the acquisition of Manfield Top, Overseas Square, Rich Horizons and ABON BioPharm. The Company will pay $50 million of the total by issuing shares of its common stock to ACON, and the remainder of the purchase price will be paid in cash. Prior to the consummation of the Company's acquisition of Manfield Top and Overseas Square, the Federal Trade Commission opened a preliminary, non-public investigation into the deal to determine whether the purchase may be anticompetitive. About Inverness Medical Innovations, Inc. Headquartered in Waltham, Massachusetts, Inverness Medical Innovations, Inc. (Amex: IMA) -- http://www.invernessmedical.com/ -- is a leading global developer of advanced diagnostic devices and is presently exploring new opportunities for its proprietary electrochemical and other technologies in a variety of professional diagnostic and consumer-oriented applications including immuno-diagnostics with a focus on women's health and cardiology. The Company's new product development efforts, as well as its position as a leading supplier of consumer pregnancy and fertility/ovulation tests and rapid point-of-care diagnostics, are supported by the strength of its intellectual property portfolio. * * * As reported in the Troubled Company Reporter on July 7, 2005, Moody's Investors Service downgraded Inverness Medical Innovations, Inc.'s ratings: * Corporate Family Rating -- to B3 from B2 * $150 million Senior Subordinated Notes -- to Caa3 from Caa1 * Senior Unsecured Issuer Rating -- to Caa1 from B3 Moody's said the outlook remains negative. As reported in the Troubled Company Reporter on Apr. 6, 2005, Standard & Poor's Ratings Services lowered its ratings on Inverness Medical Innovations Inc., including the corporate credit rating to 'B' from 'B+'. S&P said the outlook is stable. ITC HOMES: Robert Moore & Patricia Moore Want Four Leases Rejected ------------------------------------------------------------------ Robert Moore and Patricia Moore ask the Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona in Tucson to compel ITC Homes, Inc., to reject four leases with: -- Max Crigger and Carol Crigger located at 130 North Suntan Drive, in Vail, Arizona (Lot 23, Block 25, Unit 30 in New Tucson Subdivision); -- Shenouda George and Nawal Abdelmessieh located at 100 North Suntan Drive in Vail, Arizona (Lot 22, Block 25, Unit 30 in New Tucson Subdivision), and 40 North Suntan Drive, in Vail, Arizona (Lot 20, Block 25, Unit 30 in New Tucson Subdivision); and -- Robert Moore and Patricia Moore located at 2 North Suntan Drive in Vail, Arizona (Lot 19, Block 25, Unit 30 in New Tucson Subdivision). The monthly lease payments are: -- $2,673.33 for Max Crigger and Carol Crigger; -- $2,840.00 and $3,373.33 for Shenouda George and Nawal Abdelmessieh; and -- $4,193.33 for Robert Moore and Patricia Moore. The Court will convene a hearing at 1:30 p.m. on Apr. 24, 2006, at 38 South Scott Avenue, Courtroom 430, in Tucson, Arizona, to consider the couple's request. Ronald Allen, Esq., and Cherel K. Copperstone, Esq., at Law Office of Allen & Copperstone, PLLC, represent Robert Moore and Patricia Moore. 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. IVOW INC: Recurring Net Losses Spur Auditors' Going Concern Doubt ----------------------------------------------------------------- iVOW, Inc.'s (NASDAQ: IVOW) Form 10-KSB for the fiscal year ended Dec. 31, 2005 includes a report from its independent auditors that contains a going-concern qualification. J.H. Cohn LLP has expressed substantial doubt about the Company's ability to continue as a going concern after auditing its financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed the Company's recurring net losses and negative net cash flows from operating activities from its inception. As of Dec. 31, 2005, iVow had an accumulated deficit of $74,414,141. For the full year 2005, the Company incurred a $2,450,531 net loss on $1,287,848 of revenues. "With the recent Medicare ruling, we are intensely focused on promoting the growth of our business as evidenced by the recent contract signings with Clark Memorial Hospital, Goshen General Hospital and Virginia Hospital Center, while also carefully managing our financial position," said Dr. Michael H. Owens, Chief Executive Officer of iVOW, Inc. "Management is proactively exploring a number of options, which, if successful, will help to strengthen our overall position." A full-text copy of the Company's 2005 Annual Report in 10-KSB is available at no charge at http://ResearchArchives.com/t/s?7bf About iVOW, Inc. Based in San Diego, California, iVow, Inc. -- http://www.ivow.com/ -- provides program management, healthcare services, operational consulting and clinical training services to employers, payors, physicians and hospitals involved in the medical and surgical treatment of the chronic and morbidly obese. The Company also provides specialized vitamins to patients who have undergone obesity surgery. Information on iVow's nutritional supplements for post-surgical patients is at http://www.vistavitamins.com/ iVOW is traded on the NASDAQ Capital Market under the stock symbol IVOW. JABIL CIRCUIT: Discloses Second Fiscal Quarter Financial Results ---------------------------------------------------------------- Jabil Circuit, Inc. (NYSE:JBL), reported net revenue for the second quarter of fiscal 2006 ended February 28, increased 35% to $2.3 billion compared to $1.7 billion for the same period of fiscal 2005. Under accounting principles generally accepted in the United States of America, operating income for the second quarter of fiscal 2006 increased 44% to $83.3 million compared to $57.8 million for the same period of fiscal 2005. On a GAAP basis, net income for the second quarter of fiscal 2006 increased 50% to $69.0 million compared to $46.0 million for the same period in fiscal 2005. Jabil's second quarter of fiscal 2006 core operating income increased 41% to $96.2 million or 4.2% of net revenue compared to $68.1 million or 4.0% of net revenue for the second quarter of fiscal 2005. Core earnings increased 43% to $78.7 million compared to $54.9 million for the second quarter of fiscal 2005. Quarterly Highlights -- cash flow from operations was approximately $6 million for the second quarter of fiscal 2006; -- sales cycle for the second quarter of fiscal 2006 was 19 days; -- annualized inventory turns for the second quarter of fiscal 2006 were nine; -- capital expenditures for the second quarter of fiscal 2006 were approximately $53 million; -- depreciation for the second quarter of fiscal 2006 was approximately $44 million; -- cash and cash equivalent balances were $919 million at the end of the second quarter of fiscal 2006; and -- Return on Invested Capital was 19% for the second quarter of fiscal 2006. Business Outlook "We are pleased with our second quarter results and the growing strength of the business in the second half of our fiscal year," said Jabil President and CEO Timothy L. Main. "Demand for Jabil's outsourcing services continues to be broad-based across numerous markets." The company updated and raised its full fiscal year 2006 guidance to 32 percent growth over fiscal 2005. Jabil said it currently expects fiscal year 2006 revenue of $9.9 billion, $600 million higher than guidance the company provided in December 2005. Jabil Circuit, Inc. -- http://www.jabil.com/-- is an electronic product solutions company providing comprehensive electronics design, manufacturing and product management services to global electronics and technology companies. Jabil Circuit has more than 50,000 employees and facilities in 20 countries. Standard & Poor's Ratings Services places a BB+ preliminary rating on Jabil Circuit's $1.5 billion senior and subordinated debts in August 19, 2005. J.L. FRENCH: Court Establishes May 1 as General Claims Bar Date --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware, set May 1, 2006, at 4:00 p.m., as the deadline for all creditors owed money by J.L. French Automotive Castings and its debtor- affiliates, on account of claims arising prior to Feb. 10, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the May 1 claims bar date and claim forms must be delivered to: If by messenger or overnight courier: J.L. French Automotive Casings, Inc. c/o BMC Group, Inc. P.O. Box 937 El Segundo, CA 90245-0937 If by standard mail: J.L. French Automotive Casings, Inc. c/o BMC Group, Inc. 1330 East Franklin Avenue El Segundo, CA 90245 Fax: (888) 316-2354 Aug. 10, 2006, at 4:00 p.m., is the claims bar date for governmental units. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. JORDAN INDUSTRIES: Rapid Debt Maturity Cues Going Concern Doubt --------------------------------------------------------------- Auditors working for Ernst & Young LLP in Chicago, Illinois, have substantial doubt about Jordan Industries, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditors pointed to the company's substantial debt maturing within the next year. Financials Jordan Industries delivered its financial statements for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 24, 2006. The company reported a $6,011,000 net loss on $729,485,000 of net sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $611,367,000 in total assets and $862,728,000 in total liabilities, resulting in a $251,361,000 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $286,500,000 in total current assets available to pay $450,463,000 in total current liabilities coming due within the next 12 months. Full-text copies of Jordan Industries, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7cc Jordan Industries, Inc., was organized to acquire and operate a diverse group of businesses with a corporate staff providing strategic direction and support. The Company is currently comprised of 21 businesses which are divided into five strategic business units: Specialty Printing and Labeling, Consumer and Industrial Products, Jordan Specialty Plastics, Jordan Auto Aftermarket, and Kinetek Inc. At Dec. 31, 2005, the company's stockholders' equity deficit widened to $251,361,000 from a $242,981,000 equity deficit at Dec. 31, 2004. J.P. MORGAN: Moody's Places Low-B Ratings on Two Cert. Classes -------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by J.P. Morgan Mortgage Acquisition Corp 2006- WMC1, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by WMC Mortgage Corp originated adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and an interest rate swap agreement. Moody's expects collateral losses to range from 4.70% to 5.20%. The complete rating actions are: J.P. Morgan Mortgage Acquisition Corp. 2006-WMC1 * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class A-4, Assigned Aaa * Class A-5, 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 KAISER ALUMINUM: District Court Consolidates Plan-Related Appeals ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 9, 2006, Twenty-four insurers took an appeal from Judge Fitzgerald's order and findings of fact and conclusions of law confirming the Second Amended Plan of Reorganization filed by Kaiser Aluminum Corporation and its debtor-affiliates, to the U.S. District Court for the District of Delaware. The Insurers want the District Court to review the Bankruptcy Court's decision. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, relates that prior to filing their request to consolidate all appeals filed by the 24 insurers and Duncan McNeill with the U.S. District Court for the District of Delaware, the Plan Proponents conferred with Columbia Casualty Insurance Company and certain insurers. The Plan Proponents are: -- the Reorganizing Debtors, -- the Official Committee of Unsecured Creditors, -- the Official Committee of Asbestos Claimants, -- the Official Committee of Retired Employees, -- Martin J. Murphy, as Legal Representative for Future Asbestos Claimants, and -- Anne M. Ferrazi, as Legal Representative for Future Silica and Coal Tar Pitch Volatiles Claimants. In that conference, the Insurers informed the Reorganizing Debtors that they do not oppose consolidation of the Appeals but opposed further briefing. Although the Columbia Insurers' counsel indicated a willingness to agree to an expedited briefing schedule, he advised he was not authorized to make a proposal on behalf of the Insurers, Ms. Newmarch says. The Reorganizing Debtors' counsel tried, for several times, to reach out with the Insurers regarding what would deem to be a "reasonable" briefing schedule, but to no avail. Ms. Newmarch points out that the Insurers' refusal belies their assertions that they are interested in having the District Court rule on the matter, "in a relatively short period of time." Furthermore, Ms. Newmarch argues that the Insurers' argument that further briefing is critical because one legal issue before the Court "raises a matter of first impression in this Circuit" and that they need to address the undisclosed "important colloquy" between the Bankruptcy Court and the Insurers at the confirmation hearing, is baseless. Ms. Newmarch argues that contrary to the Insurers' contentions, the Third Circuit in Combustion Engineering, 391 F.3d 190 (3d Ch. 2005) answered the very question now before the Court. Although the Insurers argue that the Third Circuit in Combustion Engineering merely "affirmed the settled principle that an interest of the debtor in property . . . is property of the debtor's estate within the meaning of Section 541(c)(1) [of the Bankruptcy Code], regardless of any contractual anti-assignment provision," the Insurers' proposed reading of the opinion is absurd, Ms. Newmarch contends. "The issue before the Third Circuit in Combustion Engineering was not whether the debtor's insurance rights became property of the estate notwithstanding the anti-assignment provisions in the policies," Ms. Newmarch continues. "Rather, the issue contested by the parties in the case was the same issue as now before the Court -- whether the transfer of the right to insurance proceeds by the estate to the section 524(g) trust is permissible notwithstanding the anti-assignment provisions in the policies." Ms. Newmarch further notes that the Bankruptcy Court's ruling, which is the subject of the Appeals, is limited to a one-sentence legal conclusion -- "Section 1123(a)(5) of the Bankruptcy Code expressly permits the transfer of the Reorganizing Debtors' rights to proceeds from the Included PI Trust Insurance Assets under the Plan and preempts any anti-assignment provisions of the Included PI Trust Insurance Assets." "Because this conclusion is purely legal, it is reviewed de novo, and irrespective of the Bankruptcy Court's statements at the confirmation hearing or any 'colloquy' that occurred, the [District Court] must make an independent determination that the legal conclusion is correct," Ms. Newmarch further asserts. "The correctness of the legal conclusion is not dependent upon the Bankruptcy Court's statements at the confirmation hearing or its interaction with the Insurers' representatives." Moreover, the Insurers fail to even set out or summarize the colloquy they suggest is so important, Ms. Newmarch says. The Bankruptcy Court's reasoning at the confirmation hearing was principally that: -- the issue had been addressed by the Third Circuit in Combustion Engineering; and -- Section 1123(a)(5)(B) is clear that "estate property can be transferred in whole or in part to one or more entities, whether organized before or after confirmation of the plan." According to Ms. Newmarch, the Insurers incorrectly assert that consummation of the Plan is not dependent on a resolution of the preemption issue anytime soon. "The Insurers could not be more wrong. As the Insurers well know, until [the District] Court issues or affirms the Confirmation Order, as required by section 524(g)(3)(A) of the Bankruptcy Code, the Reorganizing Debtors cannot consummate the Plan," Ms. Newmarch explains. Given the Insurers' refusal to even propose a briefing schedule notwithstanding the narrow legal conclusion and the substantial passage of time that has already occurred, the Plan Proponents ask the District Court to: (a) overrule the Insurers' Response; and (b) set a hearing to consider oral argument. District Court Consolidates Appeals The Delaware District Court grants the Plan Proponents' request to consolidate the Appeals. District Court Judge Farnan further grants the Plan Proponents' request: -- for a de novo review of the Bankruptcy Court's findings of fact and conclusions of law regarding the confirmation of the Reorganizing Debtors' Plan; and -- to waive the mediation requirement. The District Court holds that based on the nature of the parties' dispute and the specific legal issues raised, mediation would be inefficient and unproductive. Judge Farnan, however, denies the Reorganizing Debtors' request for an expedited hearing and treatment of the consolidated cases. The District Court declines to proceed in the manner suggested by the Reorganizing Debtors. The District Court believes that additional submissions by the parties are necessary to a full adjudication of the issues. Judge Farnan notes that the submissions can be made on a modified schedule so that some measure of expedited treatment may be afforded to the bankruptcy cases. In lieu of formal briefing, Judge Farnan directs the parties to submit memoranda on the issues presented. The District Court will convene a hearing on the matter on May 11, 2006, at 12:30 p.m., in Courtroom 4B, 4th Floor, Boggs Federal Building in Wilmington, Delaware. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 93; Bankruptcy Creditors' Service, Inc., 215/945-7000) KANSAS CITY SOUTHERN: S&P Lowers Sr. Unsecured Debt Rating to B- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Kansas City Southern and Kansas City Southern de Mexico S.A. de C.V. (previously TFM S.A. de C.V.) to 'B' from 'BB-'. The company's senior secured debt rating was lowered to 'BB-' from 'BB+' and senior unsecured debt rating lowered to 'B-' from 'B+'. The 'CCC' rating on the preferred stock rating remains on CreditWatch. All ratings remain on CreditWatch with negative implications, where they were placed April 4, 2006. "The rating actions reflect our increased concerns regarding Kansas City Southern's liquidity position," said Standard & Poor's credit analyst Lisa Jenkins. In its 10-K filed on last week, Kansas City Southern disclosed that its total liquidity was about $68 million at Dec. 31, 2005, and that liquidity was further reduced on March 31, 2006, by various payments totaling $44 million. Much of the $44 million in payments related to the settlement of obligations owed to TMM, Kansas City Southern's former joint venture partner. Kansas City Southern has gotten waivers from its bank lending group for various covenant violations in recent months and is replacing its existing facility with a new facility. The new facility, which is expected to close this month, will be the same size as the existing facility and will contain terms and conditions similar to the existing facility, but with some added flexibility. However, liquidity will remain constrained due to bond indenture restrictions. At Dec. 31, 2005, Kansas City Southern failed to meet the consolidated coverage ratio (EBITDA/interest expense) threshold of 2.00:1 included in its bond indentures. The company has stated that it expects to remain below this threshold until the end of the third quarter of 2006. Failure to meet this threshold limits the company's ability to pay cash dividends and to incur additional indebtedness (except to repay existing debt). Kansas City Southern first disclosed its failure to meet the bond indenture covenant threshold in mid-March 2006. The covenant issue arose primarily because of a noncash charge of $37.8 million incurred in the third quarter of 2005 to recognize additional costs related to occupational and personal injury claims. The company called for a shareholder meeting to vote on a proposed amendment to terms of its 4.25% preferred stock, series C, to allow for the payment of dividends in stock (the current terms allow only for payment of dividends in cash), but the meeting was adjourned due to failure to achieve a quorum. If shareholder approval is granted, the ratings on the preferred stock will be reevaluated in the context of the agreement reached with the shareholders and Kansas City Southern's overall credit quality. Failure to achieve shareholder approval for the change in terms would likely result in a lowering of the rating to 'C' until the next dividend payment due date (mid-May) and then 'D' once the dividend payments are missed. KINETEK INC: 2006 Debt Maturity Triggers Going Concern Doubt ------------------------------------------------------------ Auditors working for Ernst & Young LLP in Chicago, Illinois, raised substantial doubt about Kinetek, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditors pointed to the company's substantial debt maturing within the next year. Financials The company reported a $5,217,000 net loss on $337,524,000 of net sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $372,072,000 in total assets and $404,266, resulting in a $32,194,000 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $137,404,000 in total current assets available to pay $343,688,000 in total current liabilities coming due within the next 12 months. Bank & Bond Debt Mature This Year The company's 10-3/4% Senior Notes will mature on Nov. 15, 2006, and its Credit Agreement will expire on Dec. 18, 2006. The Company is actively pursuing alternative financing to satisfy existing creditors while providing working capital necessary to support ongoing operations and the Company's acquisition strategy. Full-text copies of Kinetek, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7be Kinetek, Inc. -- http://www.kinetekinc.com/-- is a group of companies that manufactures AC Motors, DC Motors, Gearmotors, Motor Speed Controls, and Gearing systems for a wide range of markets. At Dec. 31, 2005, the company's stockholders' equity deficit swelled to $32,194,000 from a $25,236,000 equity deficit at Dec. 31, 2004. * * * As reported in the Troubled Company Reporter on Mar. 30, 2004, Standard & Poor's Rating Service lowered its ratings on Kinetek Inc. and its subsidiary Kinetek Industries Inc. including lowering its corporate credit rating to 'B-' from 'B'. At the same time, S&P assigned 'B' rating to the company's senior secured credit facilities. S&P also assigned 'B-' rating to the company's senior secured notes. KINGSLEY COACH: Equity Deficit Widens to $2.3 Million at Dec. 31 ---------------------------------------------------------------- The Kingsley Coach, Inc., delivered its financial statements for the second quarter ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 24, 2006. The company reported a $312,669 net loss on $1,019,018 of total revenues for the three months ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $2,282,178 in total assets and $4,675,221 in total liabilities, resulting in a $2,388,043 stockholders' equity deficit. The Dec. 31 balance sheet also showed strained liquidity with $1,503,366 in total current assets available to pay $4,644,446 in total current liabilities coming due within the next 12 months. Full-text copies of The Kingsley Coach, Inc.'s financial statements for the second quarter ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7bb Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 25, 2005, Mantyla McReynolds, LLC, expressed substantial doubt about The Kingsley Coach, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended June 30, 2005, and 2004. The auditing firm pointed to the Company's accumulated losses since inception and negative working capital as of June 30, 2005. The Kingsley Coach, Inc. -- http://www.kingsleycoach.com/-- manufactures motor homes, medical transport vehicles and emergency response vehicles, under the trade name "Kingsley Coach." Although available for a broad variety of uses, each Kingsley Coach has the same structural design. At Dec. 31, 2005, the company's stockholders' equity deficit ballooned to $2,388,043 compared to a $1,781,050 equity deficit at June 30, 2005. KRONOS INTERNATIONAL: Closes EUR400 Mln Private Debt Placement -------------------------------------------------------------- Kronos International, Inc., a wholly owned subsidiary of Kronos Worldwide, Inc. (NYSE: KRO), closed the private placement of EUR400 million Senior Secured Notes due 2013 at an interest rate of 6-1/2% and priced at 99.306%. Kronos International conducts Kronos Worldwide's titanium dioxide pigments operations in Europe. The net proceeds of the offering of approximately US$467.9 million, together with approximately US$2.1 million of cash on hand, were used to repay Kronos International's outstanding 8-7/8% senior secured notes due 2009. The Notes were sold to qualified institutional buyers in the United States in reliance on Rule 144A and to persons outside of the United States in reliance on Regulation S under the Securities Act of 1933, as amended. Kronos International, Inc. -- http://www.kronostio2.com/-- is a wholly owned subsidiary of Kronos Worldwide, Inc., headquartered in Dallas, Texas and produces titanium dioxide (TiO2) pigments in Europe. For the LTM ended Dec. 31, 2005, the company reported sales of US$851 million. * * * As reported in the Troubled Company Reporter on April 11, 2006, Moody's Investors Service assigned a B2 rating to Kronos International, Inc.'s new EUR400 million senior secured notes due 2013 and affirmed its corporate family rating and stable outlook. Moody's views the refinancing of KII's existing EUR375 million senior secured notes in order to reduce interest expense as favorable and the EUR25 million increase in debt as not material to the rating. The rating on the EUR375 million senior secured notes due 2009 will be withdrawn after they are repaid with the proceeds of the newly issued notes due 2013. LG.PHILIPS DISPLAYS: Has Interim Access to Lenders' Collateral -------------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware gave LG.Philips Displays USA, Inc., interim authority to use cash collateral securing repayment of its prepetition debt to a consortium of lenders. The Debtor is authorized to use the cash collateral through April 30, 2006, according to a pre-approved budget. A copy of this budget is available for free at: http://researcharchives.com/t/s?7cb The Debtor and its non-debtor affiliates jointly owe the lender group approximately $573 million on account of a $2 billion debt facility extended to the Debtor's parent, LG.Philips Displays Holding B.V., in June 2001. The Debtor unconditionally guarantees its parent's obligations to the lender group. As security agent for the lender group, JPMorgan Chase Bank, NA, Hong Kong Branch, holds a perfected, first priority lien and security interest in all the Debtor's assets. The Debtor needs to use the lenders' cash collateral to maintain business relationships with its vendors and suppliers, purchase new inventory and finance its operations. As adequate protection for the use of its cash collateral, the Debtor grants JPMorgan valid, and perfected first-priority replacement liens on and security interest in all of its assets. The Debtor further grants JPMorgan an allowed super-priority administrative claim in its Chapter 11 Case. JPMorgan requires the Debtor to submit weekly reports of receipts, disbursement and a reconciliation of actual expenditures versus budgeted item. Headquartered in San Diego, California, LG.Philips Displays USA, Inc., is an indirect American affiliate of LG.Philips Displays Holding B.V. The company manufactures cathode ray tubes that are incorporated into television sets and computer monitors. The company filed for chapter 11 protection on Mar. 15, 2006 (Bankr. D. Del. Case No. 06-10245). Adam Hiller, Esq., at Pepper Hamilton LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $50 million and $100 million. LG.PHILIPS DISPLAYS: Wants Conway MacKenzie as Financial Advisor ---------------------------------------------------------------- LG.Philips Displays USA, Inc., asks the Honorable Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware for authority to employ Conway MacKenzie & Dunleavy as its financial advisor. Conway MacKenzie will: (a) assist the Debtor in the preparation of financial related disclosures required by the Bankruptcy Court, including Schedules of Assets and Liabilities, Statement of Financial Affairs and monthly operating reports; (b) assist the Debtor with information and analyses required under the Debtor's financing; (c) assist with the identification and implementation of short term cash management procedures; (d) assist with the identification of executory contracts and leases and perform cost/benefit evaluations with respect to their affirmation or rejection; (f) assist the Debtor's management team and counsel focused on the coordination of resources related to the ongoing reorganization and sale effort; (g) assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; (h) attend meetings and assist in discussions with potential investors, banks and other secured lenders, any official committee appointed in the Debtor's bankruptcy case, the United States Trustee, other parties-in-interest and their professionals, as requested; (i) assist in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in the Debtor's bankruptcy case, including information contained in the disclosure statement, if applicable; (k) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (l) give litigation advisory services and expert testimony on case related issues as required by the Debtor; and (m) render other general business consulting or other assistance as Debtor's management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the Debtor's case. Jeffrey L. Johnston, a partner at Conway MacKenzie & Dunleavy, discloses that the Firm received a $150,000 unapplied prepetition retainer. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partner $370 to $495 Director $305 to $365 Senior Associate $265 to $300 Associate $195 to $260 Paraprofessional $95 Mr. Johnston assures the Court that Conway MacKenzie & Dunleavy does not hold any interest adverse to the Debtor's estate, and the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. A full-text copy of the Debtor's Engagement Letter with Conway MacKenzie & Dunleavy is available for a fee at: http://www.researcharchives.com/bin/download?id=060411215108 Headquartered in San Diego, California, LG.Philips Displays USA, Inc., is an indirect American affiliate of LG.Philips Displays Holding B.V. The company manufactures cathode ray tubes that are incorporated into television sets and computer monitors. The company filed for chapter 11 protection on Mar. 15, 2006 (Bankr. D. Del. Case No. 06-10245). Adam Hiller, Esq., at Pepper Hamilton LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $50 million and $100 million. LONDON FOG: Section 341(a) Meeting Scheduled for April 24 --------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of London Fog Group, Inc. and its debtor-affiliates' creditors at 2:00 p.m., on Apr. 24, 2006, at the C. Clifton Young Federal Building, 300 Booth Street, Room 2110, in Reno, Nevada. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Seattle, Washington, London Fog Group, Inc. -- http://londonfog.com/-- designs and retails the latest styles in jackets and other professional apparel. The company and six of its affiliates filed for chapter 11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtors in their restructuring efforts. Avalon Group, Ltd., serves as the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they estimated that their assets and debts totaled $50 million to $100 million. LONDOG FOG: U.S. Trustee Appoints Seven-Member Creditors Committee ------------------------------------------------------------------ The United States Trustee for Region 17 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in London Fog Group, Inc. and its debtor-affiliates' chapter 11 cases: 1. Seymour Gillman S.G.A. Recoveries, Inc. 1700 North Dixie Highway, Suite 150 Boca Raton, FL 33432 Tel: (561) 392-7188 Claims Assigned: Gun Yong Trading Co., Ltd. 684-22, Yeoksam-1 Dong Kangnam-Ku Seoul, Korea Tel: (02) 3462-3321 Fax: (02) 3453-3787 CK Global Inc. Suite #412, Milliako - 1st, 99-1 Karak-Dong, Sonpaku Seoul, Korea Tel: (82) 2-409-5634 Fax; (82) 2-409-5837 ASD Asia Limited B-1211/12, Woolim Lion's Valley 371-62, Gasan-Dong Keuchun-Ku Seoul, Korea Tel: (02) 2026-5066 Fax: (02) 2026-5067 2. Wing Tai Far East Development Ltd. Unit 03, 10/F, One Mongkok Road Commrecial Centre, KLN, H.K. Tel: (852) 241-40274 Fax: (852) 241-22001 Represented by: Ms. Jacqueline Wong Unit 03, 10/F, One Mongkok Road Commercial Centre, KLN, H.K. Tel: (852) 241-40274 3. Yea Han Trading Co. Ltd. 13F-1, No. 223, Sec 5, Nanking E. Road Taipei, Taiwan, R.O.C. Tel: (886) 2-2766-6373 Fax: (886) 2-2766-5468 Represented by: Ivan Chang 4. Distribution Resources, Inc. 23001 54th Avenue South Kent, WA 98032 Tel: (253) 395-5455 Fax: (253) 395-5504 Represented by: Pail Prusi 5. Jenny's Garments, Inc. JG Building, C. Raymundo Avenue Maybunga, Pasig City Philippines Tel: (632) 641-4771 Fax: (632) 641-4020 Represented by: John T. Cua 6. United Parcel Service 307 International Circle, Suite 270 Hunt Valley, MD 21030 Tel: (410) 773-4033 Fax: (410) 773-4057 Represented by: Kelli J. Bohuslav-Kail 7. Broome and Wellington 86 Princess Street Manchester, MI 6 NG England Tel: (011) 44-161-236-2317 Represented by: Bernard Rowe 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. Headquartered in Seattle, Washington, London Fog Group, Inc. -- http://londonfog.com/-- designs and retails the latest styles in jackets and other professional apparel. The company and six of its affiliates filed for chapter 11 protection on March 20, 2006 (Bankr. D. Nev. Case No. 06-50146). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtors in their restructuring efforts. Avalon Group, Ltd., serves as the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they estimated that their assets and debts totaled $50 million to $100 million. LYONDELL CHEMICAL: S&P Puts BB- Corp. Credit Rating on Pos. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its long-term ratings, including its 'BB-' corporate credit rating, on Lyondell Chemical Co. and its affiliate Equistar Chemicals L.P. on CreditWatch with positive implications. The CreditWatch placement follows the recent announcement that Lyondell and CITGO Petroleum Corp., partners in Lyondell-Citgo Refining L.P. (LCR), have signed a letter of intent to explore the sale of LCR's Houston, Texas-based refinery. The sale of the refinery, which is strategically located and has the capacity to process 268,000 barrels of high sulfur crude oil per day, could provide meaningful cash proceeds to Lyondell. "The CreditWatch positive indicates that the long-term corporate credit and issue ratings could be raised following the successful completion of the transaction, if management uses the majority of proceeds to accelerate its plans to reduce debt," said Standard & Poor's credit analyst Kyle Loughlin. Lyondell has indicated that the value of the refinery is supported by: * the current environment of high demand for refined products in the U.S.; and * the shortage of available refining capacity. The sale of the LCR refinery could represent a solid step toward improving overall credit quality, particularly in view of potential for the commodity chemicals cycle to begin to level off during 2006 and other challenges Lyondell faces such as the phase out of MTBE usage in the U.S. (an important product for Lyondell) and a recent lead paint ruling against its subsidiary, Millennium Holdings LLC. The divesture of the 58.75%-owned refinery would be viewed as modestly negative in terms of diminished business diversity and the loss of LCR's value as an important source of cash flows during the downturn in the chemicals sector, but this negative would be overshadowed by the reduced financial risk in advance of the next chemical industry downturn if debt is reduced as expected. Timing for the refinery transaction has not yet been specified but the companies have indicated an interest in moving expeditiously to achieve the sale. The CreditWatch placement will be resolved by the completion of the proposed refinery sale process. To achieve higher ratings, considerable progress will have to be made toward the company's debt reduction goals in advance of the next industry downturn. The review for an upgrade will also consider the outlook for Lyondell's financial performance during the next several years, the company's ability to efficiently manage through the continued phase-out of MTBE in the U.S., and any implications the adverse lead-paint ruling at Millennium could have for Equistar and Lyondell. The ratings on Millennium remain on CreditWatch with negative implications, where they were placed Feb. 23, 2006, after a jury verdict in Rhode Island found Millennium and two other companies liable for the abatement of lead paint in that state. These developments bring into question the assumption of parental support from Lyondell, particularly if the litigation results in sizable liabilities or additional litigation risk for Millennium. Therefore, the ratings on Millennium now have the potential to be lowered below the ratings on Lyondell. MAYTAG CORP: Moody's Lifts Debt and Corp. Family Ratings to Ba2 --------------------------------------------------------------- Moody's Investors Service downgraded the long term senior unsecured debt rating of Whirlpool Corporation and its subsidiaries to Baa2 from Baa1, and preferred stock rating to Ba1 from Baa3. Shelf ratings to (P)Baa2/(P)Baa3 from (P)Baa1/(P)Baa2. Whirlpool's commercial paper rating of P-2 was confirmed. These actions, resulting from the closing of Whirlpool's acquisition of Maytag, are consistent with the ratings indication given by Moody's in January 2006. The rating outlook is negative. This concludes Moody's review of Whirlpool's ratings started August 2005. Concurrently, Moody's upgraded Maytag Corp.'s senior debt to Ba2 from B2, and its corporate family rating to Ba2 from B1, ending the rating review from September 2005. The B1 rating on Maytag's bank credit facility, repaid in connection with the acquisition, was withdrawn. The new bond ratings reflect the indirect benefit of the acquisition to bondholders, along with the lack of formal support from Whirlpool. Whirlpool has not announced that it will explicitly support Maytag's debt, but a cross default provision in Whirlpool's current credit facility provides a level of protection for Maytag bondholders. Maytag's debt and CFR ratings will be withdrawn following this announcement because Moody's does not believe it will have adequate information to maintain the ratings. The downgrade reflects Whirlpool's increased leverage and weak metrics following the acquisition, as well as the risks of integration, persistent challenges to prices and market share, and exposure to commodity price fluctuations. The ratings continue to be supported by Whirlpool's improved position in the U.S. appliance market, its strong international presence, and good cash flow which Moody's expects will be sufficient to finance integration needs and repay debt over the medium term. The rating outlook is negative. Moody's expects Whirlpool's metrics will remain weak for its rating category through 2007. Ratings could fall if the meaningful decline in leverage or operating margins did not show signs of run-rate improvement within the next 18 -- 24 months. Ratings could also fall if the toll of competition accelerates, reducing the expected advantages of the acquisition. Ratings could stabilize if the integration of Maytag yields higher than expected cost synergies, causing operating margin to exceed 7%, debt / EBITDA below 2.0x, or FCF / debt above 20%. Whirlpool Corporation, with headquarters in Benton Harbor, Michigan, is a global manufacturer and marketer of home appliances under the Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other brand names. Maytag, based in Newton, Iowa is the third largest US-based appliance company. The corporation's primary brands are Maytag, Hoover, Jenn-Air, Amana, Dixie-Narco and Jade. McCUNE PAPER: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: McCune Paper Co., Inc. P.O. Box 2602 254 North Santa Fe Salina, Kansas 67402 Involuntary Petition Date: April 11, 2006 Case Number: 06-20458 Chapter: 11 Court: District of Kansas (Kansas City) Judge: Robert D. Berger Petitioners' Counsel: Michael H. Traison, Esq. Miller Canfield Paddock & Stone PLC 150 West Jefferson Avenue, Suite 2500 Detroit, Michigan 48226 Tel: (313) 496-7657 -- and -- Douglas M. Weems, Esq. Spencer Fane Britt & Browne LLP 1000 Walnut Suite 1400 Kansas City, Missouri 64106 Tel: (816) 292-8264 Petitioners Amount of Claim ----------- --------------- International Paper $296,558 c/o Dave Pettis xpedx MidAmerica Group 1901 East 119th Street Olathe, Kansas 66061 Georgia-Pacific Corporation $98,000 133 Peachtree Street Northeast P.O. Box 105605 Atlanta, Georgia 30348 Birchwood Foods $35,000 P.O. Box 639 Kenosha, Wisconsin 53144 MEDIA GENERAL: $600 Mil. NBC Deal Cues Moody's to Review Ratings ---------------------------------------------------------------- Moody's Investors Service placed Media General, Inc.'s ratings on review for possible downgrade in response to the company's announced plan to acquire four NBC television stations from NBC Universal for an approximate $600 million cash purchase price. Moody's estimates that debt-to-EBITDA will increase significantly to 5.3x from 3.3x as a result of the acquisition. On Review for Possible Downgrade: Issuer: Media General, Inc. * Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa3 * Senior Unsecured Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 Outlook Actions: Issuer: Media General, Inc. * Outlook, Changed To Rating Under Review From Stable In its review, Moody's will focus on the: 1) timing and execution risks associated with the company's plans to reduce leverage through divestitures and cash generated from operations; and 2) the effect that the company's significant planned capital spending for 2006 and 2007 will have on the ability to delever. Moody's will also consider the company's strategy with respect to future acquisitions, the structure and terms of the debt upon completion of the transaction, and the prospects for advertising revenues in the company's local newspaper and broadcast markets. In addition, Moody's will consider the beneficial effects from the increase in business diversity, and the revenue and cash flow benefits from the increased scale of operations and addition of broadcast properties with favorable operating margins and growth prospects. Media General, headquartered in Richmond, Virginia, operates newspapers, television stations and online enterprises, primarily in the Southeastern United States. Publishing assets include three metropolitan newspapers, 22 daily community newspapers and more than 100 weekly newspapers and other publications. Broadcast assets include 26 network-affiliated television stations. MICRON TECH: Earns $193 Million During Second Quarter of FY 2006 ---------------------------------------------------------------- Micron Technology, Inc., (NYSE: MU) disclosed results of operations for its second quarter of fiscal 2006, ended March 2, 2006. The Company had net income of $193 million on net sales of $1.2 billion for the second quarter of fiscal 2006. For the first quarter of fiscal 2006, the Company reported net income of $63 million on net sales of $1.4 billion. The Company achieved an 8% reduction in cost per megabit for DDR and DDR2 memory products comparing the second quarter to the first quarter of fiscal 2006. During the second quarter, the Company continued to shift its product mix to higher margin products, with CMOS image sensors leading gross margin performance across all product categories. The Company's revenue and gross margin decreased in the second quarter compared to the first quarter of fiscal 2006 primarily as a result of declines in average selling prices for memory products. IM Flash Technologies, LLC, a joint venture between the Company (51%) and Intel Corporation (49%), began operations during the second quarter of fiscal 2006. IMFT manufactures NAND Flash products for the Company and Intel. The initial contributions from the parties included cash from Intel in the amount of $500 million. In addition, the Company recognized a $230 million gain, reflected in other operating income, on the sale of existing NAND flash memory designs and certain related technology to Intel. Effective as of the beginning of the third quarter of fiscal 2006, the Company began consolidating the operating results of TECH Semiconductor. Production from TECH Semiconductor has approximated 20% to 25% of the Company's overall memory production. The Company's arrangement with TECH Semiconductor has historically been reported in revenue and cost of goods sold. During the third quarter of fiscal 2006, the Company entered into a merger agreement to acquire Lexar Media, Inc. in a stock-for- stock transaction that will be accounted for as a purchase by Micron. Completion of the merger is subject to customary closing conditions, including Lexar shareholder and regulatory approvals. At the end of the second quarter of fiscal 2006, the Company had $2.6 billion in cash and short-term investments. During the quarter, the Company generated $880 million in cash from operations and invested $268 million in capital expenditures. In addition to scheduled payments on notes and capital leases in the second quarter, the Company called for redemption of its 2.5% convertible subordinated notes, and holders of these notes converted them into 53.7 million shares of Company stock. In connection with the conversion of these notes, the Company negotiated the early termination of its call spread options for net proceeds to the Company of $171 million that were received on March 3, 2006, subsequent to quarter end. The Company anticipates capital additions for fiscal year 2006, with the inclusion of IM Flash Technologies and TECH Semiconductor, will total approximately $2.6 billion. A five-page copy of Micron Technology's Consolidated Financial Summary for the quarter ended March 2, 2006 is available for free at http://researcharchives.com/t/s?7c1 About Micron Technology Micron Technology, Inc. -- http://www.micron.com/-- is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading-edge computing, consumer, networking, and mobile products. * * * On Dec. 8, 2005, Moody's Investors Service revised its ratings outlook on Micron Technology to stable (Corporate Family Rating at Ba3). As reported in the Troubled Company Reporter on Jan. 13, 2005, Moody's affirmed these ratings: * Senior Implied rating at Ba3 * Issuer rating at Ba3 * Senior unsecured shelf registration rated at (P) Ba3 * Subordinated shelf registration rated at (P) B2 * $632 million 2.5% convertible subordinated notes due February 2010 at B2 * $210 million 6.5%, junior subordinated notes due September 2005 at B2 reflecting Micron Technology's improved operating results over the last few quarters and expectations that, while perhaps less robust, Micron should demonstrate good results over the next year. The ratings outlook, Moody's said, remains negative, driven by continued concerns of its ability to sustain positive cash flow from operations after meeting investment requirements. MOTIVE INC: Faces Nasdaq Delisting Due to Late Filing of Form 10-K ------------------------------------------------------------------ Motive, Inc. (NASDAQ:MOTVE) received a letter from The Nasdaq National Market stating that the company has failed to file its Annual Report on Form 10-K for the year ended Dec. 31, 2005 and, therefore, is not in compliance with NASDAQ Marketplace Rule 4310(c)(14) and is subject to delisting. NASDAQ Marketplace Rule 4310(c)(14) requires that Motive make, on a timely basis, all filings with the Securities and Exchange Commission, as required by the Securities Exchange Act of 1934, as amended. NASDAQ rules also require that Motive make a public announcement through the news media, which discloses receipt of the letter. Motive has previously stated that it will require additional time to file its financial reports with the SEC because of the company's decision to expand its financial restatement to include periods dating back to 2001. As a result, Motive will be unable to meet an April 13, 2006 deadline previously granted by NASDAQ. Accordingly, Motive's common stock will be subject to delisting. If delisted, the company expects its common stock to trade on the over-the-counter market and the company intends to file for reinstatement with The Nasdaq National Market as soon as possible after becoming current with its periodic financial reports. About Motive, Inc. Based in Austin, Texas, Motive, Inc. -- http://www.motive.com/-- has pioneered a unique approach to designing management services into Internet-era networks, systems and applications. Founded in 1997, Motive's software makes complex products and services self- managing, reducing overhead costs and optimizing customers' return on investment. With offices in Europe and Asia, companies worldwide have relied on Motive's software to provide a range of problem remediation and configuration management tasks for more than 45 million endpoints. MUSICLAND HOLDING: Gets OK to Honor Prepetition Bonus Obligations ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Jan. 27, 2006, Musicland Holding Corp. and its debtor-affiliates paid corporate employees under the Management Incentive Program for performance meeting various profitability or operational goals. For fiscal year 2006, the Debtors have not, to date, made any Corporate MIP payments. The Debtors also did not make any Corporate MIP payouts for fiscal year 2005. Thus, the Debtors sought authority to continue and honor any prepetition obligations owed under the Corporate MIP. The Debtors also sought to enhance the Corporate MIP solely for fiscal year 2006, to properly reward certain regular, full-time officers, directors, managers, and specifically identified individual contributors that have and will continue to play a critical role in the Debtors' restructuring. Under the modified Corporate MIP, the Debtors propose to pay 25% of the current Corporate MIP fiscal year 2006 Target Bonuses to the Eligible Employees. In addition, the Modified Corporate MIP will reward the Eligible Employees for their efforts in the Debtors' restructuring. The Debtors believe that Modified Corporate MIP is critical to their postpetition compensation structure to properly incentivize the Eligible Employees that will be formulating and implementing the initiatives necessary for the Debtors to accomplish their financial and operational goals during their Chapter 11 Cases. * * * Judge Stuart M. Bernstein authorizes, but does not direct, the Debtors to honor and pay the Shrink Plan, the Severance Program, and the Field MIP in accordance with their current policies. The Court rules that the Debtors will keep the Official Committee of Unsecured Creditors informed of their intention to make those payments. 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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) N-45 FIRST: Moody's Holds Ba1 Rating on $3.7 Mil. Class E Bonds --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of N-45 First CMBS Issuer Corporation, Commercial Mortgage-Backed Bonds, Series 2003- 3: * Class A-1, $100,666,817, Fixed, affirmed at Aaa * Class A-2, $228,469,000, Fixed, affirmed at Aaa * Class IO, Notional, affirmed at Aaa * Class B, $47,632,000, Fixed, affirmed at Aa2 * Class C, $31,446,000, Fixed, affirmed at A2 * Class D, $31,446,000, Fixed, affirmed at Baa3 * Class E, $3,701,072, Fixed, affirmed at Ba1 The bonds are collateralized by three mortgage loans, which range in size from 30.8% to 34.7% of the aggregate pool balance based on current principal amounts. As of the March 15, 2006 distribution date, the aggregate certificate balance has decreased by approximately 4.1% to $443.4 million from $462.4 million at securitization due to loan amortization. While the aggregate loan to value ratio of the loans has declined by approximately 3.0% due to loan amortization, the initial ratings levels were determined by including this future loan amortization into the ratings levels given the high quality of the buildings' tenancy. The transaction is therefore performing in- line with Moody's expectations, resulting in the affirmation of all the bonds. The Place Bell Loan, which comprises 34.7% of the pool balance, is secured by a 989,800 square foot Class A office building located in Ottawa, Ontario. The building is currently 99.4% occupied, compared to 98.9% at securitization. The largest tenant is Bell Canada, which occupies 48.0% of the building. Based on Moody's adjusted cash flow of $20.2 million and a normalized capitalization rate, Moody's LTV is 70.4% compared to 77.2% at securitization. Moody's current shadow rating is Baa3. The Fifth Avenue Place Loan, which comprises 34.5% of the pool balance, is secured by a 1.47 million square foot Class A office building complex located in Calgary, Alberta. The buildings are currently 99.4% leased, compared to 99.8% at securitization. Based on Moody's adjusted cash flow of $26.2 million and a normalized capitalization rate, Moody's LTV is 53.8%, compared to 59.4% at securitization. Moody's current shadow rating is A2. The Tour Bell Loan, which comprises 30.8% of the pool balance, is secured by a Class A office building located in Montreal, Quebec. The building is approximately 95.0% occupied, compared to 96.3% at securitization. The largest tenant is Bell Canada, which occupies 82.0% of the building. Based on Moody's adjusted cash flow of $16.2 million and a normalized capitalization rate, Moody's LTV is 77.8%, compared to 83.3% at securitization. Moody's current shadow rating is Ba1. NEW SKIES: Moody's Upgrades Debenture Rating to B2 from Caa1 ------------------------------------------------------------ Moody's Investors Service withdrew the ratings of New Skies Satellites, BV senior secured credit facilities, following the completion of the acquisition by SES Global of New Skies' parent, New Skies Satellite Holdings, Inc. In addition, New Skies' corporate family rating is upgraded to B1, the rating on senior unsecured floating rate notes is upgraded to B1, and the rating on senior subordinated notes is upgraded to B2. The outlook is changed to stable. The upgrade in the corporate family rating reflects Moody's view on the synergy benefits and the importance of NSE's five satellites to SES' growth plans and the resulting uplift of being assimilated into a larger and stronger rated entity, although SES has not, nor is expected to issue any additional explicit direct support of New Skies' remaining debt issues. Although the senior secured credit facilities were repaid at closing of the acquisition, via the intercompany loan from SES, the corporate family rating is tempered somewhat by the overall debt obligations which remain unchanged in the aggregate, including about $206 million in other intercompany loans among various NSE entities. The upgrades of the senior unsecured notes and the senior subordinated notes reflect their improved position in the overall NSE capital structure following the repayment of the senior secured debt. The change in the outlook from positive to stable reflects the previous anticipation of an upgrade as part of the announced SES acquisition. Moody's ratings actions: Upgrades: Issuer: New Skies Satellites, BV * Corporate Family Rating, Upgraded to B1 from B2 * Senior Subordinated Regular Bond/Debenture, Upgraded to B2 from Caa1 * Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B3 Withdrawals: Issuer: New Skies Satellites, BV * Issuer Rating, Withdrawn, previously rated B3 * Senior Secured Bank Credit Facility, Withdrawn, previously rated B1 NSE, headquartered in The Hague, The Netherlands, is a global provider of satellite services. It owns and operates five fixed service satellites and generated $241 million in revenue in 2005. SES Global SA is a leading international provider of satellite communications services, based in Luxembourg. SES Global has a corporate family rating of Baa2 with a stable outlook. NORTHWESTERN CORP: Moody's Places Rating on Revenue Bonds at Ba1 ---------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the proposed issuance of $170.2 million of pollution control revenue refunding bonds, Series 2006, by the City of Forsyth, Rosebud County, Montana. The underlying borrower is NorthWestern Corporation. The Aaa rating is based on a bond insurance policy to be provided by Ambac Assurance Corporation, and is subject to review of final documentation. Proceeds from the offering will be used to redeem in full two existing tax exempt debt issues for which NorthWestern is the underlying borrower. Moody's also assigned a Ba1 underlying rating to the senior secured pollution control revenue refunding bonds, consistent with the Ba1 rating on Northwestern Corporation's existing first mortgage bonds. The underlying rating considers that the obligation of NorthWestern to provide funds for repayment of the pollution control revenue refunding bonds will be secured and rank pari-passu with NorthWestern's other senior secured debt. The company's Corporate Family Rating continues to be Ba1. The lack of notching between the CFR and the senior secured rating considers that a substantial majority of the company's debt is senior secured. Northwestern's rating outlook continues to be positive. Based on Moody's rating methodology for global regulated electric utilities, NorthWestern's financial metrics for the year ended Dec. 31, 2005, including funds from operations coverage of debt and interest at 15.8% and 3x, respectively, could be consistent with a rating that is one to two notches higher, for a company that is engaged primarily in regulated utility activities, assuming reasonably supportive regulatory treatment. However, the lower rating of Ba1 incorporates these factors that currently constrain the rating: 1) It is not yet clear that the improved 2005 level of financial performance can be sustained on a multi-year basis; 2) The Montana regulatory environment is viewed as more challenging than other jurisdictions where NorthWestern operates. This challenging regulatory environment could become an issue if significant rate increases are needed after the expiration of the currently below market power supply contract with PPL; 3) Uncertainty about an ongoing Securities and Exchange Commission investigation related to actions of prior management and other shareholder litigation matters; and 4) Concerns about a strategic review being conducted by NorthWestern's Board of Directors that could involve the sale of the company or acquisitions to grow the company. The positive outlook recognizes significant potential for an upgrade over the next 12 to 18 months. An upgrade will be likely if Northwestern is able to demonstrate an ability to maintain stronger financial performance, with funds from operations as a percentage of debt in the mid-teens and FFO coverage of interest near 3x on a multi-year basis with Moody's standard financial adjustments, or if the company can make significant progress in resolving its regulatory and strategic issues. NorthWestern Corporation, headquartered in Sioux Falls, South Dakota, conducts regulated electric and gas utility operations in Montana, South Dakota, and Nebraska through its NorthWestern Energy division. The company also has limited non-regulated business investments. ONE GREGORY'S: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: One Gregory's, Inc. 4885 Alpha Road, Suite 125 Dallas, Texas 75244 Bankruptcy Case No.: 06-31531 Chapter 11 Petition Date: April 11, 2006 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale 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 Total Assets: $1,383,161 Total Debts: $1,717,859 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ LHM $745,128 4885 Alpha #125 Dallas, TX 75244 Tuscan Builders, L.P. $458,315 3100 South Gessner #125 Houston, TX 77063 Kendyl Jacox $150,000 4885 Alpha #125 Dallas, TX 75244 Neil Puckett Electric $91,753 Crawford Electric Supply Co. $66,663 Internal Revenue Service Taxes (4th/1st Qtr.) $51,328 Drake Interiors LP $49,795 Ryamark Mechanical, Inc. $38,328 American Stone Co. $19,800 Simplex Grinnell LP $16,736 Serres & Son Plumbing $12,631 Texas Duct Systems $5,053 Keizear & Murphy, LLC $3,146 Morrison Supply $2,841 Techniquex $2,400 Nathan Sommers $2,075 Jacobs & Gorman Ferguson $1,765 Champion Rentals $103 Brand & Allen Architects, Inc. Unknown Simons Attorney for Landlord Unknown O'SULLIVAN INDUSTRIES: Successfully Emerges from Bankruptcy ----------------------------------------------------------- O'Sullivan Industries, Inc. successfully exits from Chapter 11 protection on April 11, 2006. "O'Sullivan emerges from Chapter 11 with new ownership, a very manageable debt load, leaner more efficient operations and a renewed focus on our customers and consumers," said Rick Walters, Interim CEO of O'Sullivan Industries. "O'Sullivan has had its challenges in the past, but we are now poised to drive sales and profitability for O'Sullivan and our key customers through innovations in design, assembly, merchandising, advertising and promotions." In conjunction with its emergence from Chapter 11, O'Sullivan closed on its exit financing loan agreement on April 11, 2006. The loan agreement provides a revolving credit facility of up to $50 million, secured by substantially all the assets of the company, of which $27.3 million was drawn on April 11, 2006. Also, $2.7 million of letters of credit are outstanding under the loan agreement. Amounts borrowed under the loan agreement will used to repay amounts borrowed under its debtor-in-possession credit agreement, to pay fees and expenses related to its bankruptcy process and to provide working capital. In addition, as provided in its plan of reorganization, O'Sullivan issued $10 million aggregate principal amount of its secured notes to the former holders of its senior secured notes. Effective upon the emergence, O'Sullivan's new Board of Directors is in place. Serving on the Board of Directors are: * Rick Walters; Tom Shandell, founding partner and portfolio manager, GoldenTree Asset Management; * Michael Ranson, Director, Capital Solutions Group, GoldenTree Asset Management; * Eugene Davis, Chairman and CEO, Pirinate Consulting Group LLC; and * James Malone, Founding Managing Partner, Qorval LLC. About O'Sullivan Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. PACKAGING DYNAMICS: Moody's Rates $150MM Subordinated Notes at B3 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Packaging Dynamics Corporation's $90 million senior secured term loan due 2012, and a B3 to its $150 million senior subordinated notes due 2016. In addition, Moody's assigned a B1 corporate family rating and a stable outlook. Key factors influencing PDC's ratings and outlook are: 1) Subsequent to Thilmany LLC's acquisition of the former Packaging Dynamics Corporation, the combined company will have modest aggregate scale, three product lines and operations in one geography. This provides a profile that remains consistent with that of a B rated paper and packaging company; 2) Leverage that can provide credit protection measures of a low Ba rated paper and packaging company over the intermediate term. However, in the near-to-mid term, credit metrics could be adversely affected by execution risks. In order for the company to maintain the existing B1 rating, it must be successful in executing synergies, improve overall profitability and reduce debt so that credit protection measures improve; 3) Profit margins consistent with those of a B-to-Ba rated paper and packaging company; 4) Low level of vertical integration; and 5) Operational efficiency and margin stability have been recently volatile, representative of a B rating. The stable outlook reflects Moody's view that key rating factors are not likely to change over the near term. However, if the pricing environment and cost synergies strengthen, along with an established track record of the company's current operating strategy, PDC could improve its credit metrics on a sustainable basis by reducing current debt levels. Specifically, if the company improves its credit metrics on a sustainable basis over the next 12 to 18 months by lowering consolidated leverage on a gross debt to adjusted EBITDA basis to 4.0x, generating significant free cash flow, and maintaining good liquidity, the ratings would likely improve. Factors that could negatively impact the ratings include a deterioration in liquidity, a weakening of credit metrics, or additional debt-financed acquisitions. Proceeds from the term loan and notes will be used to finance Thilmany LLC's acquisition of PDC and refinance existing debt. The combination of the two companies will create a leading manufacturer of flexible packaging products and specialty papers. The ratings assume that the transaction will close in the amounts and along the terms as presented. PDC will be capitalized with approximately $285 million of debt and contributed equity of $107 million, primarily from Kohlberg & Company. In addition, Moody's confirmed the existing B2 rating of Thilmany LLC and changed the outlook to stable. Upon the closing of the transaction, Moody's will withdraw the ratings on Thilmany LLC. Packaging Dynamics Corporation, headquartered in Chicago, Illinois, is a leading manufacturer and converter of value-added food packaging products, specialty lightweight packaging, pressure sensitive, and technical and industrial papers. PAYETTE VALLEY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Payette Valley Cooperative, Inc. P.O. Box 68 New Plymouth, Idaho 83655 Tel: (208) 278-3281 Bankruptcy Case No.: 06-00390 Type of Business: The Debtor manufactures fertilizer and other agricultural chemicals products. Chapter 11 Petition Date: April 10, 2006 Court: District of Idaho (Boise) Debtor's Counsel: D. Blair Clark, Esq. Ringert Clark Chartered P.O. Box 2773 Boise, Idaho 83701-2773 Tel: (208) 342-4591 Fax: (208) 342-4657 Total Assets: $1,452,328 Total Debts: $510,656 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilbur-Ellis Company Business Expense $93,057 4272 Paysphere Circle Chicago, IL 60674 Internal Revenue Service Taxes $62,000 Special Procedures 550 West Fort Street Boise, ID 83724 Columbia Basin Ag Sales Business Expense $26,543 Dba Cleaver Ag, Inc. P.O. Box 1192 Hermiston, OR 97838 Merial Ltd. Business Expense $16,458 Jim Hicks & Company Business Expense $13,692 Montana Sulphur & Chemical Business Expense $11,113 Red West Severance Pay $10,000 Farm City Supply Business Expense $6,315 Western Laboratories Inc. Business Expense $6,183 Steve Regan Co Business Expense $5,145 Lexron Animal Health Business Expense $2,506 John Deere Agris Business Expense $2,306 Global Marketing Business Expense $1,514 Yellow Pages Business Expense $685 Insight Directories Business Expense $302 Progressive Business Business Expense $299 Ontario Photocopy Business Expense $212 Personnel Concepts Business Expense $40 US Bancorp Business Expense Unknown US Bancorp Manifest Funding Business Expense Unknown PETER HALAMANDARIS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Peter Halamandaris 16089 Teckenburg Lodi, California 95240 Bankruptcy Case No.: 06-21043 Chapter 11 Petition Date: April 7, 2006 Court: Eastern District of California (Sacramento) Judge: Thomas Holman Debtor's Counsel: T. Mark O'Toole, Esq. 110 North San Joaquin Street #412 Stockton, California 95202 Tel: (209) 462-4983 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have any creditors who are not insiders. PHI INC: Moody's Puts B1 Rating on Proposed $150MM Note Offering ---------------------------------------------------------------- Moody's assigned a B1 rating to PHI, Inc.'s proposed $150 million senior unsecured guaranteed notes offering. Moody's also affirmed the B1 Corporate Family Rating and changed the outlook to positive from stable. The note proceeds, along with a concurrent equity offering of approximately $150 million will be used to fund the tender of the existing $200 million 9.375% senior unsecured notes, plus the tender cost of about $9.4 million, $78.9 million towards the purchase of new aircraft and fees and expenses. Moody's will withdraw the ratings on the existing $200 million upon redemption. The positive outlook reflects the company's progress in improving its financial profile over the past three years and the resulting improved credit metrics; a favorable outlook for its oil and gas business, which is currently about 60% of consolidated revenues and 80% of EBITDA; and the continued modification to the helicopter fleet which is geared to the highly active deepwater Gulf of Mexico and should help further enhance earnings and cash flows in the near-term. In order to be upgraded to Ba3, PHII will need to demonstrate that it can achieve and sustain leverage within 2.5x in the upcycle given the company's still smaller scale and geographic concentration relative to its peers; and that the Air Medical business becomes a meaningful contributor in terms of earnings and cashflow to offset some of the inherent volatility in the oil and gas business. An upgrade would also be considered in the event the company pursues geographic diversification with largely common equity funded acquisitions. However, the positive outlook would become negatively pressured if the company's upcycle leverage increases to 3.5x and does not appear to be temporary in nature. As the company is expected to utilize more operating leases for the new incoming aircraft which is considered debt by Moody's, PHII's ability to effectively put those new assets to work and offset the rising operating leases will be important to maintaining the positive outlook. The outlook could also come under pressure if the operating performance improvement stalls and the credit metrics are no longer moving towards the direction of a Ba3 profile. The ratings are still supported by the company's position as a long-time leading provider of helicopter services to the oil and gas industry in the Gulf of Mexico; still supportive commodity price environment which should keep oil and gas exploration and production activity levels high in the near term; PHII's reduced leverage which provides better cushion against a potential softening of activity; a bit of diversification from some international operations and the company's attempt to expand into the Air Medical business; and a seasoned management team. Ratings continue to be restrained by the company's relatively smaller scale compared with its peers; concentration in the mature Gulf of Mexico regions that are contributing almost 80% of the company's operating earnings; significant capital spending needs of between $200 to $220 million over the next 24 months; marginal cash flow so far from the air medical division; and intense competition that has partially resulted in generally lower up- cycle realization for oil-field services companies. Lastly, all of the helicopter services operators in the Gulf of Mexico are currently under investigation by the Department of Justice, for potential antitrust violations following a subpoena issued on June 15, 2005. To date, there has been no indications of any wrongdoing. PHI, Inc. is headquartered in Lafayette, Louisiana and is engaged in providing helicopter transportation services primarily to the oil and gas industry and healthcare industry. PREMIUM PAPERS: U.S. Trustee Appoints Seven-Member Committee ------------------------------------------------------------ The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Premium Papers Holdco, LLC and its debtor-affiliates' chapter 11 cases: 1. International Paper Attn: John E. Valas 4049 Willow Lake Boulevard Memphis, TN 38118 Tel: (901) 419-1296 Fax: (901) 419-1236 2. Boise White Paper LLC Attn: Steven R. Grant 1111 Jefferson Street Boise, ID 83728, Tel: (208) 384-6642 Fax: (208) 395-7363 3. Danisco USA, Inc. Attn: Craig T. Myers 10994 Three Mile Road Thomson, IL 61285, Tel: (815) 259-3311 ext. 201 Fax: (815) 259-6202 4. CenterPoint Energy Services Attn: Robert W. Claude 111 Louisiana Street Houston, TX 77002 Tel: (713) 207-5603 Fax: (713) 207-0101. 5. United Steelworkers Attn: David R. Jury Five Gateway Center, Room 807, Pittsburgh, PA 15222 Tel: (412) 562-2545 Fax: (412) 562-2429 6. Northern States Power Company Attn: Peter M. Glass 800 Wicholett Mall, Suite 2900 Minneapolis, MN 55402 Tel: (800) 328-8226 Fax: (612) 215-4544 7. Johnson Timber Company Attn: William B. Johnson 9676 North Kruger Road, Hayward, WI 54843 Tel: (715) 634-3065 Fax: (715) 634-5755. 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. Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC -- http://www.smartpapers.com-- manufactures and markets a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and two of its affiliates filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not disclose their total assets but estimated debts between $10 million and $50 million. PREMIUM PAPERS: Section 341(a) Meeting Scheduled for April 28 ------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of Premium Papers Holdco, LLC and its debtor-affiliates' creditors at 1:30 p.m. on Apr. 28, 2006, at 2nd Floor, Room 2112, J. Caleb Boggs Federal Building, 844 North King Street in Wilmington, Delaware. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC -- http://www.smartpapers.com-- manufactures and markets a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and two of its affiliates filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not disclose their total assets but estimated debts between $10 million and $50 million. PRESIDENT CASINOS: Chairman & CEO Fired & Disqualified from Board ----------------------------------------------------------------- President Casinos, Inc.'s Board of Directors removed John E. Connelly as the Chairman and Chief Executive Officer of the Company and elected Terrence L. Wirginis as Chairman of the Board and John S. Aylsworth as President, Chief Executive Officer and Chief Operating Officer on April 4, 2006. On the same date, the Board of Directors of the Company also amended the Company's Bylaws of the Company disqualifying a person from serving as a director on his 80th birthday or when a Court of competent jurisdiction adjudged him an incapacitated person. Following the adoption of the Bylaw Amendment, Mr. Connelly did not qualify as a director and, accordingly, his services as a Company director is automatically terminated. Mr. Wirginis, the newly elected Chairman of the Board, age 54, served as Vice Chairman of the Board since July of 1997 preceding his appointment as Chairman. Mr. Wirginis has served as Vice President, Marine and Development since August 1995 and as a director since 1993. Prior to his employment with the Company, Mr. Wirginis provided consulting services to the Company with respect to the Company's marine operations and the development and improvement of the Company's facilities. The Company has been advised that Mr. Wirginis devotes an insubstantial amount of his time to Gateway Clipper Fleet, a company in which he has an ownership interest. Mr. Aylsworth, the newly elected President, Chief Executive Officer and Chief Operating Officer of the Company, age 55, served as President and Chief Operating Officer since July 1997, and as a director of the Company since July 1995. Mr. Aylsworth served as Executive Vice President and Chief Operating Officer of the Company from March 1995 to July 1997. Prior to joining the Company, Mr. Aylsworth served as an executive officer for Davis Companies, located in Los Angeles, California. From January 1992 through October 1994, Mr. Aylsworth was Chief Executive Officer of The Sports Club Company, a company, which operates premier health sand fitness facilities in Los Angeles and Irvine, California. About President Casinos Inc. Headquartered in St. Louis, Missouri, President Casinos Inc. -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. The Company's balance sheet at Nov. 30, 2005 showed assets totaling $66,292,000 and debts totaling $75,531,000. PRESIDENT CASINOS: Ex-CEO Connelly's Co. Makes More Distributions ----------------------------------------------------------------- J. Edward Connelly and Associates, Inc. (JECA), an entity controlled by John E. Connelly, President Casinos, Inc.'s former Chairman, Chief Executive Officer and director made further distributions to: * John S. Aylsworth, the Company's President, Chief Executive Officer, Chief Operating Officer and Director; * Terrence L. Wirginis, the Company's Chairman of the Board and Director; and * Ralph J. Vaclavik, the Company's Chief Financial Officer. Pursuant to their agreement resolving various bankruptcy issues with the Company's former gaming operations in Biloxi, Mississippi. The parties agreed that JECA would pay Messrs. Aylsworth, Wirginis and Vaclavik a portion of the liquidation of its Class B membership interest in President Broadwater. JECA holds a Class B membership interest in President Broadwater Hotel, LLC, which owned various assets used in connection with the Company's Biloxi operations. As reported in the Troubled Company Reporter on April 19, 2005, the Company sold substantially all of the real and personal property associated with its Biloxi operations to Broadwater Development, LLP, for around $82.0 million, subject to certain post-closing adjustments. While final distributions are subject to final determination and settlement of claims and expenses, the Company currently estimates that the proceeds of the sale of the Biloxi Properties will not be sufficient to satisfy JECA's liquidation preference of its Class B membership interest in President Broadwater. Under the Agreement, these parties will receive Approximated Distribution ------------------------- John S. Aylsworth $4.8 million Terrence L. Wirginis $4.8 million Ralph J. Vaclavik $0.3 million On June 7, 2005, JECA's Class B membership interest was partially redeemed for $14,375,000, of which, Messrs. Aylsworth, Wirginis and Vaclavik were paid $3,539,063, $3,539,063 and $218,750. In August 2005, JECA's Class B membership interest was partially redeemed for $1,400,000, of which additional distributions of $332,500, $332,500 and $70,000 were made to Messrs. Aylsworth, Wirginis and Vaclavik. In February 2006, JECA's Class B membership interest was further partially redeemed for $350,000, of which additional disbursements of $84,688, $84,688 and $11,250 were made to Messrs. Aylsworth, Wirginis and Vaclavik. About President Casinos Inc. Headquartered in St. Louis, Missouri, President Casinos Inc. -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. The Company's balance sheet at Nov. 30, 2005 showed assets totaling $66,292,000 and debts totaling $75,531,000. PRG-SCHULTZ: New CEO, Chairman & Chief Restructuring Officer ------------------------------------------------------------ The Board of Directors of PRG-Schultz International, Inc., unanimously elected James B. McCurry as President and Chief Executive Officer of the Company. On Mar. 30, 2006, Mr. McCurry was elected Chairman of the Board, succeeding David A. Cole. Mr. Cole previously served as non-executive Chairman of the Board. He continues as a director. Mr. McCurry replaced John M. Cook. Mr. Cook retired as the company's Chairman, President and Chief Executive Officer. Mr. McCurry has been a partner at Bain & Co., an international management-consulting firm. He co-founded and served as Chairman of specialty retailer Babbage's Inc., which became part of GameStop, Inc. Mr. McCurry has an M.B.A. from Harvard Business School. John M. Toma, the company's Vice Chairman also retired. Peter Limeri joined the company as Chief Restructuring Officer. On Feb. 10, 2006, Mr. Limeri was appointed Chief Financial Officer. Mr. Limeri is responsible for restructuring and managing PRG- Schultz's finances. Mr. Limeri most recently served as Chief Financial Officer and Chief Operating Officer of Nationwide Furniture Inc., a portfolio company of Sun Capital Partners, a private equity firm. Prior to that, he served as Chief Financial Officer at Anderson Press, Inc., which experienced a significant business turnaround during his tenure. Before joining Anderson Press, he served as Vice President-Finance of Cluett American where he was part of the team that led the company's financial restructuring and business turnaround. Mr. Limeri graduated from Seton Hall University in South Orange, New Jersey. PRG-Schultz International, Inc. (NASDAQ: PRGX) -- http://www.prgx.com/-- and subsidiaries, incorporated in the State of Georgia in 1996, is the leading worldwide provider of recovery audit services to large and mid-size businesses having numerous payment transactions with many vendors. The Company currently provides services to clients in over 30 countries. At Dec. 31, 2005, the company's balance sheet showed a $102,365,000 stockholders' equity deficit compared to $103,584,000 of positive stockholders' equity at Dec. 31, 2004. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Apr. 11, 2006, auditors working for KPMG LLP in Atlanta, Georgia, raised substantial doubt about PRG-Schultz International, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's: -- substantial debt obligations; -- significant losses for the years ended Dec. 31, 2003, 2004, and 2005; -- stockholders' equity deficit at Dec. 31, 2005. PRO TECH: Eisner Expresses Going Concern Doubt ---------------------------------------------- Eisner LLP in New York raised substantial doubt about Pro Tech Communications, Inc.'s ability to continue as a going concern after auditing the financial statements for the years ended Dec. 31, 2004, and 2005. The auditor pointed to the company's net losses since inception, working capital deficit, stockholders' equity deficit, and financial dependence and support from its principal stockholder, NCT Group, Inc. Financials The company delivered its financial statements for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 23, 2006. The company reported a $2,061,987 net loss on $1,260,978 of net sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $3,203,516 in total assets and $5,126,088 in total liabilities, resulting in a $1,922,572 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $563,856 in total current assets available to pay $1,301,491 in total current liabilities coming due within the next 12 months. Full-text copies of Pro Tech Communications, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7ba Headquartered in Fort Pierce, Florida, Pro Tech Communications, Inc. -- http://www.protechcommunications.com/-- engineers, designs, and distributes audio and communications solutions and other products for business users, industrial users, and consumers. The company's products include: -- Apollo(TM) headsets and amplifiers for use in contact centers; -- ProCom(TM) headsets for use in quick-service restaurants; -- NoiseBuster(R) noise canceling consumer audio headphones; and -- NoiseBuster(R) noise canceling safety earmuffs for use in high noise industrial environments. QUAKER FABRIC: PwC Expresses Going Concern Doubt ------------------------------------------------ Auditors at PricewaterhouseCoopers LLP in Seattle, Washington, raised substantial doubt about Quaker Fabric Corporation's (NASDAQ: QFAB) ability to continue as a going concern after auditing the company's Dec. 31, 2005 and Jan. 1, 2005 consolidated financial statements and its internal control over financial reporting as of Dec. 31, 2005. PwC pointed to the Company's recurring losses from operations, certain debt covenant defaults, and operating performance decline. The Company reported a $26,256,000 net loss on $224,684,000 of net sales for the year ended Dec. 31, 2005. Lender Talks On March 22, 2006, the Company entered into Amendment No. 4 with respect to the 2005 Credit Agreement. Pursuant to Amendment No. 4, the Company's lenders agreed to waive certain specified covenant defaults as of the end of fiscal February 2006 and to make certain other amendments to the 2005 Credit Agreement, subject to certain terms and conditions. Among the covenant defaults waived was the requirement that the Company deliver its Fiscal 2005 audited financial statements to the lenders without qualification or expression of concern, by the Company's independent registered public accounting firm, as to uncertainty of the Company to continue as a going concern, and it should be noted that the report issued by the Company's independent registered public accounting firm on the Company's Fiscal 2005 financial statements includes an explanatory paragraph raising substantial doubt about the ability of the Company to continue as a going concern. In addition, the Company's lenders have stated that they will agree to review revised business plans and projections and make or not make further amendments to the terms of the 2005 Credit Agreement based on those revised business plans and projections, however, they would not do so on the basis of the Company's current business plans. As of March 30, 2006, there were $37.4 million of loans outstanding under the 2005 Credit Agreement, including the remaining $18 million Term Loan component, and approximately $4.6 million of letters of credit. Pursuant to Amendment No. 4, unused availability under the 2005 Credit Agreement fluctuates daily. On March 30, 2006, unused availability was $900,000 net of the $8.5 million Availability Reserve, which includes the $1 million increase in the Availability Reserve required by Amendment No. 4. A full-text copy of the Company's 2005 Annual Report in Form 10-K is available at no charge at http://ResearchArchives.com/t/s?7b7 About Quaker Fabric Based in Fall River, Massachusetts, Quaker Fabric Corporation -- http://www.quakerfabric.com/-- is a leading manufacturer of woven upholstery fabrics for furniture markets in the United States and abroad, and the largest producer of Jacquard upholstery fabric in the world. RAILAMERICA INC: Earns $30.8 Million for Year Ended Dec. 31, 2005 ----------------------------------------------------------------- RailAmerica, Inc. (NYSE:RRA) reported its financial results for the fourth quarter and full year ended Dec. 31, 2005. Income from continuing operations for the fourth quarter ended Dec. 31, 2005, was $9.4 million, or $0.24 per share compared to $4.3 million, or $0.11 per share for the same period in 2004. Consolidated revenue from continuing operations for the fourth quarter of 2005 increased $15.3 million, or 15.7%, to $112.1 million, from $96.8 million in 2004. On a "same railroad" basis, revenue for the fourth quarter of 2005 increased $8.9 million, or 9.1%, to $105.7 million, from $96.8 million in the fourth quarter of 2004. Consolidated operating income for the fourth quarter of 2005 increased to $14.0 million, compared to $11.9 million in 2004. The operating ratio for the fourth quarter of 2005 was 87.5% compared to 87.7% in the 2004 quarter. Casualty expense in the fourth quarter of 2005 decreased to $5.6 million from $6.1 million in the same period in 2004. Interest expense in the fourth quarter of 2005 increased to $6.6 million from $4.0 million in the 2004 quarter. The fourth quarter 2005 track maintenance tax credit was $4.6 million. Net income for the fourth quarter of 2005, which includes discontinued operations, was $7.7 million, or $0.20 per share, compared to $4.3 million, or $0.11 per share in 2004. As a result of the sale of the San Luis & Rio Grande railroad property and the three Alberta railroad properties, the financial results of those railroads have been reclassified to discontinued operations. For the year ended Dec. 31, 2005, revenue from continuing operations increased 14.7% to $423.7 million from $369.4 million in 2004. Income from continuing operations for the year ended Dec. 31, 2005, was $30.8 million, or $0.80 per share, compared to a loss of $23.1 million or $0.66 per share from continuing operations for the year ended Dec. 31, 2004. The Company believes that presenting the results of 2004 operations adjusted for the refinancing costs, the E&N impairment charge and the former CEO's retirement charge provide a better basis for comparison of 2005's financial results with those of the prior year. Excluding charges of: * $12.6 million, ($8.7 million net-of-tax, or $0.25 per share) for the impairment of the E&N Railway; * $39.5 million (of which $20 million was non-cash) ($26.9 million net-of-tax, or $0.77 per share) for the debt refinancing; and * $6.7 million, ($5.6 million net-of-tax, or $0.16 per share) for the former CEO's retirement in 2004 earnings from continuing operations were $18.1 million or $0.52 per share. The operating ratio for 2005 was 87.9% compared to 84.3% in 2004, including the above 2004 adjustments. The full year 2005 track maintenance tax credit was $12.7 million. Net income for the year ended Dec. 31, 2005, which includes discontinued operations, was $30.8 million, or $0.80 per share, compared to a loss of $25.9 million or a loss of $0.74 per share for the year ended Dec. 31, 2004. Charles Swinburn, RailAmerica's Chief Executive Officer said, "Notwithstanding the challenges from our Ohio operations and Class I congestion, I am pleased with our fourth quarter. Those results included our recently acquired Alcoa railroads, whose performance exceeded our initial expectations. I am especially pleased with the safety and training initiatives that we implemented in 2005. In the fourth quarter, casualty and insurance expense declined to 5.0% of revenue from 6.3% in the 2004 quarter." Michael Howe, RailAmerica's Executive Vice President and Chief Financial Officer said, "Due to the sales of the SLRG and Alberta properties, the results of those railroads are now in discontinued operations. The four properties sold generated revenue of approximately $7.8 million and earnings per share of $0.01 in the fourth quarter 2005, and revenue of approximately $30 million and earnings per share of $0.05 per share for the full year. As of Dec. 31, 2005, our net debt-to-capital ratio was 49.3%, which is well within our desired range of 45 to 55 percent." Full-text copies of RailAmerica, Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://tinyurl.com/j7g6c RailAmerica, Inc. -- http://www.railamerica.com/-- is a leading short line and regional rail service provider with 43 railroads operating approximately 8,000 miles in the United States and Canada. The Company is a member of the Russell 2000(R) Index. READER'S DIGEST: Moody's Says Rating Outlook is Negative -------------------------------------------------------- Moody's Investors Service changed the rating outlook for The Reader's Digest Association, Inc.'s Ba1 Corporate Family Rating and Ba2 senior unsecured note rating to negative from stable and affirmed the existing ratings. The change in the outlook reflects that the company's more aggressive financial policies could lead to higher-than expected leverage over the near to intermediate term. Outlook Actions: Issuer: Reader's Digest Association, Inc. * Outlook, Changed To Negative From Stable Ratings Affirmed: Issuer: Reader's Digest Association, Inc. * Ba1 Corporate Family Rating * Ba2 senior unsecured Moody's anticipated at the time of our last rating action on May 6, 2005, that the company would use free cash flow for a balanced combination of debt reduction and share repurchases and that the company would not complete any significant debt-financed acquisitions. Continued debt reduction is important to moderate the high level of business risk and low operating margins associated with the company's mature publishing assets. The company is utilizing debt more aggressively than Moody's anticipated for share repurchases and plans to fund with debt the $66 million purchase price for the recently announced acquisition of Allrecipies.com. Moody's is concerned that more aggressive financial policies could lead to debt-to-EBITDA and debt-to-free cash flow above levels supportable by the level of business risk at the Ba1 CFR. Moody's is also concerned that heightened competition is leading to weaker than expected operating performance in the Books Are Fun business, which triggered a $188 million goodwill write-down in the second fiscal quarter and will challenge the company's ability to execute a turnaround in BAF's operating performance. A deterioration in revenues or operating margins or continued heavy use of free cash flow and debt to return capital to shareholders or fund acquisitions could lead to a downgrade. While the company will utilize nearly all of the remaining unused capacity on its $400 million revolver to fund the Allrecipies.com acquisition, Moody's anticipates the company will seek to increase the revolver commitment to restore the level of excess capacity and liquidity that existed prior to the acquisition. However, failure to restore the liquidity position could also lead to a downgrade. The rating outlook could stabilize if the company demonstrates a commitment to debt reduction and generates stable to moderate growth in organic revenues and operating margins. The Reader's Digest Association, Inc., headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including magazines, books, recorded music collections and home videos. Products include Readers Digest magazine, which is published in 48 editions and 19 languages. Annual revenues approximate $2.4 billion. REALITY WIRELESS: Files Four Amended Quarterly Financial Reports ---------------------------------------------------------------- Reality Wireless Networks, Inc., dba Arabian Recab For Trading Co., Ltd., delivered to the Securities and Exchange Commission on Mar. 24, 2006, its amended financial statements on Form 10-QSB/A for the three months ended: -- Dec. 31, 2004; -- Mar. 31, 2005; -- June 30, 2005; and -- Sept. 30, 2005. The company reported these results for the three months ended: Dec. 31 Mar. 31 June 30 Sept. 30 2004 2005 2005 2005 ------- ------- ------- -------- Revenues $0 $0 $0 $4,338,382 Net Loss $1,030,455 $723,805 $7,013,378 $226,481 The company's balance sheets show: Dec. 31 Mar. 31 June 30 Sept. 30 2004 2005 2005 2005 ------- ------- ------- -------- Current Assets $0 $0 $0 $17,133,974 Total Assets $37,698 $21,375 $21,375 $41,472,041 Total Current Liabilities $2,328,589 $2,409,924 $2,649,298 $17,918,482 Total Liabilities $2,356,000 $2,409,924 $2,627,923 $28,735,593 Stockholders' Equity (Deficit) ($2,318,303) ($2,388,549) ($2,627,923) $12,736,448 Full-text copies of Reality Wireless Networks, Inc., dba Arabian Recab For Trading Co., Ltd.'s financial statements are available for free at: Three Months Ended URL ------------------ --- Dec. 31, 2004 http://ResearchArchives.com/t/s?7c9 Mar. 31, 2005 http://ResearchArchives.com/t/s?7c8 June 30, 2005 http://ResearchArchives.com/t/s?7c7 Sept. 30, 2005 http://ResearchArchives.com/t/s?7c6 Fiscal Year Change These interim financial statements are generated based on the change in fiscal year in accordance with Reality Wireless, Inc.s' recent acquisition of Arabian Recab for Trading Co, Ltd., and reflect the third quarter financial assessment of Arabian Recab. In connection with the Merger Agreement, the Company changed its Fiscal Year end to Dec. 31. Arabian Recab Merger On July 21, 2005, the company and Arabian Recab For Trading Co., entered into an agreement to merge a wholly owned subsidiary of the company with Arabian Recab and to rename the Company "Recab International," which was subsequently amended, effective Aug. 19, 2005. The agreement provides that all shares of common stock of Arabian Recab issued and outstanding at the time the merger are converted into common stock of the company. The holders of Arabian Recab equity interests prior to the Effective Time will hold 98% of all shares of the Company 's common stock outstanding immediately after the share exchange. Salberg Resignation & Going Concern Opinion Salberg & Company, P.A., notified the company of its resignation as its principal, independent accountant. Salberg audited the company's financial statements for the year ended Sept. 30, 2004. Salberg's 2004 report contained substantial doubt about the company's ability to continue as a going concern. The Company subsequently engaged AlAzem, AlSudairy & AlNemer, a Saudi Arabia based affiliate of Horwath International, specifically for the purpose of completing US GAAP compliant audits in connection with the reverse merger, which were filed on Form 8-K dated Dec. 22, 2005. The Company is currently seeking to engage a United States based principal account do conduct its audits and review its SEC filings. About Reality Wireless Networks Reality Wireless Networks, Inc., dba Arabian Recab For Trading Co., Ltd., is a Saudi Arabian based operating company primarily focusing on transportation, transportation-related industries and in construction materials. Arabian Recab operates four primary divisions, including automobile & automotive equipment importation (into Saudi Arabia), transportation & logistics, private transportation, and building materials & concrete products. RESIDENTIAL CAPITAL: DBRS Rates Proposed $1 Bil. Note at BBB(Low) ----------------------------------------------------------------- Dominion Bond Rating Service assigned a rating of BBB (low) to the proposed $1 billion Subordinated Note issuance of Residential Capital Corporation's. A BBB rating has also been assigned to the proposed $2.5 billion Senior Note issuance. The proposed Senior Note issuance will rank pari passu with currently outstanding Senior Unsecured Debt of ResCap. All existing ratings are maintained "Under Review with Developing Implications". ResCap intends to use the proceeds of this proposed issuance, along with cash from other funding sources to pay the $3.6 billion outstanding balance under a $5 billion Subordinated Note held by General Motors Acceptance Corp., its indirect parent. DBRS believes that this is a positive step as it further reduced its dependency on GMAC for funding. Both proposed offerings are unconditionally guaranteed by certain Residential Capital Corporation's subsidiaries. Rating Action: * Commercial Paper -- Under Review, Developing R-2 (middle) * Senior Unsecured Debt -- Under Review, Developing BBB * Subordinated Notes -- Under Review, Developing BBB (low) DBRS maintains all existing ResCap's ratings as "Under Review with Developing Implications" based on General Motors Corporation's April 2, 2006, announcement that it has signed a definitive agreement to sell a 51% interest in GMAC to a Consortium led by Cerberus Capital Management, LP. The transaction is expected to close in the fourth quarter of 2006, subject to obtaining regulatory approvals. Upon completion, DBRS believes that this transaction will effectively de-link the ratings of GMAC from that of GM. DBRS notes that the proposed issuance will significantly reduce ResCap's dependency on GMAC for funding. Moreover, further progress in severing the ResCap/GMAC relationship would be viewed positively in the context of the existing rating linkage. However, given the current ownership structure of GMAC and ResCap, the potential for ResCap to be caught up in a rapidly deteriorating credit situation at GM could result in continued direct linkage of ResCap's ratings to GMAC/GM's. Nonetheless, DBRS will continue to monitor the GM/GMAC/ResCap relationship and may alter the ResCap/GMAC rating linkage in accordance with the companies' decreased related party transactions and dependencies. ResCap's ratings are based on the company's strong business franchise and market position, overall acceptable performance, and sound risk management practices. As the sixth-largest provider of residential mortgages in the U.S., ResCap's significant market presence and franchise strength gives the company the size and scale which are vital for success in the highly competitive mortgage industry. ResCap's 2005 worldwide originations increased 19.4% to $175.6 billion which has driven continued positive earnings momentum, but profitability measures remain challenged by the competitive environment. Net income for the year 2005 increased 5.4% to $1.02 billion, yet, return on-average assets fell to .96%, which is considered slight on a risk-adjusted basis. DBRS believes that the company benefits from earnings diversification provided by its international operations and business lending activities which is an advantage over many of its peers. Capitalization and leverage is appropriate for the rating, however leverage is trending higher. The Company's total equity base has grown to $7.5 billion or 6.3% of total assets at the end of Dec. 31, 2005, bolstered by GMAC's $2 billion debt-to-equity conversion earlier in 2005. Leverage compares favorably to its peer group and is acceptable on a risk-adjusted basis. The firm's success in increasing unsecured funding through separate issuances, which total four, including the proposed issuance, has improved the company's liquidity profile and enhanced financial flexibility. After the proposed transaction, ResCap's affiliated borrowings will be reduced to a $1.8 billion international revolving line of credit, which at year end 2005 had approximately $1.0 billion outstanding on this line. RIVIERA HOLDINGS: Moody's Reviews Ratings Following $426MM Merger ----------------------------------------------------------------- Moody's Investors Service placed the B2 credit ratings of Riviera Holdings Corporation on review for possible downgrade. The ratings action follows the Company's announcement that it has entered into a definitive merger agreement to be acquired by Riv Acquisition Holdings Inc, a private investment group, for $17 per share, excluding the shares of Riviera's Chairman and CEO, Mr. William L. Westerman, which will be sold for $15 per share. The Company states that the total transaction price of $426.5 million includes repayment or assumption of Riviera's $215 million senior secured notes. The rating action reflects: 1) the uncertainty of the Company's future capital structure; 2) the possibility that, following the acquisition, Riviera's credit metrics could fall below the B2 rating band; and 3) the possibility that the existing notes could remain outstanding following the acquisition. Moody's review of the credit ratings will focus on Riviera's post acquisition capital structure and expected fundamental operating performance of the Company's two properties. If the existing bonds are repaid Moody's will withdraw the ratings. The Company has stated a target acquisition close date of during the first half of 2007. On March 9, 2006 Moody's changed the ratings outlook on Riviera to Developing from Negative. Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino on the Las Vegas Strip and The Riviera Black Hawk Casino in Black Hawk, Colorado. In 2005 revenues were approximately $202 million. SALOMON BROTHERS: Moody's Lifts Ba1 Class BR Cert. Rating to Aaa ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of six classes of Salomon Brothers Commercial Mortgage Trust 2001-C2, Commercial Mortgage Pass-Through Certificates, Series 2001-C2: * Class B, $36,751,000, WAC, upgraded to Aaa from Aa2 * Class C, $10,810,000, WAC, upgraded to Aa1 from Aa3 * Class D, $27,022,000, WAC, upgraded to A1 from A2 * Class E, $11,890,000, WAC, upgraded to A2 from A3 * Class F, $10,809,000, WAC, upgraded to A3 from Baa1 * Class BR, $12,369,504, Fixed, upgraded to Aaa from Ba1 As of the March 13, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 5.2% to $831.9 million from $877.6 million at securitization. The Certificates are collateralized by 137 loans, ranging in size from less than 1.0% to 4.6% of the pool. The upgrade of Classes B, C, D, E, F and BR is due to the significant increase in defeasance since Moody's last review in March 2005. Eight loans, representing 12.9% of the pool, have defeased and have been replaced with U.S. Government securities, compared to 1.4% at Moody's last review. The largest defeased loan is the Birch Run Outlet Loan, which is the largest loan in the pool, and consists of a $38.4 million senior interest which supports the pooled classes and a $12.4 million junior interest which supports Class BR. The overall performance of the pool has been stable since Moody's last full review in March 2005. SEARS HOLDINGS: Reacts to Pershing's Call for Higher Tender Price ----------------------------------------------------------------- Sears Holdings Corporation responded to Pershing Square Capital Management, LP's call for a higher offer price for its stake in Sears Canada Inc. As reported in the Troubled Company Reporter on April 10, 2006, Pershing is ready to exercise its legal rights to secure a better value for the shares that they say Sears Holdings is trying to acquire for a "wholly inadequate" price. Sears Holdings notes that Pershing Square claims to own only 5.6 million shares directly, all of which were purchased since the mailing of the Company's offer on Feb. 9, 2006. Sears Holdings says that it is disingenuous, at best, for Pershing Square to purchase shares in the market at or around C$18 per share and then turn around and say that a purchase by Sears Holdings at a comparable price is unfair or that their "reasonable expectations [were] frustrated." According to Sears Holdings, Pershing Square used "cash-settled derivative transactions" which it believes avoid the disclosure obligations that otherwise would apply to direct ownership pursuant to Section 102 of the Securities Act (Ontario). During the period in which Pershing Square was purchasing these shares, Pershing Square did not publicly disclose that it had an economic interest in an additional 6.9 million shares. The Company recognizes that Pershing Square has the right to decide whether to tender or seek appraisal rights with regard to the shares that it in fact owns, but regardless of the actions by Pershing Square, Sears Holdings will own 100% of Sears Canada in December. While Pershing Square makes threats about various legal actions, the Company is confident that it has scrupulously followed the laws of Canada and the U.S. Importantly, the fact that several large and sophisticated shareholders independently decided to accept its offer is compelling evidence that the offer is fair and. The Company says that any pursuit of a higher price through the long and costly process of appraisal rights will be unsuccessful. Notice of Variation and Change Sears Holdings mailed its Notice of Variation and Change to shareholders of Sears Canada on April 7, 2006. As described in the Notice of Variation and Change, shareholders who deposit their shares to the revised C$18.00 per share offer will receive cash within 10 calendar days of the deposit. Any shares deposited on or after April 17, will be promptly taken up and paid for by SHLD Acquisition Corp. The decision by holders of a majority of the minority of common shares of Sears Canada to support a transaction at C$18 per share is the result of independent decisions by experienced, well- informed, and significant shareholders of Sears Canada. First, Natcan Investment Management, the largest shareholder other than Sears Holdings, agreed to tender its 9 million shares in December of 2005 at the initial offer price of C$16.86. Second, on April 1, 2006, Vornado Realty Trust, the second largest minority shareholder after Natcan, agreed to tender 7.5 million shares at a revised price of C$18. As part of this agreement, SHLD Acquisition Corp. agreed to pay all shareholders the highest price paid to any shareholder at any time until the earlier of Dec. 31, 2008 or such time as SHLD Acquisition Corp. owns, directly or indirectly, 100% of the Sears Canada shares. As required by the Canadian securities laws and as fully disclosed in the Notice of Variation and Change mailed on Tuesday, April 4, 2006, this protection is provided to all Sears Canada shareholders. Further, consistent with obligations under the Canadian and U.S. securities laws, neither SHLD Acquisition Corp. nor Sears Holdings, is providing any consideration to Vornado that it is not providing to all other Sears Canada shareholders. Third, the agreements among Sears Holdings and certain shareholders of Sears Canada in which they committed to vote their shares in favor of a going-private transaction in December 2006 at C$18.00 were reached through arms-length negotiations with each of these shareholders. As a result of the decisions to support the transaction by holders of over 25 million shares, which represent the majority of the shares not owned by Sears Holdings or its affiliates prior to the commencement of the offer, Sears Holdings has sufficient shares to assure a successful going-private transaction and ownership of 100% of the outstanding shares of Sears Canada in December 2006. About Sears Holdings Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full- line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as one of the leading retailers of tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * As reported in the Troubled Company Reporter on Dec. 30, 2005, Moody's Investors Service assigned a speculative grade liquidity rating of SGL-1 to Sears Holdings Corporation and affirmed the long-term ratings of the company and its subsidiaries with a stable rating outlook. Ratings affirmed: Sears Holdings Corp.: * Corporate family rating at Ba1 Sears Roebuck Acceptance Corp.: * Senior secured bank facility at Baa3 * Senior unsecured notes at Ba1 Rating assigned: * Speculative grade liquidity rating of SGL-1 The SGL-1 speculative grade liquidity rating is based on: * Sears Holdings' very good liquidity that reflects significant cash balances; * revolving credit availability; and * readily salable assets, including non-core brands and extraneous real estate, a sizeable amount of which is valued below market as a result of Kmart's significant post-Chapter 11 rebase of its pre-petition real estate portfolio. SEARS HOLDINGS: Canadian Unit President and CEO Steps Down ---------------------------------------------------------- Sears Canada Inc. (TSX: SCC) disclosed Monday that its Board of Directors named Dene Rogers to the role of Acting President, effective May 9, 2006, following the resignation on that day of Brent Hollister, the Company's President and Chief Executive Officer. Alan Lacy, Vice Chairman of Sears Holdings Corporation and Chairman of the Board of Directors of Sears Canada said, "Dene is familiar with Sears Canada having been a member of the Board since October, 2005, and brings a broad range of business skills and industry experience during this critical period." Mr. Rogers has been Executive Vice President, Restructuring and Business Improvement at Sears Holdings since October, 2005 and prior to this held the position of Executive Vice President and General Manager of Kmart Stores. He joined Kmart in October, 2003. Prior to Kmart, Mr. Rogers held several senior roles at Starwood Hotels and Resorts, International and prior to that was Senior Vice President, Development at GE Capital. Mr. Rogers is a graduate of Yale University. Mr. Hollister has served in virtually all sales, merchandising and operating channels of Sears Canada during his 37 years. He was appointed President, Sales & Service in 2001, President and Chief Operating Officer in 2002, and, since August 2004, has held his current role as President & CEO and a member of the Board of Directors. About Sears Canada Sears Canada - http://www.sears.ca/-- is a multi-channel retailer with a network of 188 corporate stores, 181 dealer stores, 65 home improvement showrooms, over 2,100 catalogue merchandise pick-up locations, 111 Sears Travel offices and a nationwide home maintenance, repair, and installation network. The Company also publishes Canada's most extensive general merchandise catalogue and offers online shopping. About Sears Holdings Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full- line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as one of the leading retailers of tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * As reported in the Troubled Company Reporter on Dec. 30, 2005, Moody's Investors Service assigned a speculative grade liquidity rating of SGL-1 to Sears Holdings Corporation and affirmed the long-term ratings of the company and its subsidiaries with a stable rating outlook. Ratings affirmed: Sears Holdings Corp.: * Corporate family rating at Ba1 Sears Roebuck Acceptance Corp.: * Senior secured bank facility at Baa3 * Senior unsecured notes at Ba1 Rating assigned: * Speculative grade liquidity rating of SGL-1 The SGL-1 speculative grade liquidity rating is based on: * Sears Holdings' very good liquidity that reflects significant cash balances; * revolving credit availability; and * readily salable assets, including non-core brands and extraneous real estate, a sizeable amount of which is valued below market as a result of Kmart's significant post-Chapter 11 rebase of its pre-petition real estate portfolio. SECURECARE TECHNOLOGIES: Euro Financial Grants $7 Million Loan -------------------------------------------------------------- SecureCARE Technologies, Inc., gets access to a $7 million loan under a Loan Agreement with Euro Financial Fidelity, Inc. The Loan will be represented by a ten year 6% promissory note providing for quarterly payments of accrued interest only commencing April 1, 2007, and a balloon payment of all accrued interest and principal on April 1, 2016. The Loan Agreement restricts the Company's use of the Loan proceeds to certain items agreed to by the Company and Euro Financial. Payment of the Note is secured by 1,000 shares of newly authorized Series C Contingently Convertible Preferred Stock. Each share of Series C Stock is convertible into 56,000 shares of the Company's Common Stock (an aggregate of 56,000,000 shares) if the Company defaults under the Note and Loan Agreement, but otherwise has no voting rights, no rights to receive dividends nor any liquidation preference. Since the Company does not have sufficient shares of its common stock authorized to meet this contingent obligation, it agreed to increase its authorized shares of common stock at its next shareholders' meeting. The Company will also timely register the shares, which are contingently issuable upon conversion of the Series C Preferred. Upon repayment of the Loan, the Series C Stock will have no further rights. The issuance of the Series C Stock was exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended, as not involving any public offering. A full-text copy of the Loan Agreement is available for free at http://ResearchArchives.com/t/s?7c3 A full-text copy of the Promissory Note is available for free at http://ResearchArchives.com/t/s?7c4 Headquartered in Austin, Texas, SecureCARE Technologies, Inc., provides Internet-based document exchange and e-signature solutions for the healthcare industry. The Company's SecureCARE.net application is a secure, HIPAA-ready tracking and reporting tool that streamlines operations while providing physicians with additional revenue opportunities. As of Sept. 30, 2005, SecureCARE Technologies, Inc.'s equity deficit increased to $1,880,817 compared to a $907,080 deficit at Sept. 30, 2004. Neil Burley, the Company's Chief Financial Officer informed the U.S. Securities and Exchange Commission on March 31, 2006, that the Company has not been able to compile the requisite financial data and other narrative information necessary to enable it to have sufficient time to complete the Company's Annual Report on Form 10-KSB by March 31, 2006, the required filing date, without unreasonable effort and expense. SENSATA TECH: Moody's Junks Proposed $450 Mil. Sr. Sub. Debt Issue ------------------------------------------------------------------ Moody's Investors Service assigned a first time corporate family rating of B2 to Sensata Technologies B.V. in connection with its pending acquisition by an affiliate of Bain Capital, LLC. Moody's also assigned these ratings to the preliminary tranching of the proposed $2.25 billion in debt financing: -- B1 to Sensata's proposed $1.35 billion senior secured credit facilities, expected to be split between US and Euro tranches; -- B2 to its proposed $450 million senior unsecured notes and -- Caa1 to its proposed $450 million of senior subordinated notes. Moody's assigned a SGL-2 liquidity rating, reflecting good liquidity and expected covenant compliance. The rating outlook is stable. The ratings are subject to confirmation of the final tranching and financing documentation. Sensata is the former Sensors & Controls Business of Texas Instruments Incorporated. On Jan. 9, 2006, Bain entered into an agreement to purchase Sensata from TI for $3 billion in cash, excluding fees and expenses. The aggregate debt proceeds of $2.1 billion combined with a $985 million cash equity contribution from Bain will be used to finance the acquisition. The ratings reflect Sensata's (1) high debt leverage; (2) low interest coverage; (3) relatively low free cash flow generation relative to debt levels; (4) limited tangible asset protection and (5) the potential reduction in financial and operating flexibility resulting from operating for the first time as a stand-alone company with a highly leveraged capital structure. The primary factors supporting Sensata's ratings are: 1) its track record of stable cash flow generation and margin expansion; 2) Sensata's long standing customer relationships; 3) the significant barriers to entry in Sensata's core markets; 4) its above-average revenue visibility; and 5) significant enterprise value support, reflected in part in Bain's sizeable equity investment. These first time ratings were assigned: * Corporate Family Rating -- B2; * $150 million multicurrency revolving credit facility, due 2012 -- B1; * $1,200 million in aggregate senior secured term loan Bs, due 2013 -- B1; * $450 million in aggregate principal amount of Dollar- denominated and Euro-denominated senior unsecured notes, due 2016 -- B2; * $450 million of U.S. senior subordinated notes, due 2016 -- Caa1; * Speculative Grade Liquidity rating of SGL-2. The rating outlook is stable. Sensata Technologies B.V., incorporated under the laws of The Netherlands and headquartered in Attleboro, Massachusetts, designs and manufactures sensors and electrical and electronic controls and operates in many countries around the world with manufacturing operations in the Americas, Europe and Asia. Revenues for the year ended Dec. 31, 2005 totaled approximately $1.1 billion. SERACARE LIFE: Section 341(a) Meeting Scheduled for April 18 ------------------------------------------------------------ The U.S. Trustee for Region 15 will convene a meeting of SeraCare Life Sciences, Inc.'s creditors at 1:30 p.m. on Apr. 18, 2006, at the Office of the U.S. Trustee, 402 West Broadway (use C Street entrance), Suite 630 in San Diego, California. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). Brian Metcalf, Esq., and Suzanne Uhland, Esq., at O'Melveny & Myers LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SIX FLAGS: S&P Affirms B- Corp. Credit Rating With Stable Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Six Flags Inc., including the 'B-' corporate credit rating, and removed them from CreditWatch, where they were placed with developing implications on Aug. 25, 2005. The rating outlook is stable. Roughly $2.5 billion of total debt and preferred stock was outstanding as of Dec. 31, 2005. "The affirmation reflects Standard & Poor's expectation that credit measures will continue to improve modestly in 2006, despite the increase in operating expenses necessary to implement new management's strategic plan," said Standard & Poor's credit analyst Hal F. Diamond. New York-based Six Flags is the world's largest operator of regional theme parks. The rating reflects: * the company's high debt leverage; * volatile profitability; and * negative discretionary cash flow over the past two years. These considerations are partially mitigated by company's competitive position and its degree of geographic and cash flow diversity. SOLAR TRUST: Moody's Holds Low-B Ratings on 4 Certificate Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of seven classes of Solar Trust Commercial Mortgage Pass-Through Certificates, Series 2002-1: * Class A-1, $78,204,297, Fixed, affirmed at Aaa * Class A-2, $127,959,000, Fixed, affirmed at Aaa * Class IO, Notional, affirmed at Aaa * Class B, $8,665,000, Fixed, upgraded to Aaa from Aa2 * Class C, $7,999,000, Fixed, upgraded to A1 from A2 * Class D, $6,665,000, Fixed, upgraded to Baa1 from Baa2 * Class E, $2,667,000, Fixed, upgraded to Baa2 from Baa3 * Class F, $3,999,000, Fixed, affirmed at Ba2 * Class G, $1,333,000, Fixed, affirmed at Ba3 * Class H, $2,667,000, Fixed, affirmed at B2 * Class J, $665,000, Fixed, affirmed at B3 As of the March 13, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 8.2% to $244.8 million from $266.6 million at securitization. The Certificates are collateralized by 63 loans, ranging in size from less than 1.0% to 7.9% of the pool, with the top ten loans representing 50.8% of the pool. The pool consists of a shadow rated component, representing 14.9% of the pool, and a conduit component, representing 85.1% of the pool. One loan, representing less than 1.0% of the pool, has defeased and is collateralized with Canadian Government obligations. The pool has not experienced any losses to date and there are no loans currently in special servicing. Eight loans, representing 4.8% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for 88.7% of the pool. Borrowers are only required to submit annual financial statements and thus 2005 operating results are not yet available. Moody's weighted average loan to value ratio is 70.9%, compared to 76.7% at securitization. Moody's is upgrading Classes B, C, D and E due to increased credit support and improved overall pool performance. The shadow rated component consists of two loans. The largest shadow rated loan is the Hotel Novotel Loan, which is secured by a 262-room full service hotel located in downtown Toronto, Ontario. Performance has been stable since securitization. The loan has amortized by approximately 7.4%. Moody's current shadow rating is A2, compared to A3 at securitization. The second shadow rated loan is the Chateaugay Centre Loan, which is secured by a 211,000 square foot enclosed retail center located Chateaugay, Quebec, a submarket of Montreal. The center is anchored by Super C and Hart. Performance has improved due to higher income and stable expenses. Moody's current shadow rating is Baa1, compared to Baa3 at securitization. The top three conduit loans represent 18.2% of the pool. The largest loan is the Langley Gate Shopping Centre Loan, which is secured by a 152,000 square foot retail shopping center located in the Langley suburb of Vancouver, British Columbia. The center is 100.0% occupied, compared to 97.0% at securitization. The loan amortizes on a 25-year schedule. Moody's LTV is 71.9%, compared to 76.6% at securitization. The second largest conduit loan is the La Porte de Gatineau Loan, which is secured by a 155,000 square foot retail center located in Gatineau, Quebec, in close proximity to Ottawa. The property is 93.5% occupied, compared to 92.0% at securitization. The loan amortizes on a 25-year schedule. Moody's LTV is 83.8%, compared to 91.5% at securitization. The third largest conduit loan is the Parkland Mall Loan, which is secured by a 268,000 square foot enclosed retail center located in Yorkton, Saskatchewan. The center is anchored by Zellers, The Bay and IGA and is 97.3% leased, compared to 96.0% at securitization. Hudson's Bay Company, which operates Zeller's and the Bay, was acquired by Maple Leaf Heritage Investments Acquisition Corporation in March 2006. The loan amortizes on a 25-year schedule. Moody's LTV is 80.9%, compared to 85.6% at securitization. The pool's collateral is a mix of retail, office and mixed use, industrial and self storage, lodging, multifamily and manufactured housing, specialized uses, and Canadian Government obligations. The collateral properties are located in 9 provinces. The highest province concentrations are Ontario, Quebec, Alberta, British Columbia and Saskatchewan. All of the loans are fixed rate. Thirty-five loans, representing 61.2% of the pool, are 100% recourse to the guarantors. SOLO CUP: Gets Access to $80M Loan under Second-Lien Credit Pact ---------------------------------------------------------------- Solo Cup Company gets access to an $80 million loan under a Second-Lien Credit Agreement signed on March 31, 2006. Solo Cup Investment Corporation guarantees the loan. Bank of America, N.A., serves as administrative agent. Banc of America Securities LLC is the sole lead arranger and sole bookrunning manager under the loan agreement. The Second Term Loan bears interest, at the option of the Company, at a rate equal to LIBOR plus 4.50% per annum; or 3.50% per annum plus the higher of: (a) the Bank of America prime rate; or (b) the Federal Funds rate plus 1/2 of one percentage point. The principal amount will be due in February 2012. The Company will use the proceeds reduce the amounts outstanding under its domestic revolving credit facility under its Credit Agreement dated February 27, 2004. The Second Lien Facility borrowings are secured by substantially all the Company's assets, subordinated to the Company's debts under a First Lien Facility. The Second Lien Facility borrowings are further guaranteed by the Company's other domestic subsidiaries. A full-text copy of the Second Lien Credit Agreement is available for free at http://ResearchArchives.com/t/s?7c5 Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. * * * As reported in the Troubled Company Reporter on Apr. 4, 2006, Moody's Investors Service assigned ratings on Solo Cup Company's $80 million senior secured second lien term loan due 2012 at B3; $150 million senior secured revolving credit facility maturing Feb. 27, 2010, at B2; $638 million senior secured term loan B due Feb. 27, 2011, at B2; $325 million 8.5% senior subordinated notes due Feb. 15, 2014, at Caa1; and Corporate Family Rating at B2. SOLUTIA INC: Wants Plan-Filing Period Stretched to October 10 ------------------------------------------------------------- Solutia Inc. ask the U.S. Bankruptcy Court for the Southern District of New York to further extend the time during which they have the exclusive right to: (a) file a plan of reorganization through and including October 10, 2006; and (b) solicit and obtain acceptances of that plan through and including December 11, 2006. Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York, notes that the Debtors have made remarkable progress toward their reorganization. The Debtors filed a Plan of Reorganization and Disclosure Statement on February 14, 2005. The Plan incorporates the global settlement among Monsanto Company, Pharmacia Corporation, the Official Committee of Unsecured Creditors and the Retirees' Committee. The Debtors are confident that the Plan will be adopted by the requisite number of creditors and approved by the Court. However, there is an unjustified risk that if the Plan or Disclosure Statement is not approved, perhaps as a result of the failure to resolve the adversary proceeding commenced on May 27, 2005, by JPMorgan Chase Bank, N.A., as Indenture Trustee, the Exclusive Periods will have expired in the interim period, Mr. Henes points out. The Debtors believe the JP Morgan Adversary Proceeding is wholly without merit and are confident that it will be rejected. Nonetheless, should JPMorgan prevail on its claims and the Court conclude that it has a secured claim of more than $450,000,000, the Plan will no longer be confirmable as proposed and the Debtors will have to return to the bargaining table, Mr. Henes says. In that scenario, the Debtors would be left to not only operate their business, but to do so while attempting to formulate and negotiate a new plan, assess competing plans if filed and contend with the destabilizing effect that those events would have on their business, employees, vendors and customers. Mr. Henes assures the Court that the Debtors are not seeking to extend their Exclusive Periods to pressure creditors to accede to their reorganization demands. The Debtors, Monsanto, Pharmacia, the Creditors Committee and the Retirees' Committee have already reached agreement on the terms of the Plan. The Debtors seek an extension of their Exclusive Periods to enable the Settling Parties, and potentially other parties, to once again negotiate and reach accord on the terms of a new plan of reorganization without the pressure of competing plans if the Court ultimately does not approve the current Plan, Mr. Henes says. Court's Interim Order Judge Beatty extends the time by which the Debtors have the exclusive right to: (a) file a plan of reorganization to the later of: (i) April 25, 2006; or (ii) until the Court makes a final decision on the Debtors' request; and (b) solicit and obtain acceptances for that plan to the later of: (i) June 25, 2006; or (ii) until the Court makes a final decision on the Debtors' request. 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. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) STARWOOD HOTELS: Completes Sale of 28 Hotels to Host Marriot Corp. ------------------------------------------------------------------ Host Marriott Corporation (NYSE: HMT) completed the acquisition of 28 hotels from Starwood Hotels & Resorts Worldwide, Inc. and the issuance of approximately 133.5 million shares of common stock of the Company to Starwood stockholders. The Company will also change its name to Host Hotels & Resorts, Inc. on April 17, 2006, and on April 18, 2006, it will begin trading on the New York Stock Exchange under the new ticker symbol HST. The Company and Starwood agreed to defer the purchase of two hotels located in Fiji due to certain notice periods and approvals that have not yet lapsed or been received. As a result of the deferral of the Fijian assets: * the purchase price for the transactions completed was reduced by approximately $129 million; * the amount of assumed debt was reduced by approximately $31 million; and * the cash consideration was reduced by approximately $98 million. The Company also expects to complete the purchase of four additional hotels from Starwood located in Europe by the previously-reported joint venture between the Company and two partners by no later than May 3, 2006 and to complete the purchase of The Westin Europa & Regina in Venice, Italy by no later than June 15, 2006. "We are thrilled to announce the completion of the majority of this transformational transaction and to officially announce our name change to Host Hotels & Resorts," Christopher J. Nassetta, president and chief executive officer, stated. "We are also pleased to have completed the financing of the cash portion of the transaction as originally contemplated by completing certain high- multiple asset sales, the formation of a European joint venture and our recent issuance of senior notes. Finally, we are very excited to embark on a strategic partnership with Starwood and look forward to working with Steve Heyer and his team in the years to come to create value in this portfolio and on future transactions." About Host Marriott Headquartered in Bethesda, Maryland, Host Marriott Corporation -- http://www.hostmarriott.com/-- is a lodging real estate company that currently owns or holds controlling interests in 130 upper upscale and luxury hotel properties primarily operated under premium brands, such as Marriott(R), Westin(R), Sheraton(R), Ritz- Carlton(R), Hyatt(R), W(R), Four Seasons(R), St. Regis(R), The Luxury Collection(R), Fairmont(R) and Hilton(R). About Starwood Hotels Headquartered in White Plains, New York, Starwood Hotels & Resorts Worldwide, Inc. -- http://www.starwoodhotels.com/-- is one of the leading hotel and leisure companies in the world with approximately 750 properties in more than 80 countries and 120,000 employees at its owned and managed properties. With internationally renowned brands, Starwood(R) corporation is a fully integrated owner, operator and franchiser of hotels and resorts including: St. Regis(R), The Luxury Collection (R), Sheraton(R), Westin(R), Four Points(R) by Sheraton, and W(R), Hotels and Resorts as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. * * * As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service confirmed Starwood Hotels & Resorts Worldwide Inc.'s Ba1 Corporate Family Rating, affirmed its SGL-2 rating and revised the rating outlook to Positive. Moody's also confirmed the ratings of Sheraton Holdings Corp. at Ba1. As reported in the Troubled Company Reporter on Mar. 29, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' ratings on Starwood Hotels & Resorts Worldwide Inc. subsidiary ITT Corp.'s: * $450 million senior unsecured notes, and * $150 million senior unsecured notes. All other existing ratings for Starwood were affirmed, including the 'BB+' corporate credit rating. S&P said the rating outlook is positive. SUPERIOR ENERGY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Superior Energy Services, LLC 14326 East Hawthorne Street Wichita, Kansas 67230 Bankruptcy Case No.: 06-40254 Chapter 11 Petition Date: April 10, 2006 Court: District of Kansas (Topeka) Debtor's Counsel: Joseph M. Weiler, Esq. Alderson Law Firm 2101 Southwest 21st Street Topeka, Kansas 66604-1840 Tel: (785) 232-0753 Fax: (785) 232-1866 Total Assets: $9,469 Total Debts: $2,656,749 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Post Rock Gas, LLC Contract $2,003,250 1323 East 71st Street, Suite 300 Tulsa, OK 74136 Challenger Investment Company $552,979 c/o Edward B. Cordes 4949 South Syracuse, Suite 375 Denver, CO 80237 Tiger Natural Gas, Inc. Trade Debt $35,177 P.O. Box 702437 Tulsa, OK 74170 Bank of America Trade Debt $13,831 Glenda Cafer Trade Debt $12,900 American Arbitration Assoc. Trade Debt $8,512 Kenosha Operating, LLC Trade Debt $6,977 Circle 4 Drilling, LLC Trade Debt $4,000 Jeanette Hanson Trade Debt $3,500 Midwest Energy Association Trade Debt $2,750 State Corporation Commission Regulatory Fees $2,589 Internal Revenue Service Tax Obligation $2,042 DC&B Supply Trade Debt $1,911 Platts Trade Debt $1,880 LSI Lubrication Trade Debt $1,864 Trand, Inc. Trade Debt $750 City of Pratt Finance Dept. Trade Debt $687 Rolling Thunder Gas Gathering Trade Debt $450 Doyle Dryers, Inc. Trade Debt $407 Central Kansas Medial Center Trade Debt $179 TENFOLD CORP: Issues Pref. Shares & Warrants in $2-Mil. Placement ----------------------------------------------------------------- TenFold Corp issued units to TF Holdings, First Media L.P. First Media TF Holdings, LLC, consisting of one share of TenFold's Convertible Preferred Class A Stock, par value $0.001 per share, and a warrant to purchase one half of one share of TenFold's common stock. The $2-million transaction was pursuant to a March 29, 2006, Securities Purchase Agreement, signed among the parties. In the aggregate, TF Holdings acquired 476,342 preferred shares and a warrant to purchase 3,225,757 common shares. The Warrant exercise price is $0.62 per share, subject to adjustment. The Warrant may be exercised at any time, in whole or in part, until March 30, 2011. The holder of the warrant has the right to exchange the Warrant, in whole or in part, prior to March 30, 2011 for common shares without the payment of an exercise price pursuant to a formula contained in the Securities Purchase Agreement and the Warrant. Under the Certificate of Designations for the Preferred Stock filed with the Secretary of State of Delaware, each preferred share is convertible at any time at the option of the holder into 13.54387 common shares, subject to adjustment. In addition, TenFold has the right to require conversion of the preferred shares when the closing price of the Common Stock has exceeded $5.00 per share for 30 consecutive trading days. TenFold Corporation (OTC Bulletin Board: TENF) -- http://www.tenfold.com/-- licenses its patented technology for applications development, EnterpriseTenFold(TM), to organizations that face the daunting task of replacing obsolete applications or building complex applications systems. Unlike traditional approaches, where business and technology requirements create difficult IT bottlenecks, EnterpriseTenFold technology lets a small, team of business people and IT professionals design, build, deploy, maintain, and upgrade new or replacement applications with extraordinary speed, superior applications quality and power features. As of Sept. 30, 2005, TenFold's balance sheet reflected a $945,000 stockholders' deficit, compared to $2,281,000 of positive equity at Dec. 31, 2004. * * * Going Concern Doubt Tanner LC expressed substantial doubt about TenFold's ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended Dec. 31, 2004. The auditor pointed to the company's problems in raising capital. TOWER AUTOMOTIVE: Delays Filing of Annual Financial Report ---------------------------------------------------------- Christopher T. Hatto, Tower Automotive Inc.'s chief accounting officer, tells the Securities and Exchange Commission that the company's Form 10-K for the year ended December 31, 2005, could not be filed by March 31, 2006, because Tower could not complete the preparation of the required information without unreasonable effort and expense. Mr. Hatto relates that Tower does not expect the Form 10-K to be completed within the extended time frame permitted under Rule 12b-25 of the Securities Exchange Act of 1934. Tower intends to file its Form 10-K for the year ended December 31, 2005, as soon as all information necessary to complete the report is available to the company, Mr. Hatto says. Tower expects to report a substantial net loss for the year ended December 31, 2005. However, according to Mr. Hatto, the loss is expected to be significantly lower than the net loss of $533.9 million recognized during the year ended December 31, 2004. The net loss for 2004 reflected a goodwill impairment charge of $337.2 million. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). TOWER AUTOMOTIVE: Has Until July 31 to Decide on Unexpired Leases ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended, until July 31, 2006, the period within which Tower Automotive, Inc., and its debtor-affiliates can assume, assume and assign or reject unexpired nonresidential real property leases. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that the Debtors are party to over 20 major facility lease agreements, including leases for office space locations and key production centers. The Leased Facilities will factor heavily into the Debtors' ongoing operational restructuring. The Debtors believe that they are current on all postpetition obligations under the Unexpired Leases. According to Mr. Sathy, the Debtors have already made significant progress evaluating the Unexpired Leases. As of March 9, 2006, the Debtors have rejected nine different leases. However, Mr. Sathy explains that while the Debtors have made substantial progress, they are still in the process of developing their business plan and have not yet finished their analysis of the remaining Unexpired Leases. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 31 Bankruptcy Creditors' Service, Inc., 215/945-7000). TOWER AUTOMOTIVE: Wants to Assume Menlo Logistics Contract ---------------------------------------------------------- Tower Automotive, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York for authority to assume their transportation management services agreement with Menlo Logistics, Inc. Under the agreement, Menlo Logistics provided the Debtors with transportation management and third-party logistical support in connection with: -- the delivery of supplies, products and other materials used by the Debtors in the manufacture, distribution and sale of their products; and -- the delivery of the Debtors' finished products to their OEM customers. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that Menlo serves as the intermediary between the Debtors and the various freight and shipping providers that are used by the Debtors in the ordinary course of their business. The Debtors believe that it would be extremely difficult to replace Menlo as their third-party logistics provider and that any transition would take at least six months to complete. Menlo and its network of freight providers service every Tower location across the country. Mr. Sathy explains that due to the "just-in-time" nature of the Debtors' supply chain, any transition would require significant cost and attention to reduce the risks associated with delayed deliveries. Moreover, the Debtors believe there are very few third-party logistics providers who have the capabilities or infrastructure to support their needs. Menlo's specific duties under the Agreement include coordinating timing and conditions, as well as negotiating costs, with the freight providers, on behalf of the Debtors. Furthermore, under the Agreement, Menlo provides additional operational benefits for Tower, as Menlo has numerous systems and logistics capabilities that do not exist within Tower. Thus far in 2006, the Debtors, on a composite basis, have paid $358,000 per month in services fees to Menlo. Amendments As a result of recently negotiated amendments to the Agreement, the Debtors project their service fee costs to be reduced by nearly 33% to $241,000 per month going-forward. In addition to the projected savings from the amended fee structure, the derivative savings from Menlo's negotiated freight cost reductions are expected to equal $5,000,000 over the two-year term of the Agreement, Mr. Sathy says. The Debtors and Menlo stipulate that no outstanding cure amount is owed to Menlo with respect to the Agreement. To the extent that a cure amount is determined to exist, Menlo agrees to waive its cure rights. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05- 10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 31 Bankruptcy Creditors' Service, Inc., 215/945-7000). US CAN: Moody's Withdraws Ratings Following Ball Acquisition ------------------------------------------------------------ Moody's Investors Service withdrew the ratings of United States Can Company. Ball Corporation on Mar. 27, 2006 completed its acquisition of the United States and Argentinean operations of U.S. Can. In connection with the transaction, the senior secured credit facilities of U.S. Can were repaid, and tender offers were made for U.S. Can's outstanding notes. The tender offer for U.S. Can's $125 million 10.875% senior secured second lien notes due July 10, 2010 resulted in a de minimis amount of the notes remaining outstanding. The tender offer for the 12.375% senior subordinated notes due Oct. 1, 2010 resulted in about $9.5 million of the notes remaining outstanding. Ball has directed the trustee for the senior subordinated notes to call the notes. All of the remaining notes have been stripped of covenant protections and reporting requirements. Moody's withdrew these ratings: * $65 million senior secured first lien revolving credit facility, B3 withdrawn; * $250 million senior secured first lien term loan B, B3 withdrawn; * $125 million second lien 10.875% notes due July 10, 2010, Caa2 withdrawn; * $172 million 12.375% senior subordinated notes due Oct. 1, 2010, Caa3 withdrawn; and * Corporate Family Rating, B3 withdrawn. The withdrawal of the ratings concludes the review commenced on March 2, 2006. VALOR COMMS: Alltel Merger Produces Windstream Communications ------------------------------------------------------------- The new company to be formed through the spinoff of Alltel's (NYSE: AT) landline business and merger with VALOR Communications Group will be named Windstream Communications. Jeff Gardner, president and CEO of Windstream Corporation, disclosed announced the name and logo to employees Monday during a Web cast. "Windstream Communications builds on our 60-year history as a reliable customer ally with fresh, innovative thinking and technology to deliver the information, entertainment and personal connections that customers need to thrive in today's global economy," Gardner said. "This is an important day for the wireline business because now employees have a name to rally around and they can begin building a distinct identity for Windstream," said Scott Ford, president and CEO of Alltel. "Windstream has the management strength, the workforce talent and the capital structure to be successful in the rural telecom space." On Dec. 9, 2005, Alltel announced that it would spin off its landline business and merge it with VALOR Communications Group. The combination will create a major voice, broadband and entertainment services company focused on the rural U.S. The transaction will reposition the remaining Alltel as a pure-play wireless service provider with roughly 11 million customers in 34 states. Windstream Communications' corporate headquarters will be located in Little Rock. The new company expects to trade on the New York Stock Exchange under the ticker symbol "WIN" upon close of the spinoff from Alltel and merger with VALOR, expected to be completed by mid-year. "Windstream will have a variety of service offerings including voice, broadband and satellite TV, designed to help us 'win' in the marketplace," said Keith Paglusch, chief operating officer of the new company. Company officials partnered with Lippincott Mercer of New York to develop the new name and logo. In addition, the company has selected The Concept Farm of New York as its advertising agency. About Windstream Communications After separating from Alltel and merging with VALOR Communications Group, Windstream Communications - http://www.windstreamcomm.com/ -- will provide voice, broadband and entertainment services to customers in 16 states. The company will have approximately 3.4 million access lines and about $3.4 billion in annual revenues. About Alltel Alltel Corp. -- http://www.alltel.com/-- with more than 15 million communications customers in 36 states and nearly $10 billion in annual revenues, is a leader in the communications and information services industries. Alltel provides information services to telecommunications, financial and mortgage clients in more than 50 countries. About Valor Communications Headquartered in Irving, Texas, VALOR Communications Group -- http://www.valortelecom.com-- is one of the largest providers of telecommunications services in rural communities in the southwestern United States. The company, through its subsidiary VALOR Telecom, offers to residential, business and government customers a wide range of telecommunications services, including: local exchange telephone services, which covers basic dial-tone service as well as enhanced services, such as caller identification, voicemail and call waiting; long distance services; and data services, such as providing digital subscriber lines. * * * As reported in the Troubled Company Reporter on Dec. 13, 2005, Standard & Poor's Ratings Services placed its ratings on Valor Communications Group Inc., including the 'BB-' corporate credit rating, on CreditWatch with positive implications after the announcement that Valor will merge with the newly formed wireline company created by the spin-off of ALLTEL Corp.'s wireline business. Valor, an Irving, Texas-based rural local exchange provider, has approximately $1.2 billion of outstanding debt. "The CreditWatch placement reflects our expectation that the business and financial profiles for the new company will be stronger than Valor's current profiles," said Standard & Poor's credit analyst Susan Madison. VARIG S.A.: Needs More Time to Pay Brazilian Government Debt ------------------------------------------------------------ The Associated Press reports that Marcelo Bottini, CEO of VARIG S.A., met with Waldir Pires, Brazil's Defense Minister, to ask the Brazilian government for: -- a three-month delay to pay Infraero, Brazil's airport authority; and -- a two-month delay to pay BR Distribuidora, an affiliate of Brazilian government-owned oil company Petrobras. VARIG owes airport authority about $54 million and spends about $422,000 a day for airport fees, AP relates. New Short-Term Financing VARIG is also seeking financing to cover airport fees and fuel costs, and to tide the airline over the offseason. Bloomberg says VARIG is asking the Brazilian government for a short-term credit line through Banco Nacional de Desenvolvimento Economico e Social, the government-run national development bank. However, according to Investnews (Brazil), the new BNDES chair Demian Fiocca said a likely support to VARIG will go through technical analyses as all financings granted by the bank. Brazil's Finance Minister Guido Mantega also told Investnews that it is not the government's role to help VARIG. Mr. Mantega said the government has done everything that could be done through BNDES when the bank granted loans for the purchase of VarigLog and VEM. Mr. Bottini denied local reports that the airline will suspend flights and ground its planes unless it gets financing. About VARIG Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: VarigLog Extends $350 Mil. Purchase Offer ----------------------------------------------------- As widely reported, Varig Logistica S.A., has offered $350,000,000 to acquire VARIG, S.A. However, VarigLog will not assume the company's debts. VarigLog is the former logistics arm of VARIG. VarigLog said that the proposed transaction intends to provide cash flow and reserves necessary for VARIG's continuity. According to Reuters, VARIG confirmed the $350-million saying the investment would "make possible the recovery of Brazil's biggest airline, keeping thousands of jobs." The offer, however, does not sit well with the union of VARIG crewmembers, Bloomberg News reports. Union president Graziela Baggio pointed out that the proposal plans to dismiss about 5,000 of the airline's 10,700 employees. VarigLog also would not take over the Debtor's BRL7,000,000,000 debt if it ends up buying the airline. About VARIG Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: Foreign Reps Ask Court to Endorse Recovery Plan ----------------------------------------------------------- Vicente Cervo and Eduardo Zerwes, as Foreign Representatives of VARIG, S.A., and its debtor-affiliates, ask the Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to enter a permanent injunction order granting full force and effect to the Foreign Debtors' Recovery Plan. The Foreign Debtors' Plan is comprised of: a. The judicial recovery plan, which was approved by the general assembly of creditors on December 19, 2005, and then sanctioned and approved by the Brazilian Court in a decision dated December 28, 2005; and b. The corresponding Detailed Judicial Reorganization Plan, which was approved by the general assembly of creditors in the Foreign Proceedings on February 23, 2006. To give effect to the terms of the Plan in the United States, it is necessary for the U.S. Bankruptcy Court to convert to a permanent injunction the Preliminary Injunction currently in force in the Foreign Debtors' Chapter 11 proceedings, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, contends. The Permanent Injunction will: -- replace and supersede the Preliminary Injunction order; and -- serve to implement in the United States the injunctive effect of the Plan. Preliminary Injunction Order As previously reported, the Court entered in June 2005 the Preliminary Injunction Order enjoining any party from taking actions in contravention of the Foreign Debtors' proceedings pending before the Commercial Bankruptcy and Reorganization Court in Rio de Janiero, Brazil, pursuant to the New Bankruptcy and Restructuring Law of Brazil. Subsequent Preliminary Injunction Orders including those dated Jan. 5, 2006, and Jan. 27, 2006, extended the Preliminary Injunction. The January 5 Preliminary Injunction Order provided for conditions, including: -- the creation of a contingency plan for the orderly return of aircraft by the Foreign Debtors in the event of a liquidation; and -- recognition that any lessor claims arising from the implementation of the contingency plan would be afforded priority status over prepetition claims in the Foreign Proceedings. By decision dated Jan. 6, 2006, the Brazilian Court ratified the VARIG Contingency Plan for the Orderly Return of Aircraft and recognized the priority nature of postpetition claims. The January 27 Preliminary Injunction Order, inter alia: -- granted full force and effect to the Recovery Plan on a preliminary basis; -- extended the Preliminary Injunction through and including March 21, 2006; and -- set a hearing for March 17, 2006, to consider a continuation of the Preliminary Injunction or for the entry of a permanent injunction. The Court later adjourned the March 17 hearing to April 27, 2006, and extended the Preliminary Injunction through and including April 28, 2006. The Plan The Plan, Mr. Antonoff relates, divides prepetition claims into three classes as required by the NBRL: Creditor Description -------- ----------- Class I Holders of credits derived from labor laws or resulting from work accidents. Class II Holders of credits with real collateral, i.e., secured creditors. Class III Holders of unsecured, special-privilege, general or subordinate credits, i.e., unsecured creditors. Pursuant to the Detailed Recovery Plan, Class I Creditors will receive payment on account of their claims within a year of approval of the Recovery Plan and may convert their claims into equity interests in reorganized VARIG. After a three-year grace period, Class II Creditors who retain their "guarantees," that is, liens, will be paid in full over seven years while Class III will be paid in full over 10 years. During the initial three-year grace period, BRL100,000,000 will be designated to and divided among the Class II and Class III Creditors to reduce the amounts of their claims. Classes II and III will also have the option to convert their debt into equity in reorganized VARIG and the equity interests may be freely traded, including in a public offering of shares of reorganized VARIG contemplated by the Detailed Recovery Plan. All three Classes of Creditors will have therefore the option to convert their debts into an indirect equity interest in the Foreign Debtors. Pursuant to the Plan, all of the shares held by the Ruben Berta Foundation in the Foreign Debtors will be transferred to an Equity Investment Fund. Ownership of the EIF Control will be divided between three EIF entities, each corresponding to a class of creditors -- EIF-Credit I, EIF-Credit II and EIF-Credit III. In this manner, creditors may elect to convert their claims against the Foreign Debtors into interests in the appropriate EIF-Credit entity for their creditor class. The NBRL provides that a judicial recovery plan constitutes a novation of prepetition debt. Thus, pursuant to the Plan, all claims against the Foreign Debtors that arose on or before the Petition Date are enforceable only to the extent provided by the Plan. After the grant of recovery relief on December 28, 2005, the Foreign Debtors will remain under the supervision of the Brazilian Court for two years to ensure the implementation of the Plan. At the end of this period, the Brazilian Court will declare the judicial recovery procedure terminated and will determine: -- the compensation of the judicial administrator appointed by the court; -- the value of the outstanding judicial fees; -- that the judicial administrator must present a report on the compliance of the recovery plan, within 15 days; -- the dissolution of the creditors' committee and the removal of the judicial administrator; and -- that the competent entities are notified of the decision. If the Foreign Debtors fail to meet their obligations under the Plan within two years of the grant of judicial recovery, the Foreign Debtors will enter another phase of Brazilian bankruptcy and be liquidated. Mr. Antonoff notes that the contingency plan recognizes that the Foreign Debtors will cooperate in the orderly return of aircraft, and the lessors will have a priority claim for any additional expenses they may incur in seizing or reassembling their aircraft. A full-text copy of the certified English translation of the Recovery Plan is available for free at: http://bankrupt.com/misc/VARIGJudicialRecoveryPlan.pdf A certified English translation of the Detailed Recovery Plan is available for free at: http://bankrupt.com/misc/VARIGDetailedReorgPlan.pdf Permanent Injunction is Clearly Justified The Foreign Representatives assures the Court that the Permanent Injunction will ensure just treatment of all the Foreign Debtors' creditors and interest holders. Furthermore, the Permanent Injunction will prevent the preferential distribution of assets to some of the Foreign Debtors' creditors to the disadvantage of others. Without the grant of the Permanent injunction, the Foreign Debtors' creditors may seek to obtain preferential treatment by attaching the Debtors' assets in the United States without regard to the Foreign Proceedings and the creditor-approved Plan, leading to the unequal treatment of creditors, the dispersion of the assets of the Foreign Debtors, and possibly even the failure of the Plan. That outcome would be contrary to the distributive provisions of the NBRL and the Plan as well as the fundamental purpose of United States bankruptcy laws, Mr. Antonoff says. Accordingly, the Foreign Representatives contend that the entry of a Permanent Injunction to carry out and give effect to the terms of the Plan is clearly justified. Mr. Antonoff assures the Court that the Permanent Injunction will not prejudice nor inconvenience claimholders in the United States through the processing of claims in the Foreign Proceedings. About VARIG Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) VERIFONE INC: S&P Affirms BB- Rating & Revises Outlook to Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on San Jose, California-based VeriFone Inc. to negative from stable, after the company's announcement that it intends to acquire Lipman Electronic Engineering Ltd. for about $793 million, consisting of: * $382 million in cash; and * 13.3 million shares of stock, valued at $411 million. The corporate credit rating is affirmed at 'BB-'. "The outlook revision reflects our concerns about potential operational disruptions, given that the acquisition represents the largest transaction undertaken by the company to date, as well as Lipman's decline in EBITDA margins over the past two years," said Standard & Poor's credit analyst Lucy Patricola. The ratings on VeriFone reflect the company's relatively short financial history as an independent entity and aggressive growth strategies, partially offset by VeriFone's leading position in the niche market for electronic payment solutions and a diversified customer base. VeriFone designs, markets, and services system solutions that enable secure electronic payments. After being acquired from Hewlett-Packard Co. in July 2001, VeriFone operated as a privately held company until its IPO in May 2005. Following a period of essentially flat revenues from fiscal 2000 through 2003, revenue growth has accelerated over the past two years, benefiting from: * management's focus on increasing penetration of electronic payments in international markets; * replacement of existing solutions to accommodate newer payment applications; and * an overall market shift from paper-based transactions to electronic transactions at the point of sale. The acquisition will solidify VeriFone's leading market position, particularly in international markets, and strengthen its wireless product offerings. WALKER FINANCIAL: Marcum & Kliegman Raises Substantial Doubt ------------------------------------------------------------ Auditors working for Marcum & Kliegman LLP in New York raised substantial doubt about Walker Financial Corporation's ability to continue as going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the company's recurring losses since inception and working capital deficiency. The company reported a $3,296,318 net loss on $327,657 of net revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $282,157 in total assets and $1,978,853 in total liabilities, resulting in a $1,696,696 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $65,223 in total current assets available to pay $1,978,853 in total current liabilities coming due within the next 12 months. Full-text copies of Walker Financial Corporation's financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7c0 Walker Financial Corporation, through its subsidiary American DataSource Inc., provides recordkeeping and management services to funeral homes and cemeteries relating to pre-need trusts. National Preplanning Inc., another unit of Walker Financial, markets prearranged funerals and cremations to affinity groups, employee unions, and other groups. At Dec. 31, 2005, the company's stockholders' equity deficit widened to $1,696,696 from a $1,446,995 equity deficit at Dec. 31, 2004. WAVE WIRELESS: Aidman Piser Raises Going Concern Doubt ------------------------------------------------------ Auditors at Aidman, Piser & Company, P.A., in Tampa, Florida, raised substantial doubt about Wave Wireless Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the company's recurring net losses, use of significant cash to support its operating activities, need for additional capital, and significant reconfiguration of its operations to sustain its operations beyond March 31, 2006. Financials The company delivered its financial statements for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 24, 2006. The company reported a $16,410,000 net loss on $11,807,000 of sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $15,038,000 in total assets, $10,830,000 in total liabilities, and $4,208,000 in total stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $2,176,000 in total current assets available to pay $9,286,000 in total current liabilities coming due within the next 12 months. Full-text copies of Wave Wireless Corporation's financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?7cd Wave Wireless Corporation -- http://www.wavewireless.com/-- develops, manufactures and distributes next generation wireless mesh routers for the telecommunications, security and surveillance and public safety markets. Wave Wireless' mesh, point-to-point and point-to-multipoint broadband wireless access systems combine high performance, versatility and AES encryption to deliver a broad range of powerful applications and turnkey solutions ideally suited for internet service providers, educational institutions, corporate enterprises and government agencies. Wave Wireless' wireless access systems are sold globally through its own sales force, as well as through strategic partners, distributors, systems integrators, and value added resellers. On March 24, 2006, the Company merged with WaveRider Corp. a supplier of wireless broadband equipment with great strength in Non-Line-of- Sight market segments. WHIRLPOOL CORP: Maytag Deal Prompts Moody's to Lower Ratings ------------------------------------------------------------ Moody's Investors Service downgraded the long term senior unsecured debt rating of Whirlpool Corporation and its subsidiaries to Baa2 from Baa1, and preferred stock rating to Ba1 from Baa3. Shelf ratings to (P)Baa2/(P)Baa3 from (P)Baa1/(P)Baa2. Whirlpool's commercial paper rating of P-2 was confirmed. These actions, resulting from the closing of Whirlpool's acquisition of Maytag, are consistent with the ratings indication given by Moody's in January 2006. The rating outlook is negative. This concludes Moody's review of Whirlpool's ratings started August 2005. Concurrently, Moody's upgraded Maytag Corp.'s senior debt to Ba2 from B2, and its corporate family rating to Ba2 from B1, ending the rating review from September 2005. The B1 rating on Maytag's bank credit facility, repaid in connection with the acquisition, was withdrawn. The new bond ratings reflect the indirect benefit of the acquisition to bondholders, along with the lack of formal support from Whirlpool. Whirlpool has not announced that it will explicitly support Maytag's debt, but a cross default provision in Whirlpool's current credit facility provides a level of protection for Maytag bondholders. Maytag's debt and CFR ratings will be withdrawn following this announcement because Moody's does not believe it will have adequate information to maintain the ratings. The downgrade reflects Whirlpool's increased leverage and weak metrics following the acquisition, as well as the risks of integration, persistent challenges to prices and market share, and exposure to commodity price fluctuations. The ratings continue to be supported by Whirlpool's improved position in the U.S. appliance market, its strong international presence, and good cash flow which Moody's expects will be sufficient to finance integration needs and repay debt over the medium term. The rating outlook is negative. Moody's expects Whirlpool's metrics will remain weak for its rating category through 2007. Ratings could fall if the meaningful decline in leverage or operating margins did not show signs of run-rate improvement within the next 18 -- 24 months. Ratings could also fall if the toll of competition accelerates, reducing the expected advantages of the acquisition. Ratings could stabilize if the integration of Maytag yields higher than expected cost synergies, causing operating margin to exceed 7%, debt / EBITDA below 2.0x, or FCF / debt above 20%. Whirlpool Corporation, with headquarters in Benton Harbor, Michigan, is a global manufacturer and marketer of home appliances under the Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other brand names. Maytag, based in Newton, Iowa is the third largest US-based appliance company. The corporation's primary brands are Maytag, Hoover, Jenn-Air, Amana, Dixie-Narco and Jade. WHITING PETROLEUM: S&P Affirms Ratings & Says Outlook is Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Whiting Petroleum Corp. to positive from stable, and affirmed the company ratings. The positive outlook is based on: * Whiting's improved scale across its relatively low-risk onshore basins; * a sizable drilling inventory; and * the potential for deleveraging over the near to intermediate term. Standard & Poor's could raise ratings in the next 12 to 18 months, depending on the success with which Whiting: * develops its substantial level of proved undeveloped reserves; * ramps up its production levels; and * improves credit measures. As of Dec. 31, 2005, Denver-based Whiting had $875 million of debt. The ratings on Whiting reflect: * the high cyclicality of the oil and gas exploration and production sector; * Whiting's leveraged financial profile; and * the company's significant future capital expenditures related to future development costs. These concerns are partially offset by Whiting's: * increased scale; * long-lived reserves; and * significant inventory of drilling prospects. Whiting plans to spend $360 million on drilling capital expenditures in 2006, up from slightly under $200 million (excluding acquisitions) in 2005. Of the $360 million, about $160 million relates to development of the acquired Celero properties. The company estimates total future development costs of $533 million related to these properties, 80% of which are expected to be incurred over the next five and a half years. If oil prices stay at or near their current levels, Whiting would be expected to generate about $450 million in operating cash flow in 2006. "Whiting's positive outlook reflects the company's improved scale, its relatively low-risk drilling inventory in mature onshore basins, and acceptable leverage statistics for the 'B+' rating category," said Standard & Poor's credit analyst David Lundberg. "Standard & Poor's could upgrade the credit in the next 12 to 18 months, depending on the success with which Whiting develops its substantial level of proved undeveloped reserves, ramps up its production levels, and reduces financial debt levels with free cash flow," he continued. WINN-DIXIE: Lonestar Appointed & Committee Now Has Seven Members ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 16, 2006, Felicia S. Turner, the United States Trustee for Region 21, informed the U.S. Bankruptcy Court for the Middle District of Florida that R2 Investments, LDC, had resigned from the Official Committee of Unsecured Creditors, effective Jan. 18, 2006. Pursuant to Section 1102(a) of the Bankruptcy Code, Ms. Turner, appoints Lonestar Partners, LLP, as a member of the Official Committee of Unsecured Creditors. The Creditors Committee is now comprised of: 1. Deutsche Bank Trust Company Americas 60 Wall Street New York, NY 10005-2858 Attn: S. Berg Tel: (212) 250-2921a 2. New Plan Excel Realty Trust, Inc. 420 Lexington Avenue New York, NY 10170 Tel: (212) 869-3000 3. Kraft Foods Global, Inc. Three Lakes Drive Northfield, IL 60093 Attn: Sandra Schirmang, Senior Director of Credit Tel: (847) 646-6719 4. Pepsico & Subsidiaries 7701 Legacy Drive 38-109 Plano, TX 75024 Attn: Scott Johnson, Group Credit Manager Tel: (972) 334-7405 5. Capital Research & Management Company 333 South Hope Street Los Angeles, CA 90071 Attn: Ellen Carr, Vice- President Tel: (213) 486-9200 6. Wilmington Trust Company, as Indenture Trustee 1100 North Market Street Rodney Square North Wilmington, DE 19890 Attn: Michael W. Diaz, Vice President Tel: (212) 415-0509 7. Lonestar Partners, LLP 1 Maritime Plaza, Suite 750 San Francisco, CA 94111 Attn: Vikar Tandon Tel: (415) 362-7677 Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Gets Open-Ended Deadline to Decide on Unexpired Leases ------------------------------------------------------------------ As reported in the Troubled Company Reporter on Feb. 23, 2006, the Debtors asked the U.S. Bankruptcy Court for the Middle District of Florida to further extend the period within which they must move to assume, assume and assign or reject the Unexpired Leases through and including the date on which their confirmed plan of reorganization becomes effective. Moreover, the Debtors propose that each Lessor be permitted to seek to shorten the Extension Period for cause with respect to a particular Unexpired Lease. Court Ruling At the March 23, 2006, hearing, the Court was advised that: (a) the objections of Lassiter Properties, Inc., and London Associates, Ltd., have been settled based on the Debtors' willingness to reduce the length of their requested extension to move to assume or reject the Unexpired Leases; and (b) the parties have agreed to continue the hearing on the objections filed by: -- Commodore Realty, Inc., and Isram Realty & Management, Inc.; and -- Westfork Tower, LLC, T/A Western LLC, Concord-Fund IV Retail, LP, TA Cresthaven, LLC, Flagler Retail Associates, Ltd., and Elston/Leetsdale, LLC, by and through their property manager Terranova Corporation. Judge Funk rules that provided that a motion to assume or reject the Unexpired Leases has been filed prior to the hearing to consider confirmation of the Debtors plan of reorganization, the period within which the Debtors must assume or reject the Unexpired Leases is extended through the date on which the Debtors' Plan becomes effective. The Court extends the Debtors' lease decision period for Store Nos. 188, 279, and 290 through the earlier of: (a) the date on which the Debtors begin soliciting votes on the Plan; and (b) May 19, 2006. Unresolved Objections that have not yet been withdrawn are overruled. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000). W.S. LEE: U.S. Trustee Appoints 11-Member Creditors Committee -------------------------------------------------------------- The U.S. Trustee for Region 3 appointed eleven creditors to serve on an Official Committee of Unsecured Creditors in W.S. Lee & Sons, Inc. and its debtor-affiliate, Lee Systems Solutions, LLC's chapter 11 cases: 1. Ryder Truck Rental, Inc. Attn: Kevin P. Sauntry dba Ryder Transportation Services 6000 Windward Parkway Alpharetta, GA 30005 Tel: (770) 569-6511 Fax: (770) 569-6712 2. The Proctor & Gamble Distributing Company Attn: G.M. (Jay) Jones/Jackie S. Mulligan 8500 Governors Hill Drive, Cincinnati, OH 45249 Tel: (513) 774-1782 Fax: (513) 774-1298 3. Dot Foods, Inc. Attn: Paul Kurjanski, Director of Credit 1 Dot Way Mt. Sterling, IL 62353 Tel: (217) 773-4411 Fax: (217) 773-2717 4. Star Foods & General Merchandise, Inc. 24700 Chagrin Boulevard, Suite 300 Beachwood, OH 44122 Attn: Mark Lackritz Tel: (216) 831-0992 Fax: (216) 831-4386 5. Guttman Oil Company Attn: Alan H. Sinning 200 Speers Street Belle Vernon, PA 15012 Tel: (724) 483-3533 Ext. 227 Fax: (724) 489-5132 6. Kessler's, Inc. Attn: Lindsay T. Straub 1201 Hummel Avenue, P.O. Box 126 Lemoyne, PA 17043-0126 Tel: (717) 763-7162 Fax: (717) 763-4982 7. Advantage Resource Group/Advantage Staffing, Inc. Attn: David A. Miller 1600 Valley View Boulevard, Altoona, PA 16602 Tel: (814) 944-3571 Fax: (814) 944-1308 8. K&K Gourmet Meats, Inc. Attn: Arthur Katz 300 Washington Street Leetsdale, PA 15056 Tel: (724) 266-8400 Fax: (724) 266-8402 9. Lavoi Corporation Attn: James J. Kelley, Jr. 1775 Tullie Circle Atlanta, GA 30329 Tel: (404) 325-1016 Fax: (404) 325-1923 10. Zilka & Company, LLC Attn: Phillip Zilka 101 Surrey Street Monessen, PA 15062 Tel: (724) 684-7231 Fax: (724) 684-4743 11. The Coca-Cola Company Attn: William Kaye P.O. Box 1734 Atlanta, GA 30313 Tel: (404) 676-4016 Fax: (404) 598-4016 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. The Committee's hired Robert S. Bernstein, Esq., at Bernstein Law Firm, P.C., for legal advice and PENTA Advisory Services, LLC, as its Accountants and Financial Advisors. Headquartered in Altoona, Pennsylvania, W.S. Lee & Sons, Inc. -- http://www.wslee.com/-- distributes food and non-food products primarily to schools, restaurants, hospitals and other institutions in the Mid-Atlantic region. The Company and its wholly owned subsidiary, Lee Systems Solutions, LLC, filed for chapter 11 protection on March 14, 2006 (Bankr. W.D. Pa. Case No. 06-70148). James R. Walsh, Esq., at Spence Custer Saylor Wolfe & Rose LLC, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated total assets of less than $50,000 and total debts between $1 million and $10 million. Documents submitted to the Court however show that the Debtors are indebted to Omega Bank in an amount of $20,021,000. XYBERNAUT CORP: Settling Dispute with Original DIP Lender --------------------------------------------------------- Xybernaut Corporation and its affiliate, Xybernaut Solutions, Inc., ask the U.S. Bankruptcy Court for the Eastern District of Virginia to approve a settlement agreement they signed with LC Capital Master Fund, Ltd., the Official Committee of Equity Security Holders and the Official Committee of Unsecured Creditors. The Settlement Agreement resolves disputes over LC Fund's alleged breached of its obligations under the LC Fund DIP Credit Facility. The dispute stemmed from the fact that LC Capital didn't provide funding in January and February. The Debtors already borrowed $1.9 million from the LC Fund DIP Credit Facility. As reported in the Troubled Company Reporter on March 31, 2006, the Court approved East River Capital LLC as interim replacement Debtor-in-Possession lender, subject to final approval on April 25. ERC has provided a $1.9 million initial loan to Xybernaut that will be increased to $2.6 million on final approval, and can be increased to $3.2 million by mutual agreement. LC Fund appealed the interim order. LC Fund will withdraw the appeal once the Court approves the Settlement Agreement. Under the Settlement Agreement, on April 3, 2006, the Debtors paid LC Fund $100,000 for expenses, including legal fees and expenses. After the Court gives final approval of the ERC DIP Credit Facility, the Debtors will pay LC Fund $300,000 for expenses, including legal fees and expenses, and any amount in excess of the expenses in consideration of the concessions made by LC Fund in settlement. The $300,000 payment to LC Fund will be a superpriority administrative expense claim against the Debtors' estates, which must be satisfied from the first proceeds under the ERC DIP Credit Facility beyond the interim funding. The superpriority administrative expense claim granted to LC Fund will be subordinate to the superpriority administrative expense claim previously granted to ERC in respect of the ERC DIP Credit Facility. The Settlement Agreement provides that instead of a 15% sale participation right as provided for in the LC DIP Credit Facility, the Debtors will pay to LC Fund 2.5% of all gross sale proceeds from the sale of the Debtors' assets or their business, in whole or in part, in excess of $5 million and up to $10 million, and 3.5% of any gross sale proceeds in excess of $10 million. LC Fund's interest in the sale proceeds will be a senior secured lien right, which LC Fund will hold until a year after confirmation of the Debtors' chapter 11 plan. This lien: (1) will be subordinate to the lien granted to ERC under the ERC DIP Credit Facility until the gross proceeds from the sale of the Debtors' assets equal to $5 million; (2) will be pari passu with the ERC DIP Credit Facility liens in the ratio of 2.5% for LC Fund and 97.5% for ERC until the earlier of: (a) full payment of ERC under the ERC DIP Credit Facility; and (b) the receipt of gross proceeds from the sale of the Debtors' assets equal $10 million; after that (3) will be an unsubordinate senior lien. ERC asserts that the Settlement Agreement is inconsistent with the protections granted to ERC in the Interim Order and the ERC DIP Credit Facility. The Debtors are currently negotiating with ERC regarding this issue but no resolution has been reached. About Xybernaut Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. Paul M. Sweeney, Esq., at Linowes & Blocher LLP , represents the Official Committee of Unsecured Creditors. Craig Benson Young, Esq., at Connolly Bove Lodge & Hutz, represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. ZALE CORP: SEC Launches Accounting Investigation ------------------------------------------------ Zale Corporation (NYSE: ZLC) reported that the Securities and Exchange Commission initiated a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. Subpoenas issued in connection with the SEC investigation ask for materials relating to these accounting matters as well as to executive compensation and severance, earnings guidance, stock trading, and the timing of certain vendor payments. Zale believes that its accounting complied with generally accepted accounting principles and is reviewing the matter. The Company will cooperate fully with the SEC's investigation. About Zale Corp Zale Corporation -- http://www.zalecorp.com/-- is North America's largest specialty retailer of fine jewelry operating approximately 2,345 retail locations throughout the United States, Canada and Puerto Rico. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Through its ZLC Direct organization, Zale also operates online at http://www.zales.com/and http://www.baileybanksandbiddle.com/ * Deirdre Martini Resigns as United States Trustee for New York --------------------------------------------------------------- Deirdre Martini resigned as acting U.S. Trustee for Region 2, Tom Becker of Bloomberg reports. Mr. Becker reports that Jane Limprecht, a spokewoman for the office of the U.S. Trustee, related that Ms. Martini resigned on Apr. 7, 2006, to "return to the private sector." Ms. Martini previously practiced law with Ivey Barnum and O'Mara in Greenwich, Connecticut and was assistant U.S. attorney for Connecticut in 1988 and 1989. As acting U.S. Trustee, Ms. Martini's overseen cases involving Refco Inc. and Delta Air Lines Inc. Mr. Becker reports that Ms. Martini, who has held the post sine November 2003, is succeeded by Diana Adams, an assistant trustee in Brooklyn since 2001. * Sheppard Mullin Awards A. Guilford as Pro Bono Atty. of the Year ------------------------------------------------------------------ Sheppard, Mullin, Richter & Hampton LLP will honor Andy Guilford with the firm's annual SMRH Pro Bono Attorney of the Year Award, an award that recognizes the important community service work done by Sheppard Mullin attorneys. As part of the award presentation on April 19, the firm will donate $5,000 to the Public Law Center in Orange County. The Public Law Center, Orange County's pro bono law firm, is committed to providing access to justice for the poor. Through volunteers and staff, the Public Law Center provides free civil legal services, including: * counseling, * individual representation, * community education, and * strategic litigation and advocacy to challenge societal injustices. "Andy has been a stalwart Sheppard Mullin pro bono time donor and supporter for 30 years," said Guy Halgren, chair of the firm's Executive Committee. "He's been a pro bono advocate within and outside the firm, and it is not an exaggeration to say that he's done as much work to provide access to justice for the indigent as any other lawyer in the State of California, including a number of successful initiatives during his tenure as the California State Bar President." "During his time at Sheppard Mullin, Andy has been a leader in indigent pro bono legal efforts," commented the firm's Pro Bono chair Bob Gerber. "He has personally accepted many challenging pro bono cases, and has encouraged his fellow attorneys to accept pro bono work. In awarding this year's honor, we would be remiss if we did not consider his long standing and exceptional contributions to the firm's pro bono efforts and to the pro bono legal community." Mr. Guilford has donated on average some 200 indigent pro bono legal services hours annually over the last three years. He has worked on a variety of cases over the last few years, including: (a) a challenging case in which he and a number of associates billed hundreds of hours representing an indigent domestic violence victim; (b) a unique case seeking to protect civil and religious rights for volunteers assisting the indigent; (c) some straightforward landlord/tenant disputes for indigent clients; and (d) a difficult case which restored child support rights for a Filipina and her child. Mr. Guilford was a recent president of the Public Law Center, has served on the Center's Board of Directors for decades, and is still serving as the organization's Past President. He was also appointed by the Chief Justice of the California Supreme Court to the Self-Represented Litigants Task Force. "I am honored by the firm's recognition and support," said Mr. Guilford. "Pro bono offers an excellent opportunity to serve the community, while achieving personal fulfillment and professional development. I am pleased that Sheppard Mullin's donation will support the vital work performed by the Public Law Center." Mr. Guilford is a Business Trial Practice Group partner in the Orange County office who is in the process of leaving Sheppard Mullin to become a federal district court judge in the Central District of California in Santa Ana. Sheppard Mullin's SMRH Pro Bono Attorney of the Year Award is the firm's highest pro bono honor to recognize and reward the important community service work done by Sheppard Mullin attorneys. Sheppard Mullin recognizes its recipient on behalf of all its attorneys that provide high-caliber legal and professional services to persons of limited means and to charitable and civic organizations. About Sheppard, Mullin, Richter & Hampton LLP Founded in 1927, Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 480 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate and Securities; Entertainment, Media and Communications; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Monthly Dallas/Ft. Worth meeting CityPlace Center, Dallas, Texas Contact: 214-228-9706 or http://www.turnaround.org/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/ April 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Key Indicators in Financial Distress Kansas City, Missouri Contact: http://www.turnaround.org/ April 19, 2006 PRACTISING LAW INSTITUTE Residential Real Estate Contracts & Closings New York, New York Contact: http://www.pli.edu/ April 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, FL Contact: 561-882-1331 or http://www.turnaround.org/ April 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Fraud and Forensic Accounting in a Restructuring Context Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ April 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner with The Honourable Allan Wachowich, Chief Justice of the Court of Queen's Bench of Alberta Petroleum Club, Edmonton, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ April 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION TBA Syracuse, New York Contact: 716-440-6615 or http://www.turnaround.org/ April 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Panel Program on the Role of Trustees and Examiners & Networking Reception Arizona Contact: http://www.turnaround.org/ May 2006 TURNAROUND MANAGEMENT ASSOCIATION Regional Golf Event TBD, Austin (tentative), Texas Contact: 214-228-9706 or http://www.turnaround.org/ May 2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Organization of Women Di Bruno Bros., Philadephia, Pennsylvania Contact: 215-657-5551 or http://www.turnaround.org/ May 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Fundamentals of Turnaround Management for SMEs University of Technology, Sydney, Australia Contact: http://www.turnaround.org/ May 4, 2006 TURNAROUND MANAGEMENT ASSOCIATION Texas Hold 'em Networking Event TBA, St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ May 4, 2006 TURNAROUND MANAGEMENT ASSOCIATION InterChapter Texas Hold 'em TBA - Missouri Contact: 815-469-2935 or http://www.turnaround.org/ May 4, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 5, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Alexander Hamilton Custom House, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION The Amendments to the Bankruptcy Code - Seven Months Later Mid-Day Club, Chicago, Illinois Contact: http://www.turnaround.org/ May 7-9, 2006 INTERNATIONAL BAR ASSOCIATION Restructuring Among the Ruins Hotel Bretagne Athens, Greece Contact: harriet.rowland@int-bar.org or http://www.ibanet.org/ May 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Golf 101 TBA - New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ May 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ May 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Casino Night TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Wicked Theatre Event Oriental Theatre, Chicago, Illinois Contact: 815-469-2935 or http://www.turnaround.org/ May 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, FL Contact: 561-882-1331 or http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Bergen County, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Eastside Wine & Dine TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Troubled Loan Workout Seminar National Cable Television Center & Museum, Denver, CO Contact: http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION 13 Week Cash Flow Workshop Standard Club, Chicago, Illinois Contact: http://www.turnaround.org/ May 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Forensic Accounting (Arizona Chapter Meeting) Arizona Contact: http://www.turnaround.org/ May 18-19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Great Lakes Regional Conference and Golf Tournament Ellicottville, New York Contact: 716-440-6615 or http://www.turnaround.org/ May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Golf 101 TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ May 23-26, 2006 AMERICAN BANKRUPTCY INSTITUTE 5th ABI Litigation Skills Symposium King and Spalding LLP, Atlanta, Georgia Contact: 1-703-739-0800; http://www.abiworld.org/ May 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION "Toot Your Own Horn" Forum TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Doctor Heal Thyself - Health Care Turnaround Portland, Oregon Contact: http://www.turnaround.org/ May 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Session TBA, Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ May 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 1-2, 2006 TURNAROUND MANAGEMENT ASSOCIATION Southeast Regional Conference Amelia Island, Florida Contact: 410-347-7391 or http://www.turnaround.org/ June 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA NY Golf & Tennis Outing - MEMBERS & SPONSORSHIP REGISTRATION Fresh Meadow Country Club, Lake Success, New York Contact: 646-932-5532 or http://www.turnaround.org/ June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/ June 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #2 Ernst & Young Tower, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ June 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Hedge Fund / Private Equity Round Table CityPlace Center, Dallas, Texas Contact: http://www.turnaround.org/ June 8-9, 2006 MEALEYS PUBLICATION Asbestos Bankruptcy Conference Ritz-Carlton Hotel, Chicago, Illinois Contact: http://www.mealeys.com/ June 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION How Are the Old Clients Doing? Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Outing Harborside Golf Course, Chicago, Illinois Contact: 815-469-2935 or http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Golf Outing / Spouse Social Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Signature Luncheon, Charity Event Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ June 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriot Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ June 14, 2006 (tentative) TURNAROUND MANAGEMENT ASSOCIATION LI TMA Texas Hold'em for Charity Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ June 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Afghanistan - The Ultimate Turnaround Challenge Oak Hill Country Club, Rochester, New York Contact: http://www.turnaround.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Morristown, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION What to Do When Internal Crime Strikes Your Company New Jersey Contact: http://www.turnaround.org/ June 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION 5th Annual Lenders Panel - Arizona Chapter National Bank of Arizona Conference Center, Phoenix, AZ Contact: http://www.turnaround.org/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION The New Bankruptcy Code Nine Months Later Rivers Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ July 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Event TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Red Bank, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 18-19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Distressed & Turnaround Investing Congress Swiss"tel The Drake, New York, New York Contact: http://www.turnaround.org/ July 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Golf & Tennis Outing Raritan Valley Country Club, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Summer Social BBQ Colonial Springs Country Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ August 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 3-5, 2006 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ August 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION DIP Panel Discussion Kansas City, Missouri Contact: http://www.turnaround.org/ August 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Family Night Baseball with the NJ Jackals (Yogi Berra Autograph Night) Jackals Stadium, Montclair, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ August 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Fishing Trip Point Pleasant, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ August 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION 4th Annual Alberta Golf Tournament Kananaskis Country Golf Course, Kananaskis, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ September 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Business Mixer TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ September 7-8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Saratoga Regional Conference Gideon Putnam Hotel, Saratoga Springs, New York Contact: http://www.turnaround.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Secaucus, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI Turnaround Formal Event Long Island, New York Contact: http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or www.turnaround.org September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Formal Event - Major Speaker to be Announced Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring the Troubled High Tech Company Arizona Contact: http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Education Program with NYIC Joint Reception CFA/RMA/IWIRC Woodbridge Hilton, Iselin, NJ Contact: http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION 7th Annual Cross Border Business Restructuring and Turnaround Conference Banff, Alberta Contact: http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Updates on the New Bankruptcy Law Kansas City, Missouri Contact: http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Billards Networking Night - Young Professionals TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 31 - November 1, 2006 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Annual Conference San Francisco, California Contact: http://www.iwirc.com/ November 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Halloween Isn't Over! - Ghosts of turnarounds past who remind you about what you should have done differently Portland, Oregon Contact: http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Australia National Conference Sydney, Australia Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Martini Party Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Dinner Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***